BRIJ MOHAN BAJAJ AND ORS. vs M S PRIME PROPERTY REALTY

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Del) 6401

IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of decision: 23.04.2026

O.M.P. (COMM) 501/2024 & I.A. 46321/2024

BRIJ MOHAN BAJAJ AND ORS. .....Petitioners

Through: Ms. Megha Saxena, Ms. Rashmi Kaushik & Ms. Shreya Bhatnagar, Advs with P-4 in person.

versus

M S PRIME PROPERTY REALTY .....Respondent

Through: Mr. Sachin Sain, Adv. with R partner in person.

CORAM: HON'BLE MR. JUSTICE AVNEESH JHINGAN

AVNEESH JHINGAN, J. (ORAL)

1. This petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short „the Act‟) against the arbitral award dated 29.07.2024.

2. The brief facts are that the petitioners were the owners of the property bearing Plot No. 97, Block-C, Chander Nagar, Janak Puri, New Delhi-110058. The Collaboration Agreement dated 10.05.2019 (hereinafter referred to as „CA‟) was executed between the parties to the lis. The respondent was required to demolish the existing building and re-construct a new one and in return on payment of Rs. 3.55 crores was to get the first, second, and third floors with roof rights. The petitioners apart from consideration were entitled to fully furnished upper ground floor with 1/4th share of the stilt floor. As per Clause 15 of the CA, an advance payment of Rs. 35 lacs was to be made by the respondent. The details of the payments to be made is tabulated below:

Total sale proceeds (Owners share) -	Rs.355 Lacs
Initial rental advance	Rs. 3 Lacs
Contract binding advance to be paid after Signing of collaboration agreement	Rs. 35 Lacs
After casting of roof of UGF	Rs. 35 Lacs
Balance rental amount	Rs. 2 Lacs
After casting roof of 1st floor	Rs. 35 Lacs
After casting roof of 2nd floor	Rs. 35 Lacs
At the time of registry of 2nd, 1st, and 3rd floors with roof rights	Rs.210 Lacs (Rs.175 Lacs + Rs.35 Lacs)

2.1 Clause 2 of the CA stipulates that the work was to be completed within twenty months from the execution of the CA. The construction was not completed and a notice dated 04.09.2022 was issued by the petitioners for termination of the CA. Clause 17 of the CA provided for dispute resolution through arbitration and the proceedings were initiated at the instance of the respondent. This Court vide order dated 12.10.2022 appointed an arbitrator.

2.2 The following issues were framed by the arbitrator:

i. Whether the Claimant is entitled to the declaration that the termination of the Collaboration Agreement by the Respondent on 04.09.2022 was illegal? OPC

ii. Whether the Claimant is entitled to further time for construction i.e. a period of 17 months 11 days? OPC

iii. In the alternative, whether the Claimant is entitled to a sum of Rs.3,28,40,567/- as claimed? OPC

iv. Whether the Claimant is entitled to interest and if so, at what rate and for which period? OPC

v. Whether the Respondents are entitled to the return of the sanctioned plans (B-1 and B-2) of property C-97, Chander Nagar, Janakpuri and other documents provided by them to the Claimant? OPR

vi. Relief.

2.3 All the issues except issue no. iii were rejected.

2.4 The heads of amount quantified in issue no. iii and their outcome is as under:

(i)	Recovery of the cost of construction amounting to	Rs.48,08,659	Rejected, respondent not entitled to any payment in absence of proof.
(ii)	Towards rents paid for the residence of the Respondent No. 3 and the office space taken on rent and electricity payments made by the Claimant	Rs.27,81,000	Rejected, since payments towards rent was a contractual obligation and cannot be refunded. Taking of rent for Respondent’s own personal use cannot be assigned to the Appellant and no sum can be reimbursed in this regard.
(iii)	Money spend of salaries of consultants etc.	Rs.35,88,743	Claimant not entitled to recovery of expenses.
(iv)	Advance payments made to the Respondents	Rs.50,00,000	Allowed to the extent of Rs.35 Lakh, holding there is no provision of forfeiture of amount paid in advance. Rejected claim for Rs.15 Lakh as there is no proof of the Respondent making payment in cash to the Appellant No. 3
(v)	Loss of profits on account of illegal termination of the Collaboration Agreement	Rs.1,66,62,165	Rejected (having concluded the cancellation of Collaboration Agreement being valid)
	TOTAL	Rs.3,28,40,567

2.5 Further, the petitioners were directed to bear fifty percent of the expenses of the Delhi International Arbitration Centre (DIAC) under whose aegis th

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