The Delhi High Court has declined to exclude Beanly Beverages Private Limited from arbitration in a share transfer dispute involving comedian Chirag Jain, popularly known as Papa CJ. (Chirag Jain Vs Rahul Jain & Anr).Justice Mini Pushkarna appointed Advocate Veena Ralli as sole arbitrator in two petitions filed by Jain against Beanly promoters Rahul Jain and Samayesh Khanna. The Court left it to the arbitral tribunal to decide whether Beanly itself can be bound by the arbitration agreement, despite not being a signatory to the Share Purchase Agreements..The dispute arose from two Share Purchase Agreements dated April 27, 2024. Under the agreements, Jain agreed to purchase 70 equity shares each from Rahul Jain and Samayesh Khanna at ₹1,225 per share. The total direct value of the transaction was ₹1.71 lakh.Jain claimed that he paid the full sale consideration, but the sellers failed to hand over signed share transfer deeds and physical share certificates. He also alleged that Beanly later issued fresh shares to third parties, diluting his rights under the agreements.The sellers consented to arbitration before a sole arbitrator, even though the arbitration clause provided for a three-member tribunal.Beanly, however, resisted its inclusion. It argued that it had not signed the SPAs, had not consented to arbitrate and could not be dragged into what it called a private dispute between Jain and its promoters.The Court was not persuaded to exclude Beanly at this stage..It noted that Jain’s case was that Beanly’s corporate machinery was central to the dispute. The shares were of Beanly. Its register was where the transfer had to be recorded. Its Board approval was allegedly required. Jain also relied on a clause recording that the company had subscribed its common seal to a duplicate of the SPAs. Beanly denied affixing any common seal.The Court said such issues required evidence.“The question whether a non-signatory can be treated as a party to the Arbitration Agreement, in the facts and circumstances of the present case, would require a more comprehensive enquiry, which may not be appropriate at this stage. Such an exercise is best left to the Arbitral Tribunal,” the Court said..Beanly also argued that no notice invoking arbitration had been issued to it under Section 21 of the Arbitration Act. The Court rejected the objection.“Non-issuance of notice under Section 21 of the Arbitration Act, specifically to respondent no. 2, cannot act as an impediment for referring it to arbitration,” it held..Senior Advocate Satvik Varma, briefed by Advocate Farheen Penwale, and Advocates Wasim Beg, Harshita Rawat, Shantanu Parmar, Balaram and Aditya Tewari, appeared for the petitioner, Chirag Jain (Papa CJ).Advocates Ishaan S Sharma, Shambhavi Sharma, Shubham Shukla, Ayush and Mukund Ranjan appeared for Rahul Jain and Samayesh Khanna..Senior Advocate Anurag Ahluwalia, with Advocates Vidhit Gupta, Kartik Dey and Dipanshu Gaba, appeared for Beanly Beverages Private Limited..[Read Judgment]
