# In the matter of Jignesh Shah & Anr. Vs. Union of India & Anr. Writ Petition (Civil) No. 455-2019

> SC judgment dated 2019-09-25. Citation: TCN-2019-SC-00021. The case involves a dispute over a share purchase agreement and a Letter of Undertaking between…

- **Court:** SC
- **Order date:** 25 Sept 2019
- **Citation:** TCN-2019-SC-00021
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/jignesh-shah-anr-vs-union-of-india-anr-writ-petition-305fc06f

## Summary

### Background

The case involves a dispute over a share purchase agreement and a Letter of Undertaking between Multi-Commodity Exchange India Limited (MCX), MCX Stock Exchange Limited (MCX-SX), IL&FS, and La-Fin Financial Services Pvt. Ltd. (La-Fin). IL&FS agreed to purchase shares of MCX-SX from MCX. La-Fin, as a group company of MCX, issued a Letter of Undertaking to IL&FS, promising to purchase the shares back from IL&FS after a certain period. When IL&FS exercised its option to sell the shares, La-Fin refused to purchase them. This led to a series of legal actions, including a suit for specific performance by IL&FS in the Bombay High Court and a winding-up petition against La-Fin. The winding-up petition was initially filed in the Bombay High Court and

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## Facts

On August 20, 2009, a share purchase agreement was executed between Multi-Commodity Exchange India Limited (MCX), MCX Stock Exchange Limited (MCX-SX), and IL&FS, where IL&FS agreed to purchase 442 lakh equity shares of MCX-SX from MCX. La-Fin, as a group company of MCX, issued a Letter of Undertaking to IL&FS on August 20, 2009, stating that it would offer to purchase the shares of MCX-SX from IL&FS after one year but before three years from the date of investment. This three-year period expired in August 2012. On August 3, 2012, IL&FS exercised its option to sell its entire holding of shares in MCX-SX and called upon La-Fin to purchase them. On August 16, 2012, La-Fin replied that it was under no legal or contractual obligation to buy the shares.

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## Issues and analysis

### Issue 1: Whether the winding-up petition filed by IL&FS against La-Fin is barred by limitation under the …

**Ratio:** The Limitation Act, 1963, applies to applications filed under Sections 7 and 9 of the

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**Reasoning:** The court reasoned that the cause of action arose when La-Fin refused to honor the Letter

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**Interpretation:** The court interpreted Section 238A of the Code to mean that the provisions of

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**Application:** The court applied the ratio to the facts of the case, noting that the default

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## Parties

- **Judges:** ROHINTON FALI…; R. Subhash…; +1 more
- **Appellants:** Jignesh…
- **Respondents:** La-Fin Financial…; Union of…

## Timeline

- **2009-08-20 — Share Purchase…**: Share purchase agreement executed…
- **2009-08-20 — Letter of Und…**: La-Fin issued a Letter…

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