Supreme Court of India
Shakti Nath vs Alpha Tiger Cyprus Investment No. … on 23 June, 2020Author: Hon’Ble Ms. Malhotra
Bench: Hon’Ble Ms. Malhotra
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
MISC. APPLICATION NO. 929 OF 2020
CIVIL APPEAL NO. 1674 OF 2020
Shakti Nath & Ors. … Appellant/Applicant
Alpha Tiger Cyprus Investment
No.3 Ltd. & Ors. … Respondents
1. The present Misc. Application No. 929 of 2020 was earlier
listed before this Court on 19.05.2020, when the Appellants
were permitted to deposit Rs. 26,00,00,000/ (Rupees Twenty
Six Crores only) with the Registry of this Court by 21.05.2020.
With respect to the balance payment of Rs.
3,17,20,477/ (Rupees Three Crores Seventeen Lacs Twenty
Thousand Four Hundred and SeventySeven only), an
extension of two months’ was granted to deposit the said
Signature Not Verified
Digitally signed by
amount in the Registry of this Court.
With respect to prayer (iv) of the Application, Notice
was issued to the other parties.
2. In compliance with the Order dated 19.05.2020, the
Appellants deposited Rs. 26,00,00,000 (Rupees TwentySix
Crores only) on 20.05.2020 in the Registry of this Court.
3. The matter has now come up for hearing with respect to prayer
(iv) which reads as under:
“(iv) Direct the Respondent Nos. 1 and 2 to sign and execute an
appropriate share purchase agreement to effectuate the
acquisition of M/s Good Living Infrastructure Pvt. Ltd. of the
shares held by the Respondent Nos. 1 and 2 in the Respondent
4. Mr. Dhruv Mehta, Senior Advocate appearing for the
Appellants submitted that as per the Order dated 18.02.2020
passed by this Court, M/s. Good Living Infrastructure Pvt. Ltd.
(“GLI”) of the Bhutani Group had agreed to purchase the entire
shareholding of the Appellants and Respondent Nos. 1 and 2
in I.T. Infrastructure Park Pvt. Ltd. Respondent No. 3
Company for a total sale consideration of Rs. 99,44,55,000
(Rupees NinetyNine Crores FortyFour Lacs only).
The relevant extract from the said Order is set out
herein below for ready reference:
(iii) M/s. Good Living Infrastructure of the Bhutani Group agreed
and undertook 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
5. GLI vide Order dated 16.12.2019 was directed to file an
Affidavit of Undertaking that it would be bound by the
commitments made before this Court. The Undertaking was
filed by GLI on 10.02.2020, the contents of which are recorded
in the Order dated 18.02.2020 as :
7. M/s Good Living Infrastructure Pvt. Ltd. (“GLI”) has also filed an
Affidavit of Undertaking dated 10.02.2020 stating that :
“1. I am the CEO/Additional Director of M/s Good Living
Infrastructure Pvt. Ltd. (“GLI”) and have been duly authorized by
GLI vide Resolution of Board of Directors dated 20.12.2019 to
give the present undertaking on its behalf.
2. That GLI undertakes to pay a sum of Rs.99,44,55,000/
towards the purchase of entire shareholding of IT infrastructure
Park Pvt. Ltd. (Respondent No. 3) from the Petitioners and Alpha
Tiger Cyprus Investment No.2 Ltd. and Alpha Tiger Cyprus
Investment No.3 Ltd. in order to acquire the sub lease of the
property bearing Plot No. 001B situated at Sector 140A in Noida,
District Gautam Budh Nagar, Uttar Pradesh.
3. That out of total sum of Rs.99,44,55000/. GLI undertakes to
pay the dues payable to NOIDA, amounting to
Rs.42,64,75,477/, directly to NOIDA. In this regard, GLI seeks
liberty from this Hon’ble Court to approach NOIDA for
reschedulement of payment of the above mentioned sum. GLI
undertakes to make the appropriate representation/ application
to NOIDA for such reschedulement within one week of the
receipt of the order passed by this Hon’ble Court granting the
liberty sought herein.
4. That GLI undertakes to deposit the balance purchase price after
deducting the NOIDA dues therefrom with the Hon’ble Court i.e.
an amount of Rs.56,79,79,523/, in the following manner:
Rs. 10,00,00,000/ Upfront deposit to be made with the
Court within 10 days of the signing of
the Share Purchase Agreement
between all the Parties, which shall
also be deposited in the custody of the
Rs. 46,79,79,523/ To be deposited within a period of four
months with an additional grace
period of two months after the passing
of the final order by the Hon’ble Court.
5. It is prayed that the balance amount of Rs.46,79,79,523/ be
distributed to Alpha Tiger Cyprus Investment No.2 Ltd. and
Alpha Tiger Cyprus Investment No.3 Ltd by this Hon’ble Court
after the transfer of the entire shareholding of Respondent No.3
6. I say that the above mentioned undertaking is voluntary and
In para 9 of the Order dated 18.02.2020, it was
recorded that GLI was bound by the unconditional
Undertaking submitted on Affidavit. Para 9 of the Order
reads as under:
“9. M/s. Good Living Infrastructure Pvt. Ltd. is bound by the
unconditional undertaking submitted on Affidavit before this
Court. Any default by M/s Good Living Infrastructure Pvt. Ltd.
would be treated as a breach of the undertaking submitted to
6. Mr. Dhruv Mehta, Senior Advocate appearing for the
Appellants submitted that it was imperative that the Share
Purchase Agreement (“SPA”) be executed by Respondent Nos. 1
and 2, to enable GLI to raise funds for the transaction, and
comply with its obligations under the Order dated 18.02.2020.
7. It was further submitted that after the Order dated 18.02.2020
was passed, there were various emails exchanged between the
parties for the execution of the SPA. The emails have been
annexed to the present Application. The Counsel referred to an
email dated 19.02.2020 addressed by DGM, Legal of the Logix
Group to Mr. George Jacob of Alpha Real Capital, enclosing
the draft SPA for approval.
In response, Mr. George Jacob vide his email dated
20.02.2020 stated that he had forwarded the draft SPA to their
lawyers for review and comments. Mr. George Jacob requested
Appellant No. 1 to share the final draft of the SPA after further
modalities of the sale, both operational and legal were
discussed with the lawyers of GLI. Further emails were
exchanged between the parties on 27.02.2020 and 28.02.2020,
which reveal that the parties were in the process of executing
the SPA expeditiously.
8. The Appellants submit that two months later, Respondent Nos.
1 and 2 resiled from their commitment to execute the SPA, and
vide email dated 17.04.2020, stated that as on date, they were
holding : (a) 1,00,000 Class A Shares; (b) 10,00,000 Class C
Shares; and (c) 10,00,000 Compulsorily Convertible Preference
Shares of Respondent No. 3 Company. It was further stated
that the Original Share Certificates, Share Transfer Forms,
and Resignation of existing Directors would be handed over
after the deposit of Rs 56,79,79,623 in the Registry of this
8.1 Mr. Nakul Dewan, Senior Advocate represented GLI, and placed
reliance on the averments made in the Affidavit dated
02.06.2020. It was submitted that since GLI was investing
almost Rs. 100 crores in the transaction, they would require
legal documentation for the same. The execution of the SPA
was necessary to enable them to raise funds with a commercial
bank or NBFC. The draft of the SPA had already been
forwarded to Respondent Nos.1 and 2 in February, 2020.
GLI fairly stated in its Affidavit that it is not insisting on the
immediate transfer of shares in the Respondent No. 3
Company, but was merely requesting for the execution of the
SPA. The SPA is in the nature of an agreement to transfer
shares at a future date.
8.2 GLI further submitted that they were entitled to obtain certain
minimal warranties from both the Appellants and Respondent
Nos. 1 and 2, viz. (i) warranty with respect to the absolute title
of 50% shareholding in Respondent No. 3 Company of each of
the parties; (ii) warranty stipulating that there were no existing
encumbrances, or third party rights created on the said shares;
(iii) warranty with respect to the absolute authority of the
executants of the SPA (on behalf of the Appellants and
Respondent Nos. 1 and 2) by a resolution of the Board of
Directors of their respective companies.
9. Respondent Nos. 1 and 2 filed an Affidavit stating their
objections to the present Application. Mr. Sanjeev Puri, Senior
Advocate appeared on behalf of the Respondent Nos. 1 and 2,
and submitted that the prayer for executing the SPA would
amount to a modification of the terms of the Final Order dated
18.02.2020 passed by this Court. It would also be contrary to
Clause 11.23 of the ICC Arbitral Award, which had observed
that Respondent Nos. 1 and 2 return the shares held by them,
upon payment of all sums awarded. It was submitted that they
were willing to undertake to return the shares of Respondent
No. 3 Company to the Appellants after the entire payment was
made in terms of the Order dated 18.02.2020.
Alternatively, Respondent Nos. 1 and 2 were willing to
undertake to deposit the shares in this Court, which may be
released to the Appellants/GLI in terms of the Order dated
The Counsel for Respondent Nos. 1 and 2 expressly stated
before this Court that there is no encumbrance created by
Respondent Nos. 1 and 2 on their shareholding. With respect to
the land and Title Deeds of the property, the same were in the
possession and control of the Appellants, and his clients could
not be held liable for any act of the Appellants.
The Counsel for Respondent Nos. 1 and 2 made an oral
prayer that the amounts lying deposited in the Registry of the
Court, be released in favour of his clients.
10. Having heard the learned Counsel for the parties, we are of
the view that prayer (iv) of the present Application for execution
of the SPA is justified. We note that GLI has deposited an
amount of Rs. 10,00,00,000 (Rupees Ten Crores only) as down
payment, pursuant to the Order dated 18.02.2020.
This Court vide Order dated 24.04.2020 directed the
Registry to invest the amount in an interestbearing deposit for
6 months on auto renewal basis.
11. We are of the view that the execution of the SPA would not
prejudice the rights and interest of the Respondent Nos. 1 and
2 in any manner. The emails exchanged between the parties
after the Order dated 18.2.2020, reveal that Respondent Nos. 1
and 2 were earlier agreeable to execute the SPA. However, there
was a subsequent change of mind.
GLI is entitled to the execution of the SPA, as the legal
documentation reflecting the agreement under which the
acquisition of shares would take place.
12. Accordingly, we hereby order and direct that :
(a) To effectuate the directions given in para 4(iii) of
the Order dated 18.02.2020, it is necessary that the
Appellants and Respondent Nos. 1 and 2 execute the SPA
with GLI within a period of 3 weeks from the date of this
(b) We direct the Appellants and Respondent Nos. 1
and 2 to provide the necessary warranties, including the
warranty that the parties have not created any
encumbrance or thirdparty rights whatsoever on the
land on which the Respondent No. 3 Company was to set
up the IT Infrastructure Park.
A warranty must also be furnished by both the
Appellants and Respondent Nos. 1 and 2 with respect
to their respective shareholdings in Respondent No. 3
(c) The Appellants and Respondent Nos. 1 and 2 are also
required to place a certified copy of the Board Resolution
of their respective Companies, stating that the authorized
signatories have been empowered to execute the SPA.
(d) We further direct that the amount of Rs. 26,00,00,000
(Rupees TwentySix Crores only) deposited by the
Appellants on 19.05.2020, be released to Respondent
Nos. 1 and 2 through their Power of Attorney
(e) We further direct the Registry of this Court to Retain
the amount of Rs. 10,00,00,000 (Rupees Ten Crores only)
deposited by GLI till further orders.
The present Miscellaneous Application is accordingly
disposed of in the aforesaid terms.
(UDAY UMESH LALIT)
June 23 , 2020.