RAJIB SAHA AND ANR. Vs. PAUL BERKOWITZ

JUDGEMENT

(1.) THE present appeal has been filed against the order of learned Single Judge dated 29.4.2009.

(2.) BRIEFLY , the facts of the case are that the respondent was working as a salaried Director with appellant No. 2. The appellant No. 1 was one of the shareholders of appellant No. 2 Company. The appellant No. 1 entered into a share -purchase agreement with the respondent on 8.8.2006 and the appellant No. 2 was a party to the said agreement. In terms of the share -purchase agreement, the appellant No. 1 had agreed for sale of his 16,27,043 shares of the appellant No. 2 Company at a rate of Rs. 2.90 per share. It is not disputed that appellant No. 1 received the amount as stated in the agreement through foreign remittance from the respondent on 10.4.2007 and the parties executed necessary documents as contemplated by the share -transfer agreement. Necessary permissions were applied for by appellant No. 1 and were obtained by 15.9.2007. It was the case of the respondent before the learned Arbitral Tribunal that despite getting requisite permissions for transfer of shares to a foreign national (the respondent) and despite receiving the consideration, the appellant No. 1, who was to present to the appellant No. 2 the necessary share transfer forms duly filled up and signed by the parties accompanied by necessary permissions, did not fulfill his part of the obligations of getting the shares transferred in the name of the respondent so as to enable him to be a shareholder of the appellant No. 2 Company. The appellant No. 2 Company, therefore, did not recognize the transfer and did not correct the register of shareholders as the appellant No. 1 did not do the necessary last act of submitting share -transfer forms with the appellant No. 2. On finding that the appellants were not fulfilling their part of the obligations under the agreement, the respondent invoked the arbitration clause and the impugned award was passed by the learned Arbitral Tribunal.

(3.) AFTER considering the entire agreement and contentions of both the parties, the learned Arbitral Tribunal came to the conclusion that under the terms of the agreement, the obligation of the claimant was to tender purchase price as agreed and he had done so. Though, it was done after eight months of entering into the agreement, but the purchase price was accepted by appellant No. 1, the seller, and appellant No. 1 agreed to take steps and to have necessary permissions obtained for completion of transaction of sale. The steps as contemplated in paragraph 4.2 of the agreement were completed by the parties. However, appellant No. 1 refused to actually get the shares transferred in the name of the respondent by deliberately not applying to the company or enabling the respondent to apply to the company by not making the necessary papers available to him.