The agreement to sell an immovable property must be registered under state law, failing which it is unenforceable.

1. The present petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘Act’) challenging the Arbitral Award dated 10th January, 2025 (hereinafter ‘impugned award’) passed by the Sole Arbitrator.

2. Vide the impugned award, the application filed by the respondent under Section 32 (2)(c) of the Act seeking termination of the arbitral proceedings was allowed and the arbitral proceedings were terminated.

3. Brief facts, as stated in the present petition, which are necessary for deciding the present petition are set out below:

a. Sub-lease dated 11th July, 2021 was executed by Jaypee Infratech Limited (hereinafter ‘JIL’) in favour of the respondent in respect of flat bearing unit no. KLP0152004 in Kalypso Court-15 at Jaypee Greens, Noida, Uttar Pradesh along with one car parking space (hereinafter ‘subject property’) and the respondent became the owner of the sub-leasehold rights in the subject property.

b. The respondent approached the petitioner to transfer her sub-leasehold interest in the subject property.

c. The petitioner entered into an Agreement to Sell (hereinafter ‘ATS’) with the respondent on 5th January, 2024 for transfer of the respondent’s sub-leasehold interest in the subject property for an agreed consideration of Rs. 5 crores. Out of the said consideration, the petitioner paid a sum of Rs. 50,000/- as token money to the respondent.

d. The respondent, as per clause 5.1 of the ATS, was required to obtain prior permission for transfer of sub-leasehold rights in the subject property from JIL and Yamuna Expressway Industrial Development Authority (hereinafter ‘YEIDA’). The respondent issued letter dated 15th January, 2024 to the petitioner informing about the requirement of filing a joint application before JIL and YEIDA for the aforesaid purpose.

e. The ATS was thereafter terminated by the respondent on 7th February, 2024, which was disputed by the petitioner vide his reply dated 8th March, 2024.

f. Vide notice dated 15th April, 2024, the petitioner invoked the arbitration clause, i.e., Clause 14 of the ATS in terms of Section 21 of the Act, to which the respondent replied that there was no arbitrable dispute between the parties as the ATS is not a valid contract.

g. Subsequently, the arbitration proceedings commenced before the Sole Arbitrator named in the ATS.

h. The statement of claim was filed on behalf of the petitioner.

i. The respondent, in her statement of defence, took the ground that the ATS is unenforceable as the same is not registered and stamped, which is a mandatory requirement in the State of Uttar Pradesh.

j. After completion of pleadings before the Arbitrator, the respondent filed an application under Section 32 (2)(c) of the Act seeking termination of the arbitration proceedings on the ground that the ATS, being an unregistered and unstamped document, cannot be specifically performed.

k. The petitioner filed his reply contesting the said application.

4. The Arbitrator, vide the impugned award, allowed the aforesaid application filed by the respondent and terminated the arbitral proceedings holding that the ATS executed between the parties requires mandatory registration and stamping in the State of Uttar Pradesh.

5. The petitioner has filed the present proceedings challenging the impugned award.

6. It is argued on behalf of counsel for the petitioner that the ATS does not transfer the ownership in the subject property in favour of the petitioner. It merely deals with transfer of the respondent’s sub-leasehold rights in the subject property. Thus, the ATS cannot be regarded as a ‘contract for sale’ requiring