Rajeev Saumitra Vs Neetu Singh & Ors (Delhi High Court)
In a significant ruling on January 27, 2016, the Delhi High Court, in the case of Rajeev Saumitra vs Neetu Singh & Ors, addressed crucial aspects of a director’s fiduciary duties under the Companies Act, 2013 and the maintainability of a derivative action by a shareholder. The case, arising from a dispute between estranged spouses who were equal partners in a coaching business, provided clarity on seeking recourse against a director for breaches of duty, particularly in closely held companies.
The case, formally cited as I.A. No. 17545/2015 in CS(OS) No. 2528/2015, involved Rajeev Saumitra (the plaintiff) and Neetu Singh (defendant No. 1), who were both 50% shareholders and directors in Paramount Coaching Centre Pvt. Ltd. (defendant No. 3). The genesis of the dispute lay in the allegation by Rajeev Saumitra that Neetu Singh had breached her fiduciary duties as a director of Paramount by incorporating a competing entity, K.D. Campus Pvt. Ltd. (defendant No. 2), and actively diverting business, students, and resources from Paramount to her new venture. The plaintiff also raised concerns about the unauthorized use of the ‘Paramount’ brand name and goodwill by the defendants.
I.A. No. 17545/2015 was an application filed by the plaintiff under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure, 1908, seeking an interim injunction to restrain the defendants from continuing their competing business, using the ‘Paramount’ mark, and soliciting Paramount’s students and staff.
