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Synopsis

The Delhi High Court dismissed an interim application on Friday filed by BharatPe co-founder Shashvat Nakrani. Nakrani sought to restrain the firm's former Managing Director, Ashneer Grover, from selling or transferring the shares that Nakrani had previously sold to him.

The bench of Justice Sachin Datta, while rejecting the application, directed Grover to provide intimation to Nakrani before any sale or transfer of the shares in question. 

Nakrani's contention revolved around the transfer of his shares to Grover. While Grover claimed to have paid for the shares in cash, Nakrani asserted that he never received the funds.

BharatPe, founded in March 2018 by Shashvat Nakrani and Bhavik Koladiya, initially had a 50-50 ownership split between them. Ashneer Grover joined as a third co-founder in July 2018, purchasing 3,192 shares (2,447 from Nakrani and 745 from Koladiya for Rs.10 each).

According to reports, Grover was supposed to pay Rs. 24,470 to Nakrani and Rs. 7,450 to Koladiya for the shares, but he allegedly has not made the payments. Following a share split, the 2,447 shares are now reportedly valued at Rs. 500 crore.

Advocate Giriraj Subramanium, representing Grover, argued that Nakrani's case misinterpreted the Sale of Goods Act, 1930. He emphasized that the transfer of shares, allowing Grover to be a member of BharatPe for almost five years, demonstrated Nakrani's complete delivery of shares to Grover on July 2, 2018, without reserving any disposal rights.

Subramanium contended that the contract had been fully performed, the share transfer form executed, and Grover's name entered into the shareholder register, indicating the clear transfer of title to the shares.

BharatPe's co-founder Bhavik Koladiya, the largest shareholder, has also sued Grover over share transfer disputes. Allegedly, Koladiya had to leave BharatPe due to his past conviction in a U.S. credit card fraud case hindering investor negotiations.

Upon resigning, he transferred his shares to Grover, Nakrani, and others for approximately Rs. 88 lakh. Koladiya claims that Grover has not paid the purchase consideration to date.

Case Title: Shashvat Nakrani v. Ashneer Grover