SUMMARY
The Delhi High Court also issued a summons to Ashneer Grover and BharatPe, ordering them to submit a written statement within 30 days
Senior advocate Mukul Rohtagi, representing Koladiya said that the title has not passed to Grover since the transaction was never consummated
Grover’s counsel submitted in court that Grover’s wife paid INR 8 Cr to Koladiya’s wife, including INR 88 Lakh supposedly towards the payment of shares
During the first hearing of the shares dispute case filed by BharatPe cofounder and OTPLess CEO Bhavik Koladiya against ex-BharatPe MD Ashneer Grover, the latter agreed to not create any third-party interest in the 16,110 BharatPe shares in question and in any rights that accrue to him as a consequence thereof.
During the same proceedings, the Delhi High Court admitted Koladiya’s application for an ad interim injunction restraining Grover from creating any third-party interest in the disputed shares.
The court, binding Grover to the aforementioned statement, ordered his counsel to file an undertaking in the matter within one week from Wednesday (January 18). The court further asked to reply to the application within four weeks and submit a rejoinder within two weeks thereafter.
The Delhi High Court also issued summons to Ashneer Grover and BharatPe, ordering them to submit a written statement within 30 days.
Koladiya filed the case in the Delhi HC against Grover on Tuesday (January 17), intending to take BharatPe shares back from the ex-MD, who has been holding them for the cofounder since at least 2019.
Appearing in the Delhi HC on Wednesday (January 18), senior advocate Mukul Rohtagi, representing Koladiya, referred to an agreement for sale in December 2018, adding that the title has not passed to Grover since the transaction was never consummated.
“What has happened is a transaction without consideration,” said Rohtagi during the court proceedings. However, Grover’s counsel submitted in court that Grover’s wife has paid INR 8 Cr to Koladiya’s wife, a part of which was supposed to be towards the payment of shares.
Referring to an email, Grover’s counsel noted that he has shown, prima facie, that there were two agreements, adding that the ex-BharatPe MD remembers so. Ashneer’s counsel added that one agreement has been taken by Koladiya and attached to the agreement he signed with other investors.
However, the consideration in the second agreement, between Koladiya and Grover themselves, was supposed to be INR 88 Lakh. Here, the ex-MD’s counsel argued that the INR 8 Cr paid to Koladiya’s wife by Grover’s wife included the said consideration in the second argument.
Rohtagi, however, contented the claim, stating that Grover’s counsel failed to show the whole provisions of the transaction while invoking Section 32 of the Sale of Goods Act.
Section 32 of the Sale of Goods Act noted, “Payment and delivery are concurrent conditions. Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller shall be ready and willing to give possession of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing to pay the price in exchange for possession of the goods.”
This ties in with Koladiya’s allegations of fraud, claiming that he was an unpaid seller in the transfer of shares between him and Grover.
“I am alleging a breach by him which gives me the right to treat contract as repudiated,” Koladiya’s counsel added.
Justice Prateek Jalan, who is hearing the case, noted that while Grover’s counsel continued to invite a prima facie case, they had not submitted the agreements between Grover and Koladiya. Justice Jalan added, “I haven’t seen agreements yet. For a prima facie case, I’ve to see the signed agreement.”
The court also told Grover’s counsel, “If there is no real intention to sell then make a statement and don’t invite a prima facie finding.” The comment came as Koladiya and Grover both noted that there was no consideration of ever selling the shares.
Reportedly, Grover holds over INR 1,000 Cr worth of shares for Koladiya.
It is prudent to mention that Koladiya could not directly hold shares in the fintech giant he cofounded in 2018 as he was convicted in the US and deported in 2015.
When Ashneer Grover joined the startup as a cofounder later in 2018, Koladiya held a 42.5% stake in BharatPe. After Sequoia’s investment, Koladiya took a back seat at the company and led the tech vertical as a consultant.
The aftermath also saw the cofounders and other stakeholders arriving at an arrangement and Koladiya transferring his stake in BharatPe to Grover, Shashvat Nakrani and his father, and some early-stage and angel investors in December 2018.
The case will be next heard on March 16.
The court proceedings were reported by LiveLaw on Twitter.
