* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 01st March, 2024 % Pronounced on: 28^th June, 2024 + CS(COMM) 531/2020 & I.As. 7339/2022, 4991/2023 ROHIT MALHOTRA S/o Mr. Navneet Kumar Malhotra, R/o EB-158, Maya Enclave, New Delhi-110058 ..... Plaintiff Through: Mr. Arjun Dewan, Mr. Akash Arora & Mr. Aryan Deol, Advocates.

versus GURVINDER SINGH TOOR R/o E-2085, Palam Vihar, Gurugram, Haryana-122017 Also at: E-2173, First Floor, Palam Vihar, Gurugram, Haryana-122017 ..... Defendant Through: Mr. Sagar Pathak, Advocate.

CORAM:

HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA

J U D G M E N T

NEENA BANSAL KRISHNA, J.

I.A.15134/2022 (u/O XIII A Rules 3 & 6(1)(a) & Order VIII Rule 10 r/w Section 151 of CPC, 1908 by plaintiff for Summary Judgment in relation to Prayers (A) to (D))

1. The plaintiff has filed the present Suit for Declaration of the Letter dated 18.03.2020 terminating the Memorandum of Understanding dated Signature Not Verified Digitally Signed CS(COMM) 531/2020 Page 1 of 42

14.02.2020 (hereinafter referred to as “MoU”), as illegal and has also sought the Specific Performance of MoU dated 14.02.2020 along with Recovery of Rs. 14,25,000/- as interest or in the alternative a Compensation of Rs. 1,08,41,860/- along with interest @18 per annum.

2. Facts in brief are that in November, 2018, the defendant along with one Mr. Manish Alag, approached the plaintiff for making investment in their business project, M/s Zoi International Pvt. Ltd., a Company incorporated in Thailand to engage in the business of recycling and selling of used clothes. The defendant explained the business model and assured the viability of the Company.

3. In terms of the understanding and business plan as forwarded by the defendant and Mr. Manish Alag, the plaintiff invested over a period of time, Rs. 76,40,000/- through Overseas Direct Investment in M/s Zoi International Pvt. Ltd and was allotted 45% of the total equity shareholding and total of 33,435 equity shares of the Company were given to the plaintiff vide Equity Certificate bearing Folio Nos. 33436 to 66870 in the month of March, 2020. 4. The plaintiff thus, became the owner of 45% equity shareholding, while the defendant and Mr. Manish Alag were the shareholders to the extent of 45% and 10% shareholding of the Company, respectively.

5. The plaintiff has asserted that in February, 2020 on account of various factors including mismanagement of affairs of the Company by the defendant, certain disputes arose between them. Consequently, after due negotiations, MoU dated 14.02.2020 was entered into between the parties, which was duly signed by them, whereby the plaintiff agreed to sell his 45% equity shares in the Company, to the defendant for an amount of Rs. 1,90,00,000/-. The plaintiff under the MoU also agreed to executing a Share Signature Not Verified Digitally Signed CS(COMM) 531/2020 Page 2 of 42 Purchase Agreement (hereinafter “SPA”) for transfer of his shareholding immediately on realisation of payment by him. It was further agreed that upon signing of SPA, the plaintiff shall resign from his post as a Director in the Company. It was also agreed that the plaintiff shall be absolved from all the liabilities, if any, arising on account of affairs of the Company.

6. Accordingly, one Cheque bearing No. 385471, for an amount of Rs. 1,13,50,000/- dated 30.03.2020 and another Cheque bearing No. 385472, for an amount of Rs. 76,50,000/-, dated 26.03.2020, were issued by the defendant in favour of the plaintiff with an assurance that the cheques shall be honoured on presentation.

7. However, even before the post-dated cheques could be presented by the plaintiff to the Bank, the defendant withdrew/terminated the MoU via Termination E-mail dated 18.03.2020 by citing COVID-19 Pandemic as a reason. The defendant also asked the plaintiff not to present the cheques issued by him and to return the same.

8. The plaintiff replied via E-mail dated 23.03.2020 asserting that there was no clause in the MoU for termination/withd