Karan Luthra Now Deceased vs M S Krishna Estate & Ors.

Court
Delhi High Court

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : 02.04.2026
% Pronounced on : 29.05.2026
Uploaded on : 29.05.2026

+ FAO 79/2026 & CM APPL.15713/2026


KARAN LUTHRA NOW DECEASED .....Appellant
Through: Mr. Rajesh Yadav, Senior Advocate
with Mr. Rajiv Dewan, Mr. Ravnak
Gupta, and Mr. Dhananjay Mehlawat,
Advocates.

versus

M S KRISHNA ESTATE & ORS. .....Respondents
Through: Mr. J. Sai Deepak, Senior Advocate
with Mr. Gaurav Jain, Mr. Atul
Malhotra, Ms. Karuna Sharma, Mr.
Anant Raj Kannojiya, Mr. Pramendra
Singh, Mr. Devesh Chauhan, Ms.
Akriti Chaturvedi, and Ms. Prerna
Tiwari, Advocates for Respondent
No. 2.
Mr. Gandharv Anand and Mr. Brian
Bosses, Advocates for Respondent
No. 3.
Mr. Rajesh Kumar Agnihotri,
Advocate for GNCTD/Respondent
Nos. 4 and 5.

+ FAO 102/2026, CM APPL. 22182/2026, CM APPL. 33818/2026
and CM APPL. 33820/2026

Reserved on : 26.05.2026

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Signing Date:29.05.2026
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SAHIL LUTHRA .....Appellant
Through: Mr. Jayant Bhushan, Senior Advocate
with Mr. Gandhari Anand, Mr. Brian
Menry, Mr. Ashish, and Mr. Amartya
Bhushan, Advocates.

versus

M/S KRISHNA ESTATE & ORS. .....Respondents
Through: Mr. J. Sai Deepak, Senior Advocate
with Mr. Ashwani Kumar, Advocate
for Respondent No. 1.
Ms. Karuna Sharma, Mr. Anant Raj
Kannojiya, Advocates for Respondent
No. 3.
Mr. Shahnawaz, Advocate for
Applicant.

CORAM:
HON'BLE MR. JUSTICE MANOJ KUMAR OHRI
JUDGMENT
CM APPL. 33818/2026 (impleadment) and CM APPL. 33820/2026
(impleadment) in FAO 102/2026
1. It is informed that applications under Order 1 Rule 10 CPC are
pending before the Trial Court and the same shall be considered in
accordance with the law.
2. The present applications are disposed of in the above terms.
FAO 79/2026 & CM APPL.15713/2026 (stay)
FAO 102/2026 & CM APPL. 22182/2026 (stay)
1. The captioned appeals have been filed by the appellants/defendants,
who are the legal heirs of late Karan Luthra , against an order dated
03.01.2026, whereby the application under Order 39 Rules 1 & 2 CPC filed
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by the common respondent no. 1/plaintiff in both the present appeals was
allowed, and the defendants were restrained from creating encumbrances,
selling, alienating, parting with, and/or creating third party interests in
regard to the subject properties during the pendency of the underlying suit.
The parties hereinafter are referred to according to their status before the
Trial Court.
2. While final arguments were heard and the judgment reserved in both
the captioned appeals on different dates; in view of the parties as well as the
impugned order being common, and the same questions of fact and law
being raised, both the appeals are being disposed of vide this common
judgment.
3. The impugned order came to be passed in the context of the
underlying suit bearing no. CS DJ 816/25, wherein the plaintiff has claimed
to be the owner of the subject properties, being 91 Bighas 08 Biswas of
agricultural land situated in Village Dera Mandi, Tehsil Hauz Khas (now
Mehrauli), New Delhi , on the strength of four sale deeds statedly executed in
1998 by the late Vinod Luthra , brother of late Karan Luthra , in favour of the
plaintiff organisation.
Late Karan Luthra had filed a suit in the year 2002 against late Vinod
Luthra , the plaintiff organisation herein, as well as three other individuals,
alleging that Vinod Luthra had illegally sold properties purchased by Karan
Luthra to the said parties, and seeking cancellation of the concerned sale
deeds. These included the deeds qua the subject properties in the present
dispute. The parties to the suit filed by late Karan Luthra , including the
plaintiff herein, managed to reach a settlement dated 19.07.2022 (which
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superseded an earlier settlement dated 28.05.2022) before the Mediation
Centre, Saket Courts. On a joint application under Order 23 Rule 3 CPC
being filed by the said parties, a compromise decree was passed on
21.07.2022 in terms of the said settlement. Accordingly, late Karan Luthra
was declared the owner of the subject properties, and all claims of the
plaintiff herein were declared to stand satisfied with nothing remaining to be
paid to it. It was recorded that the plaintiff had given up all rights, title, and
interest in the subject properties and possession of the same had been
handed over to late Karan Luthra . It was further recorded that the plaintiff
would execute sale deed(s) in favour of late Karan Luthra within 3 months
of the date of decree.
Now, in the underlying suit, the plaintiff (erstwhile partnership firm,
presently being run as a sole proprietorship) has sought to collaterally
challenge the said settlement and compromise decree by stating that the
complete contents of the agreement between the parties were not made part
of the same. As noted above, the Trial Court, vide the impugned order,
restrained the defendants from creating third party interests in the subject
properties during the pendency of the suit.
4. Mr. Rajesh Yadav, learned Senior Counsel appearing for the
appellant/defendant in FAO 79/2026, while assailing the impugned order,
contends that the plaintiff has not approached the Trial Court with clean
hands and has suppressed material facts. It is stated that after the passing of
the compromise decree on 21.07.2022 pursuant to the settlement dated
19.07.2022, late Karan Luthra preferred an execution petition wherein the
plaintiff was duly represented through counsel. A statement of no objection
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was given on behalf of the plaintiff to the appointment of a Local
Commissioner (“LC”) to execute the sale deeds. On 21.06.2024, a sale deed
was executed in favour of the late Karan Luthra in terms of the compromise
decree by the Executing Court. This deed explicitly mentions that the entire
sale consideration stands paid and physical possession of the property has
already been delivered. Neither Karan Luthra nor the plaintiffs assailed the
compromise decree during the lifetime of Karan Luthra . However,
following his demise on 23.08.2024 and over 3 years after passing of the
compromise decree, the plaintiff filed an application in September 2025
seeking to set aside the said decree, and additionally filed the underlying suit
in December 2025. In the underlying suit, an LC was appointed whose
report explicitly verified that physical possession of the property rests with
the defendants. The plaint, however, completely suppressed the fact that the
sale deed dated 21.06.2024 was executed under the directions of the
Executing Court. Though the plaintiff has claimed an additional oral
understanding, the same was never a part of either the settlement or the
compromise decree, and the suit remains completely silent on the crux of
this alleged understanding.
5. Per contra , Mr. J. Sai Deepak, learned Senior Counsel appearing for
the plaintiff in both appeals, submits that the Authorized Representative
(“AR”) of the plaintiff had executed a General Power of Attorney (“GPA”)
dated 05.07.2022 in favour of late Karan Luthra , authorizing him to deal
with the subject properties on behalf of the plaintiff. It is argued that
pursuant to the said GPA and as per an oral understanding between the
parties, late Karan Luthra , even after the compromise decree was passed
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recording that no further amounts had to be paid to the plaintiff, transferred
further amounts totalling Rs.10,70,00,000/- to the plaintiff through
RTGS/NEFT/CHEQUE vide eight transactions between 24.05.2022 and
26.04.2023. In addition thereto, late Karan Luthra is also stated to have
issued six cheques in favour of the plaintiff for the part pertaining to the
plaintiff’s share in the future sale(s) of the subject properties. It was claimed
that while late Karan Luthra complied with this understanding during his
lifetime, his legal heirs refused to continue with the commitment following
his demise, which necessitated the filing of the underlying suit.
6. Mr. Jayant Bhushan, learned Senior Counsel appearing for the
appellant/defendant in FAO 102/2026, adopts the submissions made by Mr.
Yadav and further contends that a written settlement, a subsequent
compromise decree, and a formal transfer of title, all recording that no
amounts remain to be paid to the plaintiff and extinguishing its rights in the
subject properties, cannot be overridden by a vague oral agreement. It is
submitted that the plaintiff’s prayer for an interim injunction is entirely
based on an alleged unwritten understanding, the exact nature, terms, and
conditions of which have not even been clarified in the plaint. It is further
submitted that the plaintiff has set up an entirely contradictory and
unsustainable case; while the plaintiff has prayed for the cancellation of the
GPA dated 05.07.2022 in the underlying suit, it is now seeking to project the
very same document, and transactions purportedly carried out pursuant to
the same, as supreme over a subsequent decree of the Court.
7. Mr. J. Sai Deepak, learned Senior Counsel for the plaintiff, reiterates
that there was a broader oral understanding between the parties, as per which
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late Karan Luthra was required to pay further sums to the plaintiff, and
submits that there is no other plausible explanation for the RTGS/NEFT
transactions made and cheques issued by the late Karan Luthra in favour of
the plaintiff. He further submits that the concerned execution proceedings
are an absolute nullity as they were filed before a Court which lacked
territorial and pecuniary jurisdiction over the matter. It is also submitted that
the counsel who appeared in the execution proceedings was never
authorized to appear in the said proceedings or consent to the appointment
of an LC for the execution of a sale deed in favour of late Karan Luthra .
8. I have heard the learned Senior Counsels for the parties and carefully
examined the record.
9. Learned Senior Counsel appearing for the plaintiff has vehemently
relied upon the GPA dated 05.07.2022 to substantiate the plaintiff’s
argument as to the existence of an oral understanding between the plaintiff
and late Karan Luthra , pursuant to which certain funds were transferred.
However, a perusal of the plaint reveals that the plaintiff has explicitly
prayed for the said GPA to be declared illegal, non-est , void ab initio , and of
no legal effect whatsoever. The plaintiff cannot be permitted to challenge a
document as a nullity in its own pleadings and then simultaneously rely
upon the very same document in appeal, especially to argue that it shall
reign supreme over a written settlement duly signed by the plaintiff’s AR, a
subsequent compromise decree of the Court, as well as a sale deed reflecting
a formal transfer of title.
10. It is also worth noting that only two out of the eight RTGS/NEFT
transactions sought to be relied upon by the plaintiff as proof of the alleged
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oral understanding between the parties were executed after the settlement
dated 19.07.2022 or the compromise decree dated 21.07.2022. Furthermore,
the execution proceedings instituted by late Karan Luthra pursuant to the
said compromise decree concluded with the execution of a sale deed dated
21.06.2024 in his favour by an LC on behalf of the plaintiff. The said deed,
too, explicitly records that the entire sale consideration stands paid and
physical possession of the property has already been delivered. No amounts
whatsoever have been shown to have been transferred by late Karan Luthra
to the plaintiff thereafter.
11. The crux of the alleged understanding between the parties has not
been pleaded by the plaintiff in its suit. It has been vaguely stated that
further sums were required to be paid by late Karan Luthra , however, the
plaintiff has failed to state the specific terms or proportions of this alleged
unwritten agreement in the plaint. Notably, no evidence has been produced
to establish that there even was any sale of the subject properties at the
relevant time these transactions were executed.
12. Indisputably, the settlement dated 19.07.2022 records that no amounts
remain to be paid to the plaintiff, that possession of the subject properties
had been handed over to late Karan Luthra , and that the plaintiff was
required to execute sale deed(s) in the favour of late Karan Luthra . The
subsequent compromise decree was passed on a joint application under
Order 23 Rule 3 CPC being filed by the parties. The same was accompanied
by the affidavits of all the parties concerned, including an affidavit by the
AR of the plaintiff, and the Court had also separately recorded the
statements of all the parties. Execution proceedings were filed thereafter and
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the same counsel who had appeared for the plaintiff at the time of the
compromise decree also represented them in the execution proceedings. The
counsel had also filed a vakalatnama on behalf of the plaintiff in the said
execution proceedings. Consent was given for the appointment of an LC to
execute a sale deed in favour of late Karan Luthra . This entire gamut of
facts does not find mention in the plaint. A plea has now been raised that the
execution proceedings are rendered a nullity due to the unauthorised
appearance and unauthorised consent of the concerned counsel. Concededly,
no complaint or remedial proceedings have been initiated against the said
counsel before the Bar Council or otherwise for the alleged unauthorized
representation. The plaintiff’s stand appears to be a complete afterthought.
13. It has also been submitted on behalf of the plaintiff that the Executing
Court lacked the requisite territorial and pecuniary jurisdiction over the
matter. However, the record shows that the plaintiff participated in the
execution proceedings through counsel without any timely demur, allowed
the process to reach its conclusion, and permitted the registration of the sale
deed to be completed on 21.06.2024.
14. Though an application to set aside the compromise decree has now
been filed, the same was done only in September 2025, years after the
execution stood satisfied and after the demise of Karan Luthra on
23.08.2024, and right before the filing of the underlying suit. The same is
stated to be pending consideration before the concerned Court.
15. Unquestionably, the compromise decree dated 21.07.2022 stands
satisfied, and the sale deed dated 21.06.2024 stands executed in favour of
the predecessor-in-interest of the defendants, and actual physical possession
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of the land firmly rests with them as verified by the LC’s report dated
22.12.2025 in the underlying suit.
16. On consideration of an application under Order 39 Rules 1 & 2 CPC,
the applicant must concurrently establish a prima facie case, a balance of
convenience, and irreparable loss. If the GPA dated 05.07.2022 is a nullity
according to the plaintiff’s own prayer, it cannot simultaneously form the
foundation of its prima facie case. The balance of convenience skews
entirely in favour of the defendants, as the settlement dated 19.07.2022, the
compromise decree dated 21.07.2022, as well as the sale deed dated
21.06.2024 record that all claims of the plaintiff stood satisfied, possession
was delivered to late Karan Luthra , and no more amounts were to be paid to
the plaintiff. Furthermore, an interim injunction is an equitable remedy
requiring a party to approach the Court with clean hands. By completely
suppressing the execution proceedings and the registered sale deed dated
21.06.2024 from its plaint, the plaintiff disentitled itself from equitable
relief. This Court is of the considered opinion that a discretionary interim
injunction cannot be granted based on a complete mystery, and a vague, un-
pleaded oral agreement cannot displace a registered title deed at an
interlocutory stage.
17. Considering all the above, the present appeals are allowed, and the
impugned order is set aside.
18. Needless to add, the findings in the present judgment have been made
merely for the disposal of the present appeals. Nothing stated herein shall be
construed as a comment on the merits of the case, and the Trial Court shall
proceed with the matter uninfluenced by the same.
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19. The present appeals, along with the pending applications, are disposed
of in the above terms.


( MANOJ KUMAR OHRI)
JUDGE
MAY 29, 2026
nb
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