A buyer who pays consideration in anticipation of a property transfer is entitled to a statutory charge over the property for the refund of that money. Furthermore, admissions of liability in balance sheets effectively extend the limitation period for recovering such amounts.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Limitation Act, 1963 - Sections 18 and 62 - Transfer of Property Act, 1882 - Section 55(6)(b) - Registration Act, 1908 - Sections 17 and 49 - Claim for refund of sale consideration - Admissibility of unregistered agreement for collateral purpose - Acknowledgment of liability in balance sheets extends limitation - Buyer's statutory charge on immovable property. (Paras 7-9, 15-17, 19)

(B) Appellate Review - Scope and ambit - Challenge to arbitral award - Appellate courts should not interfere with arbitral findings that are legally sustainable - Arbitral Tribunal as master of evidence has discretion to determine admissibility and weight of evidence - Admissions made in pleadings and documentation hold significant evidentiary value. (Paras 9, 17)

(C) Limitation - Acknowledgement of debt - Entries in financial statements or balance sheets constitute a valid acknowledgement of debt under the Limitation Act - Such acknowledgement effectively extends the period of limitation. (Paras 7, 29-30)

Facts of the case:
A property transaction failed due to the refusal of regulatory authorities to grant mandatory permissions. The vendor offered a refund in writing but failed to process payment. The purchaser initiated arbitration, initially seeking specific performance before limiting the claim to a refund. The vendor contested the claim, arguing it was barred by limitation and that the underlying agreement was inadmissible as it was unregistered.

Findings of Court:
The court upheld the arbitral award, ruling that the buyer is entitled to a refund of the sale consideration. it affirmed that acknowledgments in financial statements validly extended the limitation period and that the buyer held a statutory charge over the property for the purchase money paid. Furthermore, the court held that an unregistered agreement could be used for the collateral purpose of proving payment.

Issues: Whether the claim for refund of sale consideration was barred by limitation and whether an unregistered agreement for sale could be used as evidence for a collateral purpose.

Ratio Decidendi: Acknowledgements of debt in financial statements successfully extend the limitation period. Furthermore, a buyer who pays consideration in anticipation of transfer possesses a statutory charge on the property, rendering the refund claim enforceable. An unregistered document, while incapable of supporting specific performance, remains admissible for proving collateral facts including the transfer of funds.

Result: Appeal dismissed.

Table of Content
1. factual background of the arbitration and judicial proceedings. (Para 1 , 2 , 9)
2. appellant's arguments regarding limitation, unregistered agreement admissibility, and breach. (Para 3 , 10)
3. analysis of the arbitral award findings and admissions of liability. (Para 4 , 5 , 6 , 7 , 8)
4. buyer's statutory charge under section 55(6)(b) of the transfer of property act. (Para 11 , 12 , 13 , 14 , 15 , 16)
5. admissibility of unregistered agreements for collateral purposes and acknowledgment of liability. (Para 17 , 18 , 19)
6. interest determination and conclusion on the frivolous nature of the appeal. (Para 20 , 21 , 22 , 23 , 24)

MANMEET PRITAM SINGH ARORA, J. (ORAL)

1. The present appeal has been filed under Section 37(1)(c) of the Arbitration and Conciliation Act, 1966 (‘Act of 1996’) read with Section 13 of the Commercial Courts Act, 2015 with the following prayers:

“a) Set-aside the impugned judgement dated 11.02.2026 passed by the Ld. Single Judge in O.M.P(COMM) 34812024 titled as 'SNG Developers Limited vs. Lord Vardhman Buildtech Private Limited' and also Set-aside the Arbitral Award dated 22.04.2024 passed by the Ld. Sole Arbitrator in the arbitration between the parties.

b) Cost of the proceedings be awarded in favour of the appellant and against the respondent.

c) Pass such other order / orders as this Hon'ble Court deems fit and Proper.”

2. The relevant facts for deciding the present appeal are as follows:

2.1. The appellant is the owner of land bearing No. S-S001, admeasuring approximately 5 acres, situated at P-8, Greater Noida, District Gautam Budh Nagar, Uttar Pradesh [‘subject plot’]. The dispute arises out of an Agreement to Sell [‘ATS’] dated 04.04.2011, whereby the appellant agreed to sell an area admeasuring 2.929 acres out of the said land i.e., part of the subject plot, to the respondent for a sale consideration of Rs. 7.50 crores.

2.2. It is contended by the appellant that under the said ATS, the responsibility of obtaining the requisite statutory permissions, including bifurcation/approval, was upon the respondent, while the appellant was only to facilitate the same as owner.

2.3. It is stated that in terms of Clause 12 of the ATS, the date fixed for performance was the date of payment which in present case was 20.05.2011 and, even if deferment were assumed, the outer limit for performance could not extend beyond 19.09.2011.

2.4. It is stated that since the respondent failed to secure the requisite approvals from the Greater Noida Industrial Development Authority [‘statutory authority’ or ‘GNIDA’], the appellant, by email dated 13.05.2013¹Annexure A-4 filed along with the appeal, informed the respondent that the agreement had become incapable of performance and had become null and void, and was accordingly called upon the respondent to take refund of the amount. However, for a considerable period, the respondent neither sought specific performance of the agreement nor demanded refund of the amount.

2.5. It is stated that thereafter, the respondent belatedly invoked arbitration only on 30.07.2018 and had only sought relief of execution of sale deed. Pursuant thereto, a sole arbitrator was appointed by this Court on 04.04.2019.

2.6. It is stated that in the Statement of Claim dated 21.05.2019²Annexure A-7 (colly) filed along with the appeal, the respondent, for the first time, sought an alternative relief of refund of Rs. 7.50 crores.

2.7. It is stated that the appellant, in its Statement of Defence dated 08.07.2019³Annexure A-8 (colly) filed along with the appeal, specifically raised the plea that the claims pertaining to specific performance of ATS and claim for refund of amount were barred by limitation. It is stated that during the arbitral proceedings, the respondent relied upon the ATS, whereupon the appellant raised objections of admissibility of the ATS, inter alia, on the grounds of non-payment of stamp duty and non-registration of ATS.

2.8. It is stated that the learned Arbitrato

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2026 Supreme(Online)(Del) 6454

IN THE HIGH COURT OF DELHI AT NEW DELHIV. Kameswar Rao, Manmeet Pritam Singh Arora, JJSng Developers Limited – AppellantVersusLord Vardhman Buildtech Private Limited – RespondentFAO(OS) (COMM) 58/2026|CM APPL. 16297/2026

A buyer who pays consideration in anticipation of a property transfer is entitled to a statutory charge over the property for the refund of that money. Furthermore, admissions of liability in balance sheets effectively extend the limitation period for recovering such amounts.

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Manmeet Pritam Singh Arora, JJ
Sng Developers Limited – Appellant
Versus
Lord Vardhman Buildtech Private Limited – Respondent
FAO(OS) (COMM) 58/2026|CM APPL. 16297/2026