Waiver of first option in share sale dispute upheld where belated challenge could not reopen a crystallised valuation process.

A belated attempt to exercise a first option to purchase shares at a prior valuation was rejected where the party had not acted when the opportunity was available and later sought to reopen a valuation process that had already crystallised the parties' rights. The challenge to the fair valuation was treated as inconsistent with the later acceptance of a higher valuation, amounting to waiver of the earlier option. In a closely held company dispute, the tribunal's approach was upheld because the outgoing group was required to be fairly compensated through an objective valuation process, and the sale already made in favour of the respondents could not be displaced.

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Issues: Whether the appellant could, at the belated stage, insist on purchasing the shares at the valuation of Rs. 1,941 per share and challenge the impugned order directing the sale of shares to the respondents, and whether the valuation-based process adopted under the earlier directions suffered from any legal infirmity.

Analysis: The earlier order had granted the appellant the first opportunity to purchase the shares on the basis of the fair valuation determined by the independent auditor. The appellant did not avail that opportunity when it was available and later sought to reopen the process after the valuation reports had already crystallised the parties' rights. The challenge to the valuation was inconsistent with the appellant's later stand of accepting the higher valuation, and the conduct amounted to a waiver of the earlier opportunity. The impugned order was found to be in conformity with the prior directions and with the principle that in a closely-held company dispute of this nature, the outgoing group must be fairly compensated through an objective valuation process.

Conclusion: The appellant was not entitled to revive the first option at a later stage or dislodge the sale already made in favour of the respondents. The impugned order was upheld.

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