Delhi High Court recently issued a temporary injunction restraining Ashneer Grover, former co-founder and Managing Director of the Indian fintech company Resilient Innovations Private Limited, the owner of the BharatPe App, from selling 18,189 shares in the company. One of the former co-founders, Bhavik Koladiya, has sued Ashneer Grover for the return of these shares, which are said to be valued in excess of US$ 77 million, as per the last round of institutional funding.

In its judgement, dated 30 April 2024, the Court observed prima facie that since consideration for these shares was not paid by the purchaser to the seller, in accordance with the contract between the parties, the unpaid seller could seek return of those shares upon rescission of the contract of sale because of the purchaser’s repudiatory breach.

The Court also observed prima facie that under the [Indian] Sale of Goods Act, 1930, property in these shares has not passed from the seller to the purchaser, despite registration of the shares in the name of the purchaser. Therefore, the contract for sale of shares would only be an “agreement to sell”.  

The injunction issued by Delhi High Court will operate until the final disposal of the proceedings after trial. The order can be accessed here.

Gaurav Pachnanda SA, Barrister at Fountain Court Chambers, appeared for Mr. Bhavik Koladiya. He was instructed by attorneys from SIM AND SAN, comprising of Mohit Goel, Sidhant Goel, Deepankar Mishra, Karmanya Dev Sharma and Abhishek Kotnala. Avni Sharma, Advocate, appeared as junior with Gaurav Pachnanda.