“Irreparable Loss & Prejudice If Third-Party Rights Are Created”: Delhi HC Restrains Ashneer Grover From Selling Bhavik Koladia’s Transferred Shares

The Bench pointed out Clauses of the agreement between the parties employing the phrases “hereby agrees to purchase” and “agrees to sell”, which prima facie indicated that the Agreement was in the nature of an “agreement to sell” under Section 4(3) of the Sale of Goods Act, 1930 (SoGA), rather than a “sale”.

A Single Bench of Justice Prateek Jalan observed, “The prima facie case is in favour of the plaintiff, i.e. that the consideration was in fact not paid. This is not only because of a complete lack of any documentary evidence of payment – whether by way of bank statements or otherwise – but also because the pleadings of defendant No.1 himself are, at best, ambiguous. There is no pleading whatsoever that payment was in fact made on 03.12.2018, as recorded in Form SH-4. There is also no pleading that payment was made in terms of the Agreement, i.e. to the bank account designated in Clause 5(b)(i) of the Agreement.”

Sr. Advocate Gaurav Pachnanda represented the plaintiff, while Advocate Rakesh Pathak appeared for the defendants.

Bhavik Koladia (plaintiff) had filed for an injunction application to restrain Ashneer Grover (defendant) from selling or creating any third-party rights in the Suit Shares of BharatPe.

The plaintiff and Shashwat Nakrani (Co-developer of BharatPe) had transferred their shares to the defendant to obviate the concerns of potential investors due to legal issues faced by the plaintiff in the USA. The plaintiff and the defendant entered into an agreement for the sale of 1,611 shares of the BharatPe at ₹5,500 per share. Despite the passage of four years, the defendant did not pay any consideration to the plaintiff. Therefore, the plaintiff sought a declaration rescinding the agreement and claiming ownership of the shares.

The Court was of prima facie view that the parties had agreed that property in the Suit Shares would pass to the defendant only upon payment of the sale consideration. Secondly, Clause 6(d) of the agreement stipulated that the plaintiff had the right, until the closing date, to transfer full legal and beneficial interest in the Suit Shares to the defendant.

“This indicates that, until the closing date - which also refers to payment of the sale consideration by defendant No. 1 - plaintiff retained the legal and beneficial interest in the Suit Shares,” the Court added.

Consequently, the Court held, “The balance of convenience is also, therefore, in favour of an injunction being granted. I am satisfied that the plaintiff would suffer irreparable loss and prejudice if third-party rights are created in the Suit Shares claimed by the plaintiff at this stage.”

Accordingly, the High Court disposed of the application.

Cause Title: Bhavik Koladia v. Ashneer Grover & Anr. (Neutral Citation: 2024:DHC:3393)

Appearance:

Decree Holder: Sr. Advocate Gaurav Pachnanda; Advocates Sidhant Goel, Deepankar Mishra, Anvi Sharma and Aditya Maheshwari

Judgement Debtor: Giriraj Subramanium, Veda Singh, Simarpal Singh Sawhney, Joy Banerjee, Akhilesh T., Siddhant Juyal, Urvashi Singh, Ravi Pathak and Sourabh Rath

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