Case Note & Summary
The matter before the High Court of Judicature at Bombay arose from an arbitration petition filed by Haresh Advani under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside an arbitral award dated 22 March 2014. The dispute centered on a series of agreements relating to the sale and transfer of shares in M/s. Regency Hotels Pvt. Ltd., a company owning land at Village Sahar, Andheri. In 1995, the issued capital of the company was 24,500 shares of Rs.100 each, held by the petitioner (45%), the respondent Suraj Jagtiani (45%), and one Gul Kripalani (10%). In 1996, the three shareholders agreed to sell 50% of their shares to Cherish Investments Pvt. Ltd., but that agreement was later terminated. On 6 July 1998, the petitioner and respondent entered into a share sale agreement (SSA) under which the respondent agreed to sell his 11,025 shares to the petitioner for Rs.5.8 crores payable in instalments by 31 May 1999. The agreement included an escrow arrangement with Mr. Mahesh Jethmalani as escrow holder, and provisions for forfeiture of up to Rs.1.20 crores in case of default. A supplementary understanding granted voting rights on the shares to the petitioner. The petitioner made some payments but defaulted, leading to a supplementary agreement on 12 January 1999 that rescheduled the outstanding payments and acknowledged the default. The respondent terminated the SSA on 15 September 1999, which the petitioner disputed through correspondence. Meanwhile, on 15 November 2000, the respondent entered into a separate transaction with Accumulate Investments Pvt. Ltd. for the sale of 1225 shares and also took a loan of Rs.25 lakhs from that entity. Following further payments by the petitioner, the parties entered into new agreements on 5 and 6 October 2001, which effectively converted the earlier arrangement: the respondent agreed to treat the Rs.2,87,27,250 paid so far as consideration for 8563 shares (35%), and the remaining 2462 shares were to be purchased at Rs.12,506 per share, with an option for the respondent to take developed area instead. The agreements involved a new escrow holder, M/s. Crawford Bayley & Co., and the petitioner's shares were also placed in escrow as security. By November 2001, all 11,025 shares were transferred to the petitioner. In February and May 2002, the parties executed Letter Agreements revising the date for the respondent's option. The respondent initiated arbitration, leading to the award on 22 March 2014 that allowed some of his claims. The petitioner, aggrieved, filed the present arbitration petition challenging the award. The High Court heard the matter on 4 March 2015 and reserved judgment, which was pronounced on 24 April 2015. The available excerpt does not contain the court's analysis, reasoning, or final decision.
Issue of Consideration
ARBITRATION PETITION NO.846 OF 2014
