Share purchase agreement disputes may fall outside commercial court jurisdiction when the plaintiff is not a shareholder.

A dispute based on a share purchase agreement, where the plaintiff was not a shareholder, was treated as outside the category of commercial disputes arising from shareholders agreements under the Commercial Courts Act, 2015. The court distinguished a shareholder agreement, which regulates internal rights and obligations among shareholders, from a share purchase agreement, which governs sale of shares between buyer and seller. On that reasoning, the plaint was not maintainable before the Commercial Court and should have been returned under Order VII Rule 10 CPC. The impugned order was set aside and the matter was remitted for re-allotment before the competent civil court.

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Issues: Whether a suit founded on a share purchase agreement, as opposed to a shareholder agreement, constituted a commercial dispute within the meaning of the Commercial Courts Act, 2015, and whether the plaint was liable to be returned under Order VII Rule 10 of the Code of Civil Procedure, 1908.

Analysis: The agreement in question was found to be a share purchase agreement under which the defendant agreed to sell shares to a third party, while the plaintiff was not a shareholder of the company. The Court distinguished a shareholder agreement, which governs internal affairs among shareholders, from a share purchase agreement, which records terms for purchase of shares between buyer and seller. On that basis, the dispute was held not to fall within the category of commercial disputes arising out of shareholders agreements under Section 2(1)(c)(xii) of the Commercial Courts Act, 2015.

Conclusion: The plaint was not maintainable before the Commercial Court and the application for return of plaint ought to have been allowed.

Final Conclusion: The writ petition succeeded, the impugned order was set aside, and the matter was remitted for re-allotment before the competent civil court.

Ratio Decidendi: A dispute arising from a share purchase agreement, where the plaintiff is a third party and not a shareholder, does not by itself constitute a commercial dispute arising out of a shareholders agreement for the purposes of the Commercial Courts Act, 2015.

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