Deal Street

December 20, 2016

Luthra & Luthra Law Offices [L&L] Argued And Obtained Final Relief For Rajshree Hospitals & Apollo Hospitals Enterprise Ltd.


Anirban Bhattacharya, Partner, L&L, successfully argued a case on behalf of both Rajshree Hospitals (Rajshree) & Apollo Hospitals Enterprise Ltd. (AHEL), where the High Court of Indore passed its order allowing the application(s) for the deletion of the names of Rajshree and AHEL from the array of parties in the suit filed by Dr. Ashok Bajpai.

Bajpai, one of the most renowned doctors in Indore, along with some of his entrepreneur friends had started Rajshree in 2008. Apart from being a promoter/shareholder/director of Rajshree, he was serving there as a doctor. In 2012, Bajpai and the promoter/shareholder(s) entered into a Memorandum of Understanding (MoU) wherein it was agreed that he shall be paid the referral and other charges for patients walking into Rajshree on his reference. The said MoU was replaced by another MoU dated 18.05.2013 among the promoter/shareholder(s) where the amounts due to Bajpai under the first MoU were to be converted into equity.

This was around the time AHEL was looking to invest in Rajshree, who thereafter entered into a Share Subscription Agreement dated 12.08.2013 and other cognate agreements with Rajshree, its promoter/shareholder(s), including Bajpai. AHEL subscribed to 57.27% of shares of Rajshree and also took control of the management of Rajshree. The name “Rajshree Hospital and Research Center Private Limited” was also accordingly changed to “Apollo Rajshree Hospitals Private Limited” on 03.04.2014. Bajpai’s shareholding was reduced to 3.07% from around 8.56%.

Bajpai filed a suit for specific performance of the two MoUs and for the recovery of money before the VIII Additional District Judge, Indore, against Rajshree, AHEL and a few other promoter/shareholders for the recovery of the alleged non-payment of remuneration in lieu of services rendered by Respondent No. 1 to Respondent No. 2 for a period commencing from June 2010 to December 2013.

The firm representing Rajshree and AHEL moved application(s) under Order I Rule 10(2), CPC for deleting/striking out their names on the following among other grounds:

  • That no right to sue and/or cause of action arose against either Rajshree or AHEL since these entities were not parties to the said Memorandum of Understanding(s) dated 23.08.2012 and 18.05.2013.
  • That under Section 19 of the Specific Relief Act, 1963, specific performance can only be sought against parties to the agreement, i.e. the Memorandum of Understanding, Respondent Nos. 1, 3, 4, 5, 6 and 7, and not against either Rajshree or AHEL.
  • After the trial court declined the application preferred by Rajshree and AHEL, these entities approached the High Court of Madhya Pradesh, Indore, under Article 227 of the Constitution of India.

Anand Mohan Mathur, senior counsel (former AG, Madhya Pradesh), was engaged by Bajpai; L&L was represented by partner Anirban Bhattacharya.

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