Kailash Kumar Tibrewal vs Ajay Jain And Ors

Debangsu Basak, J

The Court: In a suit for specific performance of a contract dated September 24, 2012, the plaintiff seeks interim relief by way of this application.

Learned senior advocate appearing for the plaintiff submits that, the plaintiff entered into an agreement dated September 24, 2012 with the defendant no.1 and the defendant no.3. By and under such agreement, the defendant nos.1 and 3 were obliged to transfer shareholding of and in the defendant no.3 to the plaintiff in lieu of the plaintiff undertaking a development project on the property belonging to the defendant no.3. The plaintiff caused payment of a sum in excess of Rs.2.58 crores to be made to the defendants. The defendant nos.1 and 3 despite receipt of the same did not discharge their obligations under the agreement. The plaintiff came to learn that, the defendant no.1 transferred a portion of his shareholding to the defendant no.2 who is wife of the defendant no.1. The plaintiff apprehends that, the defendants will transfer their shareholding to third parties unless restrained. Consequently, he seeks interim protection.

Learned senior advocate appearing for the defendant no.1 submits that there is a proceeding pending in respect of the defendant no.3 before the National Company Law Tribunal with regard to oppression and mismanagement of the shareholders. Moreover, the plaintiff did not discharge his obligations under the agreement. He draws attention of the Court to the parties to the suit. He submits that, the pleadings in the application even if taken to be true and correct for the purpose of the present application shows that, three legal entities paid a sum in excess of Rs.2.58 crores to the defendants. The plaintiff is a natural person. Therefore, the plaintiff cannot have a cause of action against the defendants. He seeks direction for filing affidavits.

Learned advocate appearing for the defendant no.2 adopts the submissions advanced on behalf of the defendant no.1. In addition, he submits that, the share transactions between the defendant no.1 and defendant no.2 happened in 2013 and appropriate filing were done with the Registrar of Companies.

Therefore, on the basis of the share transfer between the defendant no.1 and 2, the plaintiff should not be granted an ad interim order. He also seeks direction for filing affidavits.

Learned advocate appearing for the defendant no.3 submits that, there is a proceeding pending with regard to the affairs of the defendant no.3 before the National Company Law Tribunal. He draws attention of the Court to the memorandum of understanding as annexed to the application. He submits that, the memorandum of understanding is not binding upon the defendant no.3 as the same did not receive the approval of the Board of Directors of the defendant no.3.

The present suit is for specific performance and consequential reliefs with regard to an agreement dated September 24, 2012. The plaintiff claims to have discharged his obligations under the agreement. The defendants contest such claim. The defendant no.3 questions the legality and validity of such agreement so far as the defendant no.3 is concerned.

Under the agreement dated September 24, 2012, the plaintiff was to receive 10% of the shareholding of the defendant no.3. The plaintiff is yet to receive the same despite the plaintiff putting in a sum in excess of Rs.2.58 crores. There is a share transfer between the defendant no.1 and defendant no.2. There is a proceeding of oppression of mismanagement filed by the defendant no.1 and 2 in relation to the affairs of the defendant no.3.

In the facts of the present case, the plaintiff having made out a prima facie case and the balance of convenience and inconvenience being in favour of the plaintiff it would be appropriate to restrain the defendants from dealing with the shares of the defendant no.3 without the leave of the Court.

Let affidavit in opposition be filed within a fortnight from date; reply, if any, within a week thereafter. List the application in the monthly list of January, 2020 under the heading "Adjourned Motion".