The Delhi High Court has recently refused to restrain payment app BharatPe’s former MD Ashneer Grover from selling, transferring, or creating any 3rd party rights in the shares sold to him by the company’s co-founder Shashvat Nakrani.
However, the high court, directed that in case Grover proposes to transfer, deal with, or alienate the shares, a prior intimation be given to the court about the proposed transaction.
Justice Sachin Datta stated, “This court is not inclined to grant an interim injunction in favour of the plaintiff/ applicant (Nakrani), as prayed for. However, considering that the shares of the defendant (Grover) in question are subject matter of the present suit and considering that the plaintiff has also made an alternative prayer seeking damages, it is directed that in case, the defendant proposes to transfer/deal with/alienate the shares in question, prior intimation with regard to any such proposed transaction(s) together with details thereof, shall be provided to the court.”
The interim order was therefore passed by the court on an application by Nakrani filed in his pending suit in which he has sought a declaration that the alleged oral agreement of July 2018 between him and Grover regarding 2447 shares in Resilient Innovations Private Limited stands rescinded and terminated in accordance with law and contract and, consequently, has become void.
In the application, Nakrani sought an interim injunction restraining Grover from transferring, alienating, selling, creating any encumbrance, 3rd party rights in the plaintiff’s shares.
However, he claimed in the suit that while executing the agreement, Nakrani didn’t receive the consideration from Grover by any mode, including cash.
Nakrani submitted the defendant represented and assured him that he would pay the purchase consideration in due course but since the purchase consideration was not paid, the property/ title in the plaintiff’s shares did not pass on to the defendant and the transaction be treated as repudiated.
Furthermore, Grover claimed before the court that Nakrani has not been able to demonstrate how a stipulation as to the time of payment of Rs 24,470 was essential to the contract.
He contended, “the plaintiff’s own legal notice dated March 18, 2023 states that ‘You have even failed to pay the purchase consideration to our client within a reasonable period of time after the agreement was entered into’. This statement itself demonstrates that the plaintiff had agreed to postpone the receipt of consideration and hence the plaintiff’s contention that the stipulation with respect to time of payment was a condition essential to the main purpose of the contract, is clearly misconceived.”
After the order, Grover posted on X (formerly Twitter), “I am highly indebted to Hon’ble High Court to pass this order (I’ve just been informed of order read out in Court) in my favour and protecting my equity. We as Founders work hard to create ‘equity’ value and this order shall go a long way in protecting rights of Founders in India. More importantly it’ll teach an important lesson to co – founders to respect each other’s equity and not break the ‘bro – code’.” In June 2022, BharatPe co-founder Bhavik Koladiya, who ran the fintech firm’s technology and product divisions, had stepped down.
Koladiya and Shashvat Nakrani founded BharatPe in July 2017, although the firm was not incorporated till March 2018. Grover joined the company in June 2018 and resigned in March 2022.
