Bhavik Koladiya vs Ashneer Grover: Delhi HC issues summons to Grover

The Delhi high court on Wednesday issued summons to former managing director Ashneer Grover and BharatPe as part of a lawsuit filed by founder Bhavik Koladiya seeking to reclaim shares transferred to Grover.

During an hour-long hearing, justice Prateek Jalan directed Grover not to create third-party rights over the 16,110 shares in question until further orders.

“The defendant No. 1 (Ashneer Grover) bound down to the said statement and is directed to file undertaking to this effect within one week from today. Reply to the application within four weeks, rejoinder within two weeks thereafter," the court said in its order.

Senior advocate Mukul Rohatgi, appearing for Koladiya, sought an interim injunction restraining Grover from creating any third-party rights in the shares which are the subject of the lawsuit.

On 3 December 2018, Koladiya had agreed to sell 1,611 shares worth around ₹87 lakh, Rohatgi said referring to an agreement of sale. “The shares have now become 16110. I am asking for my goods back which I have given…What has happened is, a transaction without consideration.” 

Rohatgi continued that Koladiya was in the position of an unpaid seller within the meaning of Sale of Goods Act.

"Why did he (Koladiya) give his shares?" the court asked.

"I’ve done whatever. My client was gullible. There are gullible people, what can I say?” Rohatgi replied. “The fact of the matter is that for the shares, I have not been paid. I am entitled to get my shares back. This is unlisted company.”

The court asked whether there was “any overall settlement going on?” To which, Rohatgi said, “There was some talk at some stage but the company has filed a suit against this man (Grover) and his wife. He has also written a book in which there is a lot of bad blood.”

Grover's counsel told the court that the agreement dates back to December 2018. “The agreement filed is a forged and fabricated document," alleged Grover's counsel.

The court then suggested, "As far as these shares are concerned...apparently there have been some news reports that you want to sell shares...instead of me reaching a prima facie finding, why don't you file your reply?"

Grover’s counsel continued that there were two agreements. Referring to one of those, he said, "The purchase consideration shall be discharged in cash or as in the manner agreed between two sides. The agreement was executed the same day. This is the pre-execution version of the agreement."

However, the court said, "The number of shares is not here, the money is not here. For the moment, I don't yet find a second executed agreement that even prima facie you are relying upon."

Commenting on the look and feel of the documents submitted in the suit, Grover's lawyer contended, "What they have done is that page 6, which is the signed version, is totally different from the other pages. He has taken one part from the agreement signed with me and attached it to an agreement signed with other investors."

Responding to this argument, the court said, "Your allegation of fraud is something that has to be proved at trial. I haven’t seen agreements yet. It is possible what you are saying is true. But there are other possibilities as well. Easiest thing for you to do is to show me proof of payment of shares."

Grover's counsel told the court, "My client's (Ashneer's) wife (Madhuri Jain Grover) has paid ₹8 crore to the plaintiff's wife (Dharti Koladiya)."

Rohatgi objected to this, saying, "We should first establish that he has paid. His stand is that ₹8 crore has been paid and ₹88 lakh is part of this ₹8 crore."

“There can't be a lie on a lie on a lie,” Rohatgi said.

Then, he started referring to Grover’s book and added, "The book says his wife gave my (Koladiya's) wife some loan. This was not part of my transaction. The fact of the matter is I (Koladiya) gave him shares. There has to be some document somewhere to suggest that he paid me…”

The matter will now be heard by the court on 16 March.

Koladiya had filed a commercial suit in the Delhi high court against Grover alleging “breach of the share purchase agreement dated 03 December 2018 and thus claiming title over 16110 shares, which is approximately 3.10% shareholding of BharatPe,” said Sidhant Goel, partner, at Sim and San, Attorneys at Law. The law firm representing Koladiya in this case.

Sharing the background, Goel added, "Bhavik Koladiya is the founder of BharatPe which he incorporated and founded with Shashvat Nakrani. In May 2018, the Bhavik and Shashvat hired Ashneer Grover as a CEO. Later, based on Ashneer’s representations that it will help BharatPe raise investments, Bhavik and Shashvat gave him the tag of a co-founder.

“It is the case of Bhavik Koladiya that Ashneer Grover in the month of November 2018 represented to Bhavik that due to his background, investors were not ready to invest in BharatPe until the time he is on the cap-table of BharatPe. With the interest of BharatPe in mind and acting on the representations of Ashneer, Bhavik agreed to come off the cap-table of BharatPe. Thus, Bhavik agreed to transfer 1611 of his 2900 shares (which are now 16,110 shares) to Ashneer by way of an agreement dated 3 December 2018. The consideration for the transfer of the 1611 shares was approximately 88 Lacs (“Purchase Consideration”).”

While Bhavik performed his obligations in their entirety on 3 December 2018 by executing the necessary forms, to give effect to the transaction in respect of the Bhavik’s shares in favour of Ashneer, he till date has not been paid the purchase consideration.

"Between February and early March 2022, Ashneer started claiming property in the 16110 shares by publicly proclaiming himself to be the single largest shareholder of BharatPe. When Bhavik asked Ashneer to return his shares, Ashneer denied. Ashneer, in his Book, has again claimed property in the 16110 shares by proclaiming himself to be the single largest individual shareholder of BharatPe."

“With this order, 3.10% of the 8.43% shareholding, which Ashneer claims to be in his ownership, has now become subject to the outcome of this case.”

Goel added, “a party which does not perform an essential condition of a contract is expected to suffer its consequences. The matter is now sub judice and we have nothing more to add.”

The development comes seven months after Koladiya moved out of BharatPe. In August 2022, Mint was the first to report about Koladiya’s exit from the firm and the reasons behind his move.