CS(OS)--2528/2015. Case: RAJEEV SAUMITRA Vs. NEETU SINGH & ORS. High Court of Delhi (India)

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment pronounced on: 27^th January,

+ I.A. No.17545/2015 in CS(OS) No.2528/2015

RAJEEV SAUMITRA ..... Plaintiff

Through Mr.P.V.Kapur, Sr. Adv. with

Mr.Rahul Kumar, Ms.Divyya Kapur, Mr.Sidhant Kapur & Mr.V.K.Nagrath, Advs.

versus

NEETU SINGH & ORS ..... Defendants

Through Mr.Sandeep Sethi, Sr.Adv. and

Ms.Geeta Luthra, Sr. Adv. with Mr.Kumar Sushobhan, Mr.Vikram Khanna & Ms.Shreya, Advs.

CORAM:

HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. Rajeev Saumitra, plaintiff has filed the present suit for, declaration, rendition of account, damages, permanent and injunctions against the three defendants namely, (i) Ms.Neetu

(ii) M/s. K.D.Campus Pvt. Ltd. (iii) M/s. Paramount Coaching Pvt. Ltd.

2. By way of this order, I propose to decide the pending application being I.A. No.17545/2015, under Order XXXIX Rules 1 and 2 CPC by the plaintiff.

3. The defendant No.3 is a private limited company under the Companies Act, 1956 vide certificate of incorporation 8^th December, 2009. The plaintiff and his wife, defendant No.

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holding 50% share each of defendant No.3 who is involved business of imparting education, training and preparation for national competitive examinations.

4. There is a dispute between the plaintiff and defendant who adopted the mark PARAMOUNT prior in times. However, it in dispute that in 2009, the said mark became the property defendant No.3-Company on its incorporation.

5. It is the case of the plaintiff that he began the business imparting education under the banner of Paramount Coaching January, 2005 as a sole proprietor. The plaintiff has pointed out documents in order to show that prior to incorporation of defendant No.3 in the year 2005, the plaintiff opened a bank account with the Maharashtra as the sole proprietor of Paramount Coaching Centre the other hand, defendant No.1 in support of her claim for ownership of the name PARAMOUNT has relied upon a document in order to show the use of the name Paramount prior to 2005 of her reply to the injunction application. The plaintiff submits that the said document purporting to be a self-serving advertisement; the same is neither dated nor does it demonstrate as to where this advertisement appeared and it also does not prove that defendant No.1 is the owner of the PARAMOUNT. In the month of July, 2005, the defendant No.1 contact with plaintiff looking for a job and requested the plaintiff to allow her to teach English subject in his coaching institute as she was in need of financial assistance to carry on her livelihood. The p allowed the defendant No.1 to take English Classes in his centre. He was a bachelor and earning handsome amount at that time

After expiry of approximately 8-9 months, defendant expressed her willingness to get married with the plaintiff.

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confirmed that she was spinster and unmarried; her father had and there was an old widow mother having six daughters and brother. Believing upon her statement, the plaintiff got married defendant No.1 on 12^th March, 2006. After the marriage, as alleged the plaintiff, she started hatching a conspiracy to get inducted sisters and family members in Coaching Centre of the plaintiff her insistence, the proprietorship concern, namely, Paramount Coaching Centre was converted into a Private Limited Company, i.e.

No.3. She was inducted as a Director of defendant No.3 and thus the husband and wife have shareholding to the extent of 50:50. plaintiff prior to incorporation of defendant No.3 also formed educational society in 2007 under the name ‘Paramount Zenith Society’.

6. The main reason for the present litigation is that defendant who is the wife of the plaintiff incorporated another company being Director of defendant No.3-Company under the name of K.D.

Pvt. Ltd. (defendant No.2). She is the founder and director of company for the purposes of competing with defendant No.3. The company of defendant No.2 was incorporated by defendant No. February, 2015 for the purposes of competing with and diverting business, staff, students and monies of defendant No.3. It is involved in imparting education, training and preparation for national examinations.

7. The plaintiff alleges that in November 2014, the plaintiff of the subsistence of her first marriage and initiated proceedings the Hindu Marriage Act for annulment of his marriage on 10^th

2015. Upon having known her game, she along with her including her sisters (i.e. Maya Chaudhary as CEO of defendant No. Director of defendant No.2) and brother-in-laws hatched a conspiracy to

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set up a competing business with defendant No.3 while still working Director/ employees of defendant No.3 to divert the business, business opportunities, staff and students to their own companies.

8. She holds 99.99% shares and her sister Maya daughter holds 0.01% share for the purposes of carrying on business of coaching centres of defendant No.2 as alleged b plaintiff. Another company, namely, Paramount Reader Publication Pvt. Ltd. (a one person Company under Section 2(62) of the Companies Act, 2013, in which she holds 100% shares) for carrying on the business of printing, publishing and distributing reading material using the property (Reading Material) of defendant No.3, which subject matter of the suit pending in Rohini Court.

9. As mentioned above, defendant No.3 has been publishing, selling and providing the books, Journals and other material in the name of defendant No.3 for various competitive other examinations on various subjects like Reasoning, Chemistry, English, Maths, etc. Defendant No.1 has been indu causing wrongful loss to the defendant No.3 and wrongful gain for her individual one-person company namely M/s. Paramount Publication OPC Pvt. Ltd. The plaintiff on behalf of the defendant as well as for himself being share-holder has filed a civil suit No.217/2015 which is pending before the Court of Sh.Satish ADJ, Rohini, Delhi.

10. The District Court granted an injunction in favour of the and the defendant No.1 appealed before this Court and a defect was discovered in the suit and the plaintiff withdrew the with leave to file a fresh suit in the District Court which was duly

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and on 15^th September, 2015 in CS No.217 of 2015, the Rohini Court granted an injunction restraining inter-alia defendant No.1 using the name PARAMOUNT for her personal and individual benefit or in any of her publications, or in any soft copy or in online material further from indulging in competing business.

11. The plaintiff submits that defendant No.1 is creating and deception in the minds of ordinary persons to believe that Campus is a part of defendant No.3 or somehow it is associated defendant No.3 or it is doing business with the consent of the which, in fact, is untrue.

12. It is also alleged in the plaint that defendant No.1 in her capacity as a Director of defendant No.3 is bound and obliged to act for benefit of the company and must not allow herself to be placed position of conflict with the defendant No.3-Company. But No.1 has incorporated a competing business under the banner of Campus Pvt. Ltd. and has placed her personal pecuniary interest above than that of defendant No.3. The plaintiff has and is continuing her position as Director to usurp business of defendant business.

13. The plaintiff says that after incorporating defendant No.2,

in itself is a breach of fiduciary duty owed to defendant defendant No.1 made all efforts to capitalise on the goodwill generated by defendant No.3 and mislead the public to believe that No.2 is a part of defendant No.3 so as to divert all its business herself and defendant No.2. In doing so, one of the key techniques she used is to use the phrase ‘A new venture by Neetu founder/director of Paramount Coaching Centre’ – defendant resources, such as Facebook and Twitter using this phrase.

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marketed K.D. Campus Pvt. Ltd. as a New venture by ‘Neetu founder/director of Paramount Coaching Centre’ over the radio, trains as well as in her personal publication i.e. Paramount Publication, a magazine run by defendant No.1 using the name defendant No.3 in violation of the Companies Act, 2013.

14. In order to restrain defendant No.1 from indulging in aforesaid wrongful actions, the plaintiff on 26^th May 2015

instituted a suit being CS(OS) No.1592 of 2015 along with application under Order XXXIX Rules 1 and 2 CPC. By an order 26^th May, 2015, the learned Single Judge issued notice. For completion of service and pleadings, the matter was listed before Joint on 7^th October, 2015.

Being aggrieved by the said order, the plaintiff preferred appeal being FAO(OS) No.301/2015. By an order dated 10^th

2015, the Division Bench was pleased to direct the learned Judge that the plaintiff’s application under Order XXXIX Rules 1 CPC be heard on 24^th August, 2015. The plaintiff earlier also filed Suit No.78/2015 before the ADJ, Rohini Courts, Delhi restraining defendants from using the mark Paramount in the publication books. The same was withdrawn on 17^th August, 2015 with liberty file the fresh one.

As far as litigation in this Court is concerned, it is submitted though the plaintiff initially instituted the suits in his personal owing to technical defects, both the suits were withdrawn with file fresh suits, which was granted. Accordingly, fresh derivative were instituted. The earlier suit being CS(OS) No.1592/2015 withdrawn by order dated 9^th September, 2015 which was already He was allowed to withdraw the said suit. In order to save time

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avoid needless confusion, as alleged, the plaintiff has been advised withdraw the said suit filed in this Court and institute a fresh which the plaintiff is hereby doing. The plaintiff has accordingly filed an application under Order XXIII Rule 1(3) CPC for withdrawal the said suit and has sought leave of this...