1. The present suit is filed as a non-commercial suit by invoking Ordinary Original Side Jurisdiction of this Court. Learned Senior Advocate Shri Doctor argued on grant of adinterim relief.

2. Learned Senior Advocate Shri Jagtiani submitted at the beginning that he may be granted some time to file reply affidavit. For deciding whether case for ad-interim relief is made out or not and whether Defendant No.1 needs to be given time or not, I have no alternative but to hear both the learned Senior Advocates. Accordingly, I have heard both of them.

3. Learned Senior Advocate Mr. Mustafa Doctor apprised me about the matter and elaborated on all issues in support of adinterim relief. The main prayer in the Interim Application is for injuncting Defendant No.1 to 12 from diverting the business of Defendant No.14 - Private Limited Company to a Limited Liability Partnership - Defendant No.10.

4. Mr. Jagtiani, Senior Advocate raised preliminary objection. Considering the averments in the plaint and the supporting documents, the present dispute falls within the meaning of Commercial Dispute under the provisions of Section 2(1)(c) Commercial Courts Act, 2015 and as such the Suit in the present format will not be maintainable. Learned Advocate for Defendant Nos.10 to 12 reiterated the same objections. Whereas, according to the learned Advocate Shri Doctor for deciding if this is a commercial dispute or not, the nature of relief sought and the averments in the plaint as a whole needs to be considered.

5. Both of them have relied upon various judgments. Mr. Jagtiani relied upon the following judgments:-

"(a) ICICI Bank Limited vs. SREI Multiple Asset Investment Trust, in Interim Application (L) No. 8534 of 2022 in Commercial Suit (L) No. 8530 of 2022, decided on 21/06/2022. It is on the point of laying of hands if the objection relates to subject matter. Ultimately, the Court has to make at least a prima facie determination of the nature of the Plaint (para 9). On facts, it was held that the claim falls within the meaning of the word debt in Section 2(g) of Recovery Of Debts Due To Banks And Financial Institutions Act, 1993. (Para 25)

(b) M/s. Indian Farmers Fertilizer Co-operative Limited vs. M/s. Bhadra Products, in Civil Appeal No. 824 of 2018 arising out of SLP (C) No. 19771 of 2017, decided on 23/01/2018. It is on the point of meaning of the word “Jurisdiction”. (Para 21)

(c) Government of India vs. M/s. Jaiswal Ashoka Infrastructure Pvt. Ltd., in Arbitration Appeal No. 14 of 2018, decided on 26/09/2019. It was also on the point of exercise of jurisdiction when it relates to the subject matter (para 3). It deals with legality of an order passed without jurisdiction.

(d) Nusli Neville Wadia vs. Ivory Properties and Ors. reported in (2020) 6 SCC 557, [LQ/SC/2019/1553] wherein the meaning of the phrase “entertaining the suits” is interpreted in paragraph 32. There is also discussion on difference between existence of jurisdiction and exercise of jurisdiction (paragraph 37). The jurisdictional and adjudicatory facts are also differentiated (para no.40).

(e) Chanda Kochar vs. Icici bank limited, in Interim Application (L) No. 10192 of 2022 in Commercial Suit No. 43 of 2022, decided on 12/04/2022, wherein claim was made that dispute pertains to Management and Consultancy Agreements and as such falls within the meaning of the word “commercial dispute”. The suit was filed as commercial suit. There was an objection about maintainability of commercial suit. The grievance was accepted and the suit was transferred from the list of Commercial Causes Division. The plaintiff was appointed as a trainee officer who gradually rose to the position of M.D. of the bank. Still the relationship continues to be of ‘employer-employee’ and hence commercial suit will not be maintainable.

(f) Kanchanganga Realtors Pvt. Ltd. & Ors. vs. M/ s. Monarch Infrastructure Developers Pvt. Ltd., in Writ Petition No. 4080 of 2018, decided on 08/02/2019 wherein the contention about interpreting the words “any relief pertaining to immovable property” has to be given broad interpretation (para 13). However these observations no more held a good law in view of observations in case of Ambalal Sarabhai Enterprises Limited vs. K.S. Infraspace LLP and Anr by the Hon’ble Supreme Court.

(g) D.M. Corporation Pvt. Ltd. vs. State of Maharashtra and Ors. reported in 2018 SCC Online Bom 1112, While deciding whether the dispute is a commercial dispute or not, the Court observed that the nature of the relief sought is required to be considered. The dispute was pertaining to Arbitration Agreement of which subject matter is about Rs.1 Crore was considered as commercial dispute.

(h) Life Shine Medical Services Pvt. Ltd. vs. Alety Jeevan Reddy and Ors., in Civil Revision Petition No. 689 of 2023, decided on 13/04/2023 by the High Court of State of Telangana."

6. According to Mr. Jagtiani, learned Senior Advocate, the Plaintiff has referred the Joint Venture Agreement in between the Plaintiff and Defendant No.14 and one Indian Prepaid Services Pvt. Ltd. They have also referred to the Share Purchase Agreement and Deed Of Adherence executed by defendant no.1. According to them, if the entire averment in the Plaint are perused, the dispute certainly falls within the meaning of commercial dispute.

7. As against this, learned Senior advocate Shri doctor submitted that if the frame of suit is considered, the foundation of various acts committed by the defendant nos.1 to 10 is conspiracy thereby causing damage to the Plaintiff. He submitted that the acts in between them are closely connected to each other. It is submitted that nature of relief sought is a predominant factor for determining the nature of dispute. There is a prayer claiming damages to the tune of Rs.16,64,37,800/- (Rupees Sixteen Crores Sixty Four Lakhs Thirty Seven Thousand Eight Hundred Only). There are also further reliefs.

8. He has referred to the provisions of Order I Rule 3 of CPC pertaining to joinder of parties and provisions of Order II Rule 3 pertaining to joinder of causes of action. Ultimately, it is the choice of the plaintiff. He relied upon the following judgments:-

"(i) Bank of Baroda and Anr. vs. Shri. Avenues Private Limited and Ors. 2022 SCC OnLine TS 768

On facts, it is observed that the dispute is not arising out of merchant, bankers, financiers and traders. There was a suit filed by the Company claiming damages that one of its Directors along with several members of the Bank have defrauded the Company. There is a dispute arising out of the misappropriation committed by the Director of the Plaintiff Company. They have joined hands with staff members of Bank. Though few facts are similar to the facts of this case, there was no joint venture agreement.

(ii) IIHR Hospitality (Andhra) Pvt. Ltd. vs. Seema Swami & Ors. 2022/DHC/004648) When the suit was filed for recovery of embezzled amount against an employee. He had embezzled the amount from bank account of plaintiff’s bank. It was held not to be a commercial dispute. Ultimately nature of relationship is important.

(iii) The Indian Hotels Company Ltd. vs. Binu Anand Khanna & Ors. 2016 SCC Online Del 55 , wherein the defendants conspired to get rid of various officers of the Indian Hotels and Taj Travels and the plaintiff filed suit for damages. An application for deletion was rejected. The Court refused to accept the prayers as it was at the trial stage and observed that full fledged trial is required. But it was not a commercial suit.

(iv) Ambalal Sarabhai Enterprises Limited vs. K.S. Infraspace LLP and Anr. 2020 (15) SCC 585 [LQ/SC/2019/1546] wherein the dispute was not considered as commercial dispute and it was observed that the provisions of Commercial Courts Act need to be interpreted narrowly. These observations were made while interpreting the word ‘used’ occurring in Section 2(1)(c)(vii).

(v) In the case of Novartis Vaccines & Diagnostics Inc. V/s Aventis Pharma Limited 2009 SCC Online Bom 2067 in an Arbitration Petition under Section 9 of the Arbitration and Conciliation Act 1996, this court observed ‘there was no provision made for partner to do rival/competing business. It is permissible to do rival business only if it is agreed specifically by the parties and if any of the partner is doing such rival business without written permission, the company/firm is entitled to seek injunction’. (para no. 45)"

9. By way of reply, Mr. Jagtiani again read over the averments in the Plaint and relied upon the judgment in case of T.V. Today Network Ltd. vs. News Laundry Media Private Limited and Ors. (2022) SCC OnLine Del 2233 and more specifically paragraph 48. That was a suit for defamation on the background of Infringement of Copyrights by Defendant Nos.1 to 9. Merely because damages are sought, it was observed, that the suit does not cease to be a commercial dispute. It was a composite suit. Suit for violation of intellectual property rights of copyright essentially becomes a commercial suit.

Averments in the plaint

10. It will be material to quote the relevant facts which are necessary for adjudication of present objection. They are as follows :-

"(a) There is a joint venture agreement executed on 20/10/2005 in between :--

"(i) the plaintiff Company incorporated as per the laws of Commonwealth of Pennsylvania,

(ii) Defendant No.14 and

(iii) Defendant No.1 India Prepaid Services (P) Ltd. and they have transferred their shares to Defendant No.13."

No relief sought against Defendant Nos. 13 and 14. This Joint Venture Agreement was entered as the plaintiff company is engaged in the business of conferencing services across the world and Plaintiff and India Prepaid Services (P) Ltd., were desirous of forming Joint venture company in India for offering similar services to Indian market. Hence they have executed Memorandum of Understanding on 28/7/2005. So, Joint Venture Agreement was entered into for recording their understanding with respect to their respective shareholding in Defendant No.14 Company. Their distribution of shareholding is follows:--

"a. 51% by the plaintiff company.

b. 49% by the India Prepaid."

Initially, Plaintiff had nominated two Directors on the board of Defendant No.14. However,

"a. the Director Dr. Coraluppi expired on 28th September 2020 and

b. Mr. Meyerthal resigned on 1st May 2023."

There was no one from their side to look after the business. Defendant No.1 was appointed as General Manager of Defendant No.14. He has executed Employment, Confidentially and IP Agreement with defendant no. 14 on 01/03/2006. Later on, he has purchased 10% of the shares from one Oxygen Services India Ltd., (new name of India Prepaid Services Pvt. Ltd.,). Whereas some of the shares were purchased by the plaintiff and their shareholding had gone to 74%. Defendant No.1 also executed Deed of Adherence to JVA on 30th November 2010 (page 216).

11. Plaintiff contended that Defendant No.14 started business in India and also acquired good business and that is why the value of the shares has increased in the market. Defendant No.1 was also made Managing Director of the Defendant No.14 Company in or around December 2010. Whereas other defendants are as follows :--

"a. Defendant No.2 is appointed as additional Director of the Defendant No.14 – Company.

b. Defendant Nos.3 to 9 are the employees of Defendant No.14- Company.

c. Defendant No.10 is a Limited liability Partnership Firm formed on 11/9/20 in the name of Defendant No.11 who is wife of Defendant No.1 and with the help of Defendant No.12."

12. Plaintiff has realized that Defendant No.1 has started diverting the business of Defendant No.14 to Defendant No.10. They have received one complaint from a whistle-blower and they have conducted fact finding inquiry from an agency. They realized that hardware of Defendant No.14 was utilized during the business of Defendant No.10. The employees of Defendant No.14 have resigned and they have joined Defendant No.14. Even the earlier clients of Defendant No.14 have started taking video conferencing services from Defendant No.10. Few of the emails sent by few the clients to defendant no. 10 were received wrongly on the email of Defendant No.1.

13. That is why the present suit is filed for damages. On the basis of the documents and averments, it is clear that the Plaintiff is one of the major shareholder of Defendant No.14. The relationship can be bifurcated as follows :-

"i. Plaintiff as a shareholder of Defendant No.14.

ii. Defendant Nos.1 and 2 are the Managing Director and Director of Defendant No.14.

iii. Defendant Nos.3 to 9 are employees/past employees of Defendant No.14."

There is a Joint Venture Agreement in between the Plaintiff and Defendant No.14. After becoming shareholder Defendant No.1 has also accepted to abide as per clauses of joint venture agreement as per deed of adherence. It is true that this Court is not dealing with:

"a. the dispute of Defendant No.1 on one hand and Defendant No.14 on the other hand or

b. dispute between the plaintiff on one hand and defendant no 14 on other hand."

As per the meaning of Commercial Disputes section 2(c), Mr. Jagtiani has invited my attention to the following items:-

"x) Management and Consultancy Agreements.

xi) Joint Venture Agreement.

xii) Shareholders Agreement."

He also invited my attention to the provisions of Section 7 which deals with commercial jurisdiction of the High Court.

14. It is no doubt true, as contended by Senior Advocate Mr. Doctor that there is a prayer for damages. It is also true that the act complained against Defendant No.1 is about diverting the business of Defendant No.14 to Defendant No.10 along with assistance of Defendant No.2 to 9.

15. It is no doubt true that the relationship in between the plaintiff on one hand and Plaintiff Nos.3 to 12 on the other hand is not of such nature wherein dispute amongst themselves will fall within the meaning of “ Commercial Dispute ”. Because ultimately they are the employees of defendant no.14 and the observations in case of Chanda Kochar’ (Supra) will be applicable.

16. The contention of Mr. Doctor that the ‘act of conspiracy amongst themselves is a cause of action’ needs to be decided. There are allegations to that effect in the plaint also. It is also true that there are averments in the plaint about the clauses of Joint Venture Agreement, Deed Of Adherence, complaints and non-compliance by Defendant Nos.1 and 2. So this case involves a dispute between :--

"a. plaintiff as a shareholder of defendant no 14 on one hand

and

b. defendant no. 1 as managing director/ shareholder conspiring with other defendants on other hand."

17. Admittedly, there is a Joint Venture Agreement and Defendant No.1 has agreed to abide to the same. So the dispute in between the Plaintiff and Defendant No.1 as Managing Director/shareholder of Defendant No.14 will certainly fall within the meaning of Commercial Dispute.

18. I do not think that merely because there was averment that conspiracy and claim for damages is made will take out the dispute outside the purview of commercial dispute, because there are two aspects, one there is a Deed of Adherence and Joint Venture Agreement and its breach and second, prayers made. Ultimately the role of defendant no.2 to 12 is conspiring with defendant no.1 to transfer the business of defendant no.14 to defendant no.10. The prayer for damages is on account of breach of various agreements of which Deed Of Adherence is important. So simply we cannot look at the prayer for damages as contended by Mr. Doctor. Ultimately, compliance of joint venture agreement/deed and the acts of breach cannot be separated. I am not inclined to accept the contention of learned Senior Counsel Mr. Doctor that the dispute will not fall within the purview of commercial dispute.

19. Even though it is the concerted act on the part of Defendant Nos.1 to Defendant No.12 and it is true that the dispute with other Defendants is not commercial dispute, I think the allegations against both the sets of Defendants cannot be separated. Ultimately, it is their joint action only which has resulted into the breach of Joint Venture Agreement and Deed Of Adherence. It may happen that these defendants may subsequently claim that their dispute is not a commercial dispute and why they should be transferred to commercial court. However, so far as their role is concerned, the allegation against Defendant No.1 is primary allegation and their role is secondary. Amongst them, this Court has already heard defendant no. 10 to 12 and they have supported the submissions of Mr. Jagtiani.

20. So I am inclined to uphold the objection raised by the learned Senior Advocate Mr. Jagtiani. Hence, I am inclined to pass the following order:-

ORDER

(i) Suit be removed from the list of Suits to the list of Commercial Suits in Commercial Division of High Court.

(ii) That Prothonotary and Senior Master to convert the suit into register of Commercial Suit and place it before appropriate Bench subject to compliance of the provisions of the Commercial Courts Act, 2015.

(iii) Parties to act on the authenticated copy of this order.