CONSCIENT INFRASTRUCTURE PVT. LTD. v. MR. MAHESH KAPOOR & ANR.

The present Petition, filed by Conscient Infrastructure Pvt. Ltd.1 under Section 9 of the Arbitration and Conciliation Act, 19962 read with Section 151 of the Code of Civil Procedure, 19083, seeks certain ad interim reliefs and directions against Mr. Mahesh Kapoor 1 Petitioner 2 A&C Act 3 and Mrs. Usha Kapoor4.

The disputes between the parties are stated to arise out of an arrangement termed as “Binding Heads of Terms of the Proposed Collaboration for Development of the land situated in the revenue estate of Village Aya Nagar, Mehrauli, Delhi (Jhankar Banquet)” dated 17.05.20235, executed in relation to the development of the land admeasuring approximately 6.76 acres situated at Revenue Estate Aya Nagar, Mehrauli, Delhi6.

By way of the present Petition, the principal relief sought is a restraint against the Respondents, their employees, agents, representatives, or any person acting on their behalf, from creating any lien, charge, encumbrance, or third-party interest of any nature whatsoever over the said Collaboration Land during the pendency of the proceedings.

The Petitioner further seeks an order restraining Respondents from obstructing, interfering with, or otherwise impeding the Petitioner in the performance of its obligations arising under the Binding HoTs concerning the aforesaid Collaboration Land. In addition thereto, the Petitioner has prayed for ad-interim ex parte protection in terms of the aforementioned reliefs, with a further direction that such interim protection be continued upon issuance of notice to the Respondents.

With the consent of parties, this matter has been taken up for final disposal. FACTUAL MATRIX:

The Petitioner is a private limited company incorporated under 4 Respondents 5 Binding HoT 6 the provisions of the Companies Act, 1956 and is engaged in the business of real estate development.

The Respondents, who are husband and wife, are the joint owners of the Collaboration Land. Being desirous of developing the said Collaboration Land, the Respondents approached the Petitioner for undertaking development thereof.

Pursuant thereto, the parties entered into discussions and negotiations in relation the proposed development of Collaboration Land, culminating in the execution of the Binding HoT.

Under the Binding HoT, the Respondents agreed to contribute the Collaboration Land, while the Petitioner was to undertake development of a Residential Group Housing Project / Mixed Land Use Project or any other permissible project as may be agreed between the parties. The Petitioner was vested with the responsibility for obtaining the requisite sanctions and approvals in relation to the proposed development.

The parties agreed to the revenue-sharing arrangement whereby

42.3% of the distributable revenue was to accrue to the Respondents and 57.7% to the Petitioner. Additionally, all project costs were to be borne by the Petitioner.

The Binding HoT further contemplated execution of a Definitive Collaboration Agreement upon receipt of sanctioned layout plans, subject to a maximum outer limit of 14 months from the date of the Binding HoT. Further, Clause R of the Binding HoT contained an arbitration agreement providing for reference of disputes to arbitration seated at Delhi.

The Respondents, while executing the Binding HoT, represented, inter alia, that they possessed a clear, marketable, and unencumbered title to the Collaboration Land and that, apart from a disclosed dispute relating to the placement of an exit gate concerning M/s Fountainhead Motels Pvt. Ltd., no material litigation affecting the Collaboration Land subsisted.

Pursuant to the execution of the Binding HoT, it is the case of the Petitioner it proceeded to undertake steps towards implementation of the proposed project, including preparation and submission of layout plans before the concerned authorities. The requisite fee for the same was deposited with the Municipal Corporation of Delhi7 and the layout plans, duly signed by the Respondents, were submitted on 03.07.2023.

During the course of processing the approvals, certain additional requirements emerged, including procurement of approvals from the Airports Authority of India8 and a No Objection Certificate from the Ministry of Defence, owing to the proximity of the Collaboration Land to an Air Force Station.

It further transpired that a substantial portion of Collaboration Land fell within a specified distance from the Air Force Station. Consequently, the layout/building plans required revision and were thereafter resubmitted on 29.02.2024.

The Petitioner also undertook demolition of the existing structure operating under the name “Jhankar Banquet”, which, according to the Petitioner, was necessary for facilitating inspection and processing by the relevant authorities. The Petitioner alleges that the said process was delayed on account of requests made by the Respondents for the postponement of demolition. 7 MCD 8

The Petitioner further asserts that a pending dispute concerning the Collaboration Land involving M/s Fountainhead Motels Pvt. Ltd. also requires resolution during the subsistence of the Binding HoT. It is stated that the Petitioner was constrained to facilitate an amicable settlement, which was reached on 11.03.2024.

Subsequently, the parties executed a First Addendum dated

06.05.2024 extending the validity of the Binding HoT till 17.08.2024.

It is the case of the Petitioner that during the relevant period, the Standing Committee of the MCD, whose approval was necessary for sanction of the layout plans, remained non-existent for a substantial duration.

The Petitioner further relies upon the imposition of the Model Code of Conduct during various elections as having contributed to delays in the approval process.

Despite these impediments, the Layout Scrutiny Committee, MCD9, comprising representatives of all concerned MCD departments and one representative of Delhi Development Authority10, agreed to recommend the project proposal for development of the Collaboration Land as a Group Housing Project to the Standing Committee. This in- principle recommendation was made subject to the submission of a reverification report concerning certain areas under the recreational plan as per the Zonal Development Plan of Zone-J under MPD-2021.

On 18.05.2025, the parties executed a Second Addendum extending the validity of the Binding HoT till 17.08.2025. Under the said Addendum, the Petitioner made further payments to the Respondents and also agreed to pay a sum of Rs. 25 lakhs per month 9 LOSC 10 during the extended period.

Thereafter, a Third Addendum dated 05.08.2025 came to be executed, extending the validity of the Binding HoT till 17.12.2025 on substantially similar terms.

It is the case of the Petitioner that on 20.10.2025, the Respondents‟ representative and son, Mr. Virat Kapoor, for the first time disclosed to the Petitioner the existence of two pending litigations concerning the Collaboration Land, being appeals filed under Section 185 of the Delhi Land Reforms Act, 1954. The said appeals were ultimately dismissed vide Judgment dated 18.12.2025.

Since the Third Addendum was nearing expiry, the Petitioner circulated a draft Fourth Addendum seeking further extension till

17.04.2026. According to the Petitioner, the Respondents suggested modifications to the draft and continued to assure the Petitioner that execution of the addendum was a mere formality.

It is the Petitioner‟s case that, notwithstanding non-execution of the Fourth Addendum, both parties continued to act in furtherance of the Binding HoT even after 17.12.2025. The Petitioner continued to pursue approvals with statutory authorities, including MCD and AAI, and claims to have kept the Respondents informed of such developments from time to time.

On 10.02.2026, representatives of both parties are stated to have jointly appeared before the Commissioner, MCD, in relation to the pending approvals concerning the project.

According to the Petitioner, by February, 2026, the process for sanction of the layout plans had substantially progressed and only final approval of the Standing Committee remained pending.

On 10.03.2026, the Respondents addressed a communication to the Petitioner asserting that the Binding HoT had elapsed on

17.12.2025 and calling upon the Petitioner to reconcile financial aspects between the parties.

Thereafter, on 25.03.2026, the Respondents remitted an amount of Rs. 2,80,00,000/- to the Petitioner and reiterated their position that the Binding HoT had lapsed.

Apprehending the creation of third-party rights in respect of the Collaboration Land, the Petitioner issued public notices and thereafter addressed a detailed communication dated 27.03.2026, asserting that the Binding HoT continued to subsist and calling upon the Respondents not to deal with the Collaboration Land in derogation of the Petitioner‟s rights.

The Petitioner states that it has paid, in aggregate, a sum of approximately Rs. 8 Crores to the Respondents under the Binding HoTs and Addendums, comprising upfront payments of Rs. 3.12 Crores, further payments of Rs. 2.75 Crores, and monthly payments of Rs. 25 lakhs from 17.02.2025 to 17.03.2026, in addition to incurring substantial expenditure on consultants, professional fees, surveys, and approval costs over a period of approximately two and a half years.

In the aforesaid factual background, and in apprehension of imminent adverse consequences likely to prejudice its rights and interests, the present Petition under Section 9 of the A&C Act has been instituted seeking the grant of interim measures pending adjudication of the disputes between the parties. SUBMISSIONS ON BEHALF OF THE PARTIES:

At the outset, learned senior counsel appearing on behalf of the Respondents would raise two broad preliminary objections to the maintainability of the present Petition. Firstly, it would be contended that the Binding HoT neither constitutes a concluded nor a specifically enforceable contract in the eyes of the law. Secondly, it would be submitted that, in the absence of any prima facie enforceable contractual right, no interim protection as sought by the Petitioner can be granted under Section 9 of the A&C Act.

In respect of the first contention, learned senior counsel for the Respondents would contend that the Binding HoT does not constitute a complete, final and concluded contract capable of specific enforcement in law. It would be submitted that the Binding HoT merely records a preliminary commercial understanding between the parties while consciously contemplating execution of subsequent definitive documentation, inter alia, the proposed Collaboration Agreement.

It would be submitted that the structure, language and scheme of the Binding HoT itself demonstrate that the parties did not intend the said document to operate as the exhaustive repository of their rights and obligations. Learned senior counsel would contend that several material facets concerning implementation of the project, operational modalities, reciprocal obligations, regulatory compliances and commercial structuring were consciously left to be subsequently negotiated, crystallised and incorporated the contemplated Collaboration Agreement.

Learned senior counsel would further submit that the Binding HoT neither transfers any present development rights nor creates any vested proprietary or contractual interest in favour of the Petitioner. Accordingly, the document merely contemplated a future collaborative framework subject to execution of further agreements and satisfaction of multiple contingencies.

In furtherance of the aforesaid submissions, learned senior counsel for the Respondents would place reliance upon the Judgement of this Court in Vijay Kumar vs. K.N. Chopra & Ors.11, to contend that where the foundational document itself contemplates execution of a subsequent Collaboration Agreement and leaves material stipulations for future negotiation and crystallisation, no concluded contract capable of specific performance comes into existence. A similar reliance would be placed upon the Judgement of this Court in Nikhil Kumar Anand vs. Hridey Vikram Bhatia & Ors.12.

In view of the foregoing submissions and the reliance placed, it would be submitted that the Binding HoT, viewed in its entirety, merely constituted a framework for future collaboration and not a final, concluded immediately enforceable development agreement.

Learned senior counsel would, in this regard, specifically place reliance upon Clauses C, D, E, F, G and J of the Binding HoT to contend that crucial aspects concerning development obligations, implementation modalities, commercial structuring, regulatory compliances, timelines, approvals and operational responsibilities were left to be comprehensively worked out subsequently under the contemplated Collaboration Agreement.

Learned senior counsel would particularly emphasise upon Clause O(b) of the Binding HoT to contend that even the pricing and valuation mechanism concerning the apartments proposed to be allotted or sold had not attained finality. According to the learned senior counsel for the Respondents, certainty of consideration 11 2000 SCC OnLine Del 162 12 2026 SCC OnLine Del 1089 constitutes an essential ingredient of a concluded agreement relating to immovable property and in the absence thereof, no enforceable agreement can be said to exist.

Learned senior counsel appearing on behalf of the Respondents, in furtherance of the aforesaid submissions, would place reliance upon the Judgement of this Court in Aggarwal Hotels (P) Ltd. vs. Focus Properties (P) Ltd13, to contend that where material and essential terms such as consideration, parties, timelines and implementation modalities remain uncertain or incomplete, no concluded agreement capable of specific performance can be said to come into existence.

Learned senior counsel would additionally submit that the continued circulation of draft addenda, proposed modifications and negotiations regarding revised commercial terms itself demonstrates the absence of consensus ad idem on several material aspects of the proposed arrangement.

It would thus be contended that the Binding HoT falls within the category of a mere “agreement to agree”, lacking certainty on essential terms and consequently incapable of specific enforcement in law.

Learned senior counsel appearing on behalf of the Respondents would further contend that the present arrangement concerns a long- term and technically complex real estate development project involving continuous reciprocal obligations, procurement of statutory approvals, coordination with multiple regulatory authorities, construction obligations, commercial implementation and continuing operational supervision.

It would therefore be submitted that enforcement of such an 13 1996 SCC OnLine Del 354 arrangement would necessarily require constant judicial supervision and monitoring over an indefinite duration, thereby attracting the prohibitions contemplated under Sections 14 and 41 of the Specific Relief Act, 196314.

In support of the aforesaid contention, learned senior counsel for the Respondents would place reliance upon the Judgment of the Hon‟ble Supreme Court in Vinod Seth vs. Devinder Bajaj and Another15, involving continuing that arrangements to contend obligations, uncertain or indeterminate terms, and acts dependent upon future consensus between the parties are ordinarily not amenable to specific enforcement. In furtherance of the said submission, reliance would also be placed upon the Judgments of the Hon‟ble Supreme Court in Gurbir Kaur vs. BDR Builders & Developers P. Ltd16, as well as the decision of this Court in Davender Kumar Sharma vs. Mohinder Singh & Ors.17.

To substantiate the further contention that agreements involving continuous obligations and requiring constant or ongoing supervision by the Court fall within the prohibitions contemplated under Sections 14(1)(b) and 14(1)(d) of the Specific Relief Act, learned senior counsel for the Respondents additionally would rely upon the Judgment of this Court in Prem Kumar Bansal vs. Ambrish Garg18, as also the Judgment of the Hon‟ble Supreme Court in Her Highness Maharani Shantidevi P. Gaikwad vs. Savjibhai Haribhai Patel & Ors.19.