Section 9 petition not maintainable to enforce specific performance of contract: Delhi high court dismisses plea to stay termination of JDA

Delhi High Court Rejects Plea to Enforce Contract: Section 9 Petition Deemed Not Maintainable for JDA Termination.

Case Title: GCD Prime v. DCM Ltd.

Case Number: O.M.P.(I) (COMM.) 472/2025 | Delhi High Court | Justice Jasmeet Singh

The Delhi High Court has dismissed a petition filed under Section 9 of the Arbitration and Conciliation Act, 1996, by a real estate developer seeking to restrain a land owning company from acting upon a notice of forfeiture and termination issued under a Joint Development Agreement (JDA).

Justice Jasmeet Singh held that the petitioner failed to establish a prima facie case, balance of convenience, or risk of irreparable injury, the three essential ingredients for grant of interim relief under Section 9.

Background

GCD Prime and DCM Ltd. had entered into a Term Sheet dated 18.05.2022, followed by a JDA dated 11.08.2022, for development of DCM's land admeasuring approximately 68.35 acres at Hisar, Haryana, under the Deen Dayal Jan Awas Yojana. GCD was entitled to 45 percent of net sales revenue as consideration for undertaking development at its own cost.

GCD obtained a development license from the Directorate of Town and Country Planning, which was subsequently suspended on 18.04.2023 pursuant to an enquiry into alleged unauthorized sale and change of land use. When the project came to a standstill, DCM issued a notice dated 22.09.2025 alleging default and, upon expiry of the cure period, issued a notice dated 31.10.2025 forfeiting GCD's rights and terminating the JDA under Clause 11.3.

GCD approached the Court seeking to restrain operation of the termination notice and to direct maintenance of status quo pending arbitration. During the pendency of the petition, arbitration was invoked and a Sole Arbitrator was appointed, though GCD's application to convert the petition into one under Section 17 was dismissed since judgment had already been reserved.

Determinability Of The JDA

The Court examined whether the JDA was a determinable contract, since specific performance cannot be granted for such contracts under Section 14(d) of the Specific Relief Act, 1963. Referring to the classification of contracts in K.S. Manjunath v. Moorasavirappa Muttanna Chennappa Batil, the Court held that the JDA, being terminable for cause with a 30 day cure period and 15 day notice, fell within the category of contracts terminable for cause with notice and opportunity to cure, and was therefore not determinable in nature.

The Court clarified that a finding of non determinability does not by itself entitle a party to interim relief, which must independently satisfy the three pronged test of prima facie case, balance of convenience, and irreparable injury.

No Prima Facie Case

The Court held that Clause 4.4.1 of the JDA cast a continuing obligation on GCD not merely to obtain licenses and approvals but to keep them valid and subsisting throughout the project. Recital E of the Term Sheet and Recital F and Clause 9.8 of the JDA recorded that GCD had conducted comprehensive due diligence and undertaken development on an as is where is basis. In view of these clauses, the Court held that GCD's contention that it bore no responsibility for reinstatement of the suspended license was contrary to the express contractual stipulations, and no prima facie case was made out.

No Irreparable Injury

On balance of convenience, the Court held that the JDA vested no proprietary or possessory interest in the subject land in favour of GCD. Clause 3.1 recorded that title and possession vested with DCM, and Clause 5.1 provided only for a 45:55 revenue sharing arrangement. The Court held that any loss suffered by GCD was compensable in monetary terms and did not amount to irreparable injury.

The Court also rejected reliance on Clause 14.9 of the JDA, which required parties to continue performing obligations unrelated to the pending dispute, holding it distinguishable from the clause considered in Innovative Facility Solutions (P) Ltd. v. Affordable Infrastructure and Housing Projects (P) Ltd., which had specifically required maintenance of status quo regarding services and consideration.

Conclusion

Holding that the reliefs sought under prayer clauses (a) and (d) amounted, in substance, to specific performance and enforcement of the JDA, the Court held that Section 9 jurisdiction is confined to preservation of the subject matter of arbitration and cannot be exercised to enforce contractual obligations. The petition was accordingly dismissed and the interim order protecting GCD was vacated, with the Court clarifying that the Sole Arbitrator would independently adjudicate the disputes on evidence.