Delhi HC Refuses BharatPe Co-Founder Shashvat Nakrani's Plea To Restrict Ashneer Grover from Establishing Third-Party Rights in Unpaid Shares

The Delhi High Court has refused to grant an interim injunction to BharatPe's co-founder Shashvat Nakrani, who sought to restrain the company's former Managing Partner from alienating, transferring or creating any third party rights in the unpaid shares.

The Bench of Justice Sachin Datta refused to restrain BharatPe's former Managing Director Ashneer Grover from creating any third party rights in the “unpaid shares” which he bought from the fintech company.

In that context, it was said that, "It is thus evident, that the transfer of shares in favour of the defendant and the consequent entry/recordal of the defendant as a shareholder of the concerned company was pursuant to approval by the Board of Directors or a duly constituted committee of the said Board. The Board Resolution dated 02.07.2018, which was admittedly passed in the present case, has been reproduced hereinabove."

Subsequently, it was said that, "Even assuming that a sum of Rs. 24,470/- was not paid at the time of execution of Form SH-4 (as alleged), it is evident from the plaintiff’s own legal notice dated 18.03.2023 that it agreed to postpone the receipt of consideration. The said legal notice inter-alia, states ―you have even failed to pay the purchase consideration to our client within a reasonable period of time after the agreement was entered into. As such, the factum of postponement of receipt of sale consideration is admitted. The statutory position (as set out hereinabove), and also noticed in Arihant Udyog (supra) is clear to the effect that mere postponement of payment of price does not dispel the existence of a valid contract of sale and passing of title thereunder."

Senior Counsel Jayant Mehta, along with others, appeared for the plaintiff. Counsel Giriraj Subramanium, among others, appeared for the defendants.

In this case, Shashvat Nakrani, in his lawsuit against Ashneer Grover, filed an interim application to prohibit Grover from transferring, alienating, or establishing third-party rights in unpaid shares.

The fintech company, founded by Bhavik Koladiya in 2017 with Nakrani, welcomed Grover as the third co-founder in 2018. Earlier this year, a similar suit was initiated by Koladiya to prevent Grover from creating third-party rights regarding his BharatPe shares. Grover verbally assured the court that he would refrain from involving third parties in the 16,110 shares transferred to him by Koladiya and any associated rights, pending further judicial directives.

The Court observed that, "As such, prima facie, there is no merit in the contention of the plaintiff that the contract for sale of shares did not fructify in the sense contemplated under the Sale of Goods Act, 1930, and/or that title therein did not pass to the defendant."

Cause Title: Shashvat Nakrani vs Ashneer Grover

Click here to read/download the Judgment