In a recent legal case, the court analyzed the arguments presented by both parties regarding the execution of a Share Purchase Agreement. The court found the prayer for execution justified based on a thorough legal analysis. This decision is expected to have significant implications on the rights and interests of the involved parties. Follow our blog for more insights on this case and its legal implications.
Facts
- An extension of two months was granted to deposit the balance payment of Rs. 3,17,20,477/- in the Registry of the Court.
- Notice was issued to the other parties regarding prayer (iv) of the Application.
- Good Living Infrastructure of the Bhutani Group agreed to pay Rs.99,44,55,000/- for the purchase of the entire shareholding of Respondent No 3 – I.T. Infrastructure Park Pvt. Ltd. from the Appellants and Respondents No 1 and 2.
- GLI sought liberty from the Court to approach NOIDA for rescheduling the payment of a mentioned sum.
- GLI deposited Rs.26,00,00,000 in the Registry of the Court on 20.05.2020 as per the Order dated 19.05.2020.
- The Original Share Certificates, Share Transfer Forms, and Resignation of existing Directors were to be handed over after the deposit of Rs 56,79,79,623 in the Registry of the Court.
- GLI undertook to pay the dues payable to NOIDA directly, amounting to Rs.42,64,75,477/-.
- Various correspondences and exchanges of emails regarding the execution of the SPA and the sale transaction were highlighted throughout the submission.
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Arguments
- Various emails were exchanged between the parties for the execution of the SPA after the Order dated 18.02.2020 was passed.
- Mr. Dhruv Mehta, Senior Advocate for the Appellants emphasized the importance of executing the SPA by Respondent Nos. 1 and 2 for GLI to raise funds and fulfill its obligations under the Order dated 18.02.2020.
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Analysis
- The court has found the prayer for execution of the SPA to be justified based on arguments presented by both parties’ Counsel.
- GLI has already deposited a down payment of Rs. 10,00,00,000 as per the Order dated 18.02.2020.
- The execution of the SPA would not prejudice the rights and interest of the Respondent Nos. 1 and 2.
- This view is based on the assessment that no harm or disadvantage would be caused to the Respondent Nos. 1 and 2 by carrying out the SPA.
- It is likely that the execution of the SPA would not negatively impact the interests of the Respondent Nos. 1 and 2, indicating that their rights would not be adversely affected.
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Decision
- Registry directed to invest the amount in interest-bearing deposit for 6 months on auto renewal basis
- Appellants and Respondent Nos. 1 and 2 to provide warranties regarding encumbrances on land and shareholdings in Respondent No 3 Company
- Certified copy of Board Resolution required for authorized signatories to execute SPA
- Amount deposited by Appellants released to Respondent Nos. 1 and 2
- Amount deposited by GLI retained by Registry
- GLI entitled to execution of SPA for acquisition of shares
- Appellants and Respondent Nos. 1 and 2 mandated to execute SPA with GLI within 3 weeks
Case Title: SHAKTI NATH Vs. ALPHA TIGER CYPRUS INVESTMENT NO. 3 LTD. (2020 INSC 443)
Case Number: MA-000929 / 2020
