Case Title: Meta Intelligence Private Limited Vs. Madhur Singhal
Order Date: 10.10.2025
Case Number: CS(COMM) 1091/2025 & I.As. 25211-16/2025
Neutral Citation: 2025:DHC:1091
Name of Court: High Court of Delhi at New Delhi
Name of Hon'ble Judge: Ms. Justice Manmeet Pritam Singh Arora
Facts
In the fast-moving world of artificial intelligence and digital innovation, where ideas and code can make or break a startup, this case unfolds like a tense boardroom drama turned courtroom showdown. Meta Intelligence Private Limited, the plaintiff company, specializes in cutting-edge tech, particularly an AI-powered tool called the Real-time Interactive Digital Human Solution—think of it as sophisticated software that creates lifelike digital interactions, like virtual assistants that feel almost human. The company has two key players: Mr. Anant Haldia, holding 60% shares and serving as a director, and the defendant, Madhur Singhal, with 40% shares and also a director. These two have been partners for 15 years, building the business from the ground up, with the defendant playing a big role in developing this valuable software.
The trouble starts in early September 2025. On September 9, the defendant leaves the company's office in a huff, locking down the main server with a "bitlocker"—a security feature that encrypts the entire system, blocking access to the software and critical data. The next day, September 10, he sends an email resigning from his executive roles but insists he remains a director, clinging to his shareholder rights. This lockout isn't just inconvenient; it's crippling. The company already has a signed licensing agreement with an existing customer, M/s Aptech Limited, for the software, and they're on the verge of sealing a lucrative deal with a prospective client called WPB. Without access, they can't service Aptech, risking damage to their reputation and potential lawsuits for breach, and the WPB opportunity slips away, threatening future revenue. The plaintiff sees this as a deliberate sabotage—breach of fiduciary duties as a director, illegal hoarding of company tech and data, business disruption, and even copyright infringement by potentially misusing the software outside the company. Mr. Haldia tries everything: direct talks, mutual friends mediating, a full month of negotiations—but nothing budges the defendant. Desperate to keep the business afloat, the company files this suit, seeking a permanent injunction to stop the defendant from any further unauthorized use of the software, along with urgent interim relief to regain access. They promise full transparency: share all deal details and accounts with the defendant, since he signed the Aptech agreement himself. The defendant, on his side, claims the bitlocker was just to safeguard his personal files on the office computer, which he left behind, and he's open to helping remove it—but only if his directorship and data privacy are respected.
Procedural Detail
This commercial suit bursts into the Delhi High Court on October 10, 2025, bundled with six interim applications under the Commercial Courts Act, 2015, and the Code of Civil Procedure, 1908 (CPC). First up is I.A. 25213/2025, seeking exemption from mandatory pre-institution mediation under Section 12A of the Commercial Courts Act— the plaintiff argues urgency, as the software lockout is bleeding the business dry. The defendant's counsel, Ms. Ria Yadav, enters appearance on advance notice. The court suggests trying mediation anyway, and both sides agree, so it refers them to the Delhi High Court Mediation and Conciliation Centre for a senior mediator to wrap things up fast, listing it there on October 15 at 3:30 PM. But the court still grants the exemption, citing the Supreme Court's recent ruling in Yamini Manohar v. T.K.D. Keerthi, because interim relief can't wait.
Next, I.A. 25212/2025 asks for a one-week extension under Section 149 CPC to pay court fees—the court allows it, warning the plaint gets rejected under Order VII Rule 1(b) CPC if missed. Then I.A. 25214/2025 seeks four weeks under Section 151 CPC to file a certificate under Section 63(4)(c) of the Bharatiya Sakshya Adhiniyam, 2023 (BSA)—the new evidence law replacing the Indian Evidence Act—and a declaration under Order XI Rule 6(3) CPC for document disclosure; granted as requested. I.A. 25216/2025 wants permission under Section 151 CPC to submit videos on a pen drive—the court directs compliance with Rule 24 of the Delhi High Court (Original Side) Rules, 2018, requiring encrypted, non-editable CDs for the registry to preserve them tamper-free.
The main suit, CS(COMM) 1091/2025, with I.A. 25211/2025 for stay and I.A. 25215/2025 for a receiver, gets registered, summons issued (defendant waives formal service), and timelines set: written statement in 30 days with affidavit of admission/denial of plaintiff's documents, or it's off-record; replication in another 30 days with the same for defendant's docs; costs for unjust denials; inspections per the 2018 Rules. No full trial yet—this is all pre-trial housekeeping. The court hears urgent oral arguments on access to the software, passes the matter for defendant instructions, then at second call, appoints Mr. Mayank Sansanwal (a local commissioner, contact details provided) to visit the plaintiff's office on October 14 at 11:30 AM. His job: facilitate a sit-down between Mr. Haldia and the defendant to remove the bitlocker peacefully, ensuring the computer stays in-office. The defendant must show up and assist, but the plaintiff can't use the access for the WPB deal until the next hearing. Post-removal, the commissioner hands the computer to Mr. Haldia in trust (superdari), with Rs. 75,000 fee on the plaintiff. The defendant objects to the plaintiff's counsel Ms. Ila Sheel due to her relation to Mr. Haldia—she withdraws without prejudice. Next hearing: November 3, 2025. The digital order is certified via the court's portal—no physical copies needed.
Dispute
This isn't your typical corporate spat; it's a high-stakes lockout in a tech firm where access to code equals survival. The plaintiff cries foul: the defendant's bitlocker is a weaponized exit strategy, breaching his director duties under the Companies Act, 2013 (like Sections 166 for good faith and 184 for conflicts), hoarding proprietary software that belongs to the company, disrupting operations with an existing client (Aptech) and killing a golden WPB prospect, and flirting with copyright violation under the Copyright Act, 1957 (Section 14 for exclusive rights). They want immediate unlock for business continuity, promising audits and shares, but fear the defendant might fork the software for his own gain. The defendant fires back: his email was only an executive resignation, not directorship—he's still entitled to protect his 40% stake and personal data on the shared machine. The bitlocker? Just prudence, not sabotage; he's ready to help remove it amicably and even welcomes mediation. But he draws lines: no rushing the WPB deal without his input, and swap out the biased lawyer. The flashpoint is trust—15 years of partnership soured by one dramatic departure, with the software as the battleground. Broader, it's about balancing director rights versus company needs in startups, where personal and professional lines blur, and one key person's walkout can halt everything. Can the court force access without prejudging the merits, or does mediation cool it down first?
Detailed Reasoning Including on Judgement with Complete Citation Referred and Discussed
The court, under Hon'ble Ms. Justice Manmeet Pritam Singh Arora, navigates this with a blend of firmness and fairness, prioritizing business salvage while nudging reconciliation. Starting with mediation exemption under Section 12A Commercial Courts Act, the judge notes the plaintiff's month-long failed attempts at settlement—talks, friends' interventions—making pre-suit mediation futile. Yet, on the court's proactive nudge, both consent to it, so reference to the Mediation Centre with a senior mediator and tight deadline (pre-next hearing). Crucially, exemption is still granted for urgency in interim relief, leaning on the Supreme Court's Yamini Manohar v. T.K.D. Keerthi (2024) 5 SCC 15. There, the apex court held that while mediation is mandatory for non-urgent commercial suits over Rs. 3 lakhs, exceptions apply where delay causes irreparable harm—like here, where software inaccessibility risks client loss and reputational hit, echoing Yamini's stress on "urgency" for injunctions under Order XXXIX CPC. This dual track—mediation plus exemption—shows the court's equity: encourage peace, but don't let urgency suffer.
On procedural apps, reasoning is straightforward efficiency. Court fee extension under Section 149 CPC gets a week's leash, tied to rejection under Order VII Rule 1(b) CPC if missed—standard to prevent abuse while allowing minor slips. The BSA certificate (Section 63(4)(c)) and Order XI Rule 6(3) CPC declaration get four weeks under Section 151 CPC, recognizing evidence prep in tech suits needs time without stalling. Video filing via pen drive/CD invokes Rule 24 Delhi High Court (Original Side) Rules, 2018, mandating hash-encrypted, non-editable formats to ensure integrity—vital in copyright disputes where tampering claims could derail. This upholds digital evidence standards under the BSA, replacing old Evidence Act rigors with modern tech safeguards.
For the suit's core—I.A.s for stay/receiver—the judge hears balanced submissions: plaintiff's dire need (Aptech servicing, WPB jeopardy) versus defendant's cooperative stance (willing unlock, data privacy). No full receiver appointed yet; instead, a tailored Local Commissioner under inherent powers (Section 151 CPC, akin to Order XXVI Rule 9 CPC for commissions). Mr. Sansanwal's role—facilitate October 14 meeting for bitlocker removal—strikes a middle ground: immediate access for existing ops (reputation-preserving), but WPB on hold till November 3, avoiding prejudice. The computer handover to Mr. Haldia in superdari (safe custody) protects evidence, with defendant present to oversee. Fee fixation at Rs. 75,000 on plaintiff is pragmatic, as urgency stems from their suit. The lawyer withdrawal? Voluntarily resolved, sidestepping conflict-of-interest under Bar Council rules (Section 52, no relative representation in family-like disputes). Overall, the order embodies commercial courts' speed (Section 13 timelines) and equity—citations like Yamini reinforce non-arbitrable urgency in IP/tech breaches, where time is the thief. It draws implicitly from precedents like Wander Ltd. v. Antox India (1990) Supp SCC 727 for interim balances (prima facie case, irreparable injury, balance of convenience—all tilting to plaintiff here) and Dorab Cawasji Warden v. Coomi Sorab Warden (1990) 2 SCC 117 for superdari in trust assets. By blending mediation (Section 12A) with commissions, the court prevents escalation, reminding that in director disputes, collaboration trumps confrontation—especially in AI startups where code is king.
Decision
All applications disposed: mediation exemption granted (with reference to Centre); court fee extension for one week (or plaint rejected); BSA/CPC certificates in four weeks; videos filed per Rule 24 (encrypted CD); suit registered, summons issued (waived), pleadings timelines enforced with costs for denials. Local Commissioner appointed for October 14 access facilitation—bitlocker removal for existing client servicing, WPB deal paused; computer in superdari to Mr. Haldia; Rs. 75,000 commissioner fee on plaintiff; defendant to attend. Lawyer withdraws. Next hearing November 3, 2025. Digital order certified.
Suggested Titles for this Legal Analytical Article:
Unlocking Trust: Director Duties and Digital Lockouts in AI Startup Disputes
Bitlocker Battles: Balancing Urgency and Mediation in Commercial Tech Suits
From Code to Court: Interim Relief in Software Sabotage and Fiduciary Breaches
Mediation with a Key: Delhi High Court's Equitable Fix for Locked-Down Legacies
15 Years to Firewall: Navigating Copyright, Access, and Amicable Exits in Partnerships
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation. Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
