Delhi HC freezes two DLF Gurugram plots for buyer who lost arbitration, doubts sham loan letter finding

Applying the Supreme Court test in Home Care Retail for an unsuccessful party seeking post-award relief under Section 9, Justice Tushar Rao Gedela held prima facie that the arbitrator branded a Rs 5.20 crore NBFC loan sanction letter a sham without a single question on its genuineness being put to the witness from the lender, and that the amended Specific Relief Act makes the case rare and compelling.

A company that lost its arbitration for specific performance of two Gurugram plots has persuaded the Delhi High Court to freeze the properties anyway. Justice Tushar Rao Gedela on 28 October 2026 restrained NYEQ Technologies Private Limited from selling, alienating or encumbering plots A-2/1 and B-7/4 at DLF City, Phase I, DLF Qutub Enclave, until the next hearing of Thor Ventures (OPC) Private Limited's petitions under Section 9 of the Arbitration and Conciliation Act, 1996. The order rests on two findings reached at the prima facie stage: that the sole arbitrator's conclusion that a loan sanction letter from Pooja Finelease Limited was a sham document was based on no evidence at all, and that the 2018 amendments to the Specific Relief Act, which made specific performance a statutory rule rather than a discretionary remedy, supply the rare and compelling circumstance the Supreme Court demanded in Home Care Retail Marts Pvt. Ltd. v. Haresh N. Sanghavi, 2026 INSC 415.

Two agreements, Rs 10 lakh paid, and a refund twenty-one months later

Thor Ventures and NYEQ signed two agreements to sell on 4 May 2019, one for each 420 square metre plot, at Rs 5,62,24,000 apiece, a combined consideration of Rs 11,24,48,000. Thor paid Rs 5,00,000 on each. Clause 3 placed obligations on the seller: fencing, a name board, mutation in DLF's revenue records, no-dues certificates for house tax and from the RWA, DLF and the maintenance agency, and a no-objection certificate for sale. On NYEQ's instructions Thor paid DLF Rs 92,031 and Rs 58,358 towards mutation and late construction charges for the two plots, and Rs 7,093 each in maintenance charges. Mutation in NYEQ's favour was recorded on 9 and 12 September 2019, and NYEQ handed Thor the original endorsement letters and certified zoning plans. Thor obtained two loan sanction letters dated 7 July 2019 from Pooja Finelease Limited for the balance. NYEQ, according to Thor, delayed its Clause 3 obligations, said the original title documents were with a director in Dubai, never came forward to execute the sale deeds, and on 8 February 2021 sent back the Rs 5,00,000 paid on each plot.

Thor invoked the arbitration clause the same day and named Mr Rajat Bhalla as sole arbitrator, who passed a stay order over the plots on 11 February 2021. On NYEQ's petition under Section 14 of the Act, the High Court replaced him with Justice Jayant Nath (retired) on 15 February 2023. Thor's statements of claim sought specific performance of each agreement with damages of Rs 10,00,000 under Clause 5, a permanent injunction against alienation, and litigation costs. NYEQ's defence was that the agreements were forged and sham, executed by an unauthorised person on fake board resolutions; that it learnt of the Rs 5 lakh deposit only in January 2021 and refunded it promptly; and that the money related to a loan transaction between Thor's promoter and an entity connected with NYEQ's director, which had soured. Thor replied that NYEQ had never acted against the representative it now disowned. The tribunal framed issues on jurisdiction, authority of Mr Gaurav Bhargava to sign, specific performance and injunction, and added an issue on readiness and willingness on 8 May 2023. The interim stay continued until the awards.

The two awards of 26 September 2026 went against Thor on the decisive point. The tribunal held it was validly constituted, and that Thor had proved the agreements were valid and executed by NYEQ's authorised representative. But it found the loan sanction letter of 7 July 2019 to be a sham document, held that Thor had therefore failed to prove readiness and willingness, refused specific performance and injunction, and awarded NYEQ costs of Rs 15,00,000. Thor filed Section 9 petitions to protect the plots during its Section 34 challenge, which was lodged after the petitions.

Perverse finding or forbidden re-appreciation

Mr Dayan Krishnan, Senior Advocate, with Mr Saurab Seth, Mr Sukrit Seth, Mr Thakur Ankit Singh, Ms Liza Arora, Ms Neelampreet Kaur and Mr Kabir Dev, argued that the sham finding was perverse because nothing on record supported it. Pooja Finelease's authorised representative, CW-2, had deposed that the company was an RBI-registered NBFC with an asset size of Rs 200 crore, had produced the sanction letter, and had said the lender was still willing to disburse. Neither NYEQ nor the tribunal had put a single question to discredit the letter. The tribunal had also recorded no finding on NYEQ's prior obligations under Clause 3, which were a precondition to payment of the balance. Thor had claimed no damages, only specific performance, and the two plots were NYEQ's only assets; without a restraint, its Section 34 petition would become infructuous and it would be left without any remedy. He relied on Home Care Retail for the proposition that an unsuccessful party may invoke Section 9 after the award in rare and compelling cases, on Saptarishi Hotels Pvt. Ltd. v. National Institute of Tourism & Hospitality Management, 2019 SCC OnLine TS 1765, approved in that judgment, and on Gayatri Balasamy v. ISG Novasoft Technologies Ltd., (2025) 7 SCC 1, for the court's power to sever and modify an award: if the sham finding went, specific performance would follow. In rejoinder he took the court through the amended Section 10 and substituted Section 14(1)(a) of the Specific Relief Act, 1963, relying on B. Santoshamma v. D. Sarala, (2020) 19 SCC 80, and Global Music Junction Pvt. Ltd. v. Shatrughan Kumar, 2023 SCC OnLine Del 5479, to argue that specific performance has been mandatory since 1 October 2018 and monetary compensation is no longer a ground to refuse it.

Mr Sahil Sethi, with Mr Kanishk Kumar, Mr Samriddh Bindal and Mr Priyansh Kohli, answered for NYEQ that Thor had paid less than one per cent of the price, taken no step towards a sale deed for 21 months, invoked arbitration only after the refund, and deposited nothing since. The tribunal had scrutinised the evidence and recorded a finding of fact that could not be touched under Section 34, let alone Section 9; where two views are possible, the arbitrator's prevails (Delhi Airport Metro Express Pvt. Ltd. v. DMRC, (2022) 1 SCC 131). Thor's readiness rested wholly on the sanction letter; no document showed the financial capacity of either Thor or the lender, and under Ritu Saxena v. J.S. Grover, (2019) 9 SCC 132, a loan approval alone does not prove readiness. The onus lay on the claimant, not on NYEQ to cross-examine (Umabai v. Nilkanth Dhondiba Chavan, (2005) 6 SCC 243; Mehboob-ur-Rehman v. Ahsanul Ghani, (2019) 19 SCC 415). Readiness and willingness is a question of fact (Olympus Superstructures Pvt. Ltd. v. Meena Vijay Khetan, (1999) 5 SCC 651; Madhukar Nivrutti Jagtap v. Pramilabai Chhandulal Parandekar, (2020) 15 SCC 731), and the arbitrator is the master of evidence (OPG Power Generation (P) Ltd. v. Enexio Power Cooling Solutions, (2025) 2 SCC 417; Ssangyong Engineering v. NHAI, (2019) 15 SCC 131). He cited the Bombay High Court's ONGC v. Swiber Offshore Construction Pte. Ltd., decided on 15 June 2026, where an arguable Section 34 challenge was held insufficient for post-award Section 9 protection, and argued that the balance of convenience and irreparable injury lay with NYEQ.

What the lender's witness was asked, and what he was not

Justice Gedela started from Home Care Retail, which he described as settling that an unsuccessful party may invoke Section 9 after the award, that its burden on the triple test is higher than before the award, that protection is reserved for rare and compelling circumstances, and that the court must ask whether removing protection would cause irreversible prejudice and whether an order would preserve the efficacy of the Section 34 challenge. He extracted paragraphs 49 to 52, 59 and 60 of that judgment, including its reference to Gayatri Balasamy and its warning that a party's rights cannot be curtailed merely on an apprehension that the provision might be misused.

The judge then set the limits of his own inquiry. The tribunal is the master of facts; under Delhi Airport Metro Express and Ssangyong, a court may interfere only where a finding is based on no evidence or ignores vital evidence, and in a Section 9 petition the question is confined to a prima facie opinion. Both sides had argued only one thing: whether the conclusion that the 7 July 2019 letter was a sham rested on no evidence. Thor had never claimed its own financial capacity; its case depended entirely on Pooja Finelease paying the price. Its documents were the lender's RBI registration certificate and the sanction letter, which the judge reproduced. The letter sanctioned Rs 5.20 crore as a loan against property for plot B-7/4 with reference to the agreement to sell, for a tenure of 60 months, at a rate to be fixed by the reference rate at disbursal, with special conditions requiring registration of the sale deed for disbursement, delivery of the complete original title documents, execution of a loan agreement, and repayment by EMI or ECS. The judge noted that the sanction was in substance a loan against property, not a home loan, and was an in-principle approval rather than the loan agreement itself.

He reproduced CW-2 Brajesh Panday's affidavit and the whole of his cross-examination. The witness, a collection manager, confirmed the NBFC registration and an asset size of Rs 200 crore, said the company's principal business was property, personal and automobile loans and primarily auto loans, that the letter bore the signature of a senior manager, Mr Bobby Sharma, that sanction letters were valid for six months, that the application came in June 2019, that the only pre-sanction diligence was a physical inspection based on photocopies of the title deeds, that valuation by an authorised valuer happens before disbursal, and that he had no valuation or inspection report. On a holistic reading, the judge held, those answers did not prima facie discredit the letter. The sanction on photocopies could not count against Thor because NYEQ admittedly did not have the originals.

Why the tribunal's reasons did not add up to evidence

The award's reasoning, in paragraphs 84 to 96, was that Thor had filed no bank statement or balance sheet; that the application and sanction bore the same date; that the letter was sketchy, stating neither the rate of interest, the manner of repayment nor the documents needed for disbursal; that the lender was primarily into auto loans, the letter had expired by the end of 2019, no valuation was done and no reports were filed; that nothing showed the lender had the means to finance upward of Rs 10 crore for both plots; and, relying on Mohammed Khaleel v. Jayamma, 2026 SCC OnLine SC 1191, that readiness means financial capacity proved at the relevant time. The tribunal concluded that the letter was clearly a sham document.

Justice Gedela found the three gaps identified in paragraph 87 to be present in the letter in general terms, and in any event addressed by CW-2's affidavit on how disbursal would work. More fundamentally, no question about the authenticity, genuineness or veracity of the letter had been put to the witness by NYEQ or by the tribunal, even though the tribunal had asked questions of its own. When a witness is produced, penetrating questions can and ought to be put to discredit the document itself; that was not done. The onus of proving readiness and willingness lay on Thor, the judge accepted, but once the lender's own witness had produced the letter, the burden of showing it was a sham shifted to NYEQ. Whether the lender could extend the validity, whether it would actually disburse at registration, and whether it had the capacity to lend were questions with no bearing on whether the document was genuine. Not one suggestion of forgery, fabrication or sham had been put to the witness; had it been, the tribunal could have decided either way on the answer. The conclusion in paragraph 96 was therefore “merely inferential however, based on no evidence at all”.

The amended Specific Relief Act as the compelling circumstance

That alone did not decide the petition. Filing a Section 34 petition, or a Section 9 petition, is something any losing party may do and is not rare or compelling. What tipped the balance was a combination of undisputed facts and a change in the law. It was not denied that the two plots are NYEQ's only assets, that Thor sought only specific performance and no alternative damages, and that the tribunal's own interim protection had run from 2021 until the awards. Section 10 of the Specific Relief Act, substituted with effect from 1 October 2018, before the agreements were signed, took away the court's discretion to refuse specific performance, and the old Section 14(1)(a), which barred enforcement where money was adequate compensation, was deleted. Citing paragraphs 69 and 70 of B. Santoshamma and the Division Bench in Global Music Junction, which described the amendment as a paradigm shift that made specific performance the general rule, the judge reasoned that if Thor showed the sham finding was baseless and the letter creditworthy, it would establish readiness and willingness under Section 16(c), and specific performance would then be mandated rather than discretionary. That, read with the no-evidence analysis, could be a compelling circumstance to prevent irreparable prejudice and preserve the efficacy of the Section 34 challenge. A second rare circumstance was that NYEQ had no other assets; if the plots went, the challenge would be redundant and infructuous; as Thor had urged, “Nothing will remain for execution.”

Thor had, in the judge's prima facie opinion, shown a rare and compelling case and a strong case on the higher pedestal required of an unsuccessful party. Prejudice was clear: Thor could not be compensated in money under the amended Act. Because the court had found the paragraph 96 finding to be based on no evidence, the many authorities cited by NYEQ against interference with findings of fact might not fully apply, though there was no quarrel with the propositions themselves. Ritu Saxena was distinguished on facts: there the plaintiff asserted her own and her husband's capacity alongside an ICICI Bank approval and failed on the former; here Thor's case hinged entirely on the lender's letter and CW-2's assertion that the lender would pay the whole price.

Order

On I.A. 27471/2026 in O.M.P.(I) (COMM.) 461/2026 and I.A. 27476/2026 in O.M.P.(I) (COMM.) 462/2026, both under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure, NYEQ Technologies was restrained from selling, alienating, creating third-party rights or any encumbrance of whatever nature in plots A-2/1 and B-7/4, DLF City, Phase I, DLF Qutub Enclave, Gurugram, till the next date of listing. NYEQ was given three weeks to file its reply and Thor two weeks thereafter for rejoinder. Both petitions were listed on 2 December 2026 along with the Section 34 petitions, O.M.P. (COMM) 471/2026 and 472/2026. The judgment was reserved on 15 October 2026 and delivered on 28 October 2026.