ARM DIGITAL MEDIA PVT LTD Vs. RITESH SINGH

JUDGEMENT

(1.) The present application, has been filed by the defendant under Order VII Rule 11(d) of the Code of Civil Procedure, 1908 (hereinafter "CPC"), seeking rejection of the plaint on the ground that the suit is barred by law. The principal objections urged by the defendant are: (i) that the dispute constitutes a "commercial dispute" within the meaning of Sec. 2(1)(c)(xii) of the Commercial Courts Act, 2015 (hereinafter "CC Act"), thereby requiring the suit to be instituted exclusively before the Commercial Court and rendering it non-maintainable before this Court; (ii) Consequently, that the suit is barred for want of compliance with the mandatory pre-institution mediation contemplated under Sec. 12A of the CC Act; and (iii) that the jurisdiction of the Civil court is expressly ousted under Sec. 430 of the Companies Act, 2013 (hereinafter "Companies Act").

(2.) The suit relates to an Employment Agreement dtd. 8/9/2016 executed between plaintiff No. 1, a private limited company engaged in digital marketing and related services, and the defendant, who originally served as its Managing Director and later as a non-executive director. The plaintiffs allege, the defendant committed various breaches of his contractual and fiduciary obligations, including unilaterally increasing his own remuneration and failing to ensure statutory and secretarial compliances that fell within his area of responsibility. These issues were allegedly discovered between late 2022 and early 2023, leading to his redesignation and eventual resignation from the position of Managing Director on 31/3/2023.

(3.) Following his resignation, the defendant is stated to have joined a competing entity, Insite Digital Private Limited (hereinafter "Icogz"), as Chief Growth Officer, which the Plaintiffs contend violates non-compete, confidentiality, and non-solicitation obligations under the Employment Agreement and the Articles of Association (hereinafter "AoA"). The plaintiffs further allege that the conduct of the defendant is adverse to the interests of plaintiff No. 1, such as sharing confidential information, soliciting clients, and initiating multiple communications raising allegations of non-compliance by the plaintiffs. The defendant also issued a requisition for an extraordinary general meeting and lodged investor complaints before the Registrar of Companies, which later formed part of oppression and mismanagement petitions filed before the National Company Law Tribunal (hereinafter "NCLT").