Rs 6.93 crore refund suit over a Connaught Place shop is vexatious, Delhi HC finds; six defendants struck off
Justice Manmeet Pritam Singh Arora found that the shop a Patna jeweller says he was cheated out of was later bought by a company his son once promoted and his family had been funding, and ordered him to pay Rs 50,000 in costs to each of the six people he had dragged in.
A Patna businessman who paid Rs 6.93 crore for a Connaught Place shop in 2018, then sued the seller, her son, her son-in-law, two relatives and two property brokers for a refund on the ground that the shop turned out to be mortgaged to HDFC Bank, has been told by the Delhi High Court that his plaint is vexatious on its face. Justice Manmeet Pritam Singh Arora found that the same shop was redeemed from the bank in 2019 and bought in 2021 by a company incorporated by the plaintiff's son, into which a company owned by the plaintiff's wife had sent more than Rs 5.6 crore, and now running a Tanishq showroom there, just as the plaintiff does in Patna. The judge deleted six of the defendants from the suit with costs of Rs 50,000 each, directed that the agreement to sell be impounded for stamp duty, and asked the plaintiff to show cause on 20 November why the suit should not be dismissed altogether.
Rs 7 crore paid in full before the agreement was signed
Anil Kumar Agrawal, a resident of Patna, was looking for a property in Delhi. According to his plaint, two brokers, Rajendra Singh Kochar and Sahib Singh, and a third, Abhinandan Kumar Jain, told him that Shop No. N-4 in Connaught Place, about 1,165 square feet on the ground floor with an 800 square foot mezzanine and balcony, was for sale, free of encumbrances, and that Nasira Begum was its absolute owner. After meetings with all the defendants, he says, she agreed to sell it for Rs 7 crore, and the parties agreed that the whole consideration would be paid before the agreement to sell was executed. He transferred Rs 6.93 crore to her in four tranches in July 2018, holding back Rs 7 lakh as tax deducted at source. The agreement to sell was executed on 1 August 2018. The same day she gave him a symbolic possession letter, since a tenant was in occupation, and an attornment letter directing the tenant to pay rent to him.
No rent ever came. In March 2019, on inspecting the shop, he found a notice pasted by HDFC Bank under Section 13(2) of the SARFAESI Act: the shop was mortgaged. He sent a legal notice on 20 July 2021 demanding the principal back with interest, filed a complaint with the Economic Offences Wing on 28 October 2021, and in March 2022 filed this suit for Rs 6.93 crore with pre-suit interest at 12 per cent from 1 August 2018 and interest during the suit, asking that the pandemic period from 15 March 2020 to 28 February 2022 be excluded for limitation. FIR No. 1/2022 was later registered under Sections 420, 406 and 120B of the Penal Code.
Besides the seller (Defendant 1), the plaint named her relatives Shakil Ahmed and Md Shanwaz Ali (Defendants 2 and 5), her son Md Mohsin Qureshi (Defendant 3), her son-in-law Md Sohab Ahmed Qureshi (Defendant 4), and the brokers Kochar and Singh (Defendants 6 and 7). Jain, the third broker, was deleted by the Joint Registrar on 14 February 2024, and the plaintiff's chamber appeal against that deletion, O.A. 77/2024, was decided along with the present applications. The company that bought the shop, M/s Exclusive Stores Pvt Ltd, was impleaded as Defendant 8 on 8 April 2025 on the plaintiff's own application.
Defendants 2 to 7 all applied in 2022 under Order I Rule 10 of the Code of Civil Procedure to be deleted from the array of parties; the plaintiff amended his plaint on 7 April 2025 to add allegations against them.
What the six defendants said
For the relatives and the son, Mr Anuj Handa said the agreement was between the plaintiff and Nasira Begum alone, the whole consideration went to her, and Defendants 2 and 3 had signed only as attesting witnesses while Defendant 5 had not signed at all; on Kasturi v. Iyyamperumal they were neither necessary nor proper parties. For the son-in-law, Mr Samar Khan said his client's name appeared on no document, there was no privity of contract between him and the plaintiff, and the plaint contained not a single averment specific to him beyond the blanket use of the word Defendants.
For the brokers, Mr Nikhil Rohatgi said no money had been paid to them, as consideration or as brokerage, and that a buyer who pays Rs 6.93 crore before the agreement is even signed, without verifying title, is deemed to have notice of any charge under Section 3 of the Transfer of Property Act. He then went further. Relying on Nasira Begum's written statement and on the documents filed by Exclusive Stores with its own written statement of 7 May 2025, he submitted that the plaintiff had in fact acquired the shop through that company, and that the cause of action was vexatious.
The financial detail he put before the court was extensive. Exclusive Stores had sales of Rs 45,82,000 and a net profit of Rs 5,61,462 in 2018-19, and its director Abhishek Kedia an income of Rs 12,26,121 for assessment year 2020-21, figures that did not suggest the capacity to buy a Connaught Place shop. Its bank statements showed transfers from Exclusive Store, the proprietorship of the plaintiff's son Saksham Agrawal, including about Rs 96,15,000 between February and July 2019 that went towards the purchase. Its ledger recorded Rs 5,62,32,800 from M/s Niharika Retail Pvt Ltd up to 3 August 2019, used for the shop, shown as a trade advance in one set of books and a loan in the other. The plaintiff, his son and his wife held 68.12 per cent of Niharika Holdings Pvt Ltd, which Exclusive Stores' audited accounts described as a related party. About Rs 96,25,000 had come from Vijay Kejriwal and Shashi Kejriwal, the sister of the plaintiff's wife. An email of 17 August 2019 from Exclusive Stores to an address linked to the plaintiff's director identification number informed him of a Rs 6 lakh payment to M.K. Overseas Pvt Ltd towards the loan on the shop, with a letter asking HDFC Bank to release the title documents. Dilip Kumar Tibrewal, who held 19.56 per cent of Exclusive Stores, worked at the plaintiff's Tanishq showroom, as did his sons. And the mobile number on the company's 2024-25 tax return was the one used in marketing for the Tanishq store on Fraser Road, Patna, run by a company promoted by the plaintiff, his wife and his son.
For the plaintiff, Mr Ravi Gupta, Senior Advocate, with Mr Akshat Nayyar, said all six were necessary and proper parties because they had falsely represented in 2018 that the title was clear, knowing of the HDFC mortgage, had handed over photocopies of the sale deed and the seller's KYC documents to induce confidence, and had thereby cheated him. The brokers, he said, had been paid in cash by the other defendants. All of them were jointly and severally liable to refund the money with 12 per cent interest.
Who bought the shop
The judge took the relationship between the plaintiff and Exclusive Stores first. Nasira Begum's written statement of 23 July 2022 said she had sold the shop to that company under a second agreement to sell dated 24 July 2019, on the plaintiff's instructions; that he had known of the mortgage all along, had negotiated with HDFC Bank for its release, and had told her the redemption money would come through a separate entity; and that the 2019 agreement was a continuation of the 2018 one. The sale deed to the company was executed on 7 January 2021, before the suit was filed.
Exclusive Stores' own written statement disclosed that it was incorporated in 2013 with Saksham Agrawal as promoter director and Beena Agrawal as a shareholder, that the family later sold their shares to others including Kedia, and that the family now had no involvement. When the court asked the plaintiff to clarify his relationship with the company and Kedia, he applied to implead the company and admitted that his family had promoted it and still had a commercial relationship with it, while denying that its purchase of the shop was at his instance. In his replication he admitted that he and his family raise finance from the company and from entities controlled by Kedia. His amended plaint, in a new paragraph 34(h), reserved the right to seek cancellation of the 2021 sale deed. No such relief was ever claimed.
The brokers filed a short note on 22 May 2025 analysing the common transactions across the bank accounts of the plaintiff, his family, their companies and Kedia's companies, supported by an affidavit. Exclusive Stores was given two chances to reply and chose not to. The judgment sets out, in two tables, the money that has moved between Kedia and his company on one side and the Agrawal family on the other since 2015: unpaid advances from Kedia to the son, the wife and the family HUF totalling well over a crore; Rs 5,24,31,000 from Niharika Retails to Exclusive Stores in 2019-20, of which Rs 2,83,58,000 was still due on 31 March 2025; a Rs 1.89 crore unsecured loan from Exclusive Stores to M/s Flagship Store Pvt Ltd in 2022-23; and repaid advances running to crores, including Rs 2,40,80,000 from Exclusive Stores to Beena Agrawal in February 2019. The plaintiff did not dispute these entries in his replication.
The judge found that this intermingling of funds supported the stand of Defendants 1, 6 and 7 that the plaintiff and Exclusive Stores were not strangers. Both Kedia and the plaintiff do business in Patna; the company had no apparent connection with Delhi yet bought the very shop the plaintiff had sought, during 2019, when the money was flowing between them and the mortgage was being redeemed. The company, like the plaintiff in Patna, runs a Tanishq showroom at the shop, which in the court's view “does not appear to be a mere coincidence”. Nasira Begum's assertion that the 2019 sale was done on the plaintiff's instructions was, the judge held, ex facie plausible, and the plaint was ex facie vexatious. On the authority of the Division Bench in Aniruddha Dutta v. Bhawani Shankar Basu and Santosh Kumar Jain v. Bahadur Singh Jain, that alone would justify rejecting the suit.
The 2019 deal that the plaint never mentioned
The judge then set the two accounts side by side. The title chain had four links, from a 1986 certificate of sale by the Union of India through sales in 2002 and 2009 to the 2011 sale to Nasira Begum, and the plaintiff admitted that all four original deeds were lying with HDFC Bank. There was no proof on record that the Rs 7 lakh withheld as TDS was ever deposited with the Income Tax Department.
From the documents filed by the seller and the company, the following emerged. HDFC Bank took possession of the shop on 1 June 2019 under SARFAESI proceedings against M.K. Overseas as borrower and Nasira Begum as mortgagor, and agreed to release it on payment of Rs 6 crore. On 24 July 2019 she signed an agreement to sell with Exclusive Stores for Rs 6,01,01,000, of which Rs 1,01,000 was for her and Rs 6 crore was to go straight to the bank. The company paid Rs 5,94,00,000 to the bank on 17 August 2019 and asked for a no-dues certificate. On 2 September the bank handed the original title deeds to Kedia in her presence, and the company acknowledged receiving possession from the bank and from her; the bank recorded release of its charge on 7 September. A sale deed was executed on 3 September 2019 but not registered. The company then served a legal notice and filed CS(OS) 644/2019 for specific performance; she entered appearance through her attorney Gulfam, signed a settlement deed on 26 February 2020 without filing a written statement, executed the sale deed herself on 7 January 2021, and the company withdrew its suit on 12 February 2021 as amicably resolved.
Against this, the plaintiff's case had what the judge called gaping holes. After the August 2018 agreement, the only written communication he relied on was the legal notice of July 2021 and the EOW complaint of October 2021; “there is a deafening silence for the intervening period of 2019-2021”. A man who had paid Rs 6.93 crore, received no rent and learnt of the bank's notice made no written protest in 2018, 2019 or 2020, while in those very years the seller, the bank and the company were documenting the redemption, the suit and the sale.
The original plaint said nothing about the sale to Exclusive Stores. On the first hearing on 29 March 2022 the court asked why specific performance had not been sought, and counsel replied that, since the shop was under encumbrance, the only remedy was a money decree. The judge held that stand was misleading: paragraph 11 of the plaintiff's own legal notice of July 2021 showed he knew by then that the shop had been transferred to a third party. His leisurely approach to court in March 2022, seeking only a refund and never cancellation of the 2021 sale deed, was contrary to the course an aggrieved buyer would take and lent credence to the seller's version. As for the 2025 amendment reserving a right to seek cancellation, “The said pleading is hogwash”: the prayer was available from the start and was consciously not made. Reading the plaint with the company's documents, the judge found the 2019 agreement to be a continuation of the 2018 one and part of a single sale.
Caveat emptor, and four title deeds lying with the bank
The plaintiff's claim that he did not know of the mortgage was found prima facie implausible. A buyer must inspect the seller's original title documents and verify them with the Sub-Registrar; Section 55(3) of the Transfer of Property Act requires the buyer to take over the originals on completion, and Section 3 fixes a buyer with notice of what ordinary diligence would reveal. The Exception to Section 19 of the Contract Act denies rescission for misrepresentation to a party who had the means of discovering the truth with ordinary diligence. The judge cited the Supreme Court in Commissioner of Customs v. Aafloat Textiles and Rajendra Kumar Barjatya v. U.P. Avas Evam Vikas Parishad on caveat emptor and the buyer's primary duty to ascertain title. The plaintiff, on his own account a man of means who regularly buys and sells property, had signed an agreement whose clause 18 recorded that all documents had been delivered to him. Reading that clause with the admission that the originals were with the bank, the judge concluded he had entered the deal knowing the originals were unavailable, and that the plea of being defrauded was not borne out by the record. He had come to court with unclean hands.
On the six applicants specifically, the judge held that being a witness to a document is not the same as executing it; witnesses attest the signing and do not consent to the obligations, and, as the Supreme Court said in Hemkunwar Bai v. Sumersingh, need not even know the contents. The new allegations of cash payments by Defendants 2 and 4 to the brokers, introduced only in 2025 and absent from the plaintiff's earlier replies, were an afterthought, unsupported by any document, and disclosed no cause of action in any event since the plaintiff had paid the brokers nothing.
The plea of fraud failed for two reasons. The plaintiff had shown no legal obligation on Defendants 2 to 7 to make any representation about encumbrances, had paid them nothing, and had no privity of contract with them. And calling conduct fraudulent does not plead fraud: Order VI Rule 4 requires the particulars, and Bishundeo Narain v. Seogeni Rai and Ranganayakamma v. K.S. Prakash require the pleader to say what representation was made, by whom, to whom, when, where and in what circumstances. The plaint rested on a general allegation. Defendants 2 to 7 were therefore neither necessary nor proper parties.
Order
I.A. Nos. 1021/2022, 10197/2022 and 11515/2022 were allowed and Defendants 2 to 7 were directed to be deleted from the array of parties. The plaintiff was directed to pay costs of Rs 50,000 to each of them. O.A. 77/2024, the chamber appeal against the Joint Registrar's deletion of Abhinandan Kumar Jain, who the plaint itself placed on the same footing as the two brokers, was dismissed for the same reasons, and the application to condone the 44-day delay in filing it was disposed of.
Two further issues were raised by the court itself. The 2018 agreement, titled Agreement of Sale, read with the symbolic possession letter, was intended to transfer the property in the manner contemplated by Section 53A of the Transfer of Property Act; such a document must be registered under Section 17(1A) of the Registration Act and stamped under Article 23A of Schedule I to the Stamp Act as applicable to Union Territories. Being unstamped, it is liable to be impounded under Section 35 of the Stamp Act, and the plaintiff is to address submissions on this. And since the court has found the plaint vexatious and the 2018 and 2019 agreements continuous, with the shop sold to a party related to the plaintiff, the plaintiff is to argue on the next date why the suit should not be dismissed; the seller's application for rejection of the plaint, I.A. 17921/2022, is already pending. The plaintiff was directed to place the amended memo of parties on record within two weeks. The matter was listed before the Roster Bench on 20 November 2026 for arguments on both issues.
Judgment was reserved on 24 July 2026 and delivered on 16 October. Mr Zia-Ul-Islam appeared for Nasira Begum, Mr Anuj Handa led for Defendants 2, 3 and 5, Mr Samar Khan for Defendant 4, Mr Nikhil Rohatgi for Defendants 6 and 7, and Mr Vidit Gupta for Defendant 9.