Gurvinder Singh Toor vs Rohit Malhotra

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 22.01.2026
Judgment pronounced on: 05.05.2026
Judgment uploaded on: 05.05.2026
+ RFA(OS)(COMM) 1/2025 and CM APPL. 921/2025
GURVINDER SINGH TOOR .....Appellant
Through: Mr. Sagar Pathak, Adv.
versus
ROHIT MALHOTRA .....Respondent
Through: Mr. Arjun Dewan, Mr. Akash
Arora and Mr. Jasraj Singh
Chhabra, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE AMIT MAHAJAN
J U D G M E N T
ANIL KSHETARPAL, J.:
1. Through the present Appeal, the Appellant [Original
Defendant] assails the correctness of the Judgment and Decree dated
28.06.2024 [hereinafter referred to as „Impugned Judgment‟] passed
by the learned Single Judge, decreeing the Respondent‟s [Original
Plaintiff] suit for specific performance of the Memorandum of
Understanding (MoU) dated 14.02.2020, while exercising powers
under Order XIII-A of the Code of Civil Procedure, 1908 [hereinafter
referred to as „CPC‟] amended by the Commercial Courts Act, 2015.
2. In order to comprehend the issues involved in the present case,
relevant facts in brief are required to be noticed.

Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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3. For the sake of convenience, the parties hereinafter are referred
to as they were arrayed in the Suit. The Plaintiff [Respondent herein]
while filing the suit prayed for the following reliefs:
―A. Issue a Decree in favour of the Plaintiff and against the defendant
declaring the Letter/Communication dated 18.03.2020 sent by the
Defendant to the Plaintiff purportedly and illegally terminating
/withdrawing from the MoU dated 14.02.2020 as illegal, null and void
having no effect in law; and
B. Issue a Decree in favour of the Plaintiff and against the Defendant
directing the Defendant to perform his obligations in accordance with
the MoU dated 14.02.2020 by making a payment of Rs. 1,90,00,000/-
to the Plaintiff for purchase of the Equity Shares owned by the
Plaintiff in the Company, Zoi International Company Limited, i.e.,
45% of the total Equity Shareholding of the Company and to execute a
Share Purchase Agreement in favour of the Plaintiff for the purchase
of the Equity Shares owned by the Plaintiff in the Company; and
C. Issue a Decree directing the Defendant to make payment of Rs
14,25,000/- [fourteen lacs twenty five thousand] as interest @ 18%
p.a on the total consideration of Rs 1,90,00,000 [one crore ninety
lacs] from 30.03.2020 till the date of institution of the Pre-Litigation
Mediation by the Plaintiff i.e 19.09.2020; and
D. Issue a Decree in favour of the Plaintiff and against the Defendant
directing the Defendant to pay further interest @ 18% p.a. to the
Plaintiff pendente lite till the date the Defendant performs his
obligation under the MoU and makes payment to the Plaintiff; and/or
In the alternative;
E. issue a decree in favour of the Plaintiff and against the Defendant
directing the Defendant to pay compensation an amount of Rs
1,08,41,860 [Rupees One Crore Eight Lakhs Forty One Eight
Hundred and Sixty Only] along with interest @ 18% p.a till the date
of realization;‖
4. The Plaintiff primarily sought a declaration that the Defendant‟s
communication dated 18.03.2020, which sought to unilaterally
terminate the MoU, was illegal and void. Further, a decree for specific
performance was sought, directing the Defendant to pay the agreed
consideration of Rs.1,90,00,000/- in exchange for the 45% equity
stake in M/s ZOI International Pvt. Ltd. (ZIPL). Alternatively, the
Plaintiff sought compensation to the tune of Rs. 1,08,41,860/-.
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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5. M/s ZOI International Pvt. Ltd. [hereinafter referred to as
„ZIPL‟] is a Thailand based company. The Plaintiff and the Defendant
were the owners to the extent of 45% shares each, whereas 10%
shares were owned by Mr. Manish Alak. The Plaintiff claims that he
was led to invest in the company on persuasion of Mr. Manish Alak,
who projected its commercial viability.
6. On 14.02.2020, the parties executed an MoU for the sale of the
Respondent‟s 45% shareholding to the Appellant for a fixed
consideration of Rs. 1,90,00,000/-. The execution of this MoU is an
admitted fact. Two post-dated cheques, one for Rs.1,13,50,000/-
(dated 30.03.2020) and another post-dated cheque dated 26.03.2020
were issued with respect to the remaining amount, i.e., Rs.76,50,000/-
in favour of the Plaintiff.
7. The Execution of the aforesaid MoU dated 14.02.2020 is not in
dispute between the parties, which reads as under:
“Memorandum of Understanding (MOU)
This Memorandum of Understanding (MOU) is entered on 14
February 2020 between Mr. Gurvinder Singh Toor, Son of Mr.
Mohinder Toor, residing at E-2085, Palam Vihar, Gurgaon, Haryana,
India 122017 and Mr. Rohit Malhotra, Son of Mr. Navneet Kumar
Malhotra, residing at EB-158 Maya Enclave, New Delhi.
Mr. Rohit Malhotra had invested and holds 45% equity stake in ZOI
International Co., Ltd, a company incorporated in the state of
Thailand and having its Registered Office Address at 89/7 Moo 5,
Free Zone, Tamboon Bangsamak, Ampur Bang Prakong
Chachoengsao -24180 Thailand. The other shareholders of the
Company are Gurvinder Singh Toor & Manish Alagh and their
shareholding is 45% & 10% respectively.
Now, Mr. Rohit Malhotra wishes to sell his entire 45% shareholding
in the said company to Mr. Gurvinder Toor and Mr. Gurvinder Toor
has agreed to purchase the same in its entirety.
The above two parties hereby agree to the following terms under this
MOU.
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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1. Mr. Rohit Malhotra agrees to sell his entire 45% shareholding in
ZOI International Co., Ltd for a consideration of INR 1,90,00,000/-
(Indian Rupees Crore & Ninety Lakhs Only) to Mr. Gurvinder Toor.
2. Mr. Gurvinder Singh Toor agrees to pay the above consideration by
way of following two cheques payable by 30th March 2020 and 26th
March 2020.
Cheque No. 385471 dtd 30.03.2020 for Rs. 1,13,50,000/-(Rupees One
Crore, Thirteen Lakhs, Fifty Thousand Only).
Cheque No. 385472 dtd 26.03.2020 for Rs. 76,50,000/- (Rupees
Seventy Six Lakhs, Fifty Thousand Only).
3. Mr. Rohit Malhotra undertakes to transfer the above shareholding
unconditionally to Mr. Gurvinder Singh Toor immediately on
realisation of above referred cheques and agrees to perform such acts
as may be necessary for legal transfer of title of such shares as per
regulations prevalent in country of Thailand including signatures on
the Share Purchase Agreement.
4. Post Signing of the Share Purchase Agreement and the
Consideration of the Equity Stake sale being realised by Mr. Rohit
Malhotra, he agrees to resign as a Director in the said company.
Further, he agrees to hand over any documents, agreements, papers
related to the company which he may be holding to Mr. Gurvinder
Singh Toor.
5. It is also mutually agreed that since Mr. Gurvinder Singh Toor has
been responsible for running of the ZOI International business since
inception, Mr. Rohit Malhotra will be absolved of all liabilities, if any,
arising from ZOI International business and commercial dealings to
date.
6. Both the above parties will enter into a detailed Share Purchase
Agreement to execute the transfer of the Shares as per the terms of
this MOU and the Rules and Regulations as mandated.
7. The Equity Sale Consideration will be treated and remitted under
the Reserve Bank of India Rules and will be guided by the Rules and
Guidelines of the Government/Banks/Institutions from where the
Overseas Investment was made by Mr. Rohit Malhotra and other
shareholders in ZOI International.
Confidentiality
Both the above parties agree to meet the commitment dates and
maintain confidentiality about the MOU and the terms mentioned
herein.
Signed by: Witness
Sd/- Sd/-
__________________ _____________
Gurvinder Singh Toor Kuldeep Kumar
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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Sd/-
__________
Rohit Malhotra‖
8. A plain reading of the MoU reveals a concluded contract, it
contains the essentialia of a contract, the identity of the parties, the
specific subject matter (45% shareholding), and a fixed consideration
(Rs. 1,90,00,000/-). The Respondent undertook to transfer the shares
unconditionally upon the realization of the cheques and promised to
execute all necessary documents, including a formal Share Purchase
Agreement (SPA), as required by Thai regulations. Significantly,
Clause 5 of the MoU provided that the Appellant, being responsible
for the company‟s operations since inception, would continue to run
the business while the Respondent stood absolved of all liabilities. It
is evident that a complete contract was executed between the parties
while paying the entire consideration through two post-dated cheques,
as already noticed, which were drawn by the Defendant on his bank
and were handed over to the Plaintiff.
9. On 18.03.2020, prior to the national lockdown, the Defendant
via email stated that due to COVID-19 pandemic, he is unable to
perform his obligations under the MoU. The Plaintiff responded to the
aforesaid communication by claiming that the Defendant cannot
unilaterally walk away from the agreement, and it is a concluded
contract.
10. Thereafter, the Defendant via email dated 25.03.2020
completely resiled from his position and submitted that he had only
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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agreed to help the Plaintiff to sell his equity shares in the company
with premium.
11. The Plaintiff in accordance with MoU presented the aforesaid
two cheques issued by the Defendant, which were returned
dishonoured with remarks “Payment stopped by drawer” as the
Defendant had instructed his bank to stop the payment. Proceedings
under Section 138 of the Negotiable Instrument Act, 1881 [hereinafter
referred to as „NI Act‟] are pending between the parties.
12. On 06.07.2020, the Plaintiff resigned from the post as Director
of the Company which was accepted on 20.07.2020. The Plaintiff also
issued a notice of demand dated 15.06.2020 under Section 138 of the
NI Act. A complaint under Section 200 of the Code of Criminal
Procedure, 1973 read with Section 138 of the NI Act against the
Defendant in respect of the dishonoured cheque is pending before the
Tis Hazari Court, Central District, New Delhi. The parties were
referred to mandatory pre-litigation mediation, wherein the Defendant
failed to enter an appearance. Consequently, a Non-Starter Report was
issued by the Delhi High Court Legal Services Committee,
constraining the Plaintiff to institute the suit.
13. The Appellant failed to file a Written Statement within the
mandatory 120-day period despite entering an appearance on
22.02.2021. Although a written statement was purportedly filed,
certain office objections were raised, which were never rectified by
the defendant, and no written statement was filed after the removal of
office objections. Consequently, the right to file the Written Statement
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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was closed on 10.10.2022. An application under Order VII Rule 11 of
the CPC filed by the Appellant was also dismissed.
14. Thereafter, the Plaintiff filed application under Order XIII-A of
the CPC as applicable to the Commercial Courts for summary
judgment, which was allowed, and the suit filed by the Plaintiff was
decreed while directing the Defendant to pay a sum of
Rs.1,90,00,000/- within two months and on payment of the said
amount, the Plaintiff shall transfer his 45% equity shareholding in
favour of the Defendant. The claim of the Plaintiff for the grant of
interest @ 18% p.a. was declined. The Plaintiff has not questioned its
correctness.
15. Heard learned counsel representing the parties at length and
perused the paper book along with the requisitioned record of the suit.
16. Learned counsel representing the Appellant has made the
following three submissions:
i. The Plaintiff has not valued the suit in accordance with
Section 12 of the Commercial Court Act, 2015 [hereinafter
referred to as „CC Act‟], hence, his suit is not maintainable;
ii. MoU is only an agreement to enter into an agreement,
which is not enforceable in view of the Judgment passed by the
Supreme Court in Speech and Software Technologies (India)
1
Pvt. Ltd. v. Neos Interactive Ltd. ; and

1
2009 1 SCC 475
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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iii. Order XIII-A of the CPC could not be invoked to decree
the Plaintiff‟s suit without giving opportunity to the parties to
lead evidence.
17. Per contra, learned counsel representing the Respondent has
supported the judgment of the learned Single Judge, and submits that
the MoU contained all essential terms to constitute a valid agreement,
and that the Appellant‟s prolonged failure to file a Written Statement
left no triable issues to be decided.
18. At this stage, it would be appropriate to reproduce Section 12 of
the CC Act.
12. Determination of Specified Value.—(1) The Specified Value of the
subject-matter of the commercial dispute in a suit, appeal or
application shall be determined in the following manner:––
(a) where the relief sought in a suit or application is for
recovery of money, the money sought to be recovered in the
suit or application inclusive of interest, if any, computed up to
the date of filing of the suit or application, as the case may be,
shall be taken into account for determining such Specified
Value;
(b) where the relief sought in a suit, appeal or application
relates to movable property or to a right therein, the market
value of the movable property as on the date of filing of the
suit, appeal or application, as the case may be, shall be taken
into account for determining such Specified Value;
(c) where the relief sought in a suit, appeal or application
relates to immovable property or to a right therein, the market
value of the immovable property, as on the date of filing of the
suit, appeal or application, as the case may be, shall be taken
into account for determining Specified Value; 1[and]
(d) where the relief sought in a suit, appeal or application
relates to any other intangible right, the market value of the
said rights as estimated by the plaintiff shall be taken into
account for determining Specified Value;
*
(2) The aggregate value of the claim and counterclaim, if any
as set out in the statement of claim and the counterclaim, if any, in
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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an arbitration of a commercial dispute shall be the basis for
determining whether such arbitration is subject to the jurisdiction
of a Commercial Division, Commercial Appellate Division or
Commercial Court, as the case may be.
(3) No appeal or civil revision application under section 115 of
the Code of Civil Procedure, 1908 (5 of 1908), as the case may be,
shall lie from an order of a Commercial Division or Commercial
Court finding that it has jurisdiction to hear a commercial dispute
under this Act.
19. It is evident that the Plaintiff is required to value the suit on the
basis of the relief claimed and the subject matter of the suit. The
Plaintiff amended his plaint, he valued the suit at Rs.2,04,25,000/-. He
deposited Court Fee of Rs.2,05,120/- in total for the relief of specific
performance, the Plaintiff paid Court Fee of Rs.1,87,800/-, whereas
for the amount of accrued interest, the Plaintiff paid Rs.16,300/-. The
Plaintiff also paid Rs.20 qua the relief of declaration. Thus, the
Plaintiff has valued the suit as per the relief claimed as well as the
subject matter of the Suit.
20. It be noted here that the Appellant while filing the Appeal has
claimed that the Company ZIPL has become defunct. The Defendant
does not claim that the market value of the 45% shareholding of the
company is more than Rs.1,90,00,000/-, hence, the objection of the
Appellant lacks substance.
21. This Court has already extracted MoU, execution whereof is not
disputed by the parties. It is evident that the Plaintiff agreed to sell his
entire 45% shareholding in M/s ZOI for a consideration of
Rs.1,90,00,000/- (Indian Rupees) in favour of the Defendant. The
Defendant in turn, handed over two post-dated cheques worth
Rs.1,90,00,000/- to the Plaintiff, who on encashment of the cheques
agreed to execute legal transfer deeds as required for transferring
Signature Not Verified
Signed By:JAI
NARAYAN
Signing Date:05.05.2026
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shares as per Thai regulations, including signatures on the share
purchase agreement.
22. The Plaintiff as agreed, did resign as the Director of the ZIPL
on 06.07.2020, which was accepted on 20.07.2020. Hence, the MoU
was not for execution of any further agreement. The MoU was not a
preliminary negotiation but a concluded contract. The issuance of the
two post-dated cheques for the full value of consideration constitutes a
valid promise to pay consideration in the future under the Indian
Contract Act. The Respondent‟s fulfilment of his obligation
(resignation as Director) further confirms the binding nature of the
agreement.
23. There is no merit in the argument that a further Share Purchase
Agreement was a condition precedent to the formation of the contract;
it was merely a formalising step for the transfer of shares under Thai
law.
24. The contract between the parties does not fall within the ambit
of either in Section 23 or Section 24 of the Indian Contract Act, 1872.
Section 25 of the Indian Contract Act provides that agreements
without consideration are void, unless they are in writing or
registered. However, even a promise to pay consideration in future
like in the present case, is a valid payment of consideration, which
excludes the applicability of Section 25. Hence, such agreement is
enforceable.
25. The Appellant‟s reliance on Speech and Software
Technologies (India) Pvt. Ltd. (Supra) is misplaced as the facts
therein pertained to a non-binding arrangement expressly contingent
Signature Not Verified
Signed By:JAI
NARAYAN
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upon future agreements. The present MoU, by contrast, was intended
to be binding. The MoU dated 14.02.2020 expressly recorded the
subject-matter of sale, the consideration, and the obligations of the
parties. Nothing material was left open for future negotiation. The act
of the Appellant in issuing cheques for the exact consideration and the
Respondent's resignation as a Director of the company, which was
acted upon and accepted by the other Directors of the company,
including the Appellant herein, are indicative of the parties having
acted upon the MoU and had moved beyond mere negotiation into
performance.
26. Moreover, the MoU was entered into at Delhi; hence the suit
was filed in the Courts located in Delhi. The contract/agreement
between the parties is enforceable as per the provisions of laws as
applicable in India against the Appellant (Defendant).
27. It is pertinent to examine the provisions of the Specific Relief
Act, 1963 [hereinafter referred to as „SRA‟]. Sections 10, 11, 14 and
16 of the SRA are extracted as under:
― 10. Specific performance in respect of contracts .—The specific
performance of a contract shall be enforced by the court subject to
the provisions contained in sub-section (2) of section 11, section
14 and section 16.]
11. Cases in which specific performance of contracts connected
with trusts enforceable .—(1) Except as otherwise provided in this
Act, specific performance of a 1[contract shall], be enforced when
the act agreed to be done is in the performance wholly or partly of
a trust.
(2) A contract made by a trustee in excess of his powers or in
breach of trust cannot be specifically enforced.
xxxx xxxx xxxx xxxx xxxx
[ 14. Contracts not specifically enforceable .—The following
contracts cannot be specifically enforced, namely:—
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NARAYAN
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(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.
xxxx xxxx xxxx xxxx xxxx
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) 3[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.‖
It is evident that the Section 10 of the SRA provides for the specific
performance of the Contract subject to provisions contained in sub-
section 2 of Section 11, Section 14 and Section 16. Sub-section 2 of
Section 11 is not applicable because this is not a case of contract made
by a Trustee in exercise of his power or in breach of trust.
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NARAYAN
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28. The present case does not fall in Section 14 because its
performance does not come within any other exceptions carved out
under Section 14 as neither the Plaintiff has obtained substituted
performance of contract, nor it involves the performance of
continuous duty which the Court cannot supervise or the contract is so
dependent on personal qualification of the parties or a contract which
in its nature is determinable. Section 16 lays down the personal bars to
the relief. It lays down three different eventualities when specific
performance cannot be invoked, however, the Defendant has failed to
bring the present case within the four corners of the aforesaid three
exceptions to the specific performance.
29. It is important to note that the Defendant though did not file
written statement, but filed an application under Order VII Rule 11 of
the CPC and also filed written submissions in support of his
application under Order VII Rule 11 of the CPC. In the aforesaid
written submissions, the Defendant does not dispute the execution of
the MoU; however, it is his stand that on account of the COVID-19
pandemic, the Defendant would not be able to enter into the share
purchase agreement, and it has become impossible to perform in view
of section 56 of the Contract Act 1872.
30. In this case, Section 56 of the IC Act is also not attracted
because the performance of the agreement has not become impossible
or unlawful. It is well-settled that commercial hardship or an onerous
bargain does not constitute frustration. A contract does not become
void merely because its performance has become less advantageous.
Furthermore, as the MoU lacked a unilateral termination clause, the
Appellant‟s reliance on Rajasthan Breweries Limited v. The Stroh
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2
Brewery Company, regarding determinability, is misplaced. The
Memorandum of Understanding („MoU‟) pertained to the sale of a
specific 45% equity stake in a private limited company. Unlike a
distributorship or agency, which may be terminated by notice, a
contract for the sale of shares in a closely held company, where
consideration has been fixed and post-dated cheques issued, does not
possess the inherent character of determinability.
31. In M. S. Madhusoodhanan & Anr. Vs. Kerala Kaumudi Pvt.
3
Ltd. & Ors. , the Court has held that specific performance of purchase
of shares in a closely held company is maintainable.
32. Order XIII-A of the CPC has been added by Section 16 of Act 4
of 2016. It provides that the Court may give a summary judgment, if it
considers that the Plaintiff has no real prospect of succeeding on the
claim or the Defendant has no real prospect of successfully defending
the case, as the case may be. In this case, the Defendant has no real
prospect of successfully defending the Plaintiff‟s claim as he does not
dispute the execution of the MoU and issuance of post-dated cheques
towards payment of the entire consideration. The Defendant does not
claim that such agreement was executed by playing fraud or coercion.
The parties entered with open mind and with free consent executed the
agreement, which is enforceable as per Section 10 of the SRA.
33. The objective of Order XIII-A of the CPC, as introduced by the
Commercial Courts Act, 2015,is to ensure accelerated disposal of
commercial disputes, including when a party has no real prospect of

2
2000 (55) DRJ(DB)
3
2004 9 SCC 204
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NARAYAN
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defending the claim. Given the admitted execution of the
Memorandum of Understanding („MoU‟) and the issuance of cheques
for payment of consideration, combined with the Appellant‟s failure
to file a Written Statement in the suit for over a year, there were no
triable issues requiring a protracted trial. Furthermore, the entire case
of the Appellant is based upon the interpretation of the MoU executed
between the parties on 14.02.2020.The defence sought to be raised in
the Appeal is purely legal in nature and does not hinge upon disputed
questions of fact or oral evidence.
34. In such circumstances, the learned Single Judge was justified in
concluding that the Appellant had no real prospect of successfully
defending the suit. The invocation of summary judgment under Order
XIII-A of the CPC for decreeing the suit of the Respondent was
therefore in consonance with both the letter and the object of the
provision.
35. Keeping in view the aforesaid discussion, and finding no merit,
the present Appeal is dismissed. The pending application also stands
closed.

ANIL KSHETARPAL, J.

AMIT MAHAJAN, J.
MAY 05, 2026
s.godara/ad
Signature Not Verified
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NARAYAN
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