XV INTERNAL MOOT COURTCOMPETITION, 2020

Before

THE HON’BLE SUPREME COURT OF REPUBLIC OF

INDUSTHAN

APPEAL NO_2020

UNDER ARTICLE OF THE CONSTITUTION OF INDUSTHAN

BETWEEN

MS. RICHA DAMANI & RICH-ALLIANCE PVT.

LTD.……………………………………………APPELLANT

V.

MS. CV ZIN-Du……………………………………….RESPONDENT

As Submitted to the Chief Justice & other Companion judges of the Hon’ble Supreme Court
of Industhan
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TABLE OF CONTENTS

• LIST OF ABBREVIATIONS…………………………………………………3
• INDEX OF AUTHORITIES…………………………………………………………..4
• STATEMENT OF JURISDICTION…………………………………………..7
• STATEMENT OF FACTS……………………………………………………..9
• STATEMENT OF ISSUES……………………………………………………12
• SUMMARY OF ARGUMENTS………………………………………………13
• ARGUMENTS ADVANCED………………………………………………….14
I. WHETHER THE FACT THAT EI HOLDS 30% SHARES OF MSD FALLS
WITHIN THE PHRASE DIRECTLY OR INDIRECTLY AS STIPULATED
UNDER CLAUSE 16 OF THE SPSHA?
II. WHETHER THE SPSHA CAN HAVE A BINDING EFFECT WITHOUT
ITS INCORPORATION INTO THE AOA?
III. WHETHER MS. ZIN-Du WAS IN BREACH OF HER OBLIGATIONS AND
CAN THE COURT ORDER THE SPECIFIC PERFORMANCE OF THE
SPSHA?
• PRAYER………………………………………………………………………….29

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LIST OF ABBREVIATIONS

Hon’ble Honourable
Vs. Versus
SCC Supreme Court Cases
Art Article
Ors. Others
Anr. Another
SC Supreme Court
Ed. Edition
no. Number
UoI Union of India
& And
gov. Government
u/s Under Section
Ltd. Limited
S. Section
AIR All India Reporter
PVT. Private
SC Supreme Court
SCC Supreme Court Cases
ITR Income Tax Reports
SCR Supreme Court Reports

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INDEX OF AUTHORITY

S.no. CASE LAW NAME PAGE No.

1. Pareena motors pvt. ltd. vs. state bank of india&anr 15
2. LeelabaiGajananPanasare v. Oriental Insurance company Ltd 15
3. Tdi International India (P) Ltd. v. Regional Executive 15
4. Hero Cycles P. Ltd. Vs. CIT. 15
5. Sundaram Iyengar and Sons Ltd. v. CIT [2000] 241 ITR 420 15
(Mad)
6. ZenitMataplast Private Limited v. State of Maharashtra 16
7. Premier Hockey development Pvt. Ltd. Vs. Indian Hockey 19
Federation
8. In Vodafone International Holdings vs. Union of India 19
and another
9. Shanti Prasad Jain v Kalinga Tubes Ltd 19
10. Sourthernfoundaries vs shirlaw 19
11. N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors 24
12. RainbowEstates Limited v Tokenhold Limited and another 24
13. Jeune queens Cross Properties Ltd 25
14. Umabai v. NilkanthDhondibaChavan, 26
15. . Gomathinayagam Pillai v. PalaniswamiNadar 26
16. Vijay Kumar v. Om Parkash 26
17. A. Kanthamani v. Nasreen Ahmed 27
18. Bank of India Ltd. v. Jamsetji A.H. Chinoy 27
19. Kasturi v. Iyyamperumal 27

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• OTHER COURT CASES

S.no. CASE LAW NAME PAGE No.

1 Wolverhampton Corp v Emmons [1901] 1 KB 515 27
2 Posner v Scott-Lewis [1987] 3 All ER 513 28
3 Grant v Dawkins [1973] 1 WLR 1406 28

BOOKS

S.no. NAME OF THE BOOKS

1 Law of CONTRACT & Specific Relief, by Dr.Avtar Singh (Author), 2017

2 The Principles of Law of Contract,Prof (Retd) R C Srivastava And Ashutosh

Pathak
3 Introduction to Company Law by Paul L. Davies
4 Company law in context by David Kershaw
5 Mulla’s The Code of Civil Procedure (Abridged) by Sir
DinshawFardunjiMulla Revised by Justice Deepak Verma and NamitSaxena ,
Lexis Nexis
6 V.N. Shukla's Constitution Of India (13th ed. 2017)
7 M.P Jain, Indian Constitutional Law 907-09 8th ed., Lexis Nexis (2018)
8 DD Basu, Commentary On The Constitution Of India. (7th ed. 2015).

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ARTICLES AND ONLINE SOURCES

S.NO. ARTICLES
1. Devika et al., SPECIFIC PERFORMANCE -- PRINCIPLES REVISITEDSCC BLOG
(2020), https://www.scconline.com/blog/post/2020/06/18/specific-
performance-principles-revisited/ (last visited Sep 21, 2020).

2. Enforceability of SHA over AOA, SAMISTI LEGAL (2020),

https://samistilegal.in/enforceability-of-sha-over-aoa/ (last visited Sep
21, 2020).
3. UmakanthVarottil et al., CONFLICTS BETWEEN SHAREHOLDERS AGREEMENTS
AND ARTICLES OF A COMPANYINDIACORPLAW (2017),
https://indiacorplaw.in/2013/06/conflicts-between-shareholders.html
(last visited Sep 21, 2020).

4. Enforceability of Shareholder's Agreement -A hard nut to crack, TAXGURU,

https://taxguru.in/company-law/enforceability-shareholders-
agreementa-hard-nut-crack.html (last visited Sep 21, 2020).
5. AMLEGALS ,THE SPECIFIC RELIEF (AMENDMENT) ACT, 2017 -
CORPORATE/COMMERCIAL LAW - INDIAWELCOME TO MONDAQ (2018),
https://www.mondaq.com/india/contracts-and-commercial-
law/742016/the-specific-relief-amendment-act-2017 (last visited Sep
21, 2020).

LEGAL DATABASE

S.no. Name of the Database

1. MANUPATRA

2. SCC ONLINE

3. JSTOR

4. LEXIS NEXIS

5. HEINONLINE

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STATUTES

S.no. NAME OF THE STATUE

1 The Constitution of India, 1950
2 The Companies Act, 2013

3 Indian Contract Act, 1872

4 Specific Relief Act, 1963

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STATEMENT OF JURISDICTION

The Supreme Court has a very wide appellate jurisdiction over all courts and tribunals in
India as much as it may, in it’s discretion, grant special leave to appeal under Art 136 of the
Constitution from any judgement, decree, determination, sentence or order in any cause or
matter passed or made by any court or tribunal in territory of India.

Art 136 of the constitution states as follows, 136. Special leave to appeal by the Supreme
Court
(1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant
special leave to appeal from any judgment, decree, determination, sentence or order in any
cause or matter passed or made by any court or tribunal in the territory of India
(2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order
passed or made by any court or tribunal constituted by or under any law relating to the
Armed Forces.
A contract is an agreement upon sufficient consideration to do or not to do a particular act.
The party on whom this contractual obligation rests must not fail to discharge such
obligation. In case of his failure, the other party will have right to sue for performance of the
contract. This is called “Specific Performance.” Orders of specific performance are granted
when damages are not an adequate remedy. A suit for specific performance can be filed by
any party in a court of competent jurisdiction who has suffered loss due to non-performance
of the contract on part of the other party to the contract.Under the current law, court grants
specific performance when they perceive that damages will be inadequate compensation.
Specific Performance is deemed as an extraordinary remedy, awarded at the court’s
discretion.

Appeals also lie to the Supreme Court in civil matters if the High Court concerned certifies:
(c) certified that the case is a fit one for appeal to the Supreme Court.

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STATEMENT OF FACTS

1. VirubhaiDamani, the most renowned industrialist in the Republic of Industhan built

the largest conglomerates through his sheer dedication. His wife gave birth to two
daughters namely Richa & Samriddhi. Both the daughters did not get along well with
each other and had opposite views except of the common interest for Cricket.
Disheartened by the lack of opportunities for Cricket, both the daughters went for
higher studies to the different universities in abroad.
2. Around the same time, when both the daughters worked in different verticals of the
business, the famous Australian business tycoon, Mr. Jerry Packers & Movers
launches the World Series of Cricket where both the daughters wanted to encash in the
opportunity.However, the daughters had to take a backseat as their father suffered a
major stroke. The Republic of Industhan was going the phase of government- imposed
emergency which adversely affected the economy.
3. As things started to stabilise gradually, VirubhaiDamani passed away due to a major
stroke and left without a Will, which ultimately led to a dispute and rivalry between
both the daughters. Both the daughters formed their industries with various subsidies
engaged in different businesses and owned 75% stake in their own industries. Richa
formed Rich-Alliance Industries Pvt. Ltd. (“RAI”)and Samriddhi formedEss
Industries Pvt. Ltd. (“EI”).
4. Both the companies had two respective alliances working for the same objective of
conducting sports events across the country. RAI’s subsidiary was SportsTeamPvt.
Ltd. (“SRT”) AND EI’s subsidiary was V4 Victory Pvt. Ltd. (“V4V”). V4V started a
tournament namely Industhan Cricket League (ICL), which did not receive attention
and V4V became bankrupt and EI suffered huge losses. Now, SRT launched Industhan
Premier League (IPL) and was a blockbuster through which Richa became the
wealthiest business tycoon in the country.
5. Mr. Bhograj Singh, the strategic advisor of Richa and key face of SRT was fired by
Richa as he was dismissive of the idea of WIPL which Richa wanted to conduct in
future. As Richa wanted to make a point that Women Cricket can be profitable, she
wanted to replace Mr. Bhograj Singh’s place in her company. Richa’s friend, Ms.
ZivaRathi suggested her about Ms. CV Zin-du for the role of head of operation.
6. Richa appoints a meeting with Ms. CV Zin-du who has been living in Whina along
with her husband Hack Ma to give some time to her family. Richa’s first plan did not
work well in front of Ms. CV Zin-du because she wanted to spend time with her
family. Richa’s plan-B worked well as she was ready to sell 5% from 75% of her
equity shares of RAI on a premium lesser than its face value!
7. On two major conditions Richa was ready to sell 5% of her equity shares i.e., First,
Ms. Zin-du will bring investors and title Sponsors for the WIPL, preferably Whinese
investors who will sponsor it at a handsome amount for a period of three years.
Second, Ms. Zin-du will never sell her shares to Richa’s competitor Samriddhi, her

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company EI or any company with which Samriddhi is directly or indirectly related

with. Richa’s emphasis was immense on the “non-compete clause”.
8. Accordingly, Ms. Zin-du entered into a Share Purchase and Shareholders Agreement
(“SPSHA”) with Richa and RAI (the relevant part is reproduced as Annexure I) after
all necessary compliances, and statutory approvals were obtained.Ms. Zin-du got JIVO
as the principal sponsor, including Title sponsors for the WIPL for a staggering
amount of INR 640 Crores per annum for three years. However, WIPL did not perform
up to the mark, and it barely managed to earn a meagre profit.
9. JIVO moved out of the deal and Richa suffered huge losses. Around this time a video
of alleged match-fixing scandal and the sting operation was played by a popular news
channel which led to tremendous amount of losses to the company. A private detective
agency “Doshi CBI” was hired to find out the reality by Richa. Doshi CBI found out
that one of the suspects was none other than Hack Ma, the husband of Ms. Zin-du who
was opposed to the idea of Ms. Zin-du working in Industhan for Hack Ma’s
competitors. Richa met Ms. CV Zin-du the same day and gave her piece of mind to
Ms. CV Zin-du.
10. Ms. CV Zin-du took an urgent opinion from SKAM, a top law firm in the entire
country with its partner Ms. Partha. They discovered that majority of clauses of
SPSHA were not incorporated in the Articles of Association (“AoA”)of RAI. While
the process of selling her equity shares of RAI was started, Ms. CV Zin-du got a call
from Ms. KushaJunjea, one of the Directors of the MSD Corporation Pvt. Ltd.
(“MSD”).
11. However, Ms. CV Zin-du was consciously aware of her obligation bestowed by non-
compete clause. Kusha told her about the potential investor who is soon going to
acquire 30% shareholdings of MSD which she was sure that is not Samriddhi. One of
the directors of EI, Mr. Fanil Sumble got to know about the VLP’s offer to MSD. Fanil
approached MSD’s owners independently and offered a higher premium for the 30%
shareholding. They had no hitch in accepting Fanil’s offer as they anyway wanted a
handsome investment.
12. EI and MSD’s transaction and their EGM for BOD approval was scheduled for
22.12.2019. RAI’s EGM was scheduled for 24.12.2019 to approve Ms. Zin-du’s
selling of shares. Both the EGMs took place on their respective schedule, and
necessary resolutions and statutory approvals were granted to both the transactions. On
28.12.2019, somebody told Richa about EI’s acquisition of 30% shareholding in MSD
that happened prior to RAI’s BOD approval of Ms. Zin-du’s selling of shares.
13. On 04.01.2020, Richa instituted a civil suit in the MomBae High Court seeking
specific performance of Clause 16 of the SPSHA and Clause 8 of the SPSHA. The
judgement was passed on 08.04.2020 and following was decided that Ms. Zin-du is in
gross violation and breach of the non-compete clause, the single judge rejected the
argument of Ms. Zin-du that since AoA of RAI did not incorporate the non-compete
clause, the same is not binding on Ms. Zindu and with respect to Clause 8, the court
held that Ms. Zin-du is in breach of the obligation of Clause 8. Ms. Zin-du had an
obligation to bring investors and title sponsors for a period of 3 years.
14. Ms. Zin-du appealed to the Division Bench on 28.04.2020. The Division Bench
pronounced its verdict on 27.07.2020, which was as follows that there is no violation
of the non-compete clause as MSD is a separate legal entity which is individual from

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its owner, the Division Bench rejected the argument of SPSHA overriding AoA as the
same undermines the importance and effect of the AoA and that Ms. Zin-du was in full
compliance of her obligation to bring investors and title sponsors as JIVO did come on
board as a principal sponsor for three years. The fact that they backed out of the deal
after one year is not Ms. Zin-du’s fault.

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STATEMENT OF ISSUES

ISSUE I

WHETHER THE FACT THAT EI HOLDS 30% SHARES OF MSD FALLS

WITHIN THE PHRASE DIRECTLY OR INDIRECTLY AS STIPULATED
UNDER CLAUSE 16 OF THE SPSHA?

ISSUE II

WHETHER THE SPSHA CAN HAVE A BINDING EFFECT WITHOUT ITS

INCORPORATION INTO THE AOA?

ISSUE III

WHETHER MS. ZIN-Du WAS IN BREACH OF HER OBLIGATIONS AND

CAN THE COURT ORDER THE SPECIFIC PERFORMANCE OF THE
SPSHA?

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SUMMARY OF ARGUMENTS

ISSUE 1: Whether the fact that EI holds 30% shares of MSD falls within the phrase
directly or indirectly as stipulated under Clause 16 of the SPSHA?
It is humbly submitted before The hon’ble court that the fact that EI holds 30% of shares of
MSD falls within the phrase of directly or indirectly as stipulated under clause 16 of
SPSHA because of section 2 (6) of Companies Act,2013, shareholding of 20% establishes
or makes both the companies associate companies and does establishes some influence and
indirect control. Also, according to section 2(27) of Companies Act,2013, control can be
established by virtue of shareholding in a company and thus,Samriddhi was indirectly
related to MSD company.

ISSUE 2: Whether the SPSHA can have a binding effect without its incorporation into
the AoA?
It is humbly submitted before the hon’ble supreme court that the SPSHA can have a binding
effect without its incorporation into the AOA as according to the Companies Act,2013,
section 58(2) any contract or arrangement between two or more persons in respect to transfer
of securities shall be enforceable as a 'contract', Not contrary to any terms in the AoA and it
is a valid agreement.

ISSUE 3: Whether Ms. Zin-du was in breach of her obligations and can the court
order the specific performance of the SPSHA?
It is humbly submitted before the hon’ble supreme court that Ms Zin du was in breach of her
obligations and the court can order specific performance of the SPSHA as there is a breach of
her obligations because, she could not bring investors and thus Appeal for specific
performance of the SPSHA.

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ARGUMENTS ADVANCED

ISSUE 1: WHETHER THE FACT THAT EI HOLDS 30% SHARES OF MSD FALLS
WITHIN THE PHRASE DIRECTLY OR INDIRECTLY AS SITPULATED UNDER
CLAUSE 16 OF SPSHA
1.1.It is humbly submitted before the court that when Richa was unable to convince Ms. Zin-
du on leading the venture of WIPL, she offered Ms. Zin-du 5% shares out of the 75% shares
of her company RAI. Richa while giving this offer, mentioned 2 major conditions which was
agreed by Ms. Zindu without any qualms. One of these 2 conditions that becomes relevant here
is, that Ms. Zindu will never sell her shares to Richa’s competitor Samriddhi, her company EI
or any company with which Samriddhi is directly or indirectly related with.
Accordingly, Ms. Zin-du entered into a Share Purchase and Share Holders Agreement with
Richa. Consequent to the sour relations between Ms. Zin-du and Richa, and as a result of the
deteriorating conditions in the Industan-Whina border, Ms. Zindu wanted to get rid of RAI and
therefore was very eager to sell the 5% of shares that was bestowed upon her.
Ms. KushaJuneja, one of the directors of MSD, approached Zin-du with an offer to buy the 5%
shares of RAI, Zin-du willingly agreed to sell it to her.
The fact that EI has acquired 30% shares in MSD, makes Ms. Zin-du violate the Non-compete
Clause mentioned in Clause 16 of the SPSHA which clearly forbids Ms Zindu to sell the shares
to anyone who is directly or indirectly related to Samriddhi or Samriddhi’s company EI.
The fact that EI having 30% shares in MSD, falls within the phrase of directly or indirectly can
be proved by the following arguments:

A. Associate company establishes an indirect control over the other company under
the S.2(6) of The Companies act

1.2. According to section 2(76) subpart (viii) A of the Companies Act 2013, “related party”,
with reference to a company, means—any company which is— a holding, subsidiary or an
associate company of such company; this proves that if a company is an associate company it
means that it will automatically turn into a related party of the company. In the present case,
EI is a related party to MSD because it plays the role of an associate company. This proves
that EI and MSD are related to each other.
1.3. According to section 2(6) of the companies’ act, ―associate company, in relation to
another company, means a company in which that other company has a significant influence,
but which is not a subsidiary company of the company having such influence and includes a
joint venture company. Explanation—For the purposes of this clause, ―significant influence‖
means control of at least twenty per cent. of total share capital, or of business decisions under
an agreement;

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1.4.According to the fact sheet, referring to paragraph no. 51, Fanil Sumble who was one of
the directors of EI, approached MSD in order to purchase 30% of MSD’s shares. MSD agreed
to sell its 30% shares to Fanil and the deal was done on 22.12.2019. According to the
explanation given in section 2(6) of companies act 2013, by selling 30% of shares from its total
share capital, it makes EI an associate company, establishing a significant influence over itself
since EI has more than 20% shareholding in MSD.
1.5. The fact that now, after EI has a control of more than 20% of MSD’s the total share capital,
EI becomes an associate company of MSD and with this, MSD becomes indirectly related to
EI.
As soon as MSD becomes indirectly related to EI, it also establishes an indirect relationship
with Samriddhi since she holds 75% shares in EI. As Zin-du sells 5% of RAI’s shares to MSD,
she violates the clause 16 of SPSHA, in a sense that, Zin-du sells RAI’s shares to a company
which is in indirectly related to EI or Samriddhi.
1.6. In the case of Pareena motors pvt. ltd. vs. state bank of india&anr.,It is further
pointed out that the When the respondent Bank found that the directors of the petitioner's
company are the same person holding entire capital and had significant influence in
another company namely Ramanandi Automobiles Pvt. Ltd. Hence, this is an associated
company under Section 2(6) of the Companies Act, 2013. In view of this fact that the
petitioner company is an associate company of M/s Ramanandi Automobiles Pvt. Ltd. it
may be found that this company has rightly been said to be an associate company of M/s
Ramanandi Automobiles Pvt. Ltd. Section 2(6) of the Companies Act, 2013 which defines
the word "associate company" is extracted hereunder together with its explanation 1
1.7. In the case of LeelabaiGajananPanasare v. Oriental Insurance company Ltd.The
other point, which has been taken on behalf of the petitioner is that in similar situation
TISCO who had also equity holding in its two other associate companies to the extent of
37% and 47%, was allowed to consume the end-product of the coal block in associate
company. Not only that two other Companies namely CICCO and CIPCO, who were having
holding equity to the extent of 26% only in its associate company, have been allowed to use
the end-product of the coal in its associate company and, thereby, the act of the Authority
has been discriminating in asking the petitioner to raise equity holding from 39% to 51%
and, thereby, on this ground also the order dated 22/02/2010 (Annexure-7) is fit to be
quashed.Learned counsel in this respect, has further submitted that the limit of having 26%
of holding equity had earlier been fixed under the guidelines issued by the Central
Government, but without there being any change in the policy of the Government, the
Authority has passed an order for raising the equity share from 39% to 51%.2
1.8. In the case of Tdi International India (P) Ltd. v. Regional Executive
director,According to the learnt senior counsel the balance and Bhadra international are
two separate entities and one is not a subsidiary of the other or an associate company as
declared by the respondents.The learnt senior counsel submitted that the application of the
definition of associate company makes it clear that significant influence means control of at
least 20% of total share capital or of business decisions according to the council the

1
Pareena Motors pvt. ltd. v. State Bank of India &anr., A.I.R 2019 BH. 1759.
2
LeelabaiGajananPanasare v. Oriental Insurance company Ltd, A.I.R 2008 S.C. 3535.

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requirement is not satisfied as far as Bhadra international is considered.The court in its

decision held at Bhadra international private limited is not exempted as it is an associate
company3.In the above case its clearly established that 20% control is enough to establish
an indirect control or a significant influence of a company on its associate company.
B. Control can be established by virtue of shareholding in a company

1.9. According to 2 (27) of the companies Act, ―control‖ shall include the right to appoint
majority of the directors or to control the management or policy decisions exercisable by a
person or persons acting individually or in concert, directly or indirectly, including by virtue
of their shareholding or management rights or shareholder’s agreements or voting agreements
or in any other manner;
1.10. We need to look at how by virtue of shareholding EI established an Indirect control over
the company. When Richa put forward her conditions she clearly specified that Zindu cannot
sell her shares to any company related to EI or Smariddhi. As EI bought 30% of the shares
from MSD, it established some control of Samrddhi in that company considering the fact that
she already owned a 75% stake in EI and then EI holds a 30% shareholding in MSD, it
establishes an indirect control of Samriddhi in MSD company.
1.11.In our considered view, when all the details of investments of shares and working of
interest paid has been provided to the Department, asking for any other evidences relating to
what income will generate to the assessee, at this stage, first of all, it is not the requirement of
Section 36(1)(iii) of the Act and secondly, at this stage, it is just asking for some hypothetical
evidences. The very fact that funds borrowed were invested in shares of an associate company
itself demonstrates the business strategy of the assessee company. We find the Hon’ble Apex
Court in the case ofHero Cycles P. Ltd. Vs. CIT.4
1.12.In the case of T.V Sundaram Iyengar and Sons Ltd. v. CIT[2000] 241 ITR 420 (Mad),
wherein the court upheld an order of remand made by the Tribunal to ascertain the reasonable
rent as it had been found that the letting was to an associate company, and that that rental
could not be regarded as the fair rent for the premises.10. Commissioner Of Income-Tax v.
Sampathammal Chordia [2000] 245 ITR 290 (Mad), wherein it was held that the actual rent
received should be taken as the basis and not the value noted in the municipal records which
in that case was found to be higher.5
1.13.In a case of ZenitMataplast Private Limited v. State of Maharashtra6, The other point,
which has been taken on behalf of the petitioner is that in similar situation TISCO who had
also equity holding in its two other associate companies to the extent of 37% and 47%, was
allowed to consume the end-product of the coal block in associate company. Not only that two
other Companies namely CICCO and CIPCO, who were having holding equity to the extent of
26% only in its associate company, have been allowed to use the end-product of the coal in its
associate company and, thereby, the act of the Authority has been discriminating in asking the

3
Tdi International India (P) Ltd. v. Regional Executive Director, A.I.R. 2018 TN. 6904.
4
Hero Cycles P. Ltd. V. CIT., S.C. 347 I.T.R. 379.
5
T.V Sundaram Iyengar and Sons Ltd. v. CIT, (2000) 241 I.T.R. 420.
6
Zenith Mataplast Private Limited v. State of Maharashtra, (2019) 10 S.C.C. 388.

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petitioner to raise equity holding from 39% to 51% and, thereby, on this ground also the order
dated 22/02/2010 (Annexure-7) is fit to be quashed.Learned counsel in this respect, has further
submitted that the limit of having 26% of holding equity had earlier been fixed under the
guidelines issued by the Central Government, but without there being any change in the policy
of the Government, the Authority has passed an order for raising the equity share from 39% to
51%, which would be quite illegal in view of the decisions rendered in a case of ZenitMataplast
Private Limited v. State of Maharashtra

C. Violation of SPSHA section 16(a), by Ms. Zin du.

1.14. While selling the shares to Ms Zindu, Richa and Ms Zindu entered into a Share
Purchase and Share Holders agreement, On the 23rd day of October 2018. While entering into
the agreement Richa added two separate clauses of ‘obligation of buyer’ and a Non- Compete
clause.
1.15. Under clause 16(a) it is clearly mentioned that the Buyer will not transfer or sell any of
the shares of the Company acquired by her under this Agreement to Ms. Samriddhi Damani
other company Ess Industries Pvt. Ltd., or any company with which Ms. Samriddhi Damani
is directly or indirectly related.According to section 16 subclause a of SPSHA it is clearly
stated that Zindu will not transfer or sell her shares to any company with which Samriddhi is
directly or indirectly related. By selling her shares to MSD company, whose 30%
shareholding was with EI she ultimately sold to company where Samriddhi was indirectly
related.
1.16. Ms. Zindu clearly and outwardly violated the non-compete clause of the Share Purchase
and Share Holders agreement. While buying the shares of Rich Alliance ltd. Ms Cv Zindu
agreed to the Non-compete clause. It was her duty to follow the non-compete clause and not
defy it. Ms Zindu should have done enough research and understand the importance of the
non-compete clause. If she just does not follows it, what is the point of including the non-
compete clause itself.
1.17. In the above sub issues and by means of Section 2(6) and section 2(27) it is clearly
established that Saamriddhi was indirectly related to related to the MSD company. It was
obligation on the part of Ms. Zindu to check whether MSD was related to Samriddhi or EI in
any form.
1.18. The main purpose of SHA is to protect the shareholder's investment in the company and
to establish a fair relationship amongst the shareholders. It is important to have a shareholders
agreement so that a business can run smoothly. If the clauses of the shareholder's agreement
are to be violated only what is the entire point of having a separate agreement with the
shareholders.
1.19. The shareholder's agreement is a contractual agreement under the Companies Act,2013
non- compete Clause is one of the major flaws in and shareholders agreement and non-
compete clause 6 to prevent the existing shareholders from engaging in any business that is
similar to the company or any other.

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1.20.A breach of SHA does not breach the articles of association is a valid corporate action
and the parties agreed can get the remedy under the general of land for any breach of
agreement.There are many case laws from time to time wherein the violation of SHA has
been recognised and SHA is upheld by the court of law
[D] Significant beneficiary owner
1.21. The Section 90 of the Companies Act 2013 explains the concept of Significant
Beneficial Owner (SBO), the definition of which was amended in October 2019 (In
concerned case, the transaction between EI & MSD happened on 22.12.19 i.e. after the
amendment, the benefit of the mentioned date cannot be availed). - applicable criteria for
being a significant owner is - holding indirectly + directly > 10% of shares/voting rights/etc.
Further, Explanation III to Section 90 provides the conditions to be fulfilled to determine
whether an individual is indirectly related to a company. To illustrate the current scenario -
Samriddhi holds 75% shares in EI,
EI holds 30% shares in MSD
The indirect holding of Samriddhi in MSD is 22.5% (30*75%) i.e. > 10%. Hence, as per the
Companies Act 2013, the indirect relationship cannot be denied. Which means, MSD and EI
are indirectly related to each other.

ISSUE 2: WHETHER THE SPSHA CAN HAVE A BINDING EFFECT WITHOUT

ITS INCORPORATION INTO THE AoA
2.1It is humbly submitted before the hon’ble court that the conditions put by Richa infront of
Zindu to never sell her shares to Samriddhi, her company EI or any company with which
Samriddhi is directly or indirectly related with were incorporated in the clause 16 of the SPSHA
entered by them.
The fact that Zindu sold the 5% shares of RAI to MSD, a company in which Smariddhi’s
company EI had 30% shares had blatantly violated the non-compete clause of SPSHA.
However, according to paragraph 45 of the fact sheet, it is clearly mentioned that SKAM, a top
law firm in the country while advising Zindu on the ways to sell her equity shares noticed that
a majority of clauses of SPSHA was not included in the AoA of RAI. Even after this, the
SPSHA will be deemed enforceable and Zindu can be taken to court in breach of the Non-
compete clause of SPSHA because: [A] 58(2) any contract or arrangement between two or
more persons in respect to transfer of securities shall be enforceable as a 'contract') [B] Not
contrary to any terms in the AoA [C] It is a valid agreement
A. Any transfer of securities shall be enforceable as a 'contract'

2.2.According to sec 58(2), any contract or arrangement between two or more persons in
respect of transfer of securities shall be enforceable as a contract. In lieu of this section, by
further breaking it down, it can be said that any agreement may it be AoA or SPSHA,
between the parties in respect of transfer of any securities shall be enforceable as a contract.

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Therefore, a contract between shareholders and the company is binding on the company, with
respect to transfer of securities in the event the AoA is silent on the matter. If by any means
there is a breach of such contract the aggrieved party may avail such legal remedies as
available in case of breach of contract under the specific performance of this contract in the
specific relief Act of 1963.
2.3.Therewas a share purchase shareholder’s agreement formed on the 23rd day of October
2019 between Zindu who is the buyer and Ms. Richa who is the seller. According to the share
purchase shareholder’s agreement clause 16, there was a non-compete clause incorporated.
The non-compete clause has two sub clauses and both were not to be violated in any case.
According to The Companies Act 2013, a SPSHA is a contract agreement between the
shareholder and the company which basically provides specific rights and some sort of
restrictions to the shareholders.
2.4.When Ms Zindu sold her shares to MSD company she violated the non -compete clause
as the company was related to Samriddhi as established in issue 1. Now when there is a
breach of contract Richa can have specific performance of this contract under the specific
relief Act. On breach of contract the parties can either claim damages under section 74 of
the Indian contract Act 1872 where in the non -defaulting party is entitled to claim from the
defaulting party compensation for loss or damage sustained by it due to breach of contract
and claim specific performance of the contract which leads to compelling the defaulting
party to perform its side of bargain.
2.5.In the case of Premier Hockey DevelopmentPvt. Ltd. Vs. Indian Hockey Federation,
ESPN and the Indian Hockey Federation entered into an SHA and a new company was
formed which was called the Premier Hockey Development Private Limited for the purpose
of organizing and conducting hockey leagues and tournaments. A hockey league was being
organized by the Indian Hockey Federation with Nimbus Sports and ESPN’s contention was
that the same was in breach of the terms of the SHA and a petition was filed by Premier
Hockey Development Private Limited against Indian Hockey Federation. It was contended by
Indian Hockey Federation that a resolution was not passed by the board of directors of the
Premier Hockey Development Private Limited for the purpose of initiation of such
proceedings against Indian Hockey Federation and that these clauses were not incorporated
in the AOA of the company. The court opined that, as these clauses were not in contravention
to the Companies Act, 1956 and did not violate the SHA, these clauses would be binding on
the parties and that such proceeding could be initiated against Indian Hockey Federation.7
2.6.In Vodafone International Holdings vs. Union of India and another Vodafone
International Holdings entered into transactions with Hutchinson Telecommunication
International Limited by which share capital of Hutchinson Telecommunication International
Limited’s Cayman subsidiary was transferred by Hutchinson Telecommunication
International Limited to Vodafone International Holdings. Vodafone International Holdings
acquired 67% in Hutch Essar Limited which is a joint venture of Hutchinson and Essar. The
Supreme Court held that agreements can be entered into by the shareholders of the company
which would be in the best interest of the company and when such provisions of the SHA

7
Premier Hockey development Pvt. Ltd. v. Indian Hockey Federation, A.I.R. 2011 DE. 52.

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arenot contrary to the provisions as incorporated in the AOA, such clauses of the agreements
shall be valid and enforceable.8
2.7.In the case of Shanti Prasad Jain v Kalinga Tubes Ltd, inthis case, an agreement was
entered into between two shareholders of a private company and an outsider relating to
allotment of new shares in the Company. The Company was not a party to the said agreement
and neither was its terms incorporated in the articles of the Company. The Company was
subsequently converted into a public company and its articles were amended. However, the
articles still did not reflect the terms of the agreement. As per the terms of the agreement, an
allotment of shares was to be made to the outsider. However, the Supreme Court precluded
the said outsider from enforcing the allotment as he was not a shareholder of the company at
the time of execution of the said agreement and neither was the company party to the
agreement. It is to be noted that the judgment did not in any way hold that the transfer of
shares agreed to between the shareholders inter se did not bind them.9
2.8. Sourthernfoundaries vs Shirlaw, The view is also consistent with the position in
English law, it was held that the company cannot be precluded from altering its articles
thereby giving itself the power to act and the provisions of the altered articles but so to act
Mein mil and the less be a breach of contract if it is contrary to a stipulation in the contract
validly made before the alteration. And the court awarded damages for wrongful dismissal of
the Managing Director of the company even though the mode of dismissing was valid in the
articles of the company there is considerable opinion to show that the relief may also apply in
terms of an injunction to restrain it possible breach of the SPSHA contract10

[B] Clauses of SPSHA not contrary to any terms in theAoA

2.9.Through various judgements, the judiciary has departed from the view laid down in the
Rangaraj Judgement, and has held that the terms of the SHA do not become unenforceable
merely on account of the same not being incorporated in the AOA, provided that they are: (a)
valid; (b) not contradictory to any of the terms of the existing AOA; and (c) are in
compliance with applicable laws.
2.10.Looking at the case of Premier Hockey development Pvt. Ltd. Vs. Indian Hockey
Federation, ESPN and the Indian Hockey Federation entered into an SHA and a new
company was formed which was called the Premier Hockey Development Private Limited for
the purpose of organizing and conducting hockey leagues and tournaments. A hockey league
was being organized by the Indian Hockey Federation with Nimbus Sports and ESPN’s
contention was that the same was in breach of the terms of the SHA and a petition was filed
by Premier Hockey Development Private Limited against Indian Hockey Federation. It was
contended by Indian Hockey Federation that a resolution was not passed by the board of
directors of the Premier Hockey Development Private Limited for the purpose of initiation of
such proceedings against Indian Hockey Federation and that these clauses were not

8
Vodafone International Holdings v. Union of India and another, (2012) 6 S.C.C. 613.
9
Shanti Prasad Jain v. Kalinga Tubes Ltd,A.I.R.1965 S.C.R (2) 720.
10
Sourthern foundaries v. Shirlaw, (1939) 2 KB. 206.

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incorporated in the AOA of the company.11The court held that the SHA will be binding and
enforceable even if it is not incorporated in AoA, this is because the clauses of SHA was in
compliance and not contrary to the AoA.
2.11. In the case of Vodafone International Holdings BV vs Union of India (2012),12the
Supreme Court ruled that shareholders can enter into any agreement deemed best for the
company, except for the provisions in the shareholders agreement shall not be contrary to the
articles of association. The main purpose of a shareholder’s agreement is to maintain
effective and proper operations as well as the internal management of a company.
2.12.Additionally, breach of shareholders agreement, that does not breach the articles of
association, is a valid corporate action. The parties that agreed to the agreement can avail of
remedies for breach of an agreement.
2.13. According to paragraph number 36 of the fact sheet, it is clearly written that Zindu and
RAI entered into the share purchase and shareholders agreement after all necessary
compliances and statutory approvals were obtained. It is to be noted that the shareholder's
agreement was in compliance with the articles of association of the company and therefore
should have a binding effect on the shareholders.
2.14.Therefore, The Non- compete clause of the SPSHA is not contrary to the AoA of the
company RAI and therefore, it can be deemed enforceable. The breach of the Non-Compete
clause done by Zindu by selling the 5% shares of RAI to MSD, a company to which
Samriddhi was directly or indirectly related to will be treated as a breach of contract even if it
is not incorporated in AoA.

[C] It is a valid agreement

2.15.According to sub issue (A), we see that according to section 58(2) of the Companies Act
2013, any contract or arrangement between two or more persons in respect of transfer of
securities shall be enforceable as a contract.
2.16.Therefore, to enforce the clauses of SPSHA as a contract, even without its incorporation
in AoA, it is mandatory to understand that the SPSHA entered into by Zindu and RAI is a
valid agreement and can be treated as a contract.
2.17.According to section 2(e) of the Indian Contract Act, 1872, every promise and every set
of promises, forming the consideration for each other, is an agreement; in lieu of this section
SPSHA is an agreement since it consists of a set of restrictions and allowances to which the
company and the shareholders promise to adhere.
2.18.According to section 2(d) of the ICA,1872, When, at the desire of the promisor, the
promisee or any other person has done or abstained from doing, or does or abstains from
doing, or promises to do or to abstain from doing, something, such act or abstinence or
promise is called a consideration for the promise; here, the promisor is Richa and the

11
Premier Hockey development Pvt. Ltd. v. Indian Hockey Federation, A.I.R. 2011 DE. 52.
12
Vodafone International Holdings BV v. Union of India, (2012) 6 S.C.C. 613.

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Promisee is Zindu according to section 2(c) of the ICA, 1872. At the desire of Richa, Zindu
promised to bring sponsorers for WIPL and promised to abstain from selling the 5% shares of
RAI to any person related to Samriddhi directly or indirectly. This act of Zindu can be termed
as a consideration to the offer given to Zindu by Richa. This can be termed as a valid
consideration since a pvt. Ltd. company can put restrictions on the transfer of shares and it is
not invalid.
2.19.According to section 2(h) of the Indian Contract Act, 1872, an agreement enforceable by
law is a contract; In the SPSHA that was entered into by Zindu and RAI, the Non-compete
clause mentioned in the SPSHA was (a) valid; (b) not contradictory to any of the terms of the
existing AOA; and (c) are in compliance with applicable laws and hence can be treated as
enforceable by law.
2.20.According to section 10 of the ICA, 1872, all agreements are contracts if they are made
by the free consent of parties competent to contract, for a lawful consideration and with a
lawful object, and are not hereby expressly declared to be void. Following the said section,
the SPSHA is a valid contract since (a) according to paragraph 34 of the fact sheet, it is
clearly stated that Ms. Zindu had no qualms in accepting all the conditions of the SPSHA.
This establishes that the element of free consent was existing. (b) The consideration is valid
as already proven in the above para that the object of the agreement is also lawful and
therefore the SPSHA entered by the parties in this case is a valid and enforceable contract.
2.21.It has therefore been established that SPSHA is an enforceable contract. However, the
fact that Zindu breached a clause of SPSHA will now be treated as a breach of contract and
Zindu can be taken to court for the same.
2.22.This is how, SPSHA can be enforceable even without its incorporation in AoA. The fact
that there is a breach of contract by Zindu will call for a remedy which is provided by section
73 of the ICA, 1872.
2.23.According to section 73 of the ICA, Compensation for loss or damage caused by breach
of contract.—When a contract has been broken, the party who suffers by such breach is
entitled to receive, from the party who has broken the contract, compensation for any loss or
damage caused to him thereby, which naturally arose in the usual course of things from such
breach, or which the parties knew, when they made the contract, to be likely to result from
the breach of it.

ISSUE 3: WHETHER MS. ZINDU WAS IN BREACH OF HER OBLIGATIONS AND

CAN THE COURT ORDER THE SPECIFIC PERFORMANCE OF THE SPSHA

It is humbly submitted before the hon’ble court that Ms, Zindu was in breach of
herobligations as per the shareholder and share purchase agreement. According to the
SPSHA, there were two obligations of Ms, Zindu which she couldn’t fulfil. There is a breach
of her obligations because, [A] She could not bring investors [B] Appeal for specific
performance of the SPSHA

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[A] She could not bring investors

3.1.Zin-du was in breach of the specific performance since she did not fulfil the obligation
that she herself agreed to. There were 2 obligations in the current scenario, one was to never
sell the 5% shares, that she got from Richa, to anyone who was directly or indirectly in
connection with Samriddhi, which was mentioned in clause 16 of SPSHA.
3.2. And the other was to bring investors and title sponsors for the WIPL, “preferably”
Whinese investors who will sponsor it for a handsome period of 3 years. However, according
to paragraph 40 of factsheet, because of the tensions at the border between Industhan and
Whina, the principle and title sponsor JIVO, moved out of the deal before starting the second
season of WIPL. Ms. Zindu couldn’t arrange for another replacement for the second season
leading to huge loss

3.3.According to the share purchase shareholder agreement clause 8, obligations of a buyer.

Sub clause(a), talks about Zindu being a buyer will have to bring title sponsors,
Considering the fact that JIVO did not sponsor the tournament for a period of 3 years led to
breach of her obligations.
The losses incurred because of Zindu’s inability to fulfil her obligations of getting investors
for a time of 3 years is a ground for demanding Specific Performance.
3.4. Since we know that SPSHA is treated as a contract, A shareholder's agreement is a
contract between the company and its shareholders. It outlines the rights, obligations of the
shareholders and provisions related to the management and the authorities of the company.A
shareholders agreement as a contract will only be legally binding on parties who sign the
contract. Therefore, it is legally binding between Zindu and Richa since they entered into the
SPSHA.
3.4.As she breached the contract., section 74 ICA, When a contract has been broken, the
party who suffers by such breach is entitled to receive, from the party who has broken the
contract, compensation for any loss or damage caused to him thereby, which naturally arose
in the usual course of things from such breach, or which the parties knew, when they made
the contract, to be likely to result from the breach of it.
3.5.On breach of contract the parties can either claim damages under section 74 of the
Indian contract Act 1872 where in the non-defaulting party is entitled to claim from the
defaulting party compensation for loss or damage sustained by it due to breach of contract
and claim specific performance of the contract which leads to compelling the defaulting
party to perform its side of bargain

3.6. In this scenario Richa applied in the apex court for the specific performance of her
obligations which was to bring sponsors for 3 years. According to the moot proposition para
58, she had to bring investors preferably whinsese but she could not. Considering the border
tension and halt in between the two countries, Ms. CV Zindu had an option of bringing in
Investors from any other country or from India as well. The fact that she did not comply by

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her obligations show us that she bluntlyignored her obligations towards the Share Purchase
and shareholder’s agreement.

3.7. The share purchase and shareholder’s agreement has a purpose which is being defied
when it is breached. Zindu breached her obligations and did not bring any investors,
whetherwhinese or non whinese. A shareholder’s agreement is a contract between the
company and its shareholders. It outlines the rights, obligations of the shareholders and
provisions related to the management and the authorities of company.

3.8.As there is a breach of contract, according the Indian contract act, section 73, When a
contract has been broken, the party who suffers by such breach is entitled to receive, from the
party who has broken the contract, compensation for any loss or damage caused to him
thereby, which naturally arose in the usual course of things from such breach, or which the
parties knew, when they made the contract, to be likely to result from the breach of it." Such
compensation is not to be given for any remote and indirect loss or damage sustained by
reason of the breach.

3.9.According to the moot proposition as there have been an obligation which has not been
met the plaintiff seeks for specific performance of these obligation from the court of law.
Specific performance meaning is fulfilling our promise made under a contract as a given a
suit for specific performance can be filed by any party in a court of competent jurisdiction, in
this case, the ab export who has suffered a loss due to non-performance of a contract on part
of the other party of the contract it is basically to meet the obligation that was not been done.

3.10.In the case of N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors.Section 16(c)
of the Act envisages that plaintiff must plead and prove that he had performed or has always
been ready and willing to perform the essential terms of the contract which are to be
performed by him, other than those terms the performance of which has been prevented or
waived by the defendant. The continuous readiness and willingness on the part of the plaintiff
is a condition precedent to grant the relief of specific performance. This circumstance is
material and relevant and is required to be considered by the court while granting or
refusing to grant the relief. If the plaintiff fails to either aver or prove the same, he must fail.
To adjudge whether the plaintiff is ready and willing to perform his part of the contract, the
court must take into consideration the conduct of the plaintiff prior and subsequent to the
filing of the suit alongwith other attending circumstances. The amount of consideration which
he has to pay to the defendant must of necessity be proved to be available. Right from the
date of the execution till date of the decree he must prove that he is ready and has always
been willing to perform his part of the contract. As stated, the factum of his readiness and
willingness to perform his part of the contract is to be adjudged with reference to the conduct
of the party and the attending circumstances. The court may infer from the facts and
circumstances whether the plaintiff was always ready and willing to perform his part of the
contract.13

3.11. In the case of RainbowEstates Limited v Tokenhold Limited and another,he judges,
in this case, concluded that the old law of refusing specific performance if it would involve
constant supervision was no longer good or (at least) that there were exceptions. It may be
that only in the most exceptional circumstances (such as in this case) specific performance

13
N.P. Thirugnanam v. Dr. R. Jagan Mohan Rao and Ors., A.I.R. 1996 S.C. 0025.

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will be available to the landlords; however, the arguments advanced indicate that it should
be available in other situations. Specific performance was ordered requiring tenants to
spend£300,000 on repairs to the flats. Factors militating in favour of this remedy were that
the landlord had no right of entry to repair in default of the tenant; that the lease had no
forfeiture clause and that the building was listed so that repairs distinct from redevelopment
was the most appropriate outcome.14

3.12.In the case of Jeunequeens Cross Properties Ltd, it was held that Specific performance
is often ordered in relation to building contracts because the contract deals with results
rather than the carrying on of an activity over a period of time and it usually defines the work
to be completed with certainty15.

[B] specific performance of the SPSHA

3.13.I t should be noticed that Zindu was asked to “preferably” get Whinese customers,
which means she would have very well invited sponsors from Industan itself which she did
not do. Ms. Zin-du gave no priority to the contract that she entered into with Richa and left
before the completion of 3 years.
3.14.According to the fact sheet paragraph number 38, its evidently written that WIPL could
not perform well even with Ms. Zindu’s contribution which means it was already running not
that well and even before the second season, Zindu was unable to find a replacement of JIVO
and couldn’t get sponsors from Industan to save WIPL. After this she finally decides to leave
the company midway which makes Richa face damages because of breach in contract, that is
clause 8 of SPSHA. This is why Richa can demand Specific performance.
3.15.Specific Relief is granted in times of breach of contract when pecuniary compensation
does not satisfy the plaintiff so he may ask for specific relief . Specific performance means
enforcement of exact teams of contract.
3.16.According to The Specific relief act 2018,Section 11 relates to contracts where the act
agreed to be done is in the performance of a trust.
3.17. Section 11(1) is sought to be amended to substitute the phrase "contract may, in the
discretion of the court" with "contract shall".
3.18. After the amendment, Section 11(1) will read: "Except as otherwise provided in this
Act, specific performance of a contract shall be enforced when the act agreed to be done is in
the performance wholly or partly or a trust."
3.19.Which means that, Richa here trusted Zindu with getting investors for WIPL and was
certain that ZIndu will not leave half way. She therefore also entrusted 5% of RAI’s shares
with Zindu thinking that WIPL will reach new heights but Zindu failed to do so and left
before the completion on 3 years.
3.20.Apart from this, Richa’s company RAI had a very bad set back because of the fake sting
operation to prove alleged match fixing in WIPL. With further investigation, Doshi CBI

14
RainbowEstates Limited v.Tokenhold Limited and another, (1998) CH. 64.
15
Jeune queens Cross Properties Ltd, (1997) A.I.I. E.R. 297.

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figured that the sting operation was a conspiracy done by Hack-ma and Zindu can be a part of
it. according to fact sheet paragraph 42, its mentioned that Richa regretted trusting Zindu
which proves that section 11(1) will be applicable and specific relief should be granted since
the element of trust in broken leading to loss of reputation and investors as mentioned in fact
sheet paragraph no. 40.
3.21.Umabai v. NilkanthDhondibaChavan,
. It is now well settled that the conduct of the parties, with a view to arrive at a finding as to
whether the plaintiff-respondents were all along and still are ready and willing to perform
their part of contract as is mandatorily required under Section 16(c) of the Specific Relief Act
must be determined having regard to the entire attending circumstances. A bare averment in
the plaint or a statement made in the examination-in-chief would not suffice. The conduct of
the plaintiff-respondents must be judged having regard to the entirety of the pleadings as also
the evidences brought on records.”16
3.22.Gomathinayagam Pillai v. PalaniswamiNadar
But the respondent has claimed a decree for specific performance and it is for him to
establish that he was, since the date of the contract, continuously ready and willing to
perform his part of the contract. If he fails to do so, his claim for specific performance must
fail. As observed by the Judicial Committee of the Privy Council in Ardeshir Mama v. Flora
Sassoon[13]:
“In a suit for specific performance, on the other hand, he treated and was required by the
Court to treat the contract as still subsisting. He had in that suit to allege, and if the fact was
traversed, he was required to prove a continuous readiness and willingness, from the date of
the contract to the time of the hearing, to perform the contract on his part. Failure to make
good that averment brought with it the inevitable dismissal of his suit.”
The respondent must in a suit for specific performance of an agreement plead and prove that
he was ready and willing to perform his part of the contract continuously between the date of
the contract and the date of hearing of the suit.”17
3.23.Vijay Kumar v. Om Parkash
“7. In order to obtain a decree for specific performance, the plaintiff has to prove his
readiness and willingness to perform his part of the contract and the readiness and
willingness has to be shown throughout and has to be established by the plaintiff.”18
3.24. A.Kanthamani v. Nasreen Ahmed
The expression “readiness and willingness” has been the subject-matter of interpretation in
many cases even prior to its insertion in Section 16(c) of the Specific Relief Act, 1963. While
examining the question as to how and in what manner, the plaintiff is required to prove his
financial readiness so as to enable him to claim specific performance of the
contract/agreement, the Privy Council in a leading case which arose from the Indian courts

16
Umabai v. NilkanthDhondibaChavan, (2005) 6 S.C.C. 246.
17
Gomathinayagam Pillai v. PalaniswamiNadar, (1967) 1 S.C.R. 227.
18
Vijay Kumar v. Om Parkash, A.I.R. 2018 S.C. 1913.

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(Bombay) in Bank of India Ltd. v. Jamsetji A.H. Chinoy19 , approved the view taken by
Chagla, Actg. C.J., and held inter alia that:
“it is not necessary for the plaintiff to produce the money or vouch a concluded scheme for
financing the transaction to prove his readiness and willingness.”The following observations
of the Privy Council are apposite“… Their Lordships agree with this conclusion and the
grounds on which it was based. It is true that Plaintiff 1 stated that he was buying for himself,
that he had not sufficient ready money to meet the price and that no definite arrangements
had been made for finding it at the time of repudiation. But in order to prove himself ready
and willing a purchaser has not necessarily to produce the money or to vouch a concluded
scheme for financing the transaction. … Their Lordships would only add in this connection
that they fully concur with Chagla, Actg. C.J. when he says:‘In my opinion, on the evidence
already on record it was sufficient for the court to come to the conclusion that Plaintiff 1 was
ready and willing to perform his part of the contract. It was not necessary for him to work out
actual figures and satisfy the court what specific amount a bank would have advanced
……’.” 20

3.25. Kasturi v. Iyyamperumal

from the above, it is now clear that two tests are to be satisfied for determining the question
who is a necessary party. Tests are — (1) there must be a right to some relief against such
party in respect of the controversies involved in the proceedings; (2) no effective decree can
be passed in the absence of such party
10. That apart, from a plain reading of Section 19 of the Act we are also of the view that this
section is exhaustive on the question as to who are the parties against whom a contract for
specific performance may be enforced
15…Therefore, in our view, a third party or a stranger to the contract cannot be added so as
to convert a suit of one character into a suit of different character.”
It is clearly proved that there were only two parties to the contract and no thirs party was
involved for specific performance of the contract.21
3.26. In the case of Wolverhampton Corp v Emmons [1901] 1 KB 515
The plaintiff acquired land for an improvement scheme and sold part of it to the defendant,
who covenanted to demolish houses on it and build new ones. The demolition was carried out
and plans for new houses approved. The defendant then refused to continue. It was held that
specific performance would be ordered since the defendant’s obligations were precisely
defined by the plans, and damages would be inadequate because the defendant had
possession of the site, and the plaintiff could not get the work done by employing another
contractor.22

19
Bank of India Ltd. v. Jamsetji A.H. Chinoy, (1949) PC. 81.
20
A. Kanthamani v. Nasreen Ahmed, (2017) 4 S.C.C. 654.
21
Kasturi v. Iyyamperumal, (2005) 6 S.C.C 733.
22
Wolverhampton Corp v. Emmons [1901] 1 KB. 515.

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3.27. Posner v Scott-Lewis [1987] 3 All ER 513

The court granted an application for specific performance of a lessor’s covenant to employ a
resident porter for certain duties. The court distinguished Ryan v Mutual Tontine, where
supervision of the execution of the undertaking had been required. Here neither personal
services, nor a continuous series of acts, were required, but merely the execution of an
agreement containing provisions for such services23
3.28. Grant v Dawkins [1973] 1 WLR 1406
The vendor’s title to land was subject to an encumbrance which amounted to a breach of
contract. It was held that the plaintiff could get specific performance of what title the
defendant had, plus damages based on the cost of discharging the encumbrance..24
3.29.Therefore, this proves that the loss was extraordinary, which couldn’t be revived through
monetary basis only and Zindu broke Richa’s trust too, making the demand of Specific
Performance valid.

23
Posner v. Scott-Lewis (1987) 3 A.l.l. E.R. 513.
24
Grant v. Dawkins (1973) 1 W.L.R. 1406.

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PRAYER

Wherefore, in light of the facts presented, issues raised, arguments advanced and authorities
cited, it is most humbly prayed before the Hon’ble Supreme Court of Industhan that it may be
pleased to adjudge and declare:
1) The fact that EI holds 30% shares of MSD falls within the phrase indirectly as
stipulated under Clause 16 of the SPSHA.
2) The SPSHA can have a binding effect without its incorporation into the AoA.
3) Ms. Zin-du was in breach of her obligations and the court may order the specific
performance of the SPSHA.

And/or pass any other order, direction or relief that it may deem fit in the best interest of
justice, equity and good conscience.

All of which is humbly and respectfully submitted.

(Counsels on behalf of the Appellant)

MEMORIAL ON BEHALF OF THE APPELLANT