Delhi High Court refuses to restrain Ashneer Grover from selling shares purchased from BharatPe's Shashvat Nakrani

The Delhi High Court on Friday rejected an interim application filed by BharatPe co-founder Shashvat Nakrani to restrain the firm's former Managing Director Ashneer Grover from selling or alienating the shares that Nakrani sold to him [Shashvat Nakrani v Ashneer Grover].Justice Sachin Datta dismissed the application but asked Grover to give an intimation to the Court when he decides to sell or transfer the shares in question. .In a detailed judgement, the Court said that there was no merit in the case set up by Nakrani.Justice Datta noted that it was evident that the shares were transferred to Grover and his name being recorded as a shareholder of BharatPe was done pursuant to the approval of the Board of Directors or a duly constituted committee of the said board.The Bench noted that subsequent to the transfer of shares, 16 agreements were entered into where both Nakrani and Grover sold their shareholding to external investors which led to ₹4,500 crores being infused in BharatPe and Nakrani was paid a personal consideration of nearly ₹40 crores by various external investors.“Admittedly, in all these agreements, to which both the plaintiff and the defendant were parties, the defendant was represented to be as a shareholder of the concerned company. It is completely untenable for the plaintiff to suggest that the defendant was wrongly portrayed as a shareholder in all these agreements or that the plaintiff was “induced” to sign these agreements,” the Court said..It rejected Nakrani’s arguments that title in the concerned shares never passed to Grover on account of non-payment of consideration and, therefore, it was permissible to repudiate the contract for sale of shares.Justice Datta also noted a “direct and utter” contradiction in the pleadings in the present suit and the suit filed by BharatPe where the company sought to recover nearly ₹88 crores from Ashneer Grover and his family members who were associated with BharatPe.The Bench recorded that in the other suit, BharatPe had said that Grover “became a shareholder” of BharatPe by “contributing a paltry sum of ₹31,920”.Therefore, the Court concluded that this aspect also disentitled Nakrani from any interim relief..It was Nakrani's case that he had transferred his shares to Grover and while the latter claimed to have paid for them in cash, the money was never received. According to a report in Mint, BharatPe was founded by Shashvat Nakrani and Bhavik Koladiya in March 2018 with each owning 50% in the firm. Ashneer Grover joined the company as a third co-founder and board member in July 2018, and purchased 3,192 shares (2,447 from Nakrani and 745 from Koladiya for ₹10 apiece).The same report claimed that Grover was to pay ₹24,470 to Nakrani and ₹7,450 to Koladiya, however, Grover is yet to pay for the shares.Mint report revealed that after the shares split, the 2,447 shares are now 24,470 shares. .People familiar with the matter say that the shares in question are worth ₹500 crore now. .Delhi High Court issues summons to Asheer Grover on BharatPe co-founder Shashvat Nakrani's suit over claims of unpaid shares.Advocate Giriraj Subramanium appeared for Grover and argued that Nakrani's case is based on complete "misreading, misinterpretation and misunderstanding of the Sale of Goods Act, 1930". He said that the transfer of shares to Grover, permitting him to join and remain a member of BharatPe for nearly five years showed that Nakrani not only delivered the shares to the defendant on July 2, 2018 but also never reserved any right of disposal whatsoever. Subramanium further contended that in the present case, the contract has been performed in its entirety, the share transfer form has been executed and Grover's name has been entered into the register of shareholder. This makes it evident that the title to the shares have passed to the Grover, he submitted. .BharatPe's other co-founder, Bhavik Koladiya has also sued Grover over the disputes regarding the transfer of shares. According to media reports, Koladiya (the largest shareholder in the company) had to leave BharatPe allegedly because his past conviction in the United States in a credit card fraud case was hindering talks with investors.As he resigned, Koladiya transferred his shares to Grover, Nakrani and one Mansukhbhai Mohanbhai Nakrani, as well as some other early-stage and angel investors.The consideration for the transfer of the shares was approximately ₹88 lakh. He has claimed that till date, Grover has not paid the purchase consideration..[Read Judgment]