ARSHIYA LIMITED Vs. AMIT GUPTA

JUDGEMENT

(1.) Defendant No. 1, was employed as 'senior vice-president' in the Plaintiff-company through a Letter of Appointment dtd. 15/6/2018. In September, 2019, the Plaintiff introduced 'Arshiya Limited Employee Stock Option Scheme 2019' for its employees [hereinafter, "ESOP Scheme"], under which, Plaintiff offered 7,50,000 stock Options [hereinafter "Options"] to Defendant No. 1 on 30/1/2020. Each Option entitled Defendant No. 1 to acquire one equity share at a price of Rs.2.00 per share or any other price as determined by the Plaintiff. Defendant No. 1 accepted the Options vide letter dtd. 30/1/2021. Consequently 7,50,000 shares were allotted to Defendant No. 1 with the approval of Board of Directors of the Plaintiff company vide Resolution dtd. 10/2/2021.

(2.) Subsequently, Plaintiff allegedly found Defendant No. 1 to be in breach of his terms of employment by being guilty of misconduct. Accordingly, his services were terminated vide termination letter dtd. 8/9/2021. Since the termination was premised on several grounds relating to his service, inter-alia being poor performance, misconduct and misappropriation of office funds and utilities, Plaintiff asserts that Defendant No. 1 has fraudulently secured the Options, in breach of his employment contract. The vested Options are 'fruits of fraud' - which Defendant No. 1 ought not to be allowed to enjoy. Plaintiff relies upon, inter alia, the legal tenet that 'fraud vitiates all'. Additionally, Plaintiff places reliance on Clause 13.4 of the ESOP Scheme that prohibits any employee, whose services are terminated for misconduct, from exercising rights under the vested Options. Reliance is also placed upon Clause 13.6 which provides that exercise of vested Options shall be on hold during the adjudication of the dispute between Employee and the Company.

(3.) Mr. Jayant Mehta, Senior Counsel for the Plaintiff, relying upon the afore-noted clauses, amongst others, argues that Defendant No. 1's misconduct is manifest from undisputed documents placed on record - all of which show that Defendant No. 1 was acting for other companies, such as one EWYN Services Private Limited [hereinafter, 'EWYN'], during the term of his employment with the Plaintiff-company. He places categorical reliance upon: