Full Text
HIGH COURT OF DELHI
Date of Decision: 03rd September, 2025
VALUE LINE INTERIORS PVT. LTD. AND ORS. .....Plaintiffs
Through: Mr. Sameer Rohatgi, Mr. Namit Suri, Mr. Rameezuddin Raja & Ms. Tanya Sharma, Advocates.
Through: Mr. Sourabh Saini & Ms. Niharika Rai, Advocates.
JUDGMENT
1. This application has been filed on behalf of the defendants seeking leave to defend the present summary suit.
2. Brief facts necessary for deciding the present application are as follows: i. The plaintiffs have filed the summary suit under Order XXXVII of the Code of Civil Procedure, 1908 (CPC), seeking a money decree for a sum of Rs. 5,08,00,000/-. ii. It is stated that the plaintiff no.1 is a well-known name in the interior designing industry. The plaintiffs no.2 and 3 are the Directors of the plaintiff no.1. iii. The defendant no.1 is engaged in real estate activities and the defendant no.2 is the Director of the defendant no.1. iv. It is the case of the plaintiffs that in and around March-April, 2018, the defendant no.2 had met the plaintiffs, wherein the defendant no.2 had advocated a scheme of ‘barter of the properties’ to the plaintiffs and had assured the plaintiffs that the plaintiffs would profit from such arrangement. v. According to the aforesaid scheme, the plaintiffs could exchange one property for another and the differential amount as agreed between the defendants and the plaintiffs could be carried forward for adjustments towards future transactions. vi. To gain the confidence of the plaintiffs, the defendant no.2 represented to have partnered with big builders in the past and approached the plaintiffs no.2 and 3 to purchase certain properties and the plaintiffs, at the behest of the defendants, entered into certain purchase and sale transactions in respect of some of the properties. vii. The defendant no.2 approached the plaintiffs in April 2018 with the proposal to purchase a property, i.e. second floor of the residential unit no. K-3/1, DLF, Phase-II (hereinafter ‘First Property’), which was notionally valued between the plaintiff no.2 and defendant no.2 at Rs. 2,12,50,000/-. viii. The plaintiff no.2 agreed to purchase the aforesaid property and paid a sum of Rs. 10,00,000/- to the defendants. The balance consideration was to be paid in the following manner, as given in paragraph 7 of the plaint: ix. Towards the purchase of the First Property, a sum of Rs. 1,10,00,000/- was paid by the plaintiffs to a third party at the behest of the defendants. At the request of the defendant no.2, the balance amount of Rs. 1,02,50,000/- outstanding and payable to the defendants by the plaintiffs was carried forward for adjustments towards future transactions. x. Around the same period, the defendant no.2 induced the plaintiffs no. 2 and 3 to sell the property bearing unit no. B-067, area measuring 400 sq. yards built up area 5691 sq. ft. Sobha International City, Sector 109, Gurugram (hereinafter 'Second Property'), which stood in the name of the plaintiff no.1. The said property was notionally valued for a sum of Rs. 5,05,00,000/-. xi. Towards the purchase of the Second Property, a total amount of Rs. 3,00,00,000/- was paid to the account of the plaintiff no.1 by the defendants and the balance amount of Rs. 2,05,00,000/-, which had accrued in favour of the plaintiffs, was carried forward for adjustments towards future transactions. xii. To be noted, after the aforesaid two transactions in respect of the First Property and the Second Property, an amount of Rs. 1,02,50,000/- had accrued in favour of the plaintiffs, which was payable by the defendants, as provided in paragraph 13 of the plaint. xiii. Meanwhile, the defendant no.2 proposed another transaction to the plaintiff no.2 whereby two shops bearing no., i.e. G-22 and G-29 situated in Spaze Plazo in Sector 69, Gurugram (hereinafter ‘Third Property’) were offered to be sold to the plaintiffs. The considered/ agreed amount for the purchase of the Third Property was to the tune of Rs. 4,65,00,000/-. xiv. The consideration amount of Rs. 4,65,00,000/- was to be paid by the plaintiffs after adjusting the amount of Rs. 1,02,50,000/- that had accrued in favour of the plaintiffs by the previous transactions. Therefore, after adjusting the excess balance, the net payable amount towards the Third Property, to be paid by the plaintiffs stood as Rs. 3,62,50,000/-. xv. For the purchase of the Third Property, a sum of Rs. 3,42,50,000/was paid by the plaintiffs to the defendants along with a further sum of Rs. 20,00,000/- in cash. The details of the payments are provided in paragraphs 17 and 18 of the plaint. xvi. At the time of the transaction with respect to the Third Property, it was orally agreed between the defendants and the plaintiffs that in case the defendants fail to transfer the said two commercial units (Third Property) in favour of the plaintiffs, the amount paid by the plaintiffs shall be treated as a loan/ debt legally recoverable by the plaintiffs from the defendants. xvii. It is the case of the plaintiffs that even after receiving the sale consideration towards the Third Property, the defendants neither paid the assured rents nor conveyed the title in respect of the Third Property in favour of the plaintiffs. xviii. The defendants issued twelve (12) post-dated cheques amounting to Rs. 5,12,74,000/- towards returning the principal amount paid by the plaintiffs towards the purchase of the aforesaid properties along with interests. Details of the post-dated cheques are given in paragraph 22 of the plaint. xix. The plaintiffs submit that only three (3) out of the aforesaid cheques bearing cheque numbers 000360, 000361 and 000364, amounting to an aggregate of Rs. 4,74,000/-, got cleared and the remaining cheques got dishonoured, in respect of which the plaintiffs have filed criminal complaint under Section 138 of the Negotiable Instruments Act, 1881. xx. Accordingly, the present suit has been filed seeking recovery of an amount of Rs. 5,08,00,000/- along with pendente lite and future interests at the rate of 18% per annum.
PROCEEDINGS IN THE SUIT
3. Summons in the present summary suit were issued on 28th March 2023. Thereafter, the defendant entered appearance on 19th April 2023.
4. I.A. 11917/2023 was filed on behalf of the plaintiffs for the issuance of summons of judgment. Summons for judgment were issued on 5th July
2023.
5. I.A. 16401/2023 seeking leave to defend the present summary suit was filed by the defendants under Order XXXVII Rule 3(5) of the Code of Civil Procedure, 1908, in which notice was issued on 29th August 2023. The plaintiffs have filed a reply to this application.
SUBMISSIONS OF THE DEFENDANTS
6. The main ground taken by the defendants is that the defendants suffered losses on account of the plaintiffs not paying the balance amount of Rs. 1,02,50,000/-. Hence, the defendants forfeited the amount of Rs. 3,42,50,000/-.
7. It is contended on behalf of the defendants that originally the plaintiffs were to purchase shops bearing no. G-2 and G-3, Space Plazo, Sector 69, Gurugram, which were of the value of INR. 6,45,00,000/-. However, since the plaintiffs did not have the financial resources to make the said payment, the properties were changed to G-22 and G-29 situated in Spaze Plazo in Sector 69, Gurugram (Third Property) and the sale consideration got reduced to Rs. 4,45,00,000/-.
8. It is contended on behalf of the defendants that the amount of Rs. 3,42,50,000/- received from the plaintiffs has not been retained by the defendants but has been disbursed to third parties, namely Mr. Balbir Singh Wadhwa and Mr. Pravesh Arora.
SUBMISSIONS OF THE PLAINTIFFS
9. Mr. Namit Suri, counsel appearing on behalf of the plaintiffs, submits that an unequivocal admission has been made on behalf of the defendants in a criminal complaint dated 4th July 2020 filed by the defendants, wherein the defendants have admitted receipt of Rs. 3,42,50,000/- from the plaintiffs. He further submits that the defendants could not have forfeited this amount on a unilateral basis. Reliance in this regard is placed on the judgment passed in Swaranjit Singh Sayal v. M.K. Jain in CS(OS) 3980/2014.
10. It is further submitted that, in terms of the Agreement to Sell dated 5th March, 2018, the defendants did not have title in respect of the Third Property. Hence, the defendants could not have passed on the title to the plaintiffs.
11. Mr. Suri submits that no such submission as to the disbursal of the amount of Rs. 3,42,50,000/- by the defendants to the third parties has been made in the application seeking leave to defend.
OBSERVATIONS AND FINDINGS
12. I have heard the counsels for the parties and perused the relevant record.
13. At the outset, the attention of this Court has been drawn to the complaint dated 4th July, 2020, filed on behalf of the defendants to the Deputy Commissioner of Police, Gurugram, wherein the defendants have clearly admitted receipt of a sum of Rs. 3,42,50,000/- from the plaintiffs through banking channels. The relevant paragraph from the said complaint is reproduced below:
14. In this regard, reference may be made to the order passed by the Predecessor Bench on 5th December 2024. The relevant paragraphs of the said order are set out below:
make a deposit for a sum of Rs. 3,42,50,000/-, the plaintiffs have no objection if the conditional leave of defend is granted to the defendants.
3. Learned counsel for the defendants is directed to take instructions on the aforesaid submissions of the plaintiffs and make a deposit of the said amount within a period of four (4) weeks from today.
4. Subject to making the said payment, this Court will consider granting conditional leave to defend to the said defendants.”
15. In the order dated 4th March 2025, the submission of the counsel for the defendant was noted that the defendant is not in a position to deposit the aforesaid amount.
16. Even in the course of arguments today, the counsel for the defendants has not disputed the aforesaid amount being received by the defendants.
17. The defence taken by the defendant is that the defendants have forfeited the aforesaid amount of Rs. 3,42,50,000/-, as the plaintiffs did not pay the balance amount of Rs. 1,02,50,000/-. However, nothing has been brought to the notice of the Court that authorised the defendants to forfeit the aforesaid amount. There is no written agreement between the parties in terms of which the defendants could have forfeited the amount.
18. In this regard, the plaintiffs have correctly placed reliance on the judgment of the Coordinate Bench in Swaranjit Singh Sayal v. M.K. Jain in CS(OS) 3980/2014, wherein a similar defence taken by the defendant in the said case, has been rejected. In this regard, paragraphs 24 and 27 of the said judgment are set out below: “24. When the defendant’s plea that there was an oral agreement entitling him to forfeit the sum of Rs.[3] crores received from the plaintiff is considered in the light of his aforesaid conduct, the same has to be necessarily rejected. Once it is clear that on the date of receipt of the amount by the defendant, he could not have executed any sale deed in favour of the plaintiff despite having received the sum of Rs.[3] crores from him, I have no hesitation in holding that this defence sought to be raised by the defendant that the amount, though received by him from the plaintiff stood forfeited in terms of Section 74 of the Act, is wholly sham, vexatious and moonshine. This attempt by the defendant to raise the baseless defence of a purported oral agreement raised by the defendant is a mere attempt to continue to deprive the plaintiff of the amount which he paid to the defendant more than a decade ago and must be curbed. *** *** *** ***
27. For the aforesaid reasons, the application for leave to defend, being meritless, is dismissed. Consequently, a decree is passed in favour of the plaintiff and against the defendant for recovery of a sum of Rs.[3] crores along with interest @10% per annum with effect from 06.01.2012 till the date of institution of the present suit, along with pendente lite and future interest at the same rate of 10% per annum till the date of recovery. The plaintiff will also be entitled to costs of the suit as per the schedule. Decree sheet be drawn up accordingly.”
19. Mr. Namit Suri has also drawn attention of the Court to a lease deed dated 13th September, 2016, executed by one Mr. Balbir Singh Wadhwa in favour of M.K. Jain Enterprises in respect of property bearing no. G-22 situated in Spaze Plazo in Sector 69, Gurugram and an Agreement to Sell dated 5th March 2018 in respect of property bearing no. G-29 situated in Spaze Plazo in Sector 69, Gurugram, to demonstrate that the defendants did not have title in the aforesaid properties that could have been passed on to the plaintiffs.
20. A perusal of the aforesaid documents leaves no doubt in the mind of the Court that the defendants did not have title in the aforesaid properties that could have been conveyed to the plaintiffs. The defendants have not placed on record any document to show that they had the title in the aforesaid properties.
21. Counsel for the defendants has submitted that initially, the plaintiffs were to purchase the shops bearing no. G-2 and G-3, Space Plazo, Sector 69, Gurugram, which was subsequently changed to the purchase of shops bearing no. G-22 and G-29 situated in Spaze Plazo in Sector 69, Gurugram (Third Property). This would have no bearing on the adjudication of the present application, as the defendants had acknowledged the change in the shops to be sold and had consequently agreed to sell the Third Property. Reference may be made to the legal notice dated 30th December 2020 issued by the defendants to the plaintiffs, thereby acknowledging the fact of the change in shops to be sold to the plaintiffs and the consequential reduction in the sale consideration from Rs. 6,45,00,000/- to Rs. 4,45,00,000/-.
22. In view of the discussion above, I am of the view that the defendants have no substantial defence insofar as the amount of Rs. 3,42,50,000/- is concerned, the receipt of which has been admitted by the defendants. Clearly, the defence set up by the defendants is vexatious and amounts to moonshine.
23. In view of the clear and categorical admission made by the defendants that they have received a sum of Rs. 3,42,50,000/- from the plaintiffs, no grounds for granting the leave to defend are made out in respect of the said amount.
24. Insofar as the remaining amount claimed in the suit is concerned, unconditional leave is granted to the defendants to contest the same.
25. Accordingly, the application is partially allowed.
26. In view of the order passed above rejecting the leave to defend in respect of the amount of Rs. 3,42,50,000, a decree of Rs. 3,42,50,000/- is passed in favour of the plaintiffs and against the defendants.
27. The plaintiffs shall also be entitled to interest at the rate of 9% per annum from the date of filing of the suit till the date of realisation.
27.1. For the remaining amount, the suit shall proceed for trial.
28. Issue summons.
29. Summons are accepted by counsel appearing on behalf of the defendants.
30. Written statement(s) be filed within thirty (30) days from today. Along with the written statement(s), the defendants shall also file affidavit(s) of admission/denial of the documents of the plaintiffs, without which the written statement(s) shall not be taken on record.
31. Liberty is given to the plaintiffs to file replication(s), if any, within thirty (30) days from the receipt of the written statement(s). Along with the replication(s) filed by the plaintiffs, affidavit(s) of admission/denial of the documents of the defendants be filed by the plaintiffs.
32. The parties shall file all original documents in support of their respective claims along with their respective pleadings. In case parties are placing reliance on a document, which is not in their power and possession, its detail and source shall be mentioned in the list of reliance, which shall also be filed with the pleadings.
33. If any of the parties wish to seek inspection of any documents, the same shall be sought and given within the timelines.
34. List before the Joint Registrar on 12th November, 2025.
35. List before the Court on 26th February, 2026. AMIT BANSAL, J SEPTEMBER 3, 2025