BharatPe Moves Delhi High Court Against Centrum, JBCG Over Transfer of Unity Bank Warrants
BharatPe has approached the Delhi High Court seeking protection against what it describes as unauthorised transfers and encumbrances of warrants issued by Unity Small Finance Bank. The petition has been filed by BharatPe’s parent company, Resilient Innovations Private Limited, against Centrum Financial Services Limited, JBCG Advisory Services Private Limited and Unity Small Finance Bank. The High Court issued notice in the matter on September 9, with the case next listed for October 1, 2026.
The proceedings have been brought under Section 9 of the Arbitration and Conciliation Act, 1996. BharatPe is seeking interim measures restraining Centrum and JBCG from transferring, marketing or creating any further encumbrance over Series 1 and Series 2 warrants of Unity Bank without BharatPe’s prior written consent. It has also sought directions preventing Unity Bank from registering or giving effect to such transactions.
The dispute is connected to the ownership structure of Unity Small Finance Bank. BharatPe holds a 49% stake in Unity Bank, while Centrum Financial Services holds 51%. The bank was established in 2021 following the Reserve Bank of India’s approval for the Centrum-BharatPe consortium to establish a small finance bank.
According to the petition, Unity Bank had allotted around 190 crore warrants to Centrum in November 2021. The warrants form part of the securities governed by the shareholders’ agreement between the relevant parties. The Delhi High Court’s earlier proceedings recorded that the Series 1 warrants were issued at Re 0.01 each and were convertible into compulsorily convertible preference shares, subject to the applicable contractual conditions.
BharatPe alleges that approximately 6.74 crore Series 1 warrants and 4 crore Series 2 warrants were transferred by JBCG, while further blocks of warrants were allegedly encumbered without BharatPe’s prior written consent. The petition specifically refers to approximately 15 crore Series 1 warrants and 16.92 crore Series 2 warrants allegedly subjected to encumbrances.
One of the transactions highlighted by BharatPe concerns an alleged pledge of 8 crore Series 2 warrants by JBCG to Vistra ITCL (India) Limited, acting as trustee for UTI Alternatives. BharatPe claims that the warrants were used to raise around ₹200 crore and that 4 crore of the warrants were subsequently transferred to UTI Alternatives schemes. These are allegations made by BharatPe and remain subject to adjudication.
The petition also raises questions about the subsequent valuation and transfer of the warrants. BharatPe says Centrum originally subscribed to the warrants at Re 0.01 each and later transferred 50 crore warrants to JBCG at Re 0.16 per warrant. BharatPe further states that it reasonably believes JBCG subsequently offered the warrants at approximately ₹26 each.
The contractual restrictions governing the warrants are central to the dispute. In its July 24 order in an earlier proceeding, the Delhi High Court noted that the Series 1 warrant conditions require prior Board or committee approval for transfers and make the warrants subject to the shareholders’ agreement and the company’s Articles of Association. The Court also noted that where there is a conflict between the warrant conditions and the shareholders’ agreement, the shareholders’ agreement is to prevail.
The earlier litigation arose after BharatPe sought protection against steps concerning conversion of the Series 1 warrants into compulsorily convertible preference shares. The July order records that BharatPe had also sought information concerning current warrant holders and details of transfers and encumbrances undertaken by Centrum and JBCG.
A significant time factor is also involved. The terms of the Series 1 warrants provide for a 60-month exercise period from their allotment. The July Delhi High Court proceedings recorded arguments that this period was due to expire on October 30, 2026, after which the warrants could lapse if the conversion right was not exercised. JBCG had argued that failure to convert before the deadline could result in substantial financial losses for warrant holders.
JBCG and Centrum have disputed BharatPe’s position. In the earlier proceedings, arguments on behalf of the respondents included that BharatPe was aware of the transfers, had not objected to them at the relevant time and was allegedly barred by principles including acquiescence and delay. The respondents also argued that the warrant transfers had been processed under the applicable contractual and depository framework.
The respondents’ position will now be tested in the fresh proceedings. The High Court has granted them two weeks to file their replies, following which BharatPe has been given three days to file a rejoinder. The matter is scheduled to come up again on October 1.
The case is significant because the dispute goes beyond the immediate transfer of securities. It involves the contractual rights of the shareholders of Unity Bank, the ability of a promoter-group entity to deal with warrants, the effect of the shareholders’ agreement on warrant transfers, and the consequences of converting the warrants into preference shares before the contractual deadline.
For BharatPe, the proceedings also concern its position as Unity Bank’s 49% shareholder. For Centrum and JBCG, the dispute involves the validity and enforceability of transactions involving the warrants. The Delhi High Court’s forthcoming consideration of the interim-relief application will determine what restrictions, if any, remain in place while the underlying contractual dispute proceeds toward arbitration.
BharatPe has already invoked arbitration and, according to the latest proceedings, nominated former Supreme Court judge Justice Vineet Saran as its nominee arbitrator. The present Section 9 proceedings are therefore focused on interim protection pending resolution of the wider dispute through the agreed arbitral process.
