Delhi District Court
Kapil Kumar Sehgal vs Sanjeev Duggal on 20 March, 2026
CNR No. DLCT01-002843-2023
IN THE COURT OF SHRI DEVENDRA KUMAR SHARMA:
DISTRICT JUDGE (COMMERCIAL COURT)- 03: CENTRAL
TIS HAZARI COURT (EXTENSION BLOCK) : DELHI.
CS (COMM) No. 334/2023
In the matter of :-
Kapil Kumar Sehgal
2342/2, Kaziwara, Ambala City,
Ambala, Haryana-134003 ......Plaintiff
Versus
Sanjeev Duggal
S/o Sh. Ravinder Kumar
R/o 725/26
Street No.5, Punjabi Basti
Military Road, Anand Prabat
Karol Bagh, New Delhi ......Defendant
Date of Institution : 22.02.2023
Date on which Judgment reserved : 20.03.2026
Date on which judgment pronounced : 20.03.2026
SUIT FOR SPECIFIC PERFORMANCE
JUDGMENT
1. Before this Court set to adjudicate on myriad issues flagged on behalf of both the parties, let the Court to spell out laconically the landscape of the pleadings.
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 1 / 44
Digitally signed
Devendra by Devendra
Kumar Sharma
Kumar Date:
Sharma 2026.03.20
14:45:26
+0530
(A) Pleadings of the Parties:-
2. This is a suit for specific performance of a contract filed by plaintiff against the defendant.
3. Succinctly stated facts of the case as set out in the plaint are that the plaintiff is Ex-Director/shareholder in a Private Limited Company by the name of M/s Unicus Labs Private Ltd. (hereinafter referred to as 'company') and is residing at 2342/2, Kaziwara, Ambala City, Ambala, Haryana.
4. It has been further averred in the plaint that the defendant is a director in the above-named company and a business partner of the plaintiff since 2014.
5. It has been further averred that the plaintiff had left the employment and operations of the company on 12.02.2017 itself and since then the Defendant Sanjeev Duggal has been managing the business affairs of the Company including operations and financials. It has been further averred that in the month of October 2017, the plaintiff came back to his native place Ambala and decided to exit from the shareholding of the above-mentioned Company.
6. It has been further averred that in January 2018 upon taking a decision for exiting from the company, the Plaintiff proposed to sell his 5000 equity shares in the Company to the Defendant and on 29.01.2018, the Plaintiff and the Defendant reached to an oral agreement over the phone regarding the exit terms and the same were also mentioned in the email dated 29.01.2018.
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 2 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date: Sharma 2026.03.20 14:45:34 +0530
7. It has been further averred that on 31.01.2018, the defendant showed his disagreement to the consideration amount and insisted to reduce it to Rs.75,00,000/- and also gave a schedule of payment for the 50% shareholding of Plaintiff and all the other terms & Conditions mentioned in the mail dated 31.01.2018 were agreed by the Defendant. It has been further averred that on 02.02.2018, the plaintiff while responding to the abovementioned proposal by Defendant agreed for the quantum of consideration offered i.e. Rs.75,00,000/- but showed his reluctance to proposed flow of payment and instead advised another timeline for flow of payment while agreeing upon all the other terms & Conditions mentioned on 31.01.2018. On the same day i.e. 02.02.2018, the Defendant confirmed to the above- mentioned payment plan proposed by the Plaintiff.
8. It has been further averred that on 16.03.2018, the defendant made the first installment of Rs.20 lakhs by way of cheque bearing no. 005107 as per the exit terms agreed between both the parties. It has been further averred that the first payment itself was delayed for almost a month, which clearly shows the casual approach of the Defendant towards the agreement.
9. It has been further averred that on 07.03.2019, the defendant through an email reaffirmed his willingness to make the payment of Rs.75,00,000/- to the Plaintiff and also mentioned about appointing new director in the Company as the Defendant needed a director for the support of the Company. It has been further averred that the plaintiff responded to the same on the same day itself and had refused for appointment of a new CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 3 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:45:40 +0530 Director in the Company till the conditions mentioned in the exit terms were fulfilled and also stated that from his side no work was delayed as he had signed all the documents in the past related to Loan, Financials, Address Shifting etc. Despite this, the defendant failed to make the payment and failed to pay the installments of Rs.20,00,000/- in June 2018 and Rs.20,00,000/- in February 2019 as agreed between the parties.
10. It has been further averred that on 07.03.2019, the defendant through an email assured to pay all the amount together but later on postponed it by shifting the burden of liability on the plaintiff for not responding to the messages sent by the defendant to which, the plaintiff responded by saying that the defendant approached the plaintiff in the month of February 2019 for setting off the remaining amount of Rs.30,00,000/- to 40,00,000/-. It has been further averred that the conduct of the defendant clearly shows that he was making excuses for not paying the outstanding amount whereas on the other hand, the plaintiff was always ready and willing to do his part under the Agreement dated 29.01.2018.
11. It has been further averred that on 13.03.2019, the plaintiff, after having telephonic conversation with the defendant, gave additional time to the defendant to make the payment and in the said mail, the plaintiff gave an extension of 6 months for the February 2019 tranche which included 3 months interest free period. In reply to above mail, the defendant on 17.03.2019 shifted the burden of his liability and showed his disagreement of the abovementioned flow of funds made by the plaintiff and CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 4 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:45:48 +0530 stated that no interest shall be charged for payment by
12.09.2019 and also refused for interest on further delay. Thereafter, on 19.03.2019 the plaintiff replied through email to the above mentioned conditions made by the defendant on 17.03.2019 thereby accepted the condition of the defendant for delayed payment but refused to accept the waiver of the interest amount and also showed his willingness to sign the company documents. It has been further averred that on 19.03.2019 itself, the defendant replied to the message of the Plaintiff stating that the delay in the payment had occurred due to the loan taken by GMC (A brand of the Company) and the defendant cleverly tried to shift the burden of his liability on the plaintiff by stating that plaintiff was the one who never responded to the messages of the defendant on time due to which the defendant was not able to pay the outstanding amount on time despite several reminders given by the plaintiff to pay the outstanding balance. On 20.03.2019, the plaintiff again rejected the proposal of the defendant with respect to the waiver of the interest amount.
12. It has been further averred that the Plaintiff vide email dated 01.04.2019 again gave a fresh timeline to the Defendant for making the outstanding payment which was later amended by the defendant and said amendment was agreed by the Plaintiff, however, the defendant failed to abide by the same despite his commitment. It has been further averred that after much efforts, the defendant on 10.05.2019 made further payment of Rs.20 lakhs by way of two cheques bearing no. 847529 & 010006 of Rs.16,50,000/- and Rs.3,50,000/- both dated 10.05.2019 which were encashed on 15.05.2019.
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 5 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date: Sharma 2026.03.20 14:45:55 +0530
13. It has been further averred that on 16.10.2019, the plaintiff again reminded the defendant about the payment of Rs.20 lakhs which was supposed to be paid by September 2019 and requested the defendant to make the payment of Rs.35 lakhs before 25.10.2019, however, the defendant used delaying tactics and after so many requests made by plaintiff, the defendant on 18.01.2020 made further payment of Rs.5 lakhs to the Plaintiff. It has been further averred that such delayed payments on part of the defendant shows that he was only trying to mentally harass the plaintiff so that the Plaintiff might settle exit terms at a lower amount. It has been further averred that in the month of June and July 2020, the Defendant made further payment of Rs.5 Lakh in various tranches of small amounts against the exit terms which led to the total payment of Rs.50 lakhs till date.
14. It has been further averred that in the financial year 2019-20, the plaintiff transferred the shares worth of Rs.45 lakhs to the defendant and in the financial year 2020-21, the plaintiff transferred shares worth Rs. 5 lakhs which clearly shows that the plaintiff had been fulfilling his obligation completely. It has been further averred that the plaintiff communicated to defendant on numerous occasions for releasing the unpaid amount but no constructive response was received and the defendant willfully defaulted in making payment of the remaining amount of the agreement which caused lot of financial loss and mental stress to the plaintiff and he was forced to take the legal action.
15. It has been further averred that in accordance with Section 12A of the Commercial Courts Act, the plaintiff had CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 6 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:46:03 +0530 exhausted the remedy of pre-institution mediation and a Non- starter report has been issued by the Delhi State Legal Services Authority. It has been further averred that defendant is liable to pay the principal amount of Rs.25 lakhs and interest amount of Rs.12,80,000/- calculated @ 1% per month from the respective date of default i.e. 12.05.2018, 07.02.2019 and 07.02.2020 in terms of agreement dated 29.01.2018 and its addendum dated 02.02.2018 till the filing of the mediation application before DSLSA i.e. 14.09.2022. It has also been averred that the present suit has been filed within the limitation period in terms of order passed by the Hon'ble Supreme Court in Suo Motu Writ Petition No. 3 of 2020 and this court has territorial jurisdiction as the defendant resides within its jurisdiction.
16. Thus aggrieved, the plaintiff has filed the instant suit praying for a decree of Specific Performance of agreement/ Exit terms dated 29.01.2019 as amended from time to time against the Defendant for making full payment of Rs.37,80,000/- (i.e. Rs.25,00,000/- towards Principal amount and Rs.12,80,000/- towards interest) towards transfer of shares of Plaintiff alongwith pendente lite and future interest from the date of filing of the mediation application before Delhi State Legal Service Authority till the realization of the same. A prayer for directing the defendant to pay the Litigation costs of Rs.2,50,000/- has also been made.
17. The defendant has contested the suit by filing a detailed written statement. By way of preliminary submissions and objections, all the averments made in the plaint have been CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 7 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:46:09 +0530 denied except that the plaintiff was one of the Directors in M/s Unicus Infolabs Private Ltd. alongwith the Defendant and the defendant still continues to hold such position in the company. It has been averred that the Company was originally founded and promoted by Udai Meena & Bhola Meena and subsequently, the ownership of the Company was transferred by its original owners to the plaintiff, defendant & Apurba Kanti Mukherjee in 2014 for a substantial consideration and the shareholding of the Company was equally divided between Plaintiff, Defendant & Apurba Kanti Mukherjee i.e. 33.33% each. It has been further averred that subsequently in 2014, Apurba Kanti Mukherjee wanted to leave the Company and therefore, plaintiff and defendant had decided to purchase his shareholding in equal proportion as a result of which plaintiff and defendant became equal partners in the Company on 30.06.2014.
18. It has been further averred that the plaintiff and the defendant had divided their roles and responsibilities in the company for its smooth and efficient functioning and according to such division, the plaintiff was responsible for handling financial and legal affairs of the Company like tax compliances, banking, investments etc. whereas the defendant was tasked with running the operations of the Company. It has been further averred that the Plaintiff was responsible for the funding/acquisition of the company, transfer the company registration from Jaipur to Delhi, transfer the service tax/GST from Haryana to Delhi, which the plaintiff never completed but he was drawing salary for the said work.
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 8 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date: 2026.03.20 Sharma 14:46:16 +0530
19. It has been further averred that the Company was originally registered at Jaipur, Rajasthan when it was founded by its original founders (Udai Meena & Bholla Meena) and when the Company was bought by the Plaintiff and the Defendant, it was decided to get its registration transferred to Delhi and the plaintiff was entrusted with this task but he miserably failed to do so and ultimately, the defendant got the needful done and got the company transferred to Delhi and had also paid a substantial amount (around 2-3 Lakhs) for the same out of his own pockets.
20. It has been further averred that in 2019, the Company had its CC Limit Account maintained with IDBI Bank, 6926/130,130-A,132-A, ward No. 12, Jaipuria M, Clock Tower, G.T.K. Road, Subzi Mandi, New Delhi branch which was being managed by Plaintiff and it had to be renewed every year and in 2020, when such renewal was due, the Plaintiff had refused to sign the renewal documents which led to stalling of the Account and Bank had created a Lien on the Current Account of the Company which led to severe obstructions in the functioning of the Company and the Defendant had to pay a considerable amount out of his own pockets to completely pay off the outstanding amount in the CC Account. It has been further alleged that the Plaintiff had his credentials in the Company bank Accounts which he has not agreed to change till date and some of the bank accounts of the Company still bears the Email Id of the Plaintiff.
21. It has been further averred that in 2018, when the plaintiff decided to leave the Company, it was represented by the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 9 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:46:25 +0530 plaintiff to the defendant that he had completed his part of the job as per the role and responsibilities entrusted to him in the Company and nothing is required to be done from his end and the defendant was induced to believe the same by the plaintiff on the basis of which the defendant had agreed to some of the exit terms as mentioned in the Email dated 29.01.2018 but when the defendant took over the affairs of the company, the defendant found various lapses on the part of the plaintiff and then the defendant realized that plaintiff has misrepresented various facts to the defendant in order to get him to agree to the Exit terms as mentioned in the Email dated 29.01.2018 and thereby had defrauded the defendant.
22. It has been further averred that in the exit terms as mentioned in the Email dated 29.01.2018 and even in the Plaint, the Plaintiff had represented that he had offered his 5000 shares in the company to sell, however, on 29.01.2018, the plaintiff did not have 5000 shares of the Company and he only had around 3300 shares of the company and the plaintiff had concealed this fact from the defendant in order to get him to agree to the Exit terms as mentioned in the Email dated 29.01.2018 and has concealed this fact from the Court and has rather tried to mislead the Court by annexing a document showing shareholding of the plaintiff and defendant in the company as on 31.03.2017. It has been further averred that the plaintiff had sold his 1700 shares to his father namely Mr. Rajinder Kumar Sehgal after 31.03.2017 and on 29.01.2018, the plaintiff did not have 5000 shares, as represented by him to the Defendant and the Defendant came to know about this fact only recently when he had gone through the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 10 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:46:32 +0530 MCA record of the Company and the Defendant could not have known about this fact earlier as the Plaintiff was responsible for managing these Compliances. It has been further averred that Mr. Rajinder Kumar Sehgal continued to hold 1700 shares of the Company up till 31.03.2020 which is also reflected in the MCA record of the Company.
23. It has been further averred that the plaintiff not only betrayed the defendant but also defrauded the Government as well and that the Defendant suffered heavy losses due to the dishonor of an overdraft (OD). It has been further averred that the Defendant's financial position was negatively impacted, making it difficult for him to fulfill the terms of the agreement. It has been further averred that the plaintiff had refused to sign the various Company documents and failed to fulfill his responsibility as he was handling the financial part of the company so the defendant advised him to appoint another director in the firm as in any documents in a Private Limited Company signature of at least two directors is needed.
24. It has been further averred that due to Corona period, the defendant needed to have more time for the payment as the transportation (taxi business specially) was affected very badly and later on when the plaintiff did not sign in the OD limit renewal as requested by IDBI bank, it was hard for the defendant to clear all payments including day to day operation and expenses in that period and hence, the defendant requested the plaintiff for some cooperation but he showed his greediness and did not accept any request, the hunger for money which the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 11 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:46:38 +0530 defendant never denied paying but which was a breach of trust.
25. It has been further averred that the plaintiff was never attentive or available at the time of need but he was betraying the company by giving unnecessary money to his friends and the plaintiff gave Rs.16 lakhs to Mr. Vivek Jhorar who was the marketing head which was later on paid by the defendant. It has been further submitted that Mr. Vivek stole the customer data and made a replica website www.picntic.com and instead of supporting the defendant or company, the plaintiff ignored and refused to take any legal action against Mr. Vivek as he is plaintiff's friend and there might be a possibility that the plaintiff shared all the data of the GetMeCab to make a replica of it and there is a police complaint in the Patel Nagar Police Station and Cyber Crime as only the directors could have the access of the data of the company at that time.
26. It has been further averred that the plaintiff had misrepresented the defendant into agreeing to Exit terms as mentioned in the Email dated 29.01.2018 for consideration of Rs.75,00,000/- for the 5000 shares of the Plaintiff (which he never had) but the defendant cannot be bound by such exit terms as his consent to the said terms was obtained through fraud and misrepresentation and in such an event, the agreement between the plaintiff and the defendant becomes voidable at the option of the defendant in terms of Section 19 of the Indian Contract Act, 1872 and therefore, the defendant had not performed the remaining part of the agreement.
27. It has been further averred that the consent of the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 12 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:46:46 +0530 defendant was not free consent as per Section 13 of the Indian Contract Act, 1872 and in this regard, reliance has been placed upon judgment in case of Rengali Hydro Electric Project vs. GiridhariSahu (2019) 10 SCC 695. It has been further averred that there were various omissions and lapses attributable to the plaintiff in the functioning of the Company which came to the knowledge of the defendant only when he took over the charge of affairs of the company and defendant had to spend considerable amount of money in order to rectify such omissions due to which the defendant faced a loss of approximately Rs.30 lakhs which he paid from his own pockets and the present suit has been filed in order to pressurize the defendant and same is devoid of any cause of action and is therefore, deserves to be dismissed.
28. On merits, it has been averred that the plaintiff decided to exit from the company in October 2017, however, he never handed over his work responsibility task till today. It is reiterated that the defendant cannot be bound by Exit terms as mentioned in the email dated 29.01.2018 as his consent was obtained through fraud and misrepresentations and it can never be said that there was a mutual agreement between the parties; that the plaintiff had only 3300 shares and not 5000 shares of the company as on 29.01.2018; that the plaintiff tried to mislead the Court by annexing Form MGT-7 showing the shareholding of the plaintiff and defendant in the company as on 31.03.2017; that the plaintiff had sold his 1700 shares to his father after 31.03.2017 and father of plaintiff continued to hold 1700 shares of the company up till 31.03.2020 and the defendant came to know about this fact only recently through MCA record of the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 13 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.03.20 14:46:54 +0530 company; that the plaintiff had never supported in company's activities as mentioned in exit terms. Rest of the averments made in the plaint have also been controverted on merits and it is prayed that suit of plaintiff be dismissed.
29. Plaintiff has filed replication reiterating the averments made in the plaint and denying contra averments made in the written statement. It has been averred that the defendant in his written statement has provided the list of shareholders of the company, omitting the original E-form MGT 7 and its attachment; that the defendant has manipulated the records of M/s Unicus Infolabs Private Limited to show that the plaintiff is not a shareholder of M/s Unicus Infolabs Private Limited; that the electronic records such as emails, whatsapp messages filed by defendant alongwith W.S. is not supported/authenticated by an affidavit U/o XI Rule 6(3) of CPC and hence same cannot be relied upon by the Court; that the financial statement of M/s Unicus Infolabs Private Limited reflecting the shareholding of the company has been filed by the defendant alongwith the W.S. and the same has been signed by the defendant which clearly proves that he had knowledge about the shareholding of the company since the beginning. It has been further averred that even after knowing that 1700 shares were transferred by the plaintiff in the name of his father, the defendant made payment to the plaintiff during the financial year 2018-19, 2019-20 and 2020-21. It has been further averred that the E-Form MGT-7 and E-form AOC-4 for the financial year 2017-18 have been digitally signed by the defendant. It has been further averred that at the time of entering into the share purchase agreement, the defendant CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 14 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.03.20 14:47:00 +0530 was meticulously apprised about the fact that 1700 shares of M/s Unicus Infolabs Pvt. Ltd. were held by the plaintiff's father and the contractual stipulations further corroborated that the said shares were bound to be reverted back to the possession of the plaintiff after entering into the share purchase agreement and that subsequently, the father of the plaintiff transferred 1700 shares held in his name to the plaintiff on 28.04.2018, which fact was also informed to the defendant. It has been further alleged that despite the manifold endeavours undertaken by the plaintiff, the defendant has failed to effectuate the registration of such a share transfer in the subsequent Board Meeting and the Shareholder's Meeting. It has been further averred that the defendant purposely failed to register the said transfer of shares with the intention of evading from his liability. It has been further averred that the roles of the Directors of the company before entering into the share purchase agreement are completely irrelevant and the defendant is only trying to mislead the Court. It has been further averred that as per clause 5&6 of the share purchase agreement, in the event of the defendant's failure to pay timely installments, the plaintiff was under no obligation to sign the documents and handover the bank access to the defendant. However, it has been averred that the plaintiff is willing and ready to handover all the access and documents pertaining to the company as soon as the defendant makes the payment of the outstanding amount. Rest of the averments made in the written statement are denied and it is prayed that suit of plaintiff be decreed as prayed for.
30. The plaintiff as well as defendant have filed their respective affidavits of admission/denial of the documents and CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 15 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:47:07 +0530 the admission/denial of documents was also carried out.
(B) Issues :-
31. From the pleadings of the parties, following issues were framed :-
1) Whether the plaintiff misrepresented to make defendant agree to exit terms, as mentioned in email dated 29.01.2018 for consideration of Rs.75,00,000/- for the 5000 shares of the plaintiff? (OPD)
2) Whether the plaintiff is entitled to decree for specific performance of agreement/exit terms, as detailed in email dated 29.01.2018, as amended from time to time and seek directions against defendant to make payment of Rs.37,80,000/- (Rs.25 lakhs towards the principal amount and Rs.12,80,000/- towards interest) towards transfer of shares of the plaintiff, as prayed for by the plaintiff? (OPP)
3) Whether plaintiff is entitled for interest. If so, at what rate and for which period? (OPP)
4) Relief.
(C) Evidence :-
32. In order to prove its case, plaintiff/ Sh. Kapil Kumar Sehgal has examined himself as PW-1. He has reiterated the averments made in plaint in his affidavit Ex.PW-1/A and relied upon the following documents:-
S.No. Details of documents Exhibit No.
1. Print-out of Master Data of M/s. Unicus Info Ex.P1 Labs Pvt. Ltd.
2. Print-out of email dated 29.01.2018 stating Ex.P2 CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 16 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.03.20 14:47:16 +0530 the exit terms / Agreement
3. Print-out of email dated 31.01.2018 Ex.P3
4. Print-out of email dated 02.02.2018 Ex.P4
5. Photocopy of cheque bearing No.005107 for Ex.P5 Rs.20,00,000/-
6. Print-out of email dated 07.03.2019 Ex.P6
7. Print-out of email dated 13.03.2019 Ex.P7
8. Print-out of email dated 17.03.2019 Ex.P8
9. Print-out of email dated 19.03.2019 Ex.P9
10. Print-out of email dated 01.04.2019 Ex.P10
11. Photocopy of cheques bearing Nos. 847529 Ex.P11 (Colly) and 010006
12. Print-out of email dated 16.10.2019 Ex.P12
13. Photocopy of E-Form AOC-4 of M/s. Unicus Ex.P13 Infolabs Pvt. Ltd. for the financial year 2017- 18
14. Photocopy of E-Form MGT-7 of M/s. Unicus Ex.P14 Infolabs Pvt. Ltd. for the financial year 2017- 18 filed before MCA
15. Photocopy of inspection challan Ex.P15
16. Copy of share transfer form Ex.P16
17. Print-out of Form MGT-7 reflecting my Ex.PW1/1 shareholding and the defendant's on 31.03.2017
18. Photocopy of my bank statement Ex.PW1/1A
19. Photocopy of my ITR for the financial years Ex.PW1/2 2019-2020 and 2020-2021 (Colly)
20. Calculation sheet of the interest amount Ex.PW1/3
21. Non-Starter Report Ex.PW1/4
22. Print-out of screenshot of the E-Form AOC-4 Ex.PW1/5 of M/s. Unicus Infolabs Pvt. Ltd. for the financial year 2017-18 reflecting the digital signature of the defendant
23. Print-out of screenshot of the E-Form MGT-7 Ex.PW1/6 of M/s. Unicus Infolabs Pvt. Ltd. for the financial year 2017-18 CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 17 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.03.20 14:47:24 +0530
33. The PW-1 was cross examined at length in respect to his investment/contribution in the company Unicus Infolabs Pvt. Ltd., work looked after by him in the company, operation/access of bank accounts of the company and the email ID and mobile phone number linked to the bank account, third party transactions rights from the account of the company, exit agreement arrived at between the parties, his shareholding in the company and shares held by his father, transfer of registration of the company to Delhi, compliances done by him at the time of exit, filing of form MGT-7 for the year 2016-17, employment of Sh. Vivek Jhorar in the company, not exiting/discontinuing from the Directorship of the Unicus Infolabs Pvt. Ltd. even after exit terms vide Ex.P2, not signing of renewal documents for OD limit of the company, deliberately delaying sending OTPs in respect of bank transactions and deliberately stalling the operations of company.
34. No other witness was examined on behalf of plaintiff. Therefore, PE was closed.
35. In order to prove his defence, the defendant/Sh.Sanjeev Duggal has examined himself, as DW1. He has reiterated the facts averred in the written statement in his affidavit Ex.DW-1/A and relied upon the following documents:-
S.No. Details of documents Exhibit No.
1. Copy of email dt. 25.05.2018 sent by Ex.D1 defendant to Nishant Gaur, CA of firm of defendant
2. Copy of email dt. 05.12.2014 sent by Sh. Ex.D2 Vivek Jhorar consultant to plaintiff as well as defendant CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 18 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:47:31 +0530
3. Copy of email dated 10.06.2017 sent by Ex.D3 plaintiff to Sh. Vivek Jhorar
4. Notice given by defendant calling for AGM of Ex.D4 his company
5. Whatsapp chats on pages 233 & 234 of the Ex.D5 (Colly) list of documents filed by defendant
6. Email dated 16.10.2017 sent from CA firm to Ex.D6 plaintiff as well as defendant
7. Photocopy of mediation settlement dated Ex.D7
24.07.2017 between plaintiff and defendant on one hand and Sh. Vivek Jhorar
8. Copy of email dated 16.05.2017 sent by Sh. Ex.D8 Vivek Jhorar to plaintiff as well as defendant
9. Printout of email communications starting Ex.D9 (Colly) from dated 29.01.2018 (already exhibited as Ex. P-2) and those from pages 23 to 41 exchanged between the plaintiff and defendant regarding exit terms of the plaintiff
10. Printout of shareholding pattern as on Ex.D10 31.03.2018, 31.03.2019, 31.03.2020.
31.03.2021, 31.03.2022
11. Printout of Emails exchanged between Ex.D11 plaintiff and defendant regarding appointment of a new director
12. Printout of the Whole Email Communication Ex.D12 (Ex.
between the plaintiff and regarding defendant D2 is part of appointment of Mr. Vivek Jhorar Ex. D12.)
13. Printout of similarity between GMC website Ex.D13 and Picntic website
14. Printout of similarity in code of GMC and Ex.D14 Picnic website
15. Printout of letter telling the similarity between Ex.D15 GMC and Picntic Picntic website
16. Printout of Information from a customer Ex.D16 telling the similarity between GMC and Picntic
17. Printout of IT confirmation replica of the Ex.D17 GMC expert's website
18. Printout of of Login proof of the plaintiff Ex.D18 allegedly used for the data CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 19 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
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19. Printout of cyber-crime complaint against Mr. Ex.D19 Vivek Jhorar
20. Printout of Police Complaint against Vivek Ex.D20 Johar by defendant
21. Printout of Complaint plaintiff to MCA by Ex.D21 defendant
22. Printout of transcript of What's app chat Ex.D22 showing Delay in sharing the OTPs by Plaintiff
23. Printout of Letter to IDBI Bank Branch Ex.D23 Manager for resumption of current account bearing No. 1588102000003711 by the Defendant
24. Printout of AGM Notice alongwith sixth Ex. D24 Annual Financial report of (colly) (Ex. D4 Financial Year 2018 is part of Ex.
D24 (colly)
25. Printout of the Email Conversation exhibiting Ex.D26 work of Mr. Vivek Jhorar as consultant
26. Printout of details of EMI for extended loan Ex.D26A tenure for Innova EURO IV &Innova Crysta 2.4 GX
27. Printout of details of repayment of EMI for Ex.D27 extended loan tenure for Innova EURO IV &Innova Crysta 2.4 GX
28. Printout of reply sent by defendant to YES Ex.D28 bank pursuant to complaint dated September 10, 2020 filed by Mr. Kapil Sehgal to Yes Bank
29. The printout of Emails exchanged between Ex.D29 [Ex.
Defendant & and the CA of the Company and D6 is part of with the Plaintiff regarding the Audit Ex. D29 Observation in respect of the Company for (colly)] Financial year 2016-17
30. Printout of Conversation regarding Settling of Ex.D30 [Ex.
equity dispute on exit of Mr. Vivek Jhorar D8 is part of Ex.
D30(colly)]
31. Printout of list of Shareholder as on Ex.D31 date of AGM CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 20 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
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36. The DW-1 was cross examined at length inter-alia in respect to the date of joining as Director of M/s Unicus Infolabs Pvt. Ltd.; procedure/knowledge of transferring of shares of company; awareness about shareholding of plaintiff and his father in the company and shareholding of plaintiff and defendant in January 2018; alleged loss of Rs.30 lakhs suffered by DW1;
alleged payments of Rs.2 lakhs to Rs.3 lakhs; shareholding pattern of M/s Unicus Infolabs Pvt. Ltd. as on date, from April 2017 till March 2018 and at the time of consenting to the exit terms; transfer of shares in terms of agreement dated 29.01.2018; signing MGT-7 form (Ex.DW1/P1) and Form AOC-4; authority of CA Manish Dubey to use his digital signatures and status of payment made by DW1 to the plaintiff for the exit terms agreement dated 29.01.2018 as well as pending payment.
37. The defendant has also examined Sh. Tushar Rajvanshi, Manager of IDBI Bank Ltd., Kamla Nagar Branch, Delhi, as DW2. During his examination-in-chief, he has deposed that he had been authorized by the IDBI Bank, Kamla Nagar Branch vide Authority letter dated 16.09.2025 and proved the same as Ex.DW2/D1, bearing signatures of the Branch Head at point X. The DW2 has brought the record of the account bearing no.1588651100000480 in the name of Unicus Infolabs Pvt. Ltd. bearing operated in his branch since 30.11.2018 till 21.06.2022 and proved the following documents:-
S.No. Details of documents Exhibit No.
1. Copy of the letter dated 10.09.2020 from Ex.DW2/D2 Mr. Kapil Sehgal
2. Copy of letter dated 26.11.2020 from Ex.DW2/D3 Mr. Sanjeev Duggal CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 21 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date:
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3. Copy of letter dated 27.04.2021 for change of Ex.DW2/D4 Authorized Signatory given by Mr. Sanjeev (Colly) alongwith copy of an Extraordinary General Meeting called by Mr. Sanjeev Duggal dated 14.12.2020, copy of metadata, copy of Resolution, copy of e-mail, copy of complaint No.202021014006455, copy of whatsapp chat, copy of notice, Director's Report, Auditor's Report all annexed with the said letter
38. The DW2 was not cross-examined on behalf of plaintiff despite opportunity.
39. The defendant has also examined Sh. Deepansh Arora, Senior Sales Manager, Yes Bank, Rajender Place, New Delhi, as DW3. He deposed that he has been duly authorized by the Dy. Branch Manager, Yes Bank, Rajendra Place, New Delhi vide Authority letter dated 04.10.2025 and proved the same as Ex.DW3/D1. He had brought the record of the account bearing no.023261900000797 of M/s Unicus Infolabs Private Limited and proved the same as under:-
S.No. Details of documents Exhibit No. 1. Account Opening Form bearing A/c Ex.DW3/D2
No.023261900000797 of M/s Unicus Infolabs (Colly) Private Ltd. alongwith KYC documents of both the directors i.e. plaintiff as well as the defendant.
2. Communication mails dated 24.11.2020, Ex.DW3/D3 18.11.2020 & 09.11.2020 (Colly)
3. Photocopy of the Complaint made by Mr. Ex.DW3/D4 Kapil Sehgal (Colly)
4. Statement of account bearing A/c No. Ex.DW3/D5.
023261900000797 of M/s Unicus Infolabs Private Limited from 08.11.2017 to 04.10.2025 CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 22 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
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40. The DW3 was also not cross-examined on behalf of plaintiff despite opportunity.
41. No other witness was examined on behalf of defendant. Therefore, DE was closed.
(D) Final Arguments :-
42. Arguments were addressed by Sh. Ajitesh Kumar and Sh. Sivanshu Srivastava, counsels for the plaintiff and Ms.Akanksha Mehta, counsel for defendant. Written submissions have also been filed on behalf of parties.
43. Counsel for plaintiff has submitted on the lines of the pleadings that the plaintiff, after having taken a decision to exit from the Company, proposed to sell his 5000 equity shares to the defendant and thereafter, the plaintiff and defendant mutually agreed to the said sale of shares vide email dated 29.01.2018. It has been further averred that the defendant agreed to purchase the said shares for a total consideration of Rs.75,00,000/- and proposed a payment schedule alongwith the certain modified terms and conditions vide email dated 31.01.2018 which have been confirmed and accepted by the plaintiff vide email dated 02.02.2018. It has been further averred that after making the payment of 1st installment of Rs.20 lakhs on 16.03.2018, the defendant delayed the payments of balance installments and after much efforts, granting additional time and issuing fresh timeline, the defendant has only paid a total sum of Rs.50 lakhs in various installments to the plaintiff with an outstanding balance of Rs.25 lakhs remaining to the paid.
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44. It has been further submitted that the defendant vide email dated 17.03.2019 attempted to shift the burden of his own default to the plaintiff by stating that no interest shall be charged for delayed payments, however, at no point did the defendant deny his liability to make the payments despite the admitted delays on his part. It has been further submitted that the defendant again sent an email to the plaintiff attempting to justify his non-payment by alleging that the delay occurred due to a loan taken by GMC (a brand of the company). It has been further submitted that the defendant, in a calculated manner, sought to shift the burden of his liability by asserting that the plaintiff allegedly did not respond to his messages in time, which purportedly hindered the defendant from making the outstanding payments. It has been further submitted that the plaintiff categorically rejected the defendant's request for waiver of interest on the delayed payments as the defendant was alone responsible for the non-payment within the agreed timelines. It has been further submitted that in the financial year 2019-20, the plaintiff had transferred the shares worth Rs.45 lakhs to the defendant and in the financial year 2020-21, the plaintiff had transferred shares worth Rs.5 lakhs which clearly shows that the plaintiff had been fulfilling his obligation as per the agreement.
45. It has been further submitted that the communication exchanged between the parties clearly constitutes a valid and binding agreement, obligating both the plaintiff and defendant to duly perform their respective obligations. In this regard, the reliance has been placed on judgment in case of Trimex International FZE Ltd. vs. Vedanta Aluminium Ltd.
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 24 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:48:18 +0530 reported in 2010 SCC OnLine SC 214. It has been further submitted that the defendant had prior knowledge about the 5000 equity shares holding pattern in the company and this is substantiated by the fact that the defendant's digital signature appear on several key documents including Ex.P-13, Ex.P-14 and Ex.PW1/5. It has been further submitted that these documents clearly outline the share distribution within the company and that the plaintiff holds 5000 shares. It has been further submitted that during cross-examination, the defendant has stated that the digital signature was affixed by CA Manish Dubey and has also admitted to having authorized CA Manish Dubey to affix his digital signature on these documents and this admission clearly established that CA Manish Dubey would not have affixed the digital signatures without the permission of the defendant and the defendant is vicariously liable for the actions carried out within the scope of that authority. It has been further submitted that factum of payment of Rs.50 lakhs and outstanding balance of Rs.25 lakhs as per the exit terms agreement dated 29.01.2018 was also acknowledged by the defendant during his cross- examination. It has been further submitted that interest amount of Rs.12,80,000/- has been calculated @ 1% per month starting from the respective dates of default, which are 12.05.2018, 07.02.2019 and 07.02.2019 in accordance with the terms of the agreement dated 29.01.2018 and the details of calculation of the interest amount is Ex.PW1/3.
46. It has been further submitted that the defendant had prior knowledge of the plaintiff's father's shareholding at the time they entered into the share purchase agreement and the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 25 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:48:24 +0530 defendant's claim during cross-examination that he only became aware of this in 2020 is incorrect. It has been further submitted that sometime in 2017, the plaintiff had transferred 1700 shares in favour of his father, Mr. Rajinder Kumar Sehgal and the defendant was aware of this transfer when they entered into the share purchase agreement which also included an agreement that the said shares would be reverted to the plaintiff and that on 28.04.2018, Mr. Rajinder Kumar Sehgal transferred the 1700 shares back to the plaintiff and the share transfer form for this transaction is Ex.P16. It has been further submitted that the defendant's false statement regarding their knowledge in 2020, in the context of the clear documentation and prior knowledge of the transfer, constitutes a material misrepresentation under oath and has committed perjury. Reliance has been placed upon judgment in case of Kishorbhai Gandubhai Pethani vs. State of Gujarat and Another reported in case of (2014) 13 SCC 539 and Anil Rishi vs. Gurbaksh Singh reported in case of (2006) 5 SCC
558. Lastly, it has been submitted that no supporting documents to substantiate the claim has been filed on behalf of the defendant in accordance with the provisions of Order 13 Rule 1 CPC and hence, it is prayed to disallow the claim of defendant. Reliance has also been placed upon judgment in case of BillaJagan Mohan Reddy vs. Billa Sanjeev Reddy & Ors. (1994) 4 SCC 659 in support of said contention.
47. Per contra, counsel for defendant has submitted on the lines of the pleadings that the plaintiff and defendants were Directors and equal partners (50% each) in M/s Unicus Infolabs Pvt. Ltd. and that the plaintiff decided to exit the company in CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 26 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:48:31 +0530 October 2017 and subsequently forwarded alleged "Exit Terms"
via email dated 29.01.2018 (Ex.P2) seeking consideration of Rs.75 lakhs for 5000 shares. It has been further submitted that the plaintiff represented that he held and was offering to sell 5000 shares of the company, however, on the date of the agreement dated 29.01.2018, the plaintiff did not possess 5000 shares but was only holding approximately 3300 shares and the plaintiff had already sold 1700 shares to his father, Mr. Rajinder Kumar Sehgal, after 31.03.2017. It has been further submitted that the shareholding pattern presented by the defendant shows that Mr. Rajinder Kumar Sehgal continued to hold 1700 shares until 31.03.2020, thus, the plaintiff actively concealed this vital fact to induce the defendant to agree to the Exit Terms. It has been further submitted that the DW1 deposed that he learned of the true shareholding of the plaintiff and his father only in the year 2020 after receiving the MCA records, as the plaintiff was responsible for managing these compliance. It has been further submitted that this concealment falls under the definition of "fraud" as per Section 17 of the Indian Contract Act and the defendant's consent was manifestly not a "free consent" as defined U/s 13 of the Indian Contract Act as it was induced by plaintiff's active concealment and misrepresentation, therefore, the agreement became voidable at the option of the defendant in terms of Section 19 of the Indian Contract Act and the plaintiff is not entitled to specific performance or any remaining payment or interest. It has been further submitted that plaintiff's repeated instances of malfeasance and non-cooperation directly impacted the company's operations and the defendant's financial position. It has been further submitted that the plaintiff failed to transfer CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 27 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
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Sharma 14:48:40
+0530
the company registration from Jaipur to Delhi and the defendant ultimately had to get this done and incurred a substantial expenses of around Rs.2-3 lakhs from his own pockets; that the plaintiff abandoned his duty regarding bank renewals; that the defendant was forced to pay off outstanding CC Account balance from his personal funds; the plaintiff failed to sign the balance sheet for the FY 2018-19 resulting in the company incurring a late fee and interest of Rs.4 lakhs; that the plaintiff continuously obstructed day-to-day operations by refusing or denying the sharing of necessary OTPs for banking transactions despite still having his credentials associated with the accounts. It has been further submitted that plaintiff betrayed the company by facilitating or failing to prevent the theft of intellectual property; that the plaintiff was instrumental in having Vivek Jhorar appointed as Marketing Head who later stole customer data and created a replica website and when the theft was discovered, the plaintiff igonored and refused to take legal action against him and the loss suffered by the defendant due to rectifying the plaintiff's omissions, including this incident, was approximately Rs.30 lakhs. It has been further submitted that any difficulty in fulfiling the payment schedule was attributable to the financial losses and operational obstructions caused by the plaintiff's non-cooperation (such as the IDBI Bank account and Yest Bank crisis and the refusal to sign documents). Thus, it is prayed that the suit filed by plaintiff be dismissed.
In support of the contentions, counsel for the defendant has relied upon following judgments:-
a) Pydi Ramana @ Ramulu vs. Davarasety Manmadha Rao, Civil Appeal No.434/2013 decided by Hon'ble CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 28 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date:
Sharma 2026.03.20
14:48:48 +0530
Supreme Court on July 10, 2024.
b) R.Kandasamy (Since Dead) & Ors. vs. T.R.K.
Sarawathy & Anr., Civil Appeal No. 3015/2013 and other connected case decided by Hon'ble Supreme Court on November 21, 2024.
(E) Analysis of Evidence and Findings:-
48. I have heard the learned Counsels for the parties and have also perused the record as well as the written submissions and case laws filed on behalf of the parties.
49. The relevant provisions of law and case law are reproduced for ready reference as under :-
50. In order to prove a case, the law is clear that any particular fact is to be proved by the person who wishes that particular fact to be in existence and that should be believed by the Court to be in existence and for ready reference, Section 106 of the Bharatiya Sakshya Adhiniyam, 2023 (corresponding to Section 103 of Indian Evidence Act) is reproduced as under:-
"Section 106: The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person."
51. It is also cardinal principle of evidence that a fact specifically within the knowledge of any person is to be proved by that person and for ready reference, the relevant provision under Section 109 of the Bharatiya Sakshya Adhiniyam, 2023 (corresponding to Section 106 of Indian Evidence Act) is reproduced as under:-
"Section 109: When any fact is especially within the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 29 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:48:55 +0530 knowledge of any person, the burden of proving that fact is upon him."
52. Sections 14, 16, 17 and 18 of the Specific Relief Act, 1963:-
14. Contracts not specifically enforceable.--The following contracts cannot be specifically enforced, namely:-- (a) where a party to the contract has obtained substituted performance of contract in accordance with the provisions of section 20; (b) a contract, the performance of which involves the performance of a continuous duty which the court cannot supervise; (c) a contract which is so dependent on the personal qualifications of the parties that the court cannot enforce specific performance of its material terms; and (d) a contract which is in its nature determinable.
16. Personal bars to relief.--Specific performance of a contract cannot be enforced in favour of a person--
(a) who has obtained substituted performance of contract under section 20; or
(b) who has become incapable of performing, or violates any essential term of, the contract that on his part remains to be performed, or acts in fraud of the contract, or wilfully acts at variance with, or in subversion of, the relation intended to be established by the contract; or
(c) who fails to prove that he has performed or has always been ready and willing to perform the essential terms of the contract which are to be performed by him, other than terms the performance of which has been prevented or waived by the defendant.
Explanation.--For the purposes of clause (c),--
(i) where a contract involves the payment of money, it is not essential for the plaintiff to actually tender to the defendant or to deposit in court any money except when so directed by the court;
(ii) the plaintiff 4 [must prove] performance of, or readiness and willingness to perform, the contract according to its true construction.
17. Contract to sell or let property by one who has no title, not specifically enforceable.-- (1) A contract to sell or let any immovable property cannot be specifically enforced in favour of a vendor or lessor--
(a) who, knowing himself not to have any title to CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 30 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:49:04 +0530 the property, has contracted to sell or let the property;
(b) who, though he entered into the contract believing that he had a good title to the property, cannot at the time fixed by the parties or by the court for the completion of the sale or letting, give the purchaser or lessee a title free from reasonable doubt.
(2) The provisions of sub-section (1) shall also apply, as far as may be, to contracts for the sale or hire of movable property.
18. Non-enforcement except with variation.--Where a plaintiff seeks specific performance of a contract in writing, to which the defendant sets up a variation, the plaintiff cannot obtain the performance sought, except with the variation so set up, in the following cases, namely:--
(a) where by fraud, mistake of fact or mis-
representation, the written contract of which performance is sought is in its terms or effect different from what the parties agreed to, or does not contain all the terms agreed to between the parties on the basis of which the defendant entered into the contact;
(b) where the object of the parties was to produce a certain legal result which the contract as framed is not calculated to produce; (c) where the parties have, subsequently to the execution of the contract, varied its terms."
53. While dealing with the law on point of specific performance, the Hon'ble Supreme Court in case titled as R.Kandasamy (Since Dead) & Ors. vs. T.R.K. Sarawathy & Anr. (supra) has held that readiness and willingness are paramount consideration to test the entitlement of a person seeking specific performance and the relevant paras are reproduced as under:-
"29. A suit for specific performance of a contract for sale, normally, is premised on a written agreement between the contracting parties, signifying a meeting of minds of two persons or more. Terms of the agreement, which are reasonably ascertainable from the written document, assume extreme relevance. After all, CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 31 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:49:12 +0530 compliance with other requisites takes the shape of a concluded contract and should there be no vitiating factor, the parties are bound thereby.
30. The first point that we need to examine is the effect of the two clauses of the Agreement and to apply the law laid down by this Court in Radha Sundar Dutta (supra) and Bharat Sher Singh Kalsia (supra). The said clauses read as follows:
"The Second party will have to pay the balance sale price within four months from today and obtain a sale deed either in his name or in the name of persons nominated by him at his own expense."
"There are tenants in the property described below at present. The First Parties agree to vacate the tenants and hand over vacant possession to the Second Party at the time of obtaining the sale."
31. On a bare reading of the aforesaid clauses, we do not find that the latter clause destroys the effect of the former clause altogether so much so that it has to be discarded. On the contrary, in this case, both the clauses were such that the same had to be read together and given effect upon ascertaining the intention of the parties as disclosed by the Agreement as a whole. The latter clause could not have been read divorced from the former, having regard to the intent of the parties that is discernible. The latter qualified the former in the sense that although it was obligatory for the buyer to pay the balance price within 19th May, 2005 and "obtain the sale deed", this was on the assumption that the property would be made free of tenants by the sellers by that time. However, the situation therefor did not arise on 19th May, 2005 since the tenant, who vacated the property last, did so sometime on 2nd February, 2006. Going by the latter clause, the buyer had time till 1st June, 2006 to complete the deal (four months of vacating of the property by all the tenants to enable the sellers to hand over vacant possession to the buyer). In our understanding, the Trial Court and the High Court were right in concluding that time was not the essence though the Agreement provided that "time mentioned in this agreement shall be of the essence."
32. We now turn our attention to the next point, which should clinch the issue between the parties. It is, whether or not the buyer demonstrated readiness and willingness to perform her part of the contract and even if she did, is she entitled to the discretionary and equitable relief of specific performance on facts and in the circumstances.
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 32 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date: 2026.03.20 Sharma 14:49:22 +0530
33. For tracing an answer, one would necessarily have to bear in mind sections 10, 16 and (unamended) section 20 of the Act. Scanning of the evidence on record unmistakably points to the conclusion that the buyer was not ready and willing to have the terms agreed by and between the parties to be performed.
34. First, the conduct of the buyer does not inspire confidence in view of the fact that despite being aware in February, 2006 of the property having been vacated by all the tenants, she started raising the bogey of failure of the sellers to share with her the 'encumbrance certificate'. Importantly, the Agreement did not record that the sellers were under any obligation to share such certificate. Thus, in the absence of such obligation, one has to presume that the buyer was duly satisfied with the sellers' title to the property and as such did not, consciously, insist on making such obligation a part of the Agreement of sharing of the 'encumbrance certificate' prior to performance of the agreed terms. It is common knowledge that none interested in buying an expensive property would agree to terms leaving himself/herself at a potential risk of facing litigation in future. Even in the absence of an express term and if it were accepted that the obligation is an implied requirement of the Agreement, the buyer would have done well to close the deal if the sellers were taking advantage of the omission in the Agreement, particularly when at the time she raised such objection the entire money received in advance had been returned by the sellers to her. This is one aspect of the matter.
35. The other aspect is this. From the documents on record, it is clear that there was no readiness and willingness on the buyer's part to pay the balance sale consideration and get the sale deed executed. The buyer, despite multiple reminders, did not come forward for execution of the sale deed. Vide letters dated 11th March, 2006, 23rd March, 2006, 06th April, 2006, the buyer was given a deadline of 13 (thirteen), 7 (seven) (counted from the date of receipt of 'encumbrance certificate') and 5 (five) days respectively; however, the buyer did not comply with any of these. It is to be noted that the above communications are subsequent to the reply letter dated 24th February, 2006 by the buyer wherein she admitted her knowledge of the property having been vacated by the last of the tenants. Hence, the conduct of the buyer in not doing the needful, especially even after the property became free of tenants, demonstrates her reluctance and CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 33 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:49:30 +0530 diffidence to perform the contract.
36. Moving further, a perusal of the buyer's cross- examination reveals her admission of not having enough fund in either of her bank accounts to pay the balance sale price. This, in our opinion, is sufficient proof of her financial incapacity to perform her part of the contract. The husband of the buyer could be a wealthy man having sufficient balance in his bank account but having perused the credit and debit entries, we have significant doubts in respect thereof which we need not dilate here in the absence of him being a party to the proceedings. Suffice is to observe, the transactions evident from the bank accounts of the buyer's husband do little to impress us that the buyer had demonstrated her financial capacity to make payment of the balance sale price and close the deal."
54. In the case titled as Pydi Ramana @ Ramulu vs. Davarasety Manmadha Rao (supra), the Hon'ble Supreme Court while dealing with the meaning of plaintiff's readiness and willingness to perform the contract has held that readiness is the capacity of the plaintiff to perform the contract and willingness is the conduct of the party and relevant paras are reproduced for ready reference which runs as under:-
13. In order to obtain a decree for specific performance, the plaintiff must aver and prove that he has performed his part of the contract and has always been ready and willing to perform the terms of the contract which are to be performed by him. Section 16(c) of the Specific Relief Act mandates 'readiness and willingness' of the plaintiff to be averred and proved and it is a condition precedent to obtain the relief of specific performance.
14. There is a distinction between the terms 'readiness' and 'willingness'. 'Readiness' is the capacity of the plaintiff to perform the contract which includes his financial position to pay the sale consideration.
'Willingness' is the conduct of the party. In the instant case, even according to the concurrent findings recorded by the courts below, it would emerge that the plaintiff had been able to successfully prove the sale agreement dated 07.06.1993 Ex.A1 on which date Rs.2,005/- was paid by CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 34 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:49:38 +0530 the plaintiff to the defendant. The evidence on record tendered by plaintiff came to be accepted by all the courts and judgments of courts below would also indicate that further amount towards sales consideration in a sum of Rs.17,000/- was paid by plaintiff to defendant on 23.06.1993 and same was endorsed by him. As per the recital in the agreements, the defendant was required to get the suit land surveyed and as such the total consideration was agreed to be settled after such survey.
On the one hand, the plaintiff contends that defendant never got surveyed the suit land. On the other hand pleadings and evidence of plaintiff is silent on steps taken by the plaintiff as expected of a reasonable person which has not been taken in the instant case namely the plaintiff has not produced any evidence either oral or documentary to establish that there was any demand made by him for the land being surveyed by defendant. No witnesses have been examined on behalf of the plaintiff to establish that at any point of time there has been demand made by the plaintiff with the defendant by calling upon him to get the suit land surveyed as agreed under the agreement of sale Ex.Al. It is for the first time after a period of 3 years from the date of agreement Ex.A.1 namely on 30.05.1996 legal notice (Ex.A3) was got issued or in other words plaintiff was silent for a period of 3 years in enforcing of the agreement of sale. It is for this specific reason the trial court while rejecting the prayer for decree of specific performance has recorded a categorical finding to the following effect:
21. The terms of the agreement xxx the period of one year. The plaintiff got issued a legal notice on 30.05.1996 Ex.A.3 expressing his readiness to go ahead with the transaction and calling upon the vendors to execute the sale deed. That means nearly for two years after the expiry of one year period. The plaintiff vendee did nothing to act in furtherance of the agreement. Excepting a bald and vague assertion that he was contacting the vendors but they were dodging nothing more is brought on record to satisfy the court that the plaintiff was at all material times interested in finalizing the deal and showing his readiness and willingness to perform the essential terms of the agreement. Though the suit was filed within the period of limitation, it is not sufficient. In assessing the question of readiness and willingness of the party to perform his part of the contract. It is highly essential to take into account the long unexplained silence and CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 35 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:49:45 +0530 inaction on the part of the plaintiff.
22. Plaintiff must perform his part of the contract within reasonable time. There was total inaction on the part of the plaintiff for 2 years which was not consistent with the terms of agreement. From 6.6.94 to 30.5.96 i.e., for a period of 23 months, plaintiff sat quiet without taking any steps to perform his part of the contract under the agreement though the agreement specified a period of one year, within which he was expected to urge the defendant-vendor to get measurements of land and fix the sale price and to tender the balance amount and call upon the defendants to execute sale deed and deliver possession of the property.
As rightly pointed out by the trial court, the respondent- plaintiff has not produced any satisfactory evidence to prove his readiness and willingness. As regards 'willingness' of the plaintiff to perform his part of the contract, the conduct of the plaintiff warranting the performance has to be looked into. The following conduct of the plaintiff warrants consideration:
a. Plaintiff got issued legal notice nearly after two years after the expiry of one year period as prescribed in the agreement.
b. Plaintiff has not brought anything on record to prove that he contacted the Defendant after the expiry of one year period and was interested in finalising the deed.
c. There was total inaction of the Plaintiff from 06/06/1994 (expiry of one year period) to 30/05/1996 (Date of issuance of legal notice) d. Suit was filed on 09/06/1997 i.e. after a period of more than one year from the date of issuing of legal notice. Said delay has not been sufficiently explained by the Plaintiff The continuous readiness and willingness is a condition precedent to grant the relief of specific performance. The trial Court has rightly held that plaintiff has not sufficiently explained and proved that he was always ready and willing to perform his part of the contract. As such the High Court and the First Appellate Court had erred in holding that plaintiff had proved his readiness and willingness.
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 36 / 44 Digitally signed Devendra by Devendra Kumar Sharma Kumar Date: Sharma 2026.03.20 14:49:52 +0530
55. In the light of the aforesaid discussed principle of law and relevant provisions, now it is to be seen before returning the findings issue-wise as to whether the plaintiff was ready and willing to perform his part of contract.
56. In the present case, there is no dispute between the parties that they arrived at a contract through various emails exchanged between the parties dated 29.01.2018 (Ex.P2), 31.01.2018 (Ex.P3) and 02.02.2018 (Ex.P4). As per their admitted version finally the contract has been arrived at between the parties vide email Ex.P2 and Ex.P4 reducing the terms of agreement in the said emails regarding the sale of 5000 shares by the plaintiff to the defendant for an amount of Rs.75 lakhs in various installments as and when there is transfer of the said shares by the plaintiff in favour of the defendant.
57. The dispute between the parties arising in the present case is that the plaintiff himself was not having title over the 5000 shares on the day of entering into the contract i.e. 02.02.2018 but the plaintiff was having title over 3300 shares only and the remaining shares were with the father of the plaintiff.
58. According to the plaintiff inadvertently the 1700 shares were got transferred in the name of his father after starting the negotiation between the parties vide email Ex.P2 but the same were again got transferred in the name of the plaintiff vide application form dated 28.04.2018 with the contention that this fact of transfer of the share in the name of father was known to the defendant who digitally as well as physically signed the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 37 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:49:59 +0530 balance sheet of the company in question for the year 2017-18, Ex.PW1/5, before entering into contract wherein it has been shown clearly that the plaintiff is possessing 3300 shares while his father is possessing 1700 shares. However, defendant has denied the same stating that for the first time the defendant came to know about the said pattern of shareholdings in the year 2020 while filing the return of the company in question and since the contract was entered into on the misrepresentation of the plaintiff of his having ownership of 50% of the shares i.e. 5000 shares of the company in question, this contract cannot be treated to be contract ad-idem and cannot be enforced specifically as the plaintiff was having no capacity to transfer all the shares on the day of entering into contract finally i.e. 31.11.2018/ 02.02.2018.
59. The Hon'ble Supreme Court in a case titled as Muddam Raju Yadav vs. B.Raja Shanker (D) Through LRs. & ORs. in a Civil Appeal No. 3255/2026 (Arising out of S.LP (Civil) No.6453 of 2024 decided on March 10, 2026 while dealing with the issue of conduct of the parties to a contract litigating for specific performance has held that if there is any slightest doubt that any of the party has withheld material fact in the agreement itself, the equitable and discretionary relief has to be denied and the relevant para 12 is reproduced for ready reference which runs as under:-
12. In a suit for specific performance, the conduct of the parties is significant as it assists the Court in evaluating the evidence to find out the bona fides of the parties at the time of execution of the agreement. Even a slight doubt in the mind of the Court that the plaintiff was not acting bonafidely and that the material facts, having bearing on the agreement, have been withheld in the agreement itself and from the Court also, the CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 38 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:50:05 +0530 equitable and discretionary relief has to be denied. A plaintiff approaching the Court with uncleaned hands, like in the present case-the plaintiff having withheld the document i.e., MoU (Exhibit B-2), as the same was nowhere mentioned in the plaint, the present was a fit case for denial of relief of specific performance and the High Court has rightly allowed the appeal preferred by the respondent(s)/defendant(s) to set aside the judgment and decree passed by the Trial Court.
60. In the present case, from the evidence available on record, it is clear that neither in the pleadings in the entire plaint nor in evidence in the affidavit there is any mention that the factum of transfer of 1700 shares in favour of father of the plaintiff was ever communicated to the defendant at the time of entering into agreement or during the pendency of the execution of agreement. Even the terms reducing in writing of the alleged agreement between the parties vide emails Ex.P2 to Ex.P4 find no mention of transfer of the shares in favour of the father of the plaintiff and its reversal or again purchase or transfer in the name of the plaintiff. Thus, from the abovesaid facts it can be clearly said that the material fact of transfer of the shares in the name of father of the plaintiff was withheld by the plaintiff while entering into the written contract with the defendant.
61. Even if for the sake of arguments it is assumed that the defendant was having knowledge of the shareholding pattern between the plaintiff and his father by virtue of his signature upon the documents of the company in question and thereby agreeing for purchase of the entire share of 5000, it is clear from the evidence available on record that as on date also the plaintiff has no ownership of the entire remaining 1700 shares which have not been transferred in order to have his readiness and CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 39 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:50:11 +0530 willingness to transfer the said shares.
62. In his cross-examination, he himself admitted that when the exit agreement Ex.P2 was arrived at between the parties, he was having only approximately 33.33% shares in his name and by voluntary statement has stated that his father had 1700 shares and it was agreed that his father would transfer the remaining shares in his name. He has further admitted that on 29.01.2018, he was not having 50% shares in his name. When a clarification was sought in his cross-examination regarding the share pattern, he had testified that he transferred 1700 shares inadvertently in the name of his father and since he did not want his father to become a party, therefore, the said term was not included in Ex.P2. This explanation has come for the first time in his cross-examination which is beyond the scope of pleadings and evidence led on his behalf. Further this explanation itself raises serious doubts about his conduct as well as his capacity to transfer the shares and falsify his claim of understanding between parties about re-transfer of shares to him by his father.
63. In the cross-examination of DW1, it has come on record that till 2024 the plaintiff was having only 16.67% shares and remaining 3.33% shares are with Mr. Rajiv Kumar who happens to be the father of the plaintiff. There is no suggestion to the witness that his assertion is wrong one nor any rebuttal evidence has been led. Thus, even if it is assumed for the sake of arguments that this contract was to be performed in phase-wise manner till 2020, the plaintiff has not acquired the entire ownership of shares from his father and in such circumstances it CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 40 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:50:18 +0530 cannot be said that he had capacity to transfer the shares agreed between the parties on the date of execution of the agreement between the parties or till the date of filing of the present suit or even during the pendency of the suit.
64. In the entire plaint, there is no pleading that the plaintiff was ready and willing to perform his part in order to execute the agreement between the parties nor there is any such deposition in the affidavit filed in examination-in-chief with assertion of holding 50% shares in the name of plaintiff.
65. Admittedly, the agreement/contract between the parties was entered into prior to 01.10.2018 before the amendment of sub-clause (c) of 16 of Specific Relief Act wherein it was mandatory that there must be averment and proof on behalf of the plaintiff of his readiness and willingness and since there is no averment in the pleadings of the readiness of the plaintiff to perform his part, on this count also it can be said that the plaint lacks material particulars disentitling the plaintiff for equitable relief of specific performance as contemplated under the Specific Relief Act.
66. Even the documents relied upon on behalf of the plaintiff for the purposes of transfer of the shares in his name from his father is an application form dated 28.04.2018 and no status has been placed on record that the said application form was ever acted upon. No suggestion was given to DW1 that the 3.33% shares are not still in the holding of father of the plaintiff.
It has also come in the testimony of PW1 that vide Ex.P13 he CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 41 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:50:26 +0530 was aware that the 1700 shares are with other than the promoters. He has further admitted that he had made complaint and on his complaint the account of the company in question with IDBI Bank was made inactive and this conduct of the plaintiff itself is writ large showing that because of his conduct the company was not in a position to operate financially.
67. It is settled law that in a suit for specific performance, the conduct of the parties are relevant and it assists the Court in evaluating the evidence to find out the bona fides of the parties at the time of execution of the agreement. In the present case, the plaintiff was never in possession and ownership of all the 5000 shares since the date of execution of agreement between the parties till the date of filing of the suit and this fact itself raises serious doubt in the mind of this Court that the plaintiff was not acting bonafidely and that the material facts, having bearing on the agreement, have been withheld in the agreement itself and from the Court also while presenting the plaint. Admittedly, the plaintiff is seeking the equitable and discretionary relief. A plaintiff approaching the Court with uncleaned hands, like in the present case-the plaintiff having withheld the essential fact of transfer of shares in the name of his father, as the same was nowhere mentioned in the plaint, the present case is a fit case for denial of relief of specific performance.
68. In the light of aforesaid discussion, issue-wise findings are as under:-
CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 42 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
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ISSUE No.1:-
Whether the plaintiff misrepresented to make defendant agree to exit terms, as mentioned in email dated 29.01.2018 for consideration of Rs.75,00,000/- for the 5000 shares of the plaintiff? (OPD)
69. The onus of proving this issue was upon defendant.
As discussed in detail hereinabove, the defendant has successfully proved on preponderance of probability that the plaintiff had misrepresented to make defendant agree to exit terms, as mentioned in email dated 29.01.2018 for consideration of Rs.75,00,000/- for the 5000 shares of the plaintiff. Therefore, this issue is decided in favour of the defendant and against the plaintiff.
ISSUE No.2:-
Whether the plaintiff is entitled to decree for specific performance of agreement/exit terms, as detailed in email dated 29.01.2018, as amended from time to time and seek directions against defendant to make payment of Rs.37,80,000/- (Rs.25 lakhs towards the principal amount and Rs.12,80,000/- towards interest) towards transfer of shares of the plaintiff, as prayed for by the plaintiff? (OPP)
70. The onus of proving this issue was upon plaintiff. As discussed in detail hereinabove, the plaintiff has failed to prove its entitlement for a decree of specific performance of agreement/exit terms, as detailed in email dated 29.01.2018, as amended from time to time or to seek directions against defendant to make payment of Rs.37,80,000/- (Rs.25 lakhs towards the principal amount and Rs.12,80,000/- towards CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 43 / 44 Digitally signed by Devendra Devendra Kumar Sharma Kumar Date:
2026.03.20 Sharma 14:50:42 +0530 interest) towards transfer of shares of the plaintiff. Therefore, this issue is decided against the plaintiff and in favour of the defendant.
ISSUE No.3:-
Whether plaintiff is entitled for interest. If so, at what rate and for which period? (OPP)
71. Onus to prove this issue was upon plaintiff. Since it has been held while deciding issue no.2 that plaintiff is not entitled to claim any amount from the defendant, the question of his being entitled to interest also does not arise. Accordingly, this issue is also decided against the plaintiff.
R E L I E F :-
72. In view of foregoing observations, it is held that plaintiff is not entitled to any relief in the present suit and the suit is dismissed with costs.
73. Decree sheet be drawn up accordingly.
74. File be consigned to record room after due compliance. Digitally signed by Devendra Dictated and pronounced Devendra Kumar Sharma in the open Court on Kumar Date:
2026.03.20 20th March, 2026. Sharma 14:50:50 +0530 (DEVENDRA KUMAR SHARMA) District Judge (Commercial Court)-03 Central, Tis Hazari Courts, Delhi CS (COMM) No.334/2023 Kapil Kumar Sehgal vs. Sanjeev Duggal Pg. 44 / 44