Delhi High Court
Mr. Sujeet Kumar Gupta vs Ideal Prepaid India Pvt. Ltd. & Ors on 23 April, 2026
Author: Subramonium Prasad
Bench: Subramonium Prasad
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 23rd APRIL, 2026
IN THE MATTER OF:
I.A. 22224/2023
IN
+ CS(COMM) 385/2023 & I.A. 11013/2023, I.A. 19176/2023
MR. SUJEET KUMAR GUPTA .....Plaintiff
Through: Mr. Bharat Arora, Mr. Pradeep
Gahlot and Mr. Daood Ahmed,
Advocates.
versus
IDEAL PREPAID INDIA PVT. LTD. & ORS. .....Defendants
Through: Mr. Sumant Nayak and Ms Smriti
Shukla, Advocates.
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
I.A. 22224/2023
1. The present application under Order VII Rule 11 (a) and (d) read with
Section 151 of the Code of Civil Procedure, 1908 has been filed by the
Defendant No.1 seeking rejection of the Plaint inter alia on the grounds that
the instant Suit does not qualify as a „commercial dispute‟ in terms of
Section 2(1)(c) of the Commercial Courts Act, 2015 [“CC Act“].
2. The instant Suit has been filed for a decree of permanent injunction in
favour of the Plaintiff and against the Defendants, restraining the Defendants
and/or its affiliates, directors, shareholders, representatives and assigns, from
directly or indirectly, defaming the Plaintiff by publishing false information
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and defamatory statement against the Plaintiff and maligning him and other
reliefs including damages.
3. Facts of the case as borne out from the Plaint are stated as under:
(i) The Plaintiff, a post-graduate in Masters of Computer
Applications, is a software programmer with over twenty-five (25)
years of experience in IT technology, the Founder as well as one
of the Directors of the Defendant No. 1 Company, i.e., M/s Ideal
Prepaid India Pvt. Ltd.
(ii) The Defendant No. 1 Company, incorporated under the provisions
of the Companies Act, 2013, having its registered office at B-94,
Ground Floor, Ph-2, Aya Nagar Extension, Kh. No. 525/1, New
Delhi – 110047, is a subsidiary of a South Africa-based company,
M/s Holistic Technologies (Pty) Ltd., which has been impleaded
as the Defendant No. 4 herein.
(iii) The Defendants No. 2 and 3 herein are also Directors in the
Defendant No.1 Company, however, stated to be residing out of
India. As such, it is the claim of the Plaintiff that he was
responsible for all the clients as well as reputation of the
Defendant No. 1 Company in India.
(iv) As per the Plaint, in the year 2004, the Plaintiff was working with
M/s Oxigen Services Pvt. Ltd. [“Oxigen”], which was one of the
Indian clients of the Defendant No. 4 Company. During this time,
the Plaintiff was handling a software provided by the Defendant
No. 4 Company to Oxigen, and in this regard, the Plaintiff also got
in touch with one Mr. MordiKushnir, the Director of the
Defendant No. 4 Company.
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(v) Later in 2010, the Plaintiff joined M/s Mindtree Limited and
moved to its on-site client, the American International Group
[“AIG”] in Singapore.
(vi) In 2015, the Plaintiff returned to India and contacted the
Defendant No. 4 Company with the vision of commencing similar
operations in India as the firm was carrying out in South Africa.
Though the Plaintiff and the Defendant No. 4 Company were
sceptical as to whether such a business would be successful or not,
both parties came to an agreement that if the business picks up, the
Plaintiff would get 25% share equity. This led to the formation of
the Defendant No. 1 Company, wherein the Plaintiff and the
Defendants No. 2 and 3 were the Directors.
(vii) The Defendant No. 1 Company did not see a lot of revenue
generation initially, which prevented the Directors from heavily
investing in it. For this reason, it is stated that the Plaintiff‟s father
used to supply meters to the Defendant No. 1 Company on a six-
months‟ credit basis.
(viii)The Defendant No. 4 Company‟s product did not perform well in
the Indian market. Ultimately, the Plaintiff was asked by the
Defendant No. 4 Company to develop his own product, both
hardware and software to suit the Indian market. Accordingly, the
Plaintiff developed his own product, which ended up being
successful in the market.
(ix) In January, 2023, the Defendants No. 2 and 3 visited India for the
first time after the incorporation of the Defendant No. 1 Company.
Both of them were satisfied with the performance of the
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Defendant No. 1 Company, which inclined them to proceed with
the equity transfer of 25% to the Plaintiff.
(x) However, somewhere in March, 2023, certain differences crept up
between the Plaintiff and the Defendants, when the Plaintiff
opposed to his credentials being used by the South African team.
(xi) In addition, it is also stated that the Plaintiff‟s wife was working as
a Sales Manager in the Defendant No. 1 Company between
November 2018 and March 2023, which was duly disclosed in the
firm‟s balance sheets, though none of the financials of the
Defendant No. 1 Company were ever signed by the Plaintiff.
(xii) A Legal Notice dated 14.03.2023 was sent on behalf of the
Defendant No. 1 Company to the Plaintiff, alleging inter alia
breach of fiduciary duties. In this Legal Notice, the Plaintiff was
asked to cease and desist handling of all websites, services, etc.
related to the Defendant No. 1 Company as well as pass on all the
login credentials, so that none of the services remain in the
Plaintiff‟s control. This was replied to by the Plaintiff on
28.04.2023, denying all the allegations levelled in the Legal
Notice. Moreover, as per the Plaintiff, the real intention of the
Defendants behind the Legal Notice was to reduce the equity
share of the Plaintiff from 25% to 15% and to induce the Plaintiff
into accepting the same.
(xiii)Later on, in April 2023, a Shareholders Agreement [“SHA”] was
entered into between the Defendant No. 1 Company and its
respective shareholders. This SHA was signed by the Defendants
No. 2 and 3 on 31.03.2023 and the Plaintiff on 10.04.2023,
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wherein the Plaintiff was offered approximately 15% of the entire
share capital (1763 shares) of the Defendant No. 1 Company,
while 85% (9990 shares) remained with the Defendant No. 4
Company. However, as per the Plaintiff, the Defendants in reality
only allotted him less than 1% of the shares, which the Plaintiff
discovered after conducting enquiries into the authorised share
capital of the Defendant No. 1 Company.
(xiv) It is stated that on 17.04.2023, the Plaintiff contacted the
Defendants, asking them to allot the agreed upon share to him.
Thereafter, a Notice for holding of an Extra Ordinary General
Meeting was given on behalf of the Defendant No. 1 Company,
wherein the agenda was set for increasing of the existing share
capital of the Defendant No. 1 Company. In this regard, a Shorter
Notice Consent for the EGM was given by the authorised
signatory of the Defendant No. 4 Company as well as the Plaintiff.
(xv) The EGM was held on 20.04.2023 and a new set of Memorandum
of Association for the Defendant No. 1 Company was adopted.
(xvi) It is stated that even after the EGM, the Defendants continued to
take undue advantage of the Plaintiff, which constrained the
Plaintiff to resign from the Defendant No. 1 Company on
03.05.2023, leaving behind all his equity. The Plaintiff‟s
resignation was accepted vide an email dated 04.05.2023 and on
the same date, a Resolution was passed by the Defendants No. 2
and 3 in a board meeting, to the effect that the Plaintiff shall no
longer be serving on the Defendant No. 1 Company‟s board.
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(xvii) Subsequently, the Plaintiff was requested by the Defendant No.
1 Company‟s staff to submit his laptop and cheque-book, however,
when the Plaintiff came to do so on 06.05.2023, no one came to
collect them. Later, on 22.05.2023, the Plaintiff received a call
from the SHO of Sector-50 Police Station, informing him that a
complaint against the Plaintiff was lodged by the Defendants
regarding the laptop and a mobile application source code.
Though, as per the Plaintiff, he was always ready to return the
laptop and even the mobile application source code was already
returned to the Defendants.
(xviii) On 24.05.2023, a Letter was addressed by MG Attorneys on
behalf of the Defendants, to the clients of the Defendant No. 1
Company, societies as well as the public at large, alleging fraud,
embezzlement and corporate sabotage by the Plaintiff and his
father. As per the Plaintiff, contents of this Letter are moonshine,
unfounded, malicious, defamatory and have the effect of causing
the Plaintiff‟s loss of reputation and future prospects. As a result,
the Plaintiff approached this Court by filing the instant Suit,
praying for the reliefs of permanent and mandatory injunction
against the Defendants, damages as well as rendition of accounts
for all the works done and billed by the Defendant No. 1 Company
till the date on which the Plaintiff resigned.
4. The Suit was instituted on 29.05.2023. It is pertinent to mention that
the requirement under Section 12A of the CC Act had not been followed by
the Plaintiff as the Plaintiff had not instituted the pre-litigation mediation or
sought exemption from the same. Summons were issued on 01.06.2023. It is
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pertinent to mention that though the Plaintiff had moved an application
being I.A. 11013/2023 under Section XXXIX Rules 1 & 2 of CPC seeking
urgent interim relief, however, on the said date, the Plaintiff did not press
that application, meaning thereby, no urgent relief was anyway
contemplated. Written Statements along with affidavits of admission/denial
to the Plaintiff‟s documents have been filed by the Defendants No. 1, 2 and
3. Additionally, the Order dated 08.11.2023 reflects that the Defendant No. 4
has adopted the written statements filed on behalf of the Defendants No. 1, 2
and 3. Replications to the respective written statements also stand filed by
the Plaintiff. Perusal of the record further indicates that the Joint Schedule of
Documents stands filed and the process of marking of exhibits also stands
concluded. However, issues are yet to be framed.
5. The Application under consideration is I.A. No. 22224/2023 which
has been filed by the Defendant No. 1 under Order VII Rule 11(a) & (d) of
the CPC, seeking rejection of the Plaint inter alia on the ground that the
instant Suit does not qualify as a „commercial dispute‟ in terms of Section
2(1)(c) of the CC Act and as such, is barred by law.
6. Another ground raised by the Defendant No. 1 Company by way of
the instant Application, is that the Plaintiff has by-passed the mandatory
requirement of a Pre-Litigation Mediation prescribed under Section 12-A of
the CC Act. In support of this contention, the learned Counsel for the
Defendant No. 1 relies on the judgments of the Apex Court in Patil
Automation (P) Ltd. v. Rakheja Engineers (P) Ltd., (2022) 10 SCC 1,
Yamini Manohar v. T.K.D. Keerthi, (2024) 5 SCC 815 and Novenco
Building and Industry A/S v. Xero Energy Engineering Solutions Private
Ltd., 2025 SCC OnLine SC 2278.
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7. Heard the learned Counsels for the parties and perused the material on
record.
8. At the outset, this Court reminds itself of the principles to be kept in
mind while adjudicating an application filed under Order VII Rule 11 of the
CPC.
9. In Popat and Kotecha Property v. State Bank of India Staff Assn.,
(2005) 7 SCC 510, the Apex Court observed as under:
“13. Before dealing with the factual scenario, the
spectrum of Order 7 Rule 11 in the legal ambit needs to
be noted.
14. In Saleem Bhai v. State of Maharashtra [(2003) 1
SCC 557] it was held with reference to Order 7 Rule 11
of the Code that the relevant facts which need to be
looked into for deciding an application thereunder are
the averments in the plaint. The trial court can exercise
the power at any stage of the suit — before registering
the plaint or after issuing summons to the defendant at
any time before the conclusion of the trial. For the
purposes of deciding an application under clauses (a)
and (d) of Order 7 Rule 11 of the Code, the averments
in the plaint are the germane; the pleas taken by the
defendant in the written statement would be wholly
irrelevant at that stage.
15. In I.T.C. Ltd. v. Debts Recovery Appellate Tribunal
[(1998) 2 SCC 70] it was held that the basic question
to be decided while dealing with an application filed
under Order 7 Rule 11 of the Code is whether a real
cause of action has been set out in the plaint or
something purely illusory has been stated with a view
to get out of Order 7 Rule 11 of the Code.
16. The trial court must remember that if on a
meaningful and not formal reading of the plaint it isSignature Not Verified
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manifestly vexatious and meritless in the sense of not
disclosing a clear right to sue, it should exercise the
power under Order 7 Rule 11 of the Code taking care
to see that the ground mentioned therein is fulfilled. If
clever drafting has created the illusion of a cause of
action, it has to be nipped in the bud at the first
hearing by examining the party searchingly under
Order 10 of the Code. (See T. Arivandandam v. T.V.
Satyapal [(1977) 4 SCC 467] .)
17. It is trite law that not any particular plea has to be
considered, and the whole plaint has to be read. As was
observed by this Court in Roop Lal Sathi v. Nachhattar
Singh Gill [(1982) 3 SCC 487] only a part of the plaint
cannot be rejected and if no cause of action is
disclosed, the plaint as a whole must be rejected.
18. In Raptakos Brett & Co. Ltd. v. Ganesh Property
[(1998) 7 SCC 184] it was observed that the averments
in the plaint as a whole have to be seen to find out
whether clause (d) of Rule 11 of Order 7 was
applicable.
19. There cannot be any compartmentalisation,
dissection, segregation and inversions of the language
of various paragraphs in the plaint. If such a course is
adopted it would run counter to the cardinal canon of
interpretation according to which a pleading has to be
read as a whole to ascertain its true import. It is not
permissible to cull out a sentence or a passage and to
read it out of the context in isolation. Although it is the
substance and not merely the form that has to be looked
into, the pleading has to be construed as it stands
without addition or subtraction of words or change of
its apparent grammatical sense. The intention of the
party concerned is to be gathered primarily from the
tenor and terms of his pleadings taken as a whole. At
the same time it should be borne in mind that noSignature Not Verified
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pedantic approach should be adopted to defeat justice
on hair-splitting technicalities.
20. Keeping in view the aforesaid principles the reliefs
sought for in the suit as quoted supra have to be
considered. The real object of Order 7 Rule 11 of the
Code is to keep out of courts irresponsible law suits.
Therefore, Order 10 of the Code is a tool in the hands
of the courts by resorting to which and by searching
examination of the party in case the court is prima
facie of the view that the suit is an abuse of the process
of the court in the sense that it is a bogus and
irresponsible litigation, the jurisdiction under Order 7
Rule 11 of the Code can be exercised.”
10. What flows from above is that a plaint cannot be rejected on the basis
of allegations levelled by the defendant in the written statement or for that
matter, in an application moved under Order VII Rule 11 CPC. Only the
material facts are required to be stated in the plaint without referring to the
evidence, except in circumstances where the pleadings relate to
misrepresentation, fraud, undue influence, wilful default, etc. The plaint
must be read as a whole to determine as to whether it discloses a cause of
action. In undertaking the said exercise, the court is not expected to consider
a particular plea. Instead, the averments made in the plaint in entirety, have
to be taken to be correct. As long as the court is satisfied that the plaint
discloses some cause of action that requires determination, the plaint ought
not to be rejected. Since a cause of action comprises of a bundle of facts, the
same are required to be proved by the plaintiff only at the stage of the trial.
At the end of the day, the court must be mindful of the underlying object of
Order VII Rule 11 of the CPC which is to nip in the bud, irresponsible and
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vexatious suits. At the same time, the opinion of the court that the plaintiff
may not ultimately succeed in the suit ought not to form the basis for
rejecting the plaint.
11. Keeping the above principles in mind, this Court deems it fit to first
deal with the issue of whether the instant Suit falls within the definition of a
„commercial dispute‟ under Section 2(1) of the CC Act, for the reason that if
it is found that the Suit does not involve any „commercial dispute‟,
fulfilment of the requirement under Section 12-A of the CC Act would not
come into play.
12. In this regard, this Court reminds itself of the observations of the
Apex Court in Ambalal Sarabhai Enterprises Ltd. v. K.S. Infraspace LLP,
(2020) 15 SCC 585, particularly, where it was noted that Section 2(1)(c) of
the CC Act will have to be interpreted strictly. Relevant paragraph of the
aforesaid judgment is being extracted below:
“The learned Senior Advocate for the appellant would
however, contend that a strict interpretation as in the
case of taxing statutes would not be appropriate in the
instant case where the issue relates to jurisdiction. In
that regard, the learned Senior Advocate has referred
to the Statement of Objects and Reasons with which the
Commercial Courts Act, 2015 is enacted so as to
provide speedy disposal of high value commercial
disputes so as to create the positive image to the
investors world about the independent and responsive
Indian legal system. Hence, he contends that a
purposive interpretation be made. It is contended that a
wider purport and meaning is to be assigned while
entertaining the suit and considering the dispute to be
a commercial dispute. Having taken note of the
submission we feel that the very purpose for which the
CC Act of 2015 has been enacted would be defeated ifSignature Not Verified
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every other suit merely because it is filed before the
Commercial Court is entertained. This is for the reason
that the suits which are not actually relating to
commercial dispute but being filed merely because of
the high value and with the intention of seeking early
disposal would only clog the system and block the way
for the genuine commercial disputes which may have to
be entertained by the Commercial Courts as intended
by the lawmakers. In commercial disputes as defined a
special procedure is provided for a class of litigation
and a strict procedure will have to be followed to
entertain only that class of litigation in that
jurisdiction. If the same is strictly interpreted it is not
as if those excluded will be non-suited without any
remedy. The excluded class of litigation will in any
event be entertained in the ordinary civil courts
wherein the remedy has always existed.‖
13. Keeping in mind the aforesaid judgment, this Court shall now look at
the reasoning given by the Plaintiff for filing the instant Suit as one under
the CC Act. The justification for filing the instant Suit as a commercial one,
has been stated at Paragraph No. 39 of the Plaint, which states that the
disputes between the parties arise out of various agreements including the
SHA and the Defendant No. 1 Company being involved in trade and
commerce. Thus, the Plaintiff has relied upon Paragraphs (xii) and (xviii)
under Section 2(1)(c) of the CC Act. The same are being extracted below for
reference:
“2. Definitions.–(1) In this Act, unless the context
otherwise requires,–
xxx
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(c) ―commercial dispute‖ means a dispute arising
out of–
(xii) shareholders agreements;
(xviii) agreements for sale of goods or
provision of services;”
14. Keeping in view that the reliefs sought by the Plaintiff are against the
impugned Letter dated 24.05.2023, contents of which are alleged to be
defamatory and malicious, this Court does not see any dispute which is
commercial in nature.
15. The Suit instituted by the Plaintiff entirely hinges on his claim that
shortly after his resignation from the Defendant No. 1 Company, the
Defendants No. 2 and 3 began targeting the Plaintiff by filing a malicious
police complaint and thereafter addressing the impugned Letter dated
24.05.2023 to the clients of the Defendant No. 1 Company. While
admittedly, the factual narration involves the SHA, coupled with the element
that the Defendant No. 1 Company is involved in the provision of services,
the ultimate point of dispute arose only when the Impugned Letter dated
24.05.2023 was addressed on behalf of the Defendant No. 1 Company to its
clients, which the Plaintiff claims to be defamatory in nature. There is
nothing which can be termed as „commercial‟ in this background. In fact,
even the Plaint does not disclose any dispute which even remotely arises
from any agreement whatsoever. In addition, reading of the Impugned Letter
dated 24.05.2023 also does not suggest any involvement of an agreement.
16. It is further unclear as to on what basis the relief of rendition of
accounts has been sought, when no particulars for the same have been
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provided by the Plaintiff. Even if allegations of embezzlement are made
against the Plaintiff in the Impugned Letter dated 24.05.2023, this Court is
not saddled with the duty to ascertain if any amount in fact has been
embezzled or not. This is for the reason that these aspects would require a
separate adjudication, either by a criminal court or by the specialized
tribunals.
17. As such, this Court is of the considered view that since the Plaint does
not disclose any dispute of commercial nature, this Court lacks jurisdiction
to entertain and decide the matter. Resultantly, the Plaint is ordered to be
returned to the Plaintiff in terms of Order VII Rule 10 of the CPC, for being
presented as a non-commercial suit before the concerned court of competent
jurisdiction, in accordance with law.
18. Resultantly, the Plaint is returned under Order VII Rule 10 of the
CPC, as not being a commercial suit, for being filed as an ordinary suit.
19. Needless to state, the Plaintiff will be entitled to the benefit of Section
14 of the Limitation Act, 1963.
20. The application is allowed.
SUBRAMONIUM PRASAD, J
APRIL 23, 2026
S. Zakir/AP
Signature Not Verified
RAHUL SINGH
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