Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 13.10.2026
Punjab and Haryana High Court: Contract Disputes Requiring Evidence Cannot Be Rejected at the Threshold
This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his email id amitnaren@outlook.com .
The Punjab and Haryana High Court has held that a suit seeking a permanent injunction over a proposed real-estate transaction cannot be rejected at the outset merely because the plaintiff may also have a remedy of specific performance.
The dispute
In Mohan Magotra v. M/s Ujjala Buildtech Pvt. Ltd. and another, the dispute concerned four acres of agricultural land in Sector 75, Badshahpur, Gurugram. Ujjala Buildtech claimed that it had entered into a binding term sheet dated 19 June 2025 to acquire and develop the land at a stated value of Rs. 40 crore per acre, with consideration linked to saleable-area inventory.
The company alleged that it had issued a Rs. 1 crore cheque, acknowledged by one of the defendants, and that an attempted RTGS transfer was obstructed. It sought a permanent injunction to prevent the defendants from creating third-party rights in the land.
The defendants sought rejection of the plaint under Order VII Rule 11 of the Code of Civil Procedure. They argued that the injunction suit was barred because the plaintiff could instead seek specific performance; that the term sheet was vague and void for uncertainty; and that the registered owner was not a signatory to the document.
Courtβs ruling
Justice Virinder Aggarwal dismissed the civil revision petition and upheld the trial courtβs refusal to reject the plaint.
The Court found that the objections raised by the defendants involved disputed factual and evidentiary questions, including:
- whether the term sheet was sufficiently certain and enforceable;
- whether one defendant was authorised to act for the registered owner;
- how the proposed collaboration agreement and power of attorney should be interpreted; and
- whether specific performance was an equally efficacious remedy that barred an injunction under Section 41(h) of the Specific Relief Act.
These issues could not be conclusively determined only from the plaint at the preliminary stage, the Court held.
Why Section 41(h) did not end the suit
Section 41(h) prevents an injunction where an equally effective remedy is available through ordinary legal proceedings. The defendants relied on earlier decisions stating that a party with a remedy for specific performance generally cannot maintain a bare injunction suit.
However, the High Court distinguished those authorities because they were decided after a full examination of the merits. Here, the issue arose in an application under Order VII Rule 11, where the court must primarily assess the plaintβs averments rather than decide contested evidence.
The Court also noted that the plaintiff had sought permission under Order II Rule 2 CPC to reserve its right to later pursue specific performance. As that application remained undecided, it was premature to hold that the injunction claim was legally barred.
Key legal takeaway
The judgment reinforces that Order VII Rule 11 is not a mechanism for deciding disputed contractual questions. Allegations that an agreement is uncertain, unauthorised, unenforceable, or better enforced through specific performance may require trial when they depend on contested facts and evidence.
The Court clarified that its findings were limited to the challenge against rejection of the plaint and did not determine the substantive rights of either side in the underlying land dispute.
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Source: Punjab & Haryana High Court
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