Research › Search › Judgment

Madras High Court · body

2022 DIGILAW 1604 (MAD)

S. Muruga Barti v. Mahadevan Venkatachalam

2022-06-21

M.DURAISWAMY, T.V.THAMILSELVI

body2022
JUDGMENT (Prayer: Appeal filed under Section 37 of Arbitration and Conciliation Act, 1996 read with Clause 13 of the Letters Patent Act, to set aside the order and decree dated 09.08.2018 made in O.P.No.781 of 2017 on the file of this Court) T.V. Thamilselvi 1. The appellant has filed the above Original Side Appeal to set aside the order passed by the learned single Judge in O.P.No.781 of 2017 dated 09.08.2018. 2. The Brief facts of the case are as follows:- (i) The respondent was a promoter of a company called Primex Scans and Labs Private Limited, believing his representation, the appellant/ financial investor invested a sum of Rs.1.5 Crores in the year 2011 in the said Primex Scans and Labs Private Limited. The appellant was allotted 1798 shares for the said investments of Rs. 1.5 Crores. After some time, the appellant wanted to quit the company and take back his investments. After deliberation and negotiations, the respondent agreed to buy-back the shares held by the appellant. According to the appellant, based on the settlement that was arrived between him and the respondent, a share purchase agreement dated 15.07.2015 was entered into between them and the respondent agreed to buy-back the shares held by the appellant for a consideration of Rs.1.5 Crores, which was the amount invested by the appellant, together with a sum of Rs.50,00,000/- being the return on the said investment. The appellant made a demand to the respondent for the payment of the balance sale consideration under the share purchase agreement dated 15.07.2015, for which, the respondent denied his liability. Therefore, the claimant/financial investor/appellant filed an application in Application No.2185 of 2016 before this Court under Section 9 of the Arbitration and Conciliation Act, 1996. (ii) The promoter/respondent also filed a counter claim against the appellant before the Arbitrator and contended that the appellant was a money lender and was doing Kandhuvatti (Usurious Interest) business. The modus operandi of the appellant was that he develops his tacit friendship with the start up promoters and promises to invest in their business. If the business makes profit, then he sells his shares with dividend and makes a good profit of it. If it makes any loss, he blackmails, coerces and illegally extracts his money, back from the promoters with the exorbitant rate of interest. If the business makes profit, then he sells his shares with dividend and makes a good profit of it. If it makes any loss, he blackmails, coerces and illegally extracts his money, back from the promoters with the exorbitant rate of interest. (iii) The respondent submitted that the appellant approached the respondent and expressed his interest to invest in the Company. Accordingly, the appellant invested Rs.1.5 Crores, for which, certain shares were allotted to him. The appellant subscribed to the share capital of the company, after being satisfied with the company's business plan. The appellant started coercing the respondent and demanded that he should purchase his shares with exorbitant rate of interest. Several times the respondent informed the appellant that he had made an investment in the company and that investment was not a personal debt payable by the respondent. If the company makes a profit, as a shareholder, he will get his dividends and if the company make loss, the same has to be borne by all the shareholders of the company. The appellant started threatening the respondent to repay his money by purchasing his shares, with dire consequences. The respondent signed the share purchase agreement dated 15.07.2015 only under duress and coercion of the appellant and the respondent was made to part with a sum of Rs.50,00,000/- as advance to the appellant and for the balance amount, a cheque was taken from him with an assurance that the cheque will be deposited only after getting consent from the respondent. (iv) Relying the terms of the alleged share purchase agreement, the respondent contended that the appellant will transfer the shares only if the respondent made the payment as per the share purchase agreement and it was clear that if the payment was not made, then no shares will be transferred. Contrary to the terms, the appellant deposited the cheque issued by the respondent for a sum of Rs.1.5 Crores without the consent of the respondent. Since there was breach of the terms of the share purchase agreement, the respondent terminated the share purchase agreement by his letter, dated 14.04.2016 and demanded the refund of Rs.50,00,000/- (Rupees Fifty Lakhs only) paid as advance to the appellant. The respondent further contended that the shares subscribed by the appellant has not been sold to the respondent and still stands in the name of the appellant. The respondent further contended that the shares subscribed by the appellant has not been sold to the respondent and still stands in the name of the appellant. Further, he contended that already the value of the shares was very less as the company was making losses and no prudent man will enter into such share purchase agreement by paying an exorbitant price for a share because the actual value of which at that time was in negative as the company was making losses. The share purchase agreement was entered only under coercion and it is evident from the Compact Disc and transcript, which have been submitted to show that the appellant has actually threatened the respondent to pay the money. The respondent also made a counter claim for the refund of Rs.50,00,000/- paid by him as advance together with interest. 3. Considering the submissions made by both the parties, the learned Arbitrator passed the following order:- Issue No.1: The Claimant is entitled for a declaration that the Share Purchase Agreement dated 15.7.2015 is legal and binding on the parties and the termination letter dated 14.04.2016 issued by the Respondent is not valid. Issue No.2: The Respondent is directed to return a sum of Rs.1.5 Crores towards the balance sale consideration of the shares sold by the Claimant within a period of eight weeks from the date of the receipt of the Award. On receipt of the amount in full, the Claimant shall transfer the entire shares held by him in Primax Scans and Labs Private Ltd and hand over the original shares within two weeks thereafter complying with due formalities. Issue No.3: The Claimant is not entitled to get any damages from the Respondent. Issue No.4: The Claimant is entitled to get interest at the rate of 20% for the delay of the first 90 days i.e. from 1.1.2016 to 31.3.2016 on the 1.5 Crores which was failed to be refunded. For further period from 1.4.2016 till the date of of the full amount, i.e. Rs.1.5 Crores together with interest, the Respondent is liable to pay interest at the rate of 12% per annum and this rate of interest is ordered in terms of section 31(7) of the Arbitration and Conciliation Act, 1996. For further period from 1.4.2016 till the date of of the full amount, i.e. Rs.1.5 Crores together with interest, the Respondent is liable to pay interest at the rate of 12% per annum and this rate of interest is ordered in terms of section 31(7) of the Arbitration and Conciliation Act, 1996. Issue No.5: The action of the Respondent in terminating the Share Purchase Agreement by his letter dated 14.4.2016 is not valid in law and not binding on the Claimant. Issue No.6: The Share Purchase Agreement dated 15.7.2015 (Ex.C1) cannot be repudiated on the ground that the Respondent was made to execute the same under coercion. Issue No.7: The claim made by the Respondent for the return of Rs.50,00,000/- paid as first installment for the purchase of shares is declined. Issue No.8: The Respondent is not entitled to get any damages from the Claimant. Issue No.9: The Respondent shall pay a sum of Rs.1,89,485/- towards the cost incurred by the Claimant in conducting the arbitral proceedings. 4. Challenging the Arbitral Award dated 10.05.2017 passed by the Arbitrator, the Promoter/respondent filed a petition in O.P.No.781 of 2017 under Section 34 of the Arbitration and Conciliation Act before the learned Single Judge praying to set aside the said Award. 5. Taking into consideration the submissions made by the parties, the learned single Judge, by order dated 09.08.2018, set aside the Award passed by the Arbitrator and allowed the Original Petition with liberty to the respondent-petitioner to initiate fresh Arbitration against the appellantrespondent for refund of Rs.50,00,000/-, together with interest and cost and the appellant-respondent is also given liberty to defend the claim, if any made by the respondent-petitioner and also make a counter claim if the appellant-respondent has suffered losses in excess of a sum of Rs.50,00,000/- and the Arbitrator shall decide the counter claim made by the petitioner in accordance with law. 6. Challenging the order passed by the learned Single Judge, the appellant has filed the above Original Side Appeal. 7. 1.Mrs.Chithra Sampath, learned Senior Counsel appearing for the appellant submitted that the law of specific performance works both ways and it is not as if it is a privilege of the purchaser alone to dictate terms. In case of a concluded contract, each one of the terms in the contract can be specifically enforced under law, subject to the well known exception carved out under the Act itself. In case of a concluded contract, each one of the terms in the contract can be specifically enforced under law, subject to the well known exception carved out under the Act itself. In the absence of any clause in the Articles of Association of a private limited company, the shares can be sold to any party and such a contract can be specifically enforced under the provisions of the Specific Relief Act and it does not come within the exception provided under the Act. 7.2. The learned Senior Counsel for the appellant further submitted that for the first time, the respondent raised the plea before the learned Single Judge that the seller of shares under an Agreement, does not have the right to sue for specific performance to compel the buyer to purchase the shares and it was not raised before the learned Arbitrator. Therefore, the learned Single Judge ought not to have given a finding with regard to the said contention. 7.3. The learned Senior Counsel for the appellant also submitted that after considering the oral and documentary evidences and also considering the fact that Share Purchase Agreement dated 15.7.2015 is legal and binding on the parties, the learned Arbitrator has rightly passed the Award that the appellant-claimant is entitled to the relief of specific performance in terms of the Ex.C1 Share Purchase Agreement against the respondent and directed the respondent to return a sum of Rs.1.5 Crores towards the balance sale consideration of the shares sold by the appellant-claimant within a period of eight weeks from the date of the receipt of the Award and on receipt of the amount in full, the appellant-claimant shall transfer the entire shares held by him in Primax Scans and Labs Private Ltd and hand over the original shares within two weeks thereafter complying with due formalities. The learned Senior counsel further submitted that the learned Single Judge without considering the award in its entirety, came to the conclusion that the learned Arbitrator has converted an Agreement to Sell into a Sale is totally misconceived and unsustainable in law. 7.4. The learned Senior Counsel appearing for the appellant, in support of her contentions, has relied upon the following judgments:- (i) (2001) 8 Supreme Court Cases 133 [Vasantha Viswanathan and others v.V.K.Elayalwar and Others ], wherein the Hon'ble Supreme Court held as follows:- “... 13. 7.4. The learned Senior Counsel appearing for the appellant, in support of her contentions, has relied upon the following judgments:- (i) (2001) 8 Supreme Court Cases 133 [Vasantha Viswanathan and others v.V.K.Elayalwar and Others ], wherein the Hon'ble Supreme Court held as follows:- “... 13. The further submission of Shri Chandra is that in any view of the matter, the High Court was not justified in passing a decree against Defendants 4 to 7 as there was no privity of contract between them and the plaintiff. The High Court has recorded a categorical finding that these defendants were not bona fide purchasers and had notice of the agreement between the plaintiff and the Defendant 1 which finding has not been assailed before this Court. Learned Senior Counsel appearing on behalf of both the parties are in agreement that the High Court was not justified in holding that the present case would be governed by Section 52 of the Transfer of Property Act as the same applies to immovable property alone and not to movable. Section 58 of the Sale of Goods Act expressly lays down that subject to the provisions of Chapter II of the Specific Relief Act, 1877, in a suit for breach of contract to deliver specific or ascertained goods, the court may, if it thinks fit, on the application of the plaintiff, by its decree direct that the contract shall be performed specifically, without giving the defendant the option of retaining the goods on payment of damages. It further lays down that decree may be unconditional, or upon such terms and conditions as to damages, payment of price, or otherwise, as the court may deem just and the application of the plaintiff may be made at any time before the decree. Section 19(b) of the Specific Relief Act, 1877 (sic 1963), which occurs in Chapter II, applies to movables by virtue of the provisions of Section 58 of the Sale of Goods Act referred to above. Under Section 19(b) a specific performance of a contract can be enforced not only against either party thereto but against any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of original contract. Under Section 19(b) a specific performance of a contract can be enforced not only against either party thereto but against any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of original contract. Further, Section 91 of the Indian Trusts Act, 1882 lays down that where a person acquires property with notice that another person has entered into an existing contract affecting that property, of which a specific performance could be enforced, the former must hold the property for the benefit of the latter to the extent necessary to give effect to the contract. Defendants 4 to 7 had notice of the contract between the plaintiff and the Defendant 1 and they were not bona fide purchasers, therefore, in view of the provisions referred to above, we are of the view that the High Court was quite justified in passing a decree against them as well. (ii) (2004) 9 Supreme Court Cases 204 [M.S.Madhusoodhanan and Others v. Kerala Kaumudi (P) Ltd and Others] wherein the Hon'ble Supreme Court held as follows: - “... 141. Subject to this restriction, a holder of shares in a private company may agree to sell his shares to a person of his choice. Such agreements are specifically enforceable under Section 10 of the Specific Relief Act, 1963, which corresponds to Section 12 of the Specific Relief Act, 1877. The section provides that specific performance of such contracts may be enforced when there exists no standard for ascertaining the actual damage caused by the non-performance of the act agreed to be done, or when the act agreed to be done is such that compensation in money for its nonperformance would not afford adequate relief. In the case of a contract to transfer movable property, normally specific performance is not granted except in circumstances specified in the explanation to Section 10. One of the exceptions is where the property is “of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market”. In the case of a contract to transfer movable property, normally specific performance is not granted except in circumstances specified in the explanation to Section 10. One of the exceptions is where the property is “of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market”. It has been held by a long line of authority that shares in a private limited company would come within the phrase “not easily obtainable in the market” (see Jainarain Ram Lundia v. Surajmull Sagarmull [AIR 1949 FC 211 : 1949 FCR 379] , AIR at p. 218). The Privy Council in Bank of India Ltd. v. Jamsetji A.H. Chinoy [ AIR 1950 PC 90 : 77 IA 76] (AIR p. 96, para 21) said: “It is also the opinion of the Board that, having regard to the nature of the Company and the limited market for its shares, damages would not be an adequate remedy.” The specific performance of a contract for transfers of shares in a private limited company could be granted. ... 144. The decision does not in any way hold that the transfer of shares agreed to between shareholders inter se does not bind them or cannot be enforced like any other agreement.” (iii) (2006) 11 Supreme Court Cases 181 [McDermott International. Inc v. Burn Standard Co. Ltd and Others] wherein the Hon'ble Supreme Court held as follows: - ''... 112. It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law. (See Pure Helium India (P) Ltd. v. ONGC [ (2003) 8 SCC 593 ] and D.D. Sharma v. Union of India [ (2004) 5 SCC 325 ].) 113.Once, thus, it is held that the arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award. 114.The above principles have been reiterated in Chairman and MD, NTPC Ltd. v. Reshmi Constructions, Builders & Contractors[ (2004) 2 SCC 663 ] , Union of India v. Banwari Lal & Sons (P) Ltd. [ (2004) 5 SCC 304 ], Continental Construction Ltd. v. State of U.P. [ (2003) 8 SCC 4 ] and State of U.P. v. Allied Constructions (2003) 7 SCC 396 .” (iv) (2015) 14 Supreme Court Cases 21 [National Highways Authority of India v. ITD Cementation India Limited], wherein the Hon'ble Supreme Court held as follows: - “... 21. Since it was argued that the Arbitral Tribunal disregarded the material terms of the contract while making its assessment and failed to consider the impact of sub-clauses 70.1 to 70.3(B) and exclusion in Clause 70.8, the law on the point needs to be briefly adverted to. In McDermott International v. Burn Standard Co. Ltd. [ (2006) 11 SCC 181 ] this Court held as under: (SCC pp. 225-26, paras 112-13) “112. It is trite that the terms of the contract can be express or implied. The conduct of the parties would also be a relevant factor in the matter of construction of a contract. The construction of the contract agreement is within the jurisdiction of the arbitrators having regard to the wide nature, scope and ambit of the arbitration agreement and they cannot be said to have misdirected themselves in passing the award by taking into consideration the conduct of the parties. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. It is also trite that correspondences exchanged by the parties are required to be taken into consideration for the purpose of construction of a contract. Interpretation of a contract is a matter for the arbitrator to determine, even if it gives rise to determination of a question of law. [See Pure Helium India (P) Ltd. v. Oil & Natural Gas Commission [ (2003) 8 SCC 593 ] and D.D. Sharma v. Union of India [ (2004) 5 SCC 325 ].] 113. Once, thus, it is held that the arbitrator had the jurisdiction, no further question shall be raised and the court will not exercise its jurisdiction unless it is found that there exists any bar on the face of the award.” 25. It is thus well settled that construction of the terms of a contract is primarily for an arbitrator to decide. He is entitled to take the view which he holds to be the correct one after considering the material before him and after interpreting the provisions of the contract. The Court while considering challenge to an arbitral award does not sit in appeal over the findings and decisions unless the arbitrator construes the contract in such a way that no fair-minded or reasonable person could do.” (v) AIR 1949 Federal Court 211 [Jainarain Ram Lundia v. Surajmull Sagarmull], wherein the Federal Court held as follows: - “... 21.The fourth and the last point is not of any substance. The subject matter of contract in the present case consists of certain shares in a private limited company and a fractional interest in a partnership business. Illustration (iii) under cl. (c) of s. 12 of the Specific Relief Act clearly shows that when shares are limited in number and are not ordinarily available in the market, it is quite proper to grant a decree for specific performance of a contract for the sale of such shares. Specific performance is undoubtedly a discretionary remedy but we are totally unable to say that the discretion has been wrongly exercised in the present case by the courts below.'' (vi) 2019 (1) CTC 757 [Chilllara Kalyan and others v. Berggruen Estate Project Private Limited], wherein the High Court of Madras held as follows: - “... 50. It is axiomatic that wrongful repudiation and/or termination and/or breaches of Contract give rise to claim for damages. 50. It is axiomatic that wrongful repudiation and/or termination and/or breaches of Contract give rise to claim for damages. However, the Court does not sit in Appeal over an award. It is for the Arbitral Tribunal to interpret the Contract and if the interpretation of the Arbitral Tribunal is not absurd or capricious or unreasonable or perverse, the Court does not interfere with the same. In this case, the learned Arbitral Tribunal found on facts, having regard to the evidence before it, that the Appellants had not suffered any loss or damages and were hence not entitled to claim damages. On consideration of the Contract, the learned Tribunal arrived at the finding in effect, that the Appellants had no right to forfeiture of the Security Deposit under the terms of the Contract, more so as they had not suffered damages. The impugned Award directing refund of Security Deposit is not liable to interference. The Judgment in M/s. Datar Switehgear Limited, supra, is clearly distinguishable on facts (vii) 2017 SCC Online Ker 19872 : (2018) 1 KLJ 128 [T.O Abraham v. Jose Thomas and others] wherein the High Court of Kerala held as follows: - “... 24. One issue that engaged our mind, even when the hearing of this matter commenced is whether an agreement to transfer shares in a company could be specifically enforced in view of the provisions of section 10 of the Specific Relief Act. This suspicion arose in our mind because in chapter 2 of the Act, which contain section 10, it is provided that specific performance of a contract to transfer movable property is enforceable only where the property is not an ordinary article of commerce or is of special value or interest of the plaintiff or consists of goods which are not easily obtainable in the market. Our suspicion was kindled by the accepted fact that equity or shares in a company are not immovable property but are in the nature of movable property. Therefore, initially we had a doubt whether it would be available to the appellant herein to contend that Ext.A1 cannot be enforced, because it involves movable property. We are relieved that we did not have to labour much on this because Sri. Therefore, initially we had a doubt whether it would be available to the appellant herein to contend that Ext.A1 cannot be enforced, because it involves movable property. We are relieved that we did not have to labour much on this because Sri. Joseph Kodianthara, learned Senior counsel appearing for the first defendant brought to our notice the judgment of the Honourable Supreme Court of India in M.S. Madhusoodhanan v. Kerala Kaumudi Pvt. Ltd. [(2004) 9 SCC 204 : AIR 2004 SC 909 ] and he invited our attention to paragraphs 138 and 139 thereof which reads as under: “138. That decision must be understood and read after enunciating certain basic principles relating to the transfer of shares and in the background of earlier decisions on the subject it is settled law that shares are movable properties and are transferable. As far as private companies like Kerala Kaumudi are concerned, the Articles of association restrict the shareholder's right to transfer shares and prohibit any invitations to the public to subscribe for any shares in, or debentures of, the company. This is how a “private company” is now defined in Section 13(1)(iii) of the Companies Act, 1956 and how it was defined in Section 2(13) of the 1913 Act. 139. Subject to this restriction a holder of shares in a private company may agree to sell his shares to a person of his choice. Such agreements are specifically enforceable under Section 10 of the Specific Relief Act, 1963, which corresponds to Section 12 of the Specific Relief Act, 1877. The section provides that specific performance of such contracts may be enforced when there exists no standard for ascertaining the actual damage caused by the nonperformance of the act agreed to be done, or when the act agreed to be done in such that compensation in money for its non-performance would not afford adequate relief. In the case of a contract to transfer movable property, normally specific performance is not granted except in circumstances specified in the Explanation to Section 10. One of the exceptions is where the property is “of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market”. In the case of a contract to transfer movable property, normally specific performance is not granted except in circumstances specified in the Explanation to Section 10. One of the exceptions is where the property is “of special value or interest to the plaintiff, or consists of goods which are not easily obtainable in the market”. It has been held by a long line of authority that shares in a private limited company would come within the phrase “not easily obtainable in the market” (See: Jainarain Ram Lundia v. Surajmull Sagarmull, AIR [36] 1949 FC 211, 218. The Privy Council in The Bank of India Ltd. v. J.A.H. Chinoy, [ AIR 1950 PC 90 ] said: “It is also the opinion of the Board that, having regard to the nature of the company and the limited market for its shares, damages would not be an adequate remedy” specific performance of a contract for transfers of shares in a private limited company could be granted.” (viii) (2022) 1SCC 131 [Delhi Airport Metro Express Private Limited v. Delhi Metro Rail Corporation Limited], wherein the Hon'ble Supreme Court held as follows:- “... 37. By referring to certain paragraphs of the award, the Division Bench of the High Court held [DMRC v. Delhi Airport Metro Express (P) Ltd., 2019 SCC OnLine Del 6562] that there was confusion in the mind of the Arbitral Tribunal relating to the actual date of termination, which would have a material bearing on the exegesis of Article 29.5.1. The confusion around the date of termination is highlighted by the High Court by referring to the award of the Arbitral Tribunal in which it was held that the defects were not cured within the 90-day period from the date of the cure notice dated 9-7-2012. However, in paras 128, 130 and 131, the Arbitral Tribunal, while considering the counterclaim, referred to 7-1-2013 as the date of termination of the Concession Agreement. It is clear from a careful examination of the award that the Arbitral Tribunal had in precise terms held that the defects had to be cured within 90 days from the date of the cure notice dated 9-7- 2012. Further, the Arbitral Tribunal held that the termination notice dated 8-10-2012 was issued as defects were not cured. The Tribunal expressed its view that consequently, the effective date of termination was 7-1- 2013, which is 90 days from the termination notice. Further, the Arbitral Tribunal held that the termination notice dated 8-10-2012 was issued as defects were not cured. The Tribunal expressed its view that consequently, the effective date of termination was 7-1- 2013, which is 90 days from the termination notice. As there is no ambiguity in the findings of the Arbitral Tribunal regarding the time given for curing the defects and the effective date of termination of the Concession Agreement, we are not in agreement with the findings of the Division Bench that there is an ambivalence in the award concerning the date of termination, having a bearing on the final outcome of the award.''' 8. 1. Countering the submissions made by the learned Senior Counsel appearing counsel for the appellant, Mr.P.Pugazh Gandhi, learned counsel appearing for the respondent submitted that the Share Purchase Agreement is only an agreement to sell and hence, the award passed by the learned Arbitrator is against the public policy of India. The learned counsel further submitted that clause 3 of the Share Purchase Agreement clearly indicates that share transfer will happen only on receipt of the balance sale consideration of Rs.1.5 Crores by the respondent. If the balance sale consideration of Rs.1.5 Crores is not paid on or before 08.12.2015, the offer extended by the appellant to sell his shares stands cancelled and the appellant is at liberty to sell the shares to any third party or deal with the shares as he likes, after refunding the advance amount of Rs.50,00,000/- paid by the respondent to the appellant. 8.2 The learned counsel for the respondent further submitted that the appellant had only purchased the shares in the company and if for some reason, there was no appreciation of its value, he cannot compel the respondent to purchase the same. Profits derived out of holding any shares depends upon the market fluctuation and having purchased the share fully depends upon the market fluctuation and having purchased the share fully knowing the business of it, the appellant cannot compel the respondent to take back the shares. The learned counsel further submitted that once the respondent decides not to purchase the shares, the appellant is at liberty to sell the shares to any person who is willing to purchase the same. The learned counsel further submitted that once the respondent decides not to purchase the shares, the appellant is at liberty to sell the shares to any person who is willing to purchase the same. 8.3 The learned counsel for the respondent further submitted that the amount of Rs.50,00,000/- paid is only a part of the sale consideration and it was not security for ensuring the transaction. In the event of transaction fail, the advance amount has to be refunded by the appellant. There is no forfeiture available for the appellant to retain the amount. Therefore, the learned counsel submitted that it is only the appellant, who has to refund the sum of Rs.50,00,000/- to the respondent and therefore, the same was rightly set aside by the learned Single Judge in the Original Petition. 8.4 In support of his contention the learned counsel relied upon a Judgment reported in 2003 (9) SCC 204 , [M.S.Madhusoodhanan v. Kerala Kaumudi Pvt. Ltd & Others], wherein the Hon'ble Supreme Court held as follows: “... The Division Bench, therefore, erred in holding that the agreement for transfer of shares was conditional on the determination of the price of the shares and in concluding that as there had been no such determination, no transfer could have taken place. The express intention was to effect an immediate transfer of the shares and to agree upon the consideration later. Section 9 of the Sale of Goods Act, 1930 permits this. Section 4 read with Section 2(10) of the Sale of Goods Act, 1930 require that the contract of sale must provide for the payment of money as a consideration for the transfer of goods, or to put it differently, that a price must be paid. But Section 9 of the 1930 Act allows the parties not to fix the price at the time of the transfer and to leave the determination of the amount of consideration to a later date. An agreement which provides for the future fixation of price either by the parties themselves or by a third party is capable of being made certain and is not invalid as provided under Section 29 of the Contract Act, 1872 [See: Illustration (e)] In view of such categoric and clear statutory provisions, the submission of learned counsel representing Mani that such a contract is void for uncertainty because the price was not fixed, is unacceptable. The passage from Benjamin's Sale of Goods (1974 Edn.) relied on which says "If the price is left to be agreed upon subsequently between the parties, there will ordinarily be no binding contract, on the grounds of uncertainty, unless and until they later reach agreement on a price. Moreover, an agreement to leave the price open to further negotiation will normally exclude any inference that the price should be a reasonable price in accordance with the provisions of section 8(2)." may be an exposition of the law as it is in England and cannot be seen as an authority on the interpretation of section 9(1) of the Sale of Goods Act. Besides, the same passage cited goes on to say: "But in accordance with the principle that the Courts will endeavor to uphold bargains which the parties believe themselves to have concluded, especially in the case of executed or partially executed contracts, it may sometimes be possible either to infer an intention that at any rate a reasonable price should be paid if no price is later settled, or to have regard to other circumstances, such as the course of dealing between the parties." In this case, there can be no doubt that the first stage of the agreement for the immediate transfer of shares was executed and the Division Bench erred when it held to the contrary. The questions as to what would be the reasonable price for the shares, the mode of its determination and whether any consideration has already been paid by Madhusoodhanan to Mani are considered subsequently. The minutes of the Board meeting held on 21st May 1985 [Exhibit P-62 ( C ) ] of Kerala Kaumudi record that the following share transfer deeds were placed before the Board, namely, the deeds relating to the transfer of 222 shares by M. S. Mani to Madhusoodhanan, 84 shares by Valsa Mani to Madhusoodhanan, 84 shares by Sukumaran Mani to M. S. Mani and 84 shares by Mani to Madhusoodhanan. The Board resolution goes on to record. The Board resolution goes on to record. "After discussion the share transfers were approved by the Board and the Managing Director and any other Director was authorised to sign the relative new share certificates to be issued in favour of Sri M. S. Madhusoodhanan and to affix the common seal of the company in the share certificates in the presence of the Company Secretary" The minutes of the Board meeting held on 21st May 1985 were read and approved on 4th June 1985. Both meetings were attended by Madhavi, Madhusoodhanan, Srinivasan and Ravi and the minutes signed by Madhavi as Chairman. The transfer of the shareholding of Mani and his children was also admittedly entered in the Company's Share Certificate Ledger (Ex. P-90). It is evident from this that the share transfer forms which were placed before the Board had been executed and were otherwise duly completed, or else the question of the approval of such transfer would not arise.” 9. Considering the submissions made by the learned counsel on either side and the judgments relied upon by them, it could be seen that the respondent was able to establish a new plea before the learned single Judge that the seller of shares under an Agreement does not have a right to sue for specific performance to compel the buyer to purchase the shares, which is not permissible by invoking under Section 34 of the Arbitration and Conciliation Act, 10. Though the learned counsel appearing for the respondent submitted that the appellant had only purchased the shares in the company and if for some reason there was no appreciation of its value, he cannot compel the respondent to purchase the same. Profits derived out of holding any shares depends upon the market fluctuation and having purchased the share fully knowing the business of it, the appellant cannot compel the respondent to take back the shares. Further it was submitted that once the respondent decides not to purchase the shares, the appellant is at liberty to sell the shares to any person who is willing to purchase the same. However, this argument cannot be sustained as the respondent had subsequently entered into a Share Purchase Agreement agreeing to purchase the share and had parted with part of the consideration and the balance was also paid by way of a post dated cheque. 11. However, this argument cannot be sustained as the respondent had subsequently entered into a Share Purchase Agreement agreeing to purchase the share and had parted with part of the consideration and the balance was also paid by way of a post dated cheque. 11. In the light of the above, the claimant is entitled to succeed so as to specifically enforcing the terms of the Share purchase Agreement in Ex.C1 against the respondent. The respondent having not honoured the cheque given by him is bound to return a sum of Rs.1.5 Crores towards the balance sale consideration of the shares sold by the appellant. 12. The appellant apart from seeking for enforcement of the terms in the Share Purchase Agreement in Ex.Cl also claimed damages quantified at Rs.10 lakhs. This demand was justified on the ground that the avoiding of payment by the respondent had caused great financial hardship and also loss to the appellant. The appellant also stated that he had certain business commitments made anticipating the payments from the respondent firstly in December 2015 and later in March 2016. First time when he attempted to deposit the cheque, he was prevented from doing so and the said cheque was replaced with another cheque. Even payment under the said cheque was stopped by the advise given the respondent to his bankers. Finally, the respondent also attempted to resile from the Share Purchase Agreement itself. Therefore, he has quantified the damages receivable from the respondent on this account at a sum of Rs.10 lakhs. 13. As a counter blast, the respondent has made a counter claim claiming damages from the appellant and he had quantified the amount at Rs.10 lakhs. In the statement made in support of the counter claim, the respondent has not given any reason to support the claim, Only in the prayer portion the respondent prayed for a direction to the appellant to pay Rs.10 lakhs as damages. Even in the notices exchanged, there was no claim with reference to demand for payment of damages. Further in the proof affidavit filed by him, before he was examined as RW1 no justification was made regarding this claim. 14. It is clear that the respondent is not very serious in making a claim under the head damages. Even in the notices exchanged, there was no claim with reference to demand for payment of damages. Further in the proof affidavit filed by him, before he was examined as RW1 no justification was made regarding this claim. 14. It is clear that the respondent is not very serious in making a claim under the head damages. On the other hand, as correctly suggested by the appellant, in cross-examination, the respondent had made a counter claim for Rs.10 lakhs towards damages only as a counter blast to the claim made by the appellant. Further, the material issues raised by the respondent had already been answered against him and even the allegations of his having been coerced into signing the Share Purchase Agreement in Ex.C1 was also disbelieved by this Tribunal. Under the said circumstances, the respondent is not eligible for getting any damages. 15. While in the claim statement the appellant had claimed that he was to made an investment out of the said amount and the refusal to make payment had caused great financial hardship and loss, in his proof affidavit he had stated that the damages were claimed due to great hardship and mental trauma. The statements found in the claim statement as well as in the proof affidavit lacks any details and were not based upon same set of allegations. Even otherwise, with reference to the denial of payment, already he had succeeded in making the respondent to agree for payment of 20% interest towards delayed payment which had already been accepted by the Tribunal while answering the relevant issue. Further, not only for the 20% for the initial 90 days delay, further interest till the date of full payment of the dues have also been ordered although at a different rate. 16. The learned Single Judge, without considering all these facts, came to the conclusion that the learned Arbitrator has converted an Agreement to Sell into a Sale. Therefore, the finding of the learned single Judge that the contract could not be enforced at the instance of the appellantclaimant, who was seller of the shares, is unsustainable one. 17. In these circumstances, we are of the considered view that the learned Arbitrator has rightly concluded that the appellant-claimant is entitled to enforce the Share Purchase Agreement. Hence, we do not find any patent illegality in the Award passed by the learned Arbitrator. 18. 17. In these circumstances, we are of the considered view that the learned Arbitrator has rightly concluded that the appellant-claimant is entitled to enforce the Share Purchase Agreement. Hence, we do not find any patent illegality in the Award passed by the learned Arbitrator. 18. The ratio laid down in the judgments relied upon by the learned Senior Counsel appearing for the appellant squarely applies to the facts and circumstances of the present case. 19. Though there is no dispute with regard to the ratio laid down in the judgment relied upon by the learned counsel appearing for the respondent, the said judgment is not applicable to the facts of the present case. 20. In the result, the order passed by the learned Single Judge is liable to be set aside. Accordingly, the order passed in O.P.No.781 of 2017 is set aside and the Award passed by the Arbitrator is confirmed. The Original Side Appeal is allowed. No costs. Consequently, connected Miscellaneous Petition is closed.