Delhi District Court
Satish Kumar Malhotra vs Manoj Vats on 8 January, 2026
IN THE COURT OF DISTRICT JUDGE
(COMMERCIAL COURT)-02, SOUTH WEST DISTRICT,
DWARKA COURTS, NEW DELHI
CS (COMM.) No. 537/2024
CNR NO.: DLSW01-010509-2024
IN THE MATTER OF: -
Mr. Satish Kumar Malhotra
S/o Late Sh. Gela Ram Malhotra
R/o B-9/6396, Vasant Kunj,
New Delhi -110070.
. . . . . Plaintiff
Versus
Mr. Manoj Vats
S/o Sh. Samrath Kumar
R/o House No 22, VPO- Mitraon Village,
Najafgarh, South-West,
Delhi - 110043.
. . . . . Defendant
SUIT FOR PERMANENT & MANDATORY INJUNCTION
AND DAMAGES
Date of Institution : 05.11.2024
Date of reserving Judgment : 22.12.2025
Date of pronouncement of Judgment : 08.01.2026
J U D G M E N T :-
1. Vide this judgment, I shall decide the present suit filed by the plaintiff for permanent & mandatory injunction and CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 1 of 19 damages against the defendant.
2. At the outset, it may be noted that Ld. Predecessor of this Court raised issue of maintainability of the suit before this Court in the light of averments made in para 19 of the original plaint regarding valuation of the suit as per which the suit was below the pecuniary jurisdiction of this Court. Accordingly, an application under Order VI Rule 17 CPC was moved by the plaintiff seeking amendment in the valuation of the suit and to pay the court fee accordingly. The said application was allowed by the Ld. Predecessor vide order dated 21.01.2025 and the amended plaint was taken on record.
3. The case of the plaintiff as set out in the amended plaint, in nutshell, is as under: -
3.1. The plaintiff is sole proprietor of M/s Malhotra Construction Company (in short 'MCC') and is involved in the business of construction activities, supply of building materials etc. The plaintiff has executed various construction and infrastructure projects for various Government agencies including MES, CPWD, NHPC, etc. since the year 1979 and is known to be a credible executing agency in the infrastructure and construction space in India.
3.2. Around 2019, the defendant who is also involved in the business of the construction activities approached the plaintiff and offered a proposal to enter into a partnership with the plaintiff in his proprietary firm i.e. MCC. The proposal was considered by the plaintiff and both the parties CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 2 of 19 were engaged in further discussion regarding the terms of partnership.
3.3. In the meanwhile, the Military Engineering Services ('MES') floated a tender no. 2018_MES_197704 bearing reference GE(1) R & D Chandipur Balasore vide CA No. CE R&D/DLI-03/CHANDI/2019-2020 for the project 'Provision of Single Living Accommodation for additional DSC Platoons allotted to ITR, Chandipur' (hereinafter referred to as 'MES Chandipur Project'). Since the plaintiff was one of the enlisted contractors with the MES, the defendant proposed to place the bid for the said work through plaintiff proprietary firm, namely, MCC, which was agreed by the plaintiff and it was decided that the work would be undertaken in partnership. Subsequently, MCC emerged as the successful bidder in relation to the aforesaid tender and the contract was awarded to the MCC.
3.4. A bank account bearing No. 0521010100000415 was opened in the name of "M/s Malhotra Construction Company" in Jammu and Kashmir Bank, Dwarka Branch, for the purpose of the transactions with relation to the MES Chandipur Project. The said account was joint bank account in the name of plaintiff and the defendant.
3.5. As the aforesaid contract was to be executed at Chandipur, Balasore, Odisha, a new GST registration under no. 21ABFPM8804N1ZH in the name of plaintiff trading as M/s Malhotra Construction Company (Proprietorship) was CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 3 of 19 applied for and procured on 17.01.2020. The said GSTIN was to be solely used for the transactions in relation to MES Chandipur Project and for no other purpose whatsoever.
3.6. Subsequently, the defendant started executing the works in relation to the MES Chandipur Project. However, in the intervening period, various irreconcilable disputes arose between the plaintiff and the defendant and various rounds of discussion were held to settle the disputes. Eventually a settlement agreement titled "Memorandum of Agreement and Settlement Agreement" dated 30.03.2023 (hereinafter referred to as "Settlement Agreement") was executed, terms of which were binding on the parties and have been detailed in para no. 8 of the plaint.
3.7. However, despite the agreed terms under the Settlement Agreement, the defendant is still continuing to use the Bank Account no. 0521010100000415 maintained with Jammu and Kashmir Bank, Dwarka Branch, New Delhi for making transactions with various entities without any authorization and consent of the plaintiff and the bank account statement reveals that the defendant has made payments to various private entities by using this bank account. The defendant has also made various payments to the GST department.
Even the access details for login in the GST portal for the GST registration No. 21ABFPM8804N1ZH of the plaintiff have been changed by the defendant without any information or consent of the plaintiff.
CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 4 of 19 3.8. It is stated that the actions of the defendant are clearly in breach and violation of the terms of the Settlement Agreement dated 30.03.2023 and the unauthorized use of the plaintiff's name, bank account and other governmental credentials including GST registration by the defendant for soliciting business is illegal and fraudulent and prejudicial to the plaintiff's goodwill and reputation. The plaintiff issued a legal notice dated 14.11.2023 to the defendant with regard to unauthorized use of his tradename, bank account, GSTIN and asked for rendition of accounts but to no avail. Hence, the present suit.
3.9. The plaintiff by way of present suit has sought decree of permanent injunction in his favour and against the defendant thereby restraining the defendant, his partners, agents, affiliates, sister concerns, related entities or anyone acting on his behalf, from (1) using / carrying any business in the name of the plaintiff and/or his proprietary firm namely "M/s Malhotra Construction Company"; (2) using GSTIN No. 21ABFPM8804N1ZH in the name of the plaintiff trading as "Malhotra Construction Company" and (3) from using the plaintiff's bank account no. 0521010100000415 maintained in Jammu and Kashmir Bank, Dwarka, New Delhi. The plaintiff has also sought decree of damages of Rs. 5,00,000/- in his favour and against the defendant for unauthorized use of his firm's name, GSTIN and bank account by the defendant.
4. On being served with the summons of the suit, the CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 5 of 19 defendant has contested the suit by filing written statement wherein it is denied that around 2019, the defendant approached the plaintiff offering a proposal to enter into a partnership with the plaintiff in his proprietary firm i.e. MCC. It is stated that it was the representative of the plaintiff who approached the defendant to meet the plaintiff and further enter into partnership. The defendant has not disputed the floating of tender by the MES for its Chandipur Project and award of the said contract to the proprietorship firm of the plaintiff i.e. MCC. However, it is stated that there was a mutual understanding and agreement between the plaintiff and the defendant and they moved a letter/application to the MES for conversion of proprietorship into partnership in MES. While the same was under process, MES floated the tender for Chandipur Project. The plaintiff was one of the enlisted contractors with MES and since partnership was not yet functional as the entity has not yet changed its constitution in MES, both the plaintiff and the defendant agreed that the defendant would propose the bid for the said project work through Plaintiff's proprietary firm, namely, MCC and it was decided that the work would be undertaken in partnership. It is further stated that the contract was awarded to MCC and there was clear understanding of partnership between the parties.
5. The defendant has also not disputed the opening of bank Account in Jammu and Kashmir Bank, Dwarka Branch, New Delhi, however it is denied that the bank account was in the name of the plaintiff and the defendant. It is stated that the bank CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 6 of 19 account was a general current account which was opened in the capacity of a partnership i.e M/s Malhotra Construction Company, entered between two individuals i.e. the plaintiff and the defendant and the authorized signatory earlier was Mr. Vikas Vats which further updated to Mr. Manoj Vats. It is further stated that even the PAN card used to open the account was of partnership and not on individual basis. The defendant has not denied the contents of para 8 of the plaint wherein the terms of the Settlement Agreement dated 30.03.2023 arrived at between the parties have been listed. However, the defendant has denied allegation of unauthorized use of the bank account, and GST number as claimed in the plaint, though he has not denied the various payments made to the GST department. It is stated that as a contractor, several payments were to be made to the workers, entities, and department and since the bank account is of the Partnership firm and not for the plaintiff /individual use and it was the defendant who was doling all the payment for the project, no authorization/consent was ever needed for doing any transaction. It is further stated that GST is a statutory lability which has to be paid as per law and there are no violation by the defendant. The defendant has denied change of access details of the GST. It is stated that it was the plaintiff who time and again violated the agreement and refused to sign certain documents due to which the defendant has suffered loss of around Rs. 10 lakh as the plaintiff has got the POA cancelled which he issued in terms of the agreement without informing the same to the defendant. The other contents of the plaint are stated to be wrong and denied and the defendant has prayed for CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 7 of 19 dismissal of the suit.
6. The plaintiff has filed the replication to the written statement filed by the defendant wherein averments made in the plaint have been reiterated and reaffirmed and those made in the written statement have been controverted.
ISSUES:
7. From the pleadings of the parties, following issues were framed for adjudication by the Ld. Predecessor vide order dated 19.05.2025 : -
1. Whether the plaintiff is entitled for a decree of permanent injunction , as prayed for in the plaint?
OPP.
2. Whether the plaintiff is entitled for damages of Rs. 5,00,000/- from the defendant, as prayed for in the plaint? OPP.
3. Relief .
8. It is pertinent to note that when the matter was fixed for final arguments, an application under Order 14 Rule 5 CPC was moved by the plaintiff to frame the additional issue. The said application was allowed vide order dated 17.11.2025 and following additional issue was framed: -
(1) Whether plaintiff is entitled to the decree of rendition of accounts, as prayed? OPP.
CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 8 of 19 EVIDENCE LED BY THE PARTIES
9. In support of its case, the plaintiff has examined himself as PW-1 and filed his evidence by way of affidavit Ex.PW1/A wherein he has deposed in terms of the averments made in the plaint. He has relied upon the following documents:-
Sr. Details of documents Exhibit
No.
1. None Starter Report Ex.PW1/1
2. Memorandum of Agreement Ex.PW1/2
and Settlement Agreement
3. Copy of GSTIN Registration Mark X-1
Certificate under No.
21ABFPM8804
4. Income tax document Mark X-2
5. Statement of account of Mark X-3
Jammu & Kashmir Bank,
Dwarka Branch
6. Legal notice along with Ex.PW1/3
tracking report and Whats
App screenshot
10. The defendant has also examined himself as DW-1 and filed his evidence by way of Ex.DW1/A in terms of the averments made in the written statement. He has relied upon the following documents:-
Sr. Details of documents Exhibit
No.
1. Copy of PAN card of the Ex. DW1/1
Partnership firm M/s
Malhotra Construction
CS (Comm.) No.: 537/2024
Satish Kumar Malhotra vs. Manoj Vats Page 9 of 19
Sr. Details of documents Exhibit
No.
Compony
2. Copy of Operation Ex. DW1/2
instruction of the bank
account of the Partnership
firm signed by the plaintiff
3. Copy of MES Contractor Ex. DW1/3
Order Sheet
4. Copy of Completion Ex. DW1/4
Certificate issued by MES
5. Copy of Partnership Deed Already Ex.PW1/D1
(mentioned as
Ex. DW1/5 in the
evidence affidavit)
6. Copy of reply to the letter Ex.DW1/6
issued by the plaintiff for
conversion of
proprietorship to
partnership (change of
constitution)
7. Certificate under Section Ex.DW1/7
63 (4) C of Bharatiya
Sakshya Adhiniyam, 2023
11. I have heard Ld. Counsel for the parties and perused the record. I have also gone through the written arguments filed on behalf of the plaintiff.
FINDINGS AND ANALYSIS
12. On the basis of material available on record and the evidence led by the parties, my issue-wise findings are as under:-
CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 10 of 19 Issue No.1 (Whether the plaintiff is entitled for a decree of permanent injunction , as prayed for in the plaint? )
13. The onus to prove this issue was placed upon the plaintiff.
14. From the pleadings of the parties, it is not in dispute that the plaintiff is involved in the business of construction activities and supply of building material etc and running his business in the name of sole proprietorship firm M/s Malhotra Construction Company (MCC) and that the defendant is also involved in the business of construction activities. It is also not in dispute that a Partnership Deed dated 06.01.2020 Ex. PW1/D1 was executed between the parties by which they agreed to carry on their business of construction, as suppliers, contractors etc. in partnership in the name and style of plaintiff's firm M/s Malhotra Construction Company (MCC).
15. There is also no dispute to the fact that Military Engineering Services ('MES') floated a tender for its Chandipur Project at Balasore, Odisha and since the plaintiff was one of the enlisted contractors with MES, the defendant placed the bid for the said work through plaintiff proprietary firm MCC and it was decided that the said work would be undertaken in partnership by the plaintiff and the defendant. The said contract was awarded to the plaintiff firm MCC which fact is also not in dispute. It is also not in dispute that a joint account in the name of the plaintiff and the defendant was CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 11 of 19 opened in the name of plaintiff's firm MCC with Jammu and Kashmir Bank vide bank account no. 0521010100000415 and a new GST Number 21ABFPM8804N1ZH was procured on 17.01.2020 in the name of plaintiff's proprietary firm MCC which were to be solely used for transactions related to MES Chandipur Project. It is also an admitted position that during execution of work in relation to MES Chandipur Project, some disputes arose between the parties, which was resolved by entering into a Memorandum of Agreement and Settlement Agreement dated 30.03.2023 Ex. PW1/2.
16. As per the said Settlement Agreement Ex. PW1/2, it was agreed between the parties, inter alia, that the defendant would continue to execute the MES Chandipur Project till its final completion and will be entitled and liable for all the risks and rewards, liabilities, banking transactions, any statutory liabilities (like VAT, GST, Income Tax, Provident Fund etc.) in relation to the MES Chandipur Project and the plaintiff shall have full ownership, right, title and interest in M/s Malhotra Construction Company (MCC) with no share, stake or any right in favour of the defendant except the risk and rewards as noted above in relation to the MES Chandipur Project. It was also agreed that the defendant would not undertake or conduct any further business in the name and style of MCC and the bank A/C No. 0521010100000415 and the GST Registration No. 21ABFPM8804N1ZH in the name of MCC would not be used by the defendant for any further transactions except for the transactions concerned with the execution of works in relation CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 12 of 19 to MES Chandipur Project.
17. Now, the grievance of the plaintiff is that the despite the aforesaid terms agreed under the Settlement Agreement Ex. PW1/2, the defendant is still continuing to use the bank A/C No. 0521010100000415 for making transactions with various entities, which do not belong to the MES Chandipur Project. It is also claimed by the plaintiff that various payments have also been made by the defendant to the GST department and even the defendant has changed the access details of the GST number to login the GST portal without his knowledge.
18. The defendant in the written statement has denied the allegations of the plaintiff of unauthorized use of his tradename, bank account and GSTIN. He took a categorical stand that the bank account and the GST registration number do not belong to the plaintiff exclusively and the same belong to the partnership. It is also contended by the defendant that being a contractor, several payments have to be made to workers, entities and departments and the GST is a statutory liability which has to be paid as per law and hence there is no violation on his part.
19. Since the onus to prove this issue was on the plaintiff, he has examined himself as PW-1 and reiterated the averments made in the plaint in his examination-in-chief filed by way of affidavit Ex. PW1/1.
20. During his cross-examination, PW-1 (the plaintiff) has admitted that a partnership deed was executed between him and the defendant. He stated that this partnership deed was executed CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 13 of 19 for only one work. He was shown the partnership deed dated 06.01.2020 Ex. PW1/D1 from the record and after seeing the same, he admitted the same to have been executed with the defendant and his signature at point A on each page. He admitted that no where in the Ex. PW-1/D1, it is mentioned that the partnership is only limited to one work. He further admitted that they have applied the same partnership deed to be registered with the MES( Military Engineering Services). He did not know that the Bank account no. 0521010100000415 as mentioned by him in Para 4 and 7 of his affidavit pertains to the partnership deed. He admitted that the MES contract at Balasore, Odissa was entered into under the name of Malhotra Construction Company by the defendant with his consent. He further admitted that as per the MOU Ex. PW-1/2, the defendant had full freedom to execute the MES contract at Balasore Odissa and every tax including GST, income tax, any other govt. taxes as applicable was the liability and responsibility of the defendant and he could also reap all the benefits arising out of the said contract. PW-1 could not tell any other work apart from the MES contract at Balasore Odissa, which defendant has executed in the name of Malhotra Construction Company. He did not know whether he has written any letter to MES cancelling the power of attorney issued by him to the defendant/his representative as per MOU Ex. PW-1/2. He admitted that the Bank account No. 0521010100000415 was the joint account. He did not know as to how the defendant had misused the joint account. He admitted that the defendant had his consent for usage of his GST No, Pan No. and Joint Bank CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 14 of 19 Account for the MES Project Balasore, Odissa. He further admitted that the defendant has not used GST, PAN and Joint Account for any other work other than MES Project at Balasore, Odissa and he is still doing it.
21. From the aforesaid cross-examination of PW-1 (the plaintiff), the case of the plaintiff is totally shattered and it is apparent that the plaintiff has not been able to prove the allegations made in the plaint or in his affidavit filed towards examination-in-chief.
22. On the other hand, the defendant has examined himself as DW-1 and has deposed more or less as per the averments made in the written statement in his evidence. In his cross- examination, DW-1 (the defendant) has stated that he himself and the plaintiff had opened the joint account. He denied the suggestion that plaintiff had not accompanied him to the Bank for the purpose of opening the joint account. He stated that the plaintiff's proprietorship concern was registered with the MES and pursuant to formation of partnership with the plaintiff, they had applied before the Chief Engineer, Udhampur, where the plaintiff's firm was registered for change of constitution of the firm from proprietorship to partnership but the same was rejected as plaintiff had furnished forged document of his property. He further stated that he had personally apprised the plaintiff about the submission of forged document of his property with the MES, Udhampur, resulting in rejection of change in the constitution. He admitted that he had completed the work at the site of Chandipur, Orissa. He denied the CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 15 of 19 suggestion that any other work was done in the name of Malhotra Construction company, other than the work related/in connection to Chandipur, Orissa.
23. From the aforesaid cross-examination of DW-1 (the defendant), it is evident that nothing material could be extracted by the Ld. Counsel for the plaintiff to impeach his testimony. Rather the testimony of DW-1 on the material aspects has gone unchallenged and not a single question has been put to him on the assertions that GST payments were made as per the law being the statutory liability; and that payments made to the worker, departments and entities were made in relation to the MES Chandipur Project and no authorization or consent was even needed for doing any transaction as it was the defendant who was doling all the payment for the project; and that the bank account and the GST registration number were of the partnership and not for plaintiff's individual use.
24. In the light of the aforesaid evidence led by the parties, it is quite clear that the plaintiff has not been able to prove its case that the defendant has misused his tradename and the bank account and the GST registration number which were obtained exclusively for MES Chandipur Project. Rather PW-1 (the plaintiff) during his cross-examination admitted that the defendant had full freedom to execute the MES contract at Balasore Odissa and he could also reap all the benefits arising out of the said contract. He could not tell any other work apart from the MES contract at Balasore Odissa, which defendant has executed in the name of Malhotra Construction Company. The CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 16 of 19 plaintiff neither in the plaint nor in his examination-in-chief has specified as to how the defendant has misused the joint account or GST number obtained in his firm's name exclusively for the MES Chandipur Project. This fact is evident from the cross- examination of PW-1 (the plaintiff) as he did not know as to how the defendant has misused the joint account. As per his own admission, the defendant had his consent for usage of his GST Nunber, PAN Number and joint Bank Account for the MES Porject Balasore, Odissa and the defendant has not used the same for any other project.
25. The plaintiff has also failed to examine any other witness from the Govt. department/bank to show that the defendant has carried out the transactions using GST number of the plaintiff firm for any other business activities other than MES Chandipur Project or has made the banking transactions in respect of other business transactions or with third parties other than the transactions related to the MES Chandipur Project. The plaintiff is not aware of the said transactions allegedly done by the defendant other than the transactions related to MES Chandipur Project and has only made bald and vague allegations against the defendant. The plaintiff has miserably failed to lead any shred of evidence in support of the allegations made in the plaint.
26. Admittedly, in terms of the Settlement Agreement/MoU Ex.PW1/2, it was the liability of the defendant to execute the work related to MES Chandipur Project and he was entitled to use the GST number of the plaintiff firm and the joint bank CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 17 of 19 account belonging to the plaintiff and the defendant as also admitted by the plaintiff in his cross-examination. Therefore, the plaintiff cannot have any grudge and grievance in fulfilling the said obligations by the defendant towards completion of MES Chandipur Project.
27. In view of the aforesaid discussions, in my considered opinion, the plaintiff has failed to discharge the onus to prove this issue. Hence, the plaintiff cannot be held entitled for decree of permanent injunction as prayed for. Accordingly, this issue is decided against the plaintiff and in favour of the defendant.
Issue No.2 (Whether the plaintiff is entitled for damages of Rs. 5,00,000/- from the defendant, as prayed for in the plaint? )
28. The onus to prove this issue was on the plaintiff.
29. In view of my findings under issue No. 1, since the plaintiff has not been able to prove that the defendant has misused the name of the plaintiff firm or GST number or the joint bank account belonging to both the parties or has done any act contrary to terms of MoU Ex. PW1/2, the plaintiff cannot be held entitled for damages of Rs. 5,00,000/- as prayed for. Hence, this issue is decided against the plaintiff and in favour of the defendant.
Additional Issue No. (1) Whether plaintiff is entitled to the decree of rendition of accounts, as prayed?
CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 18 of 19
30. The onus to prove this issue was again placed on the plaintiff.
31. The plaintiff has failed to lead any evidence to show that the defendant has made illegal gain by misusing the name of plaintiff firm, GST registration number of the plaintiff firm or misusing the joint bank account belonging to both the parties and further in view of my findings under Issue no. 1 that the plaintiff has miserably failed to prove that the defendant has used the GST number and the joint account for the work other than the MES Chandpur Project, the plaintiff cannot be held entitled for decree of rendition of accounts. Hence, this issue is decided against the plaintiff and in favour of the defendant.
RELIEF
32. As a sequel to my findings under Issue No. 1, 2 and Additional Issue No. (1), the suit filed by the plaintiff is dismissed. No order as to cost.
33. Decree sheet be prepared accordingly.
34. File be consigned to Record Room, after due compliance.
Digitally signed by BALWANT Announced in the open Court BALWANT RAI BANSAL RAI Date: on 8th January, 2026 BANSAL 2026.01.08 15:55:12 +0530 (Balwant Rai Bansal) District Judge (Commercial Court)-02 South-West District, Dwarka Courts, New Delhi CS (Comm.) No.: 537/2024 Satish Kumar Malhotra vs. Manoj Vats Page 19 of 19