Smt. Shally Gupta & Anr. vs Smt. Stuti Agarwal
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
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% Reserved on: 01 September, 2026
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Pronounced on:07 September, 2026
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Uploaded on:.07 September, 2026
# CNR No. DLHC010408652026
+ RFA No. 925/2026, CM APPL. 58610/2026
1. SMT. SHALLY GUPTA
W/o Sh. Mahesh Gupta
R/o B-27, Tagore Road,
Adarsh Nagar, Delhi. ....Appellant No.1
2. SH. ASHISH GUPTA
S/o Sh. Mahesh Gupta
R/o B-27, Tagore Road,
Adarsh Nagar, Delhi. ...Appellant No. 2
Through: Mr. S K Sharma and Mr. Tejas
Singh, Advocates.
versus
SMT. STUTI AGARWAL
W/o Sh. Sajal Agarwal
R/o House No. K-1/46,
Model Town-II, Delhi. ....Respondent
Through: Mr. Sujeet Beniwal, Advocate
and Mr. Hitesh Kumar,
Advocate and Mr. Tushar
Rohmetra, Advocate and Mr.
Devansh Jain, Advocate.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G M E N T
NEENA BANSAL KRISHNA, J.
RFA 925/2026 Page 1 of 14
Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:07.09.2026
17:29:42
1. Regular First Appeal under Section 96 read with Order XLI read
with Section 151 of the Code of Civil Procedure, 1908 ( hereinafter referred
to as „CPC‟ ), has been filed on behalf of the Appellants against the
Judgment and Decree dated 20.07.2026 , whereby the Suit bearing CS DJ
No.269/2022 filed by the Plaintiff/Respondent for Possession, Mesne
Profits/Damages and Permanent Injunction , has been decreed.
2. The facts in brief , as stated in the Plaint, are that Defendant No.1,
Ms. Shally Gupta and Defendant No.2, Mr. Ashish Gupta , being the joint
owners of the entire Second Floor of Property bearing No.27, Block-B,
ad measuring 238 sq. yards, situated in Village Bharola, popularly
known as Tagore Road, Adarsh Nagar, Delhi (hereinafter referred to as
the “suit property”) , sold it to the Plaintiff, for a sale consideration of
Rs.48,51,000/-, vide registered Sale Deed dated 25.01.2019, registered on
29.01.2019.
3. The Plaintiff asserted that after purchase of the Property, she got the
electricity connection in respect of the suit property changed in her name .
Her name was also recorded in the MCD records and she has been paying
the House Tax, thereafter.
4. The Defendants however, expressed their inability to immediately
vacate the suit premises and sought permission to continue therein, till they
were able to make alternate arrangements. They undertook to hand over the
physical possession on or before 25.02.2019, failing which they would be
liable to pay Damages/ Mesne Profits at the market rate. The Plaintiff stated
that it was only on humanitarian grounds that she gave the Defendants one
month to vacate the Property . However, they failed to do so, despite
repeated requests.
RFA 925/2026 Page 2 of 14
Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:07.09.2026
17:29:42
5. The Plaintiff thus, served a Legal Notice dated 10.03.2022 , seeking
peaceful possession, but to no avail. Hence, she filed the Suit for Possession,
Damages/Mesne Profits @ Rs.40,000/- per month, excluding water,
electricity and other charges, w.e.f. 25.02.2019. She also sought Permanent
Injunction for restraining the Defendants from creating third party rights in
the suit property.
6. The Defendants, in their Written Statement , took t he preliminary
objection that the Plaintiff had not approached the Court with clean hands
and had suppressed material facts.
7. It was denied that Defendant Nos.1 and 2 had sold the suit property to
the Plaintiff. They claimed that they had merely transferred the documents
for the purpose of securing a loan availed by them from the Plaintiff and
that the Sale Deed had been executed in favour of the Plaintiff, only as
security for the loan.
8. T he loan amount was to be refunded by 31.12.2021, but on account
of Covid-19 Lockdown , the Defendants were unable to repay the entire
amount, as per the terms of the Settlement. However, the Plaintiff allegedly
turned dishonest and despite receiving major part of the loan amount , filed
the present Suit for Possession.
9. The Defendants asserted that there was no relationship of licensee
and licensor between the parties nor did they ever seek time for vacating
the suit property.
10. The Defendants claimed that it was only a loan transaction and, to
secure the same, the Sale Deed had been executed, in terms of a Mutual
Agreement , allegedly executed in the presence of witnesses, including the
RFA 925/2026 Page 3 of 14
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Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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father-in-law of the Plaintiff, but the original Mutual Agreement was in
possession of the Plaintiff.
11. It was further asserted that the Plaintiff had executed a balance
confirmation, acknowledging an outstanding amount of Rs.63,00,000/- and
Undertaking to return the original Sale Deed and previous title documents,
upon receipt of the entire loan amount. The Defendants claimed that subject
to reconciliation of the interest charged, they were ready and willing to pay
the remaining amount of approximately Rs.52,00,000/- . According to them,
instead of seeking recovery of the alleged balance loan amount, the Plaintiff
had filed the present Suit for Possession, merely to pressurise the
Defendants and, therefore, the Suit was not maintainable.
12. The Defendants also contended that they had never sought permission
to continue in possession of the suit property nor undertaken to pay
damages. According to them, they continued to occupy the suit property as
owners and not as licensees and were therefore, not liable to pay
Rs.40,000/- per month, towards use and occupation charges.
13. It was their case that the transaction was, in fact, a loan transaction
and the Sale Deed had been executed only as security for the loan advanced
by the Plaintiff and her family members. Owing to their urgent financial
requirement , they had agreed to execute a nominal Sale Deed on the
understanding recorded in the Mutual Agreement, that upon repayment of
the loan, the suit property would be re-conveyed in their favour, at their cost.
14. It is, therefore, submitted that the Suit of the Plaintiff, is liable to be
dismissed.
15. The Plaintiff in the Replication , reaffirmed the assertions made in the
Plaint and denied the allegations made in the Written Statement.
RFA 925/2026 Page 4 of 14
Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:07.09.2026
17:29:42
16. The Issues on the pleadings were framed on 28.02.2024, which are
as under:
“ 1. Whether the plaintiff is entitled for decree of
possession qua suit property i.e. entire second floor of
property bearing No. 2 7, Block B, Area measuring 238 Sq.
Yards in area of village Bharola, Adarsh Nagar, Delhi, as
prayed in the plaint? OPP
2. Whether the plaintiff is entitled for a decree for a sum
of Rs. 14,40,000/- towards arrears of Mesne Profits, as
prayed for? OPP
3. Whether plaintiff is entitled to pendente lite and
future [email protected],000/- per month alongwith
interest@ 18% per annum? OPP
4. Whether the plaintiff is entitled for decree of
permanent injunction restraining defendants or their agents
from entering into agreement or passing over possession of
suit property, as prayed in the plaint? OPP
5. Whether the plaintiff is entitled for costs? OPP
6. Whether the suit is not properly valued for the
purpose of Court fees? OPD
7. Whether the plaint is liable to be dismissed on ground
of concealment and suppression of material facts?OPD
8. Whether the suit is under-valued for purposes of
pecuniary jurisdiction? OPD
9. Relief.”
17. The Plaintiff, Ms. Stuti Agarwal, examined herself as PW-1 .
18. PW-2, Mr. Yashpal Singh , Executive, CRD Bhargarh, TPDDL
Office, Roshanara Road, Delhi-110007 , proved the record pertaining to the
electricity connection as Ex.PW-2/1 and Ex.PW-2/2.
RFA 925/2026 Page 5 of 14
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Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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19. PW-3, Mr. Sudeep Kumar, Junior Secretariat Assistant, A & C
Department, Civil Lines Zone , produced the House Tax Payment Record for
the years 2021-2024, which stood in the name of the Plaintiff, Ms. Stuti
Agarwal, and the Property Tax documents were proved as Ex.PW-3/1.
20. PW-4, Mr. Manish Kumar, Junior Assistant , Sub-Registrar-VIA,
Pitampura, Delhi , proved the registered Sale Deed in favour of the Plaintiff
as Ex.PW-4/1 .
21. The Defendants examined DW-1, Mr. Ashish Gupta , who deposed
in terms of the defence taken in the Written Statement and proved the
WhatsApp conversations between the parties as Ex.DW-1/1 and the
Certificate under Section 63(4) of the Bharatiya Sakshya Adhiniyam,
2023 , as Ex.DW-1/2. The screenshots of the listing, were Ex.DW-1/3.
22. DW-2, Mr. Mahesh Gupta and DW-3, Mr. Ashok Kumar Jindal
also deposed in support of the defence of the Defendants.
23. The learned District Judge, on appreciation of the evidence,
concluded that the Sale Deed dated 25.01.2019, registered on 29.01.2019 ,
in favour of the Plaintiff, Ms. Stuti Agarwal, had been duly proved .
24. DW-1, Mr. Ashish Gupta, in his cross-examination admitted that he
and his mother had been informed , before going to the Office of the Sub-
Registrar, that they were going for execution of the Sale Deed. He further
admitted that the consideration mentioned in the Sale Deed had been
received by him and his mother and that no force or pressure had been
exerted upon either of them for execution thereof.
25. The Property Tax Receipts, Ex.PW-3/1 , established that after
execution of the Sale Deed, the House Tax was being paid by the Plaintiff,
RFA 925/2026 Page 6 of 14
Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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while DW-1, Mr. Ashish Gupta, admitted that neither he nor his mother
had been paying the same.
26. Likewise, PW-2, Mr. Yashpal Singh from TPDDL , proved that the
electricity connection had been changed in the name of the Plaintiff. DW-2,
Mr. Mahesh Gupta , also admitted in his cross-examination that the Sale
Deed had been executed by his wife and son in favour of the Plaintiff
without any pressure.
27. On appreciation of the evidence , it was concluded that after
execution of the Sale Deed, the Defendants continued in possession of the
suit property, on the assurance that they would vacate it within one month.
Their defence that the Sale Deed was merely a transaction executed as
security for the loan under the Mutual Agreement, Ex.PW-1/D-1, was
rejected.
28. Accordingly, the Plaintiff was held entitled to possession, Mesne
Profits @ Rs.40,000/- per month with interest @ 18% p.a., and Permanent
Injunction restraining the Defendants from creating third party rights in the
Suit Property.
29. Aggrieved by the said Judgment and decree, the Regular First
Appeal has been filed.
30. The principal ground of challenge is that the learned Trial Court
committed a material error in not framing a specific Issue with respect to
the Mutual Agreement executed on the stamp paper dated 04.01.2019 ,
despite a specific plea having been raised by the Appellants.
31. It is further contended that the learned Trial Court failed to appreciate
the specific defence of the Appellants that the Sale Deed dated 25.01.2019
was not an outright sale, but had been executed merely as security for
RFA 925/2026 Page 7 of 14
Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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the loan transaction inter se the parties. The Mutual Agreement was,
therefore, central to their defence and its execution, contents and effect were
material to the adjudication of the Suit. The failure to frame a specific Issue
in this regard, is asserted to be contrary to Order XIV Rule 1 CPC .
32. The Appellants further claimed that the original Mutual Agreement
was in the possession of the father-in-law of the Respondent and
therefore, its non-production had been sufficiently explained. It is contended
that the secondary evidence ought to have been considered under Section 60
of the Bharatiya Sakshya Adhiniyam, 2023 , particularly when PW-1 had
admitted her signature at Point ‘A’ on the Mutual Agreement, Ex.PW-
1/D1 .
33. Moreover, the loan transaction and the Mutual Agreement stood
corroborated by the WhatsApp communications exchanged with Mr.
Rajinder Kumar Aggarwal , which have not been duly appreciated by the
learned Trial Court.
34. Lastly, it is contended that the Appellants had instituted CS DJ
No.246/2025 seeking Declaration and Cancellation of the Sale Deed dated
25.01.2019 and Permanent and Mandatory Injunction . Since the validity of
the Sale Deed was directly in issue , the learned Trial Court ought to have
considered consolidation of the two Suits and a joint trial, to avoid
conflicting decisions. The failure to do so, has caused serious prejudice to
the Appellants.
35. The Impugned Judgment is, therefore, sought to be set aside.
Submissions heard and record perused.
36. The Plaintiff had instituted the present Suit for Possession and Mesne
Profits claiming ownership over the suit property, on the basis of the
RFA 925/2026 Page 8 of 14
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Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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registered Sale Deed dated 25.01.2019, registered on 29.01.2019 . The
execution of the Sale Deed by the Appellants is not in dispute and the same
was duly proved through the official from the Office of the Sub-Registrar, as
Ex.PW-4/1 .
37. Significantly, DW-1, Sh. Ashish Gupta , in his cross-examination
admitted that he and his mother had been informed before going to the
Office of the Sub-Registrar that they were going there for the purpose of
execution of a registered Sale Deed. He further admitted that the sale
consideration mentioned therein had been received by them and that there
was no force or pressure upon either him or his mother for execution of the
Sale Deed.
38. It is further established from the evidence of PW-3 that after
execution of the Sale Deed, the suit property stood mutated in the name of
the Plaintiff and the Property Tax was being paid by her. DW-1, Sh. Ashish
Gupta admitted that neither he nor his mother, had been paying House
Tax
39. Likewise, PW-2, Sh. Yashpal Singh from TPDDL , proved the
change of the electricity connection in the name of the Plaintiff. DW-2, Sh.
Mahesh Gupta, also admitted in his cross-examination that the registered
Sale Deed had been executed in favour of the Plaintiff without any pressure.
The execution of the registered Sale Deed, therefore, is not merely
proved from the official record but is also admitted by the Defendants
themselves
40. It was further the case of the Plaintiff that, after purchase of the suit
property, the Appellants were permitted, at their request , to continue in
possession for one month to enable them to arrange alternate
RFA 925/2026 Page 9 of 14
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Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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accommodation. However, they failed to vacate the suit premises,
thereafter.
41. The entire defence of the Defendants/Appellants, however, is that
notwithstanding the execution of the registered Sale Deed, the transaction
was in substance a loan transaction, and the Sale Deed had been executed
only as security. The foundation of this defence, is the alleged Mutual
Agreement, Ex.PW-1/D1 .
42. According to the Appellants, a loan in the sum of Rs.1,65,00,000/-
carrying interest @ 21% per annum had been taken from the Plaintiff, for
a period of three years and the Sale Deed had been executed only to secure
repayment thereof.
43. The Mutual Agreement relied upon by the Appellants records that a
registered Sale Deed had been executed in favour of the Plaintiff. The
relevant terms relied upon by the Appellants are as under:
“ 1. That the first party shall pay the said loan amount on
or before 31.12.2021 to the second party.
2. That the first party shall pay the interest of 21% per
annum of the said amount to the second party. Which will
pay by the first party in every month in monthly ratio to the
second party.
3. That the expenses of the execution and registration of
Sale Deed in Favour of the second party in respect of the
said property shall be borne and paid by the first party.
4. That in case the first party will fail to pay the said
loan amount to the second party in respect of the said
stipulated period i.e. 31.12.2021, then the second party has
right to take the possession of the said property on the
RFA 925/2026 Page 10 of 14
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Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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basis of sale deed and the first party shall have no objection
for the same and shall not file any case in any court of law.
5. That the same way if the first party will pay the said
loan amount to the second party in the said stipulated
period i.e. on or before 31.12.2021 then the second party
shall return their original documents in respect of the said
property and the second party shall also execute the sale
deed in respect of the said property in Favour of the first
party on the cost and expenses of the first party.
6. That the first party assure the second party that
neither they and nor their any legal heir have any objection
for the same .”
44. According to the Defendants/Appellants, the Plaintiff had also
executed a Balance Confirmation acknowledging that a sum of
Rs.63,00,000/- remained outstanding and had undertaken to return the
original Sale Deed and previous title documents, after receiving the entire
loan amount.
45. In the Written Statement, the Defendants had asserted that they were
ready and willing to pay approximately Rs.52,00,000/- , subject to
reconciliation of the interest, allegedly charged by the Plaintiff.
46. The entire defence of the Appellants / Defendants was therefore,
around the mutual Settlement Ex.PW-1/D1.
47. The terms as reproduced above clearly show that even as per this
mutual Settlement Agreement, the parties had agreed that loan of
Rs.1,65,00,000/- along with interest @ 21% per annum , taken by the
Defendants, shall be repaid within three years, and if the loan amount is
returned within the stipulated period, i.e. on or before 31.12.2011 , then the
RFA 925/2026 Page 11 of 14
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ARORA
Signing Date:07.09.2026
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Plaintiff shall execute a Sale Deed in respect of the suit property, in favour
of the Defendants / Appellants.
48. It is the case of the Defendants themselves that there was a balance
loan amount, which was to be repaid along with interest. Once the entire
alleged loan amount of Rs.1,65,00,000/- along with interest had not been
paid till 31.12.2011, the covenant of mutual Agreement was not complied
with, the Defendants could not have claimed the right to reside in the
suit property, without the repayment of alleged loan as well as execution
of the Sale Deed in respect of suit property, in their favour.
49. It is significant to note that the Mutual Settlement, Ex.PW-1/D1, is
undated , though the e-stamp paper on which it was prepared was purchased
on 04.01.2019 . The stamp paper for the Sale Deed was subsequently
purchased on 23.01.2019 and the Sale Deed was executed on 25.01.2019 .
However, the recitals of the Mutual Settlement themselves, refer to the Sale
Deed as having already been executed, indicating that the Mutual
Settlement came to be executed, thereafter.
50. The Appellants’ claim that they are entitled to continue to reside
in the suit premises, is defeated by their own Settlement Agreement, on
which heavy reliance has been placed.
51. It is also significant that while the sale consideration was
Rs.48,51,000/- , the alleged loan amount was Rs.1,65,00,000/- . The disparity
between the two amounts, by itself, does not establish that the Sale Deed
was executed, merely as security. In any event, even under the terms of the
Mutual Settlement relied upon by the Appellants, re-conveyance of the suit
property was conditional upon repayment of the entire loan amount by
31.12.2021 , which admittedly was not done.
RFA 925/2026 Page 12 of 14
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Signed By:VIKAS
ARORA
Signing Date:07.09.2026
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52. Much emphasis has been placed by the Appellants on the alleged
admission of the Mutual Settlement, Ex.PW-1/D1 , by the Plaintiff in her
testimony as PW-1. However, even if the said document is taken into
consideration, its own terms do not advance the case of the Appellants.
53. The Appellants have also relied upon WhatsApp conversation
Ex.DW-1/1 exchange between the Defendants and Sh. Rajendra Kumar
Aggarwal, which also records the payment of interest and the penal interest ,
which is in consonance with the Settlement Agreement, but it does not, in
any way, nullify the Sale Deed, which admittedly had been duly executed
in favour of the Plaintiff.
54. Not only this, no avoidance of Sale Deed is warranted in the
circumstances, which the Defendants / Appellants could have sought only
on complying with the terms of the Mutual Settlement.
55. The Appellants have subsequently instituted CS DJ No.246/2025
seeking Declaration and Cancellation of the registered Sale Deed dated
25.01.2019 and Mandatory Injunction for re-transfer of the suit property in
their favour, upon payment of the alleged balance loan amount of
Rs.47,00,000/- .
56. The Appellants are at liberty to pursue the said Suit in accordance
with law. However, its pendency does not affect the present Suit of the
Plaintiff, which is founded upon the registered Sale Deed dated
25.01.2019 , admittedly executed in her favour by the Appellants.
57. The Appellants had continued in possession of the suit premises
beyond the period of one month allowed to them and thereafter, became
unauthorized occupants. The learned Trial Court, therefore, rightly passed
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ARORA
Signing Date:07.09.2026
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the Decree of Possession, Mesne Profits and Permanent Injunction
against them.
58. There is no merit in the present Appeal, which is accordingly
dismissed . The pending Applications are also disposed of.
(NEENA BANSAL KRISHNA)
JUDGE
SEPTEMBER 07, 2026/RS
RFA 925/2026 Page 14 of 14
Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:07.09.2026
17:29:42