Case Note & Summary
The dispute arises out of a Share Purchase Agreement dated 14th June 2019 between the Kamdar Group (appellants) and the Sanghvi Group (respondents) for the transfer of shares in Automotive Manufacturers Private Limited (respondent no. 5). The plaintiffs (respondents 1-4) filed a suit seeking specific performance of the agreement and an interim injunction restraining the defendants from transferring shares or interfering with the management. The learned Single Judge granted an interim injunction on 30th June 2022. The defendants appealed. The Division Bench upheld the injunction, finding that the plaintiffs had a prima facie case, the balance of convenience was in their favour, and irreparable loss would be caused if the injunction was not granted. The court noted that the agreement was valid and enforceable, and the defendants' arguments regarding lack of board approval were not sufficient to deny interim relief. The appeal was dismissed.
Headnote
A) Contract Law - Specific Performance - Interim Injunction - Section 9, Specific Relief Act, 1963 - The court considered whether an interim injunction could be granted to restrain the transfer of shares and interference with management pending suit. Held that the plaintiffs had made out a prima facie case, balance of convenience was in their favour, and irreparable loss would be caused if injunction was not granted (Paras 1-45). B) Company Law - Share Transfer Agreement - Validity - The agreement dated 14th June 2019 between the Kamdar Group and Sanghvi Group for transfer of shares was found to be valid and subsisting. The court held that the defendants' contention that the agreement was not binding due to lack of board approval was not tenable at the interim stage (Paras 10-20). C) Civil Procedure - Interim Orders - Appellate Court's Scope - The appellate court's interference with a discretionary order of the trial court is limited unless the order is perverse or based on no evidence. Held that the Single Judge's order was not perverse and did not warrant interference (Paras 30-35).
Issue of Consideration
Whether the learned Single Judge was correct in granting an interim injunction restraining the appellants from transferring shares and interfering with the management of the company pending the suit, and whether the agreement dated 14th June 2019 was valid and enforceable.
Final Decision
The appeal is dismissed. The interim injunction granted by the learned Single Judge on 30th June 2022 is upheld.
Law Points
- Specific performance of contract
- interim injunction
- balance of convenience
- prima facie case
- irreparable loss
- Section 9 of the Specific Relief Act
- 1963
- Section 41(h) of the Specific Relief Act
