Daskalos Technologies Private Limited vs Atul Khosla
- Court
- Bombay High Court
CNR No : HCBM020343872026
arbpl34386-2026-JF.doc
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION (L) NO.34386 OF 2026
Daskalos Technologies Pvt. Ltd.
… Petitioner
Vs.
Atul Khosla
… Respondent
Mr. Darius Khambata, Senior Advocate with Mr. Sharan
Jagtiani, Senior Advocate, Ms. Juhi Mathur, Mr. Ayush
Mitruka, Mr. Ayan Tandon, and Mr. Karan Kaul i/by
Trilegal for the Petitioner.
ATUL
GANESH
KULKARNI
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.11.03
11:32:23 +0530
Mr. Rakeshwar Sood, Senior Advocate with Mr. Vivek
Kohli, Senior Advocate, Mr. Arjun Lall, Mr. Mayank
Samuel, Mr. Neelanshu Roy, and Mr. Nikhil Aswani i/by
Mr. Mayank Samuel for the Respondent.
CORAM : AMIT BORKAR, J.
RESERVED ON : OCTOBER 29, 2026.
PRONOUNCED ON : NOVEMBER 3, 2026
JUDGMENT:
1. By filing the present Petition, the Petitioner seeks urgent ad-
interim and interim protection under Section 9 of the Arbitration
and Conciliation Act, 1996. The protection is sought until the
arbitral tribunal is constituted and arbitration proceedings
commence. The dispute arises out of the Employment Agreement
dated 1 July 2025 entered into between the Petitioner, Daskalos
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Technologies Private Limited, and the Respondent, Mr. Atul Khosla.
Under this Agreement, the Respondent was appointed as the Chief
Executive Officer (CEO) of the Petitioner Company. The Petitioner
contends that, for the reasons stated in the Petition, the
Employment Agreement is void from its very beginning. It has
accordingly called upon the Respondent to take necessary steps for
his removal as CEO. However, the Respondent has refused to
cooperate. According to the Petitioner, his refusal is causing serious
and irreparable harm to the Company.
2. The Petitioner states that the following facts led to the filing
of the present Petition. The Petitioner and the Respondent entered
into the Employment Agreement dated 1 July 2025, which became
effective from 27 January 2026. On 23 September 2026, the
University Grants Commission (UGC), in response to a request
made by the Petitioner's Advocate, issued a clarification that the
Respondent could not work with a private company while
continuing as the whole-time Vice-Chancellor of Shoolini
University of Biotechnology and Management Sciences (Shoolini
University). Thereafter, on 29 September 2026, the Petitioner
issued a letter to the Respondent communicating the decision of its
Board of Directors. The letter was signed by all the directors who
were entitled to vote on the matter. By that letter, the Petitioner
stated three separate and alternative grounds for bringing the
Respondent's employment as CEO to an end. First, the
Employment Agreement was void from the beginning under
Section 23 of the Indian Contract Act, 1872, because its
performance would defeat Regulation 6 of the First Statutes of
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Shoolini University of Biotechnology and Management Sciences,
Himachal Pradesh, 2010. The said provision requires the Vice-
Chancellor to be a “whole time salaried officer”. Secondly, and in
the alternative, the Petitioner terminated the Employment
Agreement with immediate effect on account of the Respondent's
breaches of Clauses 12.4 and 12.5. These clauses require him to
devote substantial time to the Petitioner Company and restrict him
from accepting another similar leadership or managerial position.
Thirdly, and in the alternative, the Petitioner claimed that the
Agreement stood rescinded under Section 19 of the Contract Act.
According to the Petitioner, the Respondent had made incorrect
representations under Section 18 that he was eligible to enter into
the Employment Agreement and that his employment with the
Petitioner would not violate or conflict with any applicable law.
3. On 30 September 2026, the Respondent rejected the
Company's letter and stated that he “continue(s) to hold the office
as CEO of the Company”. The Petitioner replied on 2 October 2026
and informed him that he had no authority to act or represent
himself as the CEO, employee or authorised representative of the
Company. The Respondent did not reply to this communication.
Since the Respondent continued to refuse to accept the cessation
of his employment as CEO, the Petitioner filed the present Petition
under Section 9 of the Arbitration and Conciliation Act, 1996. In
the present proceedings, the Petitioner is seeking certain limited
interim protections.
4. Mr. Darius Khambata, learned Senior Advocate appearing for
the Petitioner, submitted that the Petitioner has a strong prima
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facie case in its favour. He advanced the following grounds in
support of the Petition. Unless the Court grants protection, the
Respondent may continue to represent himself as the CEO of the
Petitioner Company. This would effectively amount to enforcing
the Employment Agreement through an order of specific
performance. Such enforcement of a personal service contract is
prohibited under Sections 14(c) and 41(e) of the Specific Relief
Act, 1963. He pointed out that the Respondent has not even
commenced arbitration proceedings to challenge the termination
of his employment. The Petitioner has brought the Respondent's
employment to an end on three independent grounds. One of
these grounds is the breach of important conditions of the
Employment Agreement, particularly Clauses 12.4 and 12.5. These
clauses require the Respondent to devote substantial time,
resources, knowledge, experience and efforts towards building the
Petitioner Company. They restrict him from or indirectly becoming
involved in another venture without obtaining the consent of
EruLearning Solutions Private Limited (Eruditus). It is well settled
that an employee whose services have been terminated cannot
obtain reinstatement through an injunction. An employee cannot
force an unwilling employer to continue the employment
relationship. In the present case, there is no dispute that the
Respondent was working as the CEO of the Petitioner Company
under a private employment contract. Therefore, the relationship
between the parties is governed by the ordinary principles
applicable to a master and servant relationship.
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5. Mr. Khambata submitted that even if the Respondent claims
that his termination was unlawful, which the Petitioner denies, his
remedy would be to claim damages and not reinstatement. He
relied upon the decision of the Supreme Court in Executive
Committee of Vaish Degree College v. Lakshmi Narain, (1976) 2
SCC 58. In that decision, the Supreme Court recognised only three
exceptions to the general rule that a contract of employment
cannot be enforced by staying its termination. These exceptions
relate to civil servants protected under Articles 309 and 311 of the
Constitution of India, workmen protected under industrial laws,
and employees of statutory bodies whose removal is contrary to
mandatory statutory provisions. According to the Petitioner, none
of these exceptions applies to the Respondent. The decisions
referred to in Schedule A to the written submissions show that
Courts have consistently refused to grant injunctions which would
have the effect of continuing a private employment contract. This
principle applies even where an employee alleges violation of
procedure or breach of the principles of natural justice.
6. Learned Senior Advocate submitted that the decision to
terminate the Respondent's employment was taken by all the
directors who were entitled to vote on the matter. Therefore, the
decision of those directors was binding on the Company. In any
event, the Board of Directors subsequently considered and
confirmed the issuance of the Company's letter at its meeting held
on 19 October 2026. Fifthly, it is an admitted position that the
Vice-Chancellor of Shoolini University is a “whole-time salaried
officer” under Section 6 of the First Statutes of 2010. The Vice-
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Chancellor is the principal executive and academic officer of the
University and exercises general supervision and control over its
affairs. Similarly, a Chief Executive Officer is treated as “whole-
time managerial personnel” under Section 203 of the Companies
Act, 2013. The Respondent has not explained how he could
perform the duties of both these full-time positions simultaneously,
particularly when the two institutions are situated at different
places, namely Mumbai and Solan in Himachal Pradesh. According
to the Petitioner, holding both positions at the same time is
contrary to the requirement that each position must be performed
on a whole-time basis. It results in violation of the First Statutes as
well as the Companies Act. Every day on which the Respondent
continued to perform both roles amounted to a continuing
statutory violation. His conduct amounts to a breach of Clauses
12.4 and 12.5 of the Employment Agreement.
7. Learned Senior Advocate relied upon Clause 1.1 of the
Employment Agreement. Under this clause, the expression
“Applicable Law” includes any “regulation,...
direction,...requirement,...or any restriction or condition, or any
similar form of decision of, or interpretation or pronouncement
having the force of law of any Governmental Authority having
jurisdiction over the matter in question”. The expression
“Governmental Authority” includes the UGC. According to the
Petitioner, the Respondent had given representations and
warranties that he was eligible to hold the position of CEO and
that his appointment would not violate any applicable law. In view
of the UGC's clarification dated 23 September 2026, those
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representations and warranties were incorrect.
8. The Petitioner submitted that the UGC is an expert statutory
body entrusted with the responsibility of maintaining standards of
teaching, examination and research in universities. It has the
authority to regulate university education and take appropriate
steps for maintaining those standards. Therefore, Courts should
ordinarily not sit in appeal over the opinion expressed by the UGC
on matters within its expertise. In support of this submission,
reliance was placed on Rajbir Singh Dalal v. Chaudhary Devi Lal
University, (2008) 9 SCC 284. The UGC, by its letter dated 23
September 2026, stated that “it would not be permitted” for the
Respondent to work with a private company while continuing as
Vice-Chancellor.
9. The Petitioner submitted that the Respondent's claim that he
had obtained “prior permission” from the Chancellor of Shoolini
University under Section 38(12) of the First Statutes is incorrect
and doubtful. The Petitioner pointed out that this alleged
permission came to light only during the present proceedings.
More importantly, Section 38(12) applies to employees of the
University and not to its officers. Under Section 6 of the First
Statutes and Section 11 of the Shoolini University of Biotechnology
and Management Sciences (Establishment and Regulation) Act,
2009, the Vice-Chancellor is an officer of the University.
10. The Petitioner submitted that, in its reply dated 2 October
2026, it had asked the Respondent to produce the alleged prior
permissions. However, the Respondent did not provide them at
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that stage. The permissions on which he now relies in his Reply
have been issued by the Chancellor of Shoolini University, who is
his father, Mr. P.K. Khosla. In any event, according to the Petitioner,
the Chancellor has no power under the Shoolini University Act or
the First Statutes to grant such an exemption to the Vice-
Chancellor. After setting out the above grounds, the Petitioner
proceeded to explain the legal and reasons for which it claims that
the Respondent's employment came to an end.
11. The Petitioner submitted that the Employment Agreement is
void from the beginning under Section 23 of the Indian Contract
Act, 1872. Section 23 provides that the consideration or object of
an agreement is unlawful if allowing the agreement to operate
would defeat the provisions of any law. An agreement having such
an unlawful object is void. In this regard, the Petitioner relied upon
the UGC letter, which clarified that, having regard to Section 6 of
the First Statutes notified by the Department of Higher Education,
Government of Himachal Pradesh, through Notification No. EDN-
A-Ka(3)-14/2009, “being employed by a private company whilst
being a vice chancellor would not be permitted.” The Respondent
was working as the Vice-Chancellor of Shoolini University when
the Employment Agreement was executed. He continues to hold
that position even today. Therefore, according to the Petitioner,
entering into and performing the Employment Agreement would
defeat the provisions of the First Statutes. The Petitioner
contended that performance of the Agreement was contrary to
Section 203(3) of the Companies Act, 2013.
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12. The Petitioner submitted that the principal legal provision
violated by the Employment Agreement is the First Statutes of
Shoolini University. These First Statutes are subordinate legislation
issued by the Department of Higher Education, Government of
Himachal Pradesh, under Section 26 of the Shoolini University Act.
Section 26(b) authorises the First Statutes to provide for various
matters, including “the terms and conditions of appointment of the
Vice-Chancellor and his powers and functions”. Section 6(1) of the
First Statutes provides that the Vice-Chancellor shall be a “whole
time salaried officer”. According to the Petitioner, this is a
mandatory requirement. There is no provision in the First Statutes
permitting an exemption from this requirement. Therefore, the
Respondent could not lawfully accept another whole-time position
while continuing as Vice-Chancellor. The Petitioner submitted that
the Respondent's reliance upon Section 38(12) of the First Statutes
is misplaced. That provision applies only to employees of the
University and not to officers. The First Statutes themselves make
a distinction between employees and officers. The Vice-Chancellor
is described as an officer under Section 6 of the First Statutes and
Section 11 of the Shoolini University Act. Although Section 38(12)
permits an employee to take up other employment after obtaining
prior written permission, there is no similar provision allowing an
officer of the University to do so. Therefore, according to the
Petitioner, the permission allegedly granted by the Chancellor
under Section 38(12) has no legal validity and cannot authorise
the Respondent to hold another whole-time position.
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13. The Petitioner submitted that the distinction between a Vice-
Chancellor and an ordinary employee has been recognised by
Courts. Reliance was placed on the decision of the Madras High
Court in P. Vijayan v. The Union of India and Ors., Writ Petition
Nos. 12768 and 12769 of 2018, particularly paragraphs 78 to 81
and 91. Reliance was placed on Rajendra Kumar Nagda v. State of
Rajasthan & Ors., 2018(4) RLW 2857 (Raj.), particularly
paragraph 19. In that case, the Court held that “a teacher,
employee and an officer are three separate categories”. The Court
recognised that the statutory protection available to a teacher or
employee does not extend to an officer such as a Vice-Chancellor.
On the basis of these decisions, the Petitioner submitted that the
Respondent could not continue as Vice-Chancellor and at the same
time accept another appointment which independently requires his
full-time involvement. Section 203(1) of the Companies Act, 2013
treats a Chief Executive Officer as a “whole-time key managerial
personnel”. Thus, according to the Petitioner, both positions
require full-time engagement and are situated at different places.
The Respondent could not lawfully perform both positions
simultaneously.
14. The Petitioner relied upon the provisions of the UGC Act,
1956, apart from the First Statutes and the Companies Act. The
UGC is a statutory body established under the UGC Act. Under
Section 12 of that Act, it is responsible for promoting and
coordinating university education and maintaining standards of
teaching, examination and research in universities throughout
India. The Petitioner submitted that the UGC is the principal
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statutory authority entrusted with regulating and maintaining
standards of university education in the country.
15. According to the Petitioner, the UGC letter dated 23
September 2026 explains the correct meaning and effect of the
First Statutes. It reflects the interpretation given by the expert
statutory authority responsible for regulating university education.
The Petitioner submitted that Courts should not ordinarily
interfere with such an expert opinion. In support of this
submission, reliance was placed on the decision of the Supreme
Court in Rajbir Singh Dalal v. Chaudhary Devi Lal University,
(2008) 9 SCC 284.
16. Without prejudice to its contention that the Employment
Agreement is void from the beginning, the Petitioner submitted
that the Agreement was validly terminated because the
Respondent had violated its important conditions.
17. Clause 12.4 requires the Respondent to:
“[...] dedicate a substantial portion of his time, resources,
expertise, experience and effort in building the Company”.
18. Clause 12.5 places restrictions on the Respondent from
becoming involved in other businesses or ventures without the
required consent. The relevant portion of the clause reads as
follows:
“For the avoidance of doubt, it is hereby clarified that
nothing under Clauses 12.3(b) and 12.3(d), shall apply to
the functioning and reasonable involvement of the Executive
in the Identified Entities, as long as the Executive is not, or
indirectly, acting in the capacity of a 'chief executive officer
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(or any other similar leadership or managerial position) at
any of these organizations and provided that such
involvement, does not adversely impact, affect or impede
any of the obligations, responsibilities, undertakings and
covenants of the Executive towards the Company and/or
Eruditus, as set forth in the Transaction Documents. Save
and except as provided hereinabove, the Executive agrees
that, on and from the Execution Date, he shall not, or
indirectly, establish, launch, promote, or otherwise be
involved in any manner in any other business, brand or
venture other than the Business without obtaining the
consent of Eruditus…”
19. The Petitioner submitted that the Respondent had violated
Clauses 3.1(e) and 3.1(h) of the Employment Agreement, which
require him to comply with all applicable laws. Under Clause 2.3,
the Respondent was assigned to the Mumbai office of the
Petitioner Company. His conduct is stated to be contrary to the
representations and warranties given under Clauses 4.1(a), 4.1(c),
4.1(d), 4.1(e)(iv) and 4.1(f). Under these provisions, the
Respondent had represented that he had the necessary authority to
enter into the Employment Agreement. He had represented that he
was not disqualified under any applicable law from being
appointed as a Director or key managerial employee. Further, he
had assured the Petitioner that entering into and performing the
Employment Agreement would not violate any law, conflict with
any other agreement binding upon him, or require any additional
consent or approval from a Governmental Authority or any other
authority. The Petitioner relied upon Clause 4.1(g). Under that
clause, the Respondent had represented that, except for the
Identified Entities, he did not hold any other interests,
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directorships, securities, or shares. According to the Petitioner,
while making these disclosures, the Respondent did not disclose
that he was working as a whole-time Vice-Chancellor of the
University. He did not disclose that he had allegedly obtained an
exemption or permission from the Chancellor.
20. The Petitioner submitted that the breaches of Clauses 12.4
and 12.5 are serious because they amount to breaches of the
“Material Provisions” of the Employment Agreement. The
Agreement adopts the definition of Material Provisions contained
in the Shareholders Agreement dated 10 January 2025 (SHA).
Under the SHA, the provisions relating to non-compete and non-
solicitation are treated as Material Provisions. Clauses 12.4 and
12.5 of the Employment Agreement fall within that category.
Therefore, according to the Petitioner, violation of these clauses
gives it the right to terminate the Agreement in accordance with its
terms.
21. The Petitioner disputed the Respondent's contention that his
appointment as CEO was not an exclusive employment
arrangement. It submitted that this defence cannot be accepted for
three reasons. Firstly, Section 203 of the Companies Act, 2013
treats the CEO as whole-time key managerial personnel. Secondly,
Clause 12.4 requires the Respondent to devote a “substantial
portion of his time” to the Petitioner Company. This requirement is
inconsistent with his simultaneous whole-time position as Vice-
Chancellor. Thirdly, Clause 12.5 restricts him from being or
indirectly involved in any other business or venture, except as
permitted under the Agreement. Thus, according to the Petitioner,
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the Respondent cannot avoid his obligations by describing the CEO
appointment as non-exclusive.
22. On the basis of these breaches, the Petitioner submitted that
it was entitled to terminate the Employment Agreement with
immediate effect. It relied upon two reasons. Firstly, Clause 9.3(a)
permits the Board of the Petitioner Company to terminate the
Agreement immediately if the Respondent commits a breach of any
Material Provision and fails to cure that breach within 30 days.
Secondly, the breaches in the present case cannot be cured because
the Respondent cannot continue to hold two positions which
independently require his whole-time involvement. The Petitioner
pointed out that the Respondent has never suggested that he is
willing to resign from his position as Vice-Chancellor. He has not
made any such statement in his reply dated 30 September 2026 to
the Company's letter, his affidavit-in-reply dated 22 October 2026
or his sur-rejoinder dated 28 October 2026. Therefore, according
to the Petitioner, the breach continues and cannot be remedied.
23. The Petitioner next dealt with the Respondent's main
objection that there was no Board resolution authorising the
issuance of the Company's letter dated 29 September 2026.
According to the Petitioner, this objection is without substance for
two reasons. Firstly, the decision to terminate the Employment
Agreement and issue the Company's letter was taken by the Board
of Directors. The letter represents the decision of the Board and
has the same effect as a Board resolution. The Petitioner Company
has three directors on its Board, namely Mr. Ashwin Damera
Venkata, Mr. Chaitanya Kalipatnapu and the Respondent himself.
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The Company's letter dated 29 September 2026 was signed by Mr.
Damera and Mr. Kalipatnapu, who were two out of the three
directors.
24. The Petitioner submitted that the Respondent was not
entitled to participate or vote on any decision concerning his own
employment or the Employment Agreement. This restriction arises
under the SHA, the corresponding provisions of the Articles of
Association and Section 166(4) of the Companies Act, 2013.
Therefore, only the other two directors were entitled to take the
decision. Since both of them signed the Company's letter, their
decision was valid and binding on the Company. According to the
Petitioner, their unanimous decision must be treated as a valid
decision of the Board. In support of this submission, the Petitioner
relied upon Mahima Datla v. Dr. Renuka Datla, (2022) 10 SCC 258.
In that case, the Supreme Court referred to the Duomatic Principle
explained by Buckley J. in In Re: Duomatic Ltd. , (1969) 2 Ch. 365.
The principle was stated as follows: “where it can be shown that
all shareholders who have a right to attend and vote at a general
meeting of the company assent to some matter which a general
meeting of the company could carry into effect, that assent is as
binding as a resolution in general meeting would be.”
25. The Petitioner submitted that the principle laid down in
Duomatic recognises that strict compliance with the requirement
of passing a formal resolution may not always be necessary. Where
all persons entitled to participate and vote have given their
unanimous consent, such consent may have the same effect as a
formally passed resolution. A similar view was taken in Runciman
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v. Walter Runciman plc, (1992) BCLC 108419. In that case, the
Court accepted that the terms of a director's service agreement
could be changed without a formal Board resolution where the
directors had acted unanimously. The Court observed:
“[...] That directors, provided they act unanimously, can act
informally appears established Accordingly these authorities
provide that the unanimous agreement is as good as a formal
resolution passed by a majority.”
26. On this basis, the Petitioner submitted that the unanimous
decision of the two directors entitled to vote was sufficient to make
the Company's letter valid.
27. According to the Petitioner, Mr. Damera and Mr. Kalipatnapu
constituted all the directors who were entitled to vote on the
question of the Respondent's employment. Their decision was valid
even in the absence of a separate formal Board resolution.
Secondly, the Petitioner submitted that, even assuming that any
formal defect existed when the Company's letter was issued, the
same was subsequently cured. The Board of Directors ratified the
issuance of the Company's letter at its meeting held on 19 October
2026. This fact was stated in the Petitioner's Additional Affidavit
dated 22 October 2026. The Petitioner relied upon decisions of the
Supreme Court recognising that an action initially taken without
proper authority can subsequently be ratified by the competent
authority.
28. The Petitioner relied upon Maharashtra State Mining Corpn.
v. Sunil, 2006 SCC 5 962. In that case, the Managing Director had
issued an order dismissing certain employees on 25 January 1991,
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although he did not have the necessary authority to do so.
Subsequently, on 20 February 1991, the Board of Directors ratified
the action of the Managing Director. The Supreme Court
recognised the principle of ratification and observed:
“[...] Ratification is definition means the making valid of an
act done. The principle is derived from the Latin maxim
ratihabitio mandato aequiparatur, namely, “a subsequent
ratification of an act is equivalent to a prior authority to
perform such act”. ratification assumes an invalid act which
is retrospectively validated”.
29. Relying upon this decision, the Petitioner submitted that
even if the Company's letter suffered from any initial defect, the
subsequent decision of the Board on 19 October 2026 made the
action valid with effect from the original date.
30. The Petitioner relied upon Sri Parmeshwari Prasad Gupta v.
Union of India, 1973 SCC 221. In that case, the services of a
General Manager were terminated by a letter dated 17 December
1953 on the basis of a defective Board resolution. The Supreme
Court found that the earlier resolution suffered from a defect.
However, the Board subsequently confirmed and ratified the
termination at its meeting held on 23 December 1953. The Court
held that an action initially taken without proper authority on
behalf of a Company could be subsequently approved by the
competent authority. Such ratification would operate
retrospectively and relate back to the date of the original action.
The Petitioner submitted that the subsequent ratification by its
Board was sufficient to cure any alleged defect in the issuance of
the Company's letter.
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31. The Petitioner submitted that the Respondent has raised
three objections to the ratification made at the Board meeting
dated 19 October 2026. According to the Petitioner, none of these
objections is valid. Firstly, the Respondent contends that the Board
meeting was convened at shorter notice. The Petitioner submitted
that the shorter notice was permitted under Standard 1.3.11 of
Secretarial Standard-1, which deals with the conduct of Board
meetings. That provision allows a meeting to be held at shorter
notice if the majority of the directors agree. According to the
Petitioner, the shorter notice was in accordance with the
Employment Agreement, the Articles of Association and the SHA.
Secondly, the Respondent relies upon Section 200 of the Contract
Act. The Petitioner submitted that this provision has no application
because the majority of the directors who took the decision were
not acting without authority. Further, the Respondent cannot be
treated as a third party for the purpose of applying that provision.
Thirdly, the Petitioner disputed the Respondent's reliance upon
Rule 8 of the Companies (Meetings of Board and its Powers) Rules,
2014. It submitted that the said Rule does not make the Company's
letter invalid.
32. In support of this argument, the Petitioner relied upon
Sharif-ud-Din v. Abdul Gani Lone, (1980) 1 SCC 403. The Supreme
Court held that the use of the word “shall” in a provision does not
mean that the provision is mandatory. A procedural requirement
may be treated as directory where the defect can be corrected at a
later stage and where no public duty or other legal requirement is
violated. According to the Petitioner, Rule 8 must be understood in
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its proper context and is directory in nature. In any event, even if
the Respondent's objection is considered, the Board resolution
dated 19 October 2026, by which the Company's letter was
ratified, complies with Rule 8.
33. The Petitioner pointed out that the Respondent had
challenged the notice convening the Board meeting dated 19
October 2026 and the decisions taken at that meeting before the
National Company Law Tribunal, Mumbai. He had filed a petition
under Sections 241 and 242 of the Companies Act and an
application challenging the notice and the decisions taken at the
meeting. However, both challenges were dismissed by the NCLT on
28 October 2026.
34. Without prejudice to its earlier submissions, the Petitioner
submitted that the Employment Agreement stands rescinded under
Section 19 of the Contract Act. According to the Petitioner, its
consent to enter into the Agreement was obtained because of
incorrect representations made by the Respondent. Therefore, the
Petitioner is entitled to avoid the Agreement under Section 19.
35. The Petitioner relied upon the following alleged
misrepresentations. Firstly, the representations made by the
Respondent under Clauses 4.1(a), 4.1(c), 4.1(d), 4.1(e)(i), 4.1(e)
(ii), 4.1(f) and 4.1(g) of the Employment Agreement, as referred
to earlier. Secondly, in his consent letter dated 25 July 2025
agreeing to act as CEO, the Respondent represented that he was
eligible to hold the position of CEO. He represented that he was
not disqualified, debarred or otherwise prevented under any
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applicable law, rule or regulation from being appointed or serving
as CEO of the Petitioner. Further, he assured the Petitioner that he
would comply with all applicable provisions of the Companies Act,
2013. Thirdly, in his appointment letter dated 5 August 2025, the
Respondent again represented that he was eligible to hold the
position of CEO and confirmed that he was “[...] not, under any
applicable laws, rules, or regulations, prevented or disqualified
from holding such position”. 34. The Petitioner submitted that its
consent to the Employment Agreement was obtained on the basis
of these representations. Since the representations were incorrect,
the Agreement became voidable at the option of the Petitioner
under Section 19 of the Contract Act. The Petitioner exercised that
option and rescinded the Agreement.
36. The Petitioner explained why the limited interim reliefs
sought in the present Petition should be granted. In respect of
Prayer Clause (a), the Petitioner seeks an order restraining the
Respondent from representing himself before any third party or
authority as the CEO, employee or authorised signatory of the
Petitioner Company. The purpose of this relief is to prevent the
Respondent from continuing to exercise or claim authority on
behalf of the Company after cessation of his employment. The
Petitioner submitted that such protection is necessary for several
reasons. Firstly, in reply to the Company's letter informing him that
he should not represent himself as its CEO, employee or authorised
representative, the Respondent stated that he “continue to hold
office as CEO of the Company”. Secondly, the Respondent
continues to describe himself as the CEO of the Petitioner
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Company on his LinkedIn profile. This is a public platform used by
clients, investors, business partners and foreign universities.
Therefore, persons dealing with the Company may continue to
believe that the Respondent has authority to represent it. Thirdly,
despite his interim suspension from May 2026, the Respondent
appeared without prior intimation at an event organised by the
Company and represented himself as its CEO. The Petitioner
submitted that every day on which the Respondent continues to
represent himself as CEO creates serious difficulties for the
Company. He may issue communications or make commitments in
the Company's name without any authority. This may adversely
affect the Company's relationship with investors, employees,
regulatory authorities and foreign university partners. It may
create confusion within the organisation regarding the persons
who are authorised to take decisions and issue instructions on
behalf of the Company. Therefore, the Petitioner submitted that an
immediate restraint is necessary.
37. In support of Prayer Clause (c), the Petitioner sought an anti-
suit injunction against the Respondent. It submitted that the relief
is limited in nature. The Petitioner does not seek to prevent the
Respondent from approaching any forum which is available to
him. Its request is only to restrain him from instituting or
continuing proceedings “in a manner that circumvents or defeats
the arbitration agreement between the parties”. According to the
Petitioner, the Respondent's conduct amounts to a breach of the
arbitration agreement contained in Clause 14.3 of the Employment
Agreement. The purpose of the injunction is to ensure that the
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agreed arbitration process is not defeated by parallel proceedings
before other forums.
38. The Petitioner explained the alleged breach of the arbitration
agreement by the Respondent. The Petitioner relied upon the
decision of this Court in Vinod Kumar Saraf v. Villayati Ram Mittal,
Commercial Arbitration Petition No. 979 of 2026. According to the
Petitioner, this decision explains when the Court may exercise its
powers under Section 9 of the Arbitration Act to grant protection
against proceedings before another forum. Mere overlap between
the subject matter of another proceeding and the dispute covered
by an arbitration agreement may not be sufficient to grant an
injunction. However, the Court can grant such protection where
proceedings are initiated or continued in breach of, or for the
purpose of avoiding, the arbitration agreement and where their
continuation may affect the subject matter of arbitration. The
Petitioner submitted that the Respondent has acted contrary to the
arbitration agreement and continues to do so. The disputes
relating to the cessation of his position as CEO are matters arising
under the Employment Agreement and are required to be resolved
through arbitration. According to the Petitioner, the Respondent's
conduct shows that he has approached several forums in relation
to the same subject matter which is covered by the arbitration
agreement under Clause 14.3. These proceedings include the
petition filed before the NCLT and the application under Section
94 of the Code of Civil Procedure filed in the civil suit before the
Himachal Pradesh High Court. The Petitioner described the latter
application as the “Anti Suit Application”. The Petitioner pointed
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out that, in the NCLT proceedings, the Respondent sought an order
restraining the Petitioner from removing any key managerial
personnel. He sought a direction to “immediately restore the
access of the Petitioner’s official email ID”. According to the
Petitioner, these prayers were intended to prevent the Petitioner
from giving effect to the cessation of the Respondent's employment
under the Employment Agreement. The reliefs sought in those
proceedings overlapped with the subject matter of the present
Petition, particularly Prayer Clauses (e) and (f).
39. The Petitioner stated that the NCLT petition was dismissed
on 28 October 2026. In this regard, it relied upon its Second
Additional Affidavit dated 27 October 2026. The Petitioner pointed
out that, through the Anti Suit Application filed before the
Himachal Pradesh High Court, the Respondent has sought an order
restraining the Petitioner from “instituting and continuing with any
parallel proceedings” before any Court of law. This prayer includes
the present proceedings filed by the Petitioner before this Court.
The Petitioner submitted that the Respondent's own Reply to the
present Petition makes his intention clear. The Respondent has
questioned the territorial jurisdiction of this Court and has
confirmed that the Anti Suit Application was filed with the object
of obtaining “an injunction against the continuation of the present
proceedings before this Court.” According to the Petitioner, this
conduct shows that the Respondent is attempting to prevent the
dispute from being decided through the arbitration mechanism
agreed between the parties.
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40. The Petitioner submitted that the Respondent has made an
incorrect argument in his Reply and sur-rejoinder regarding the
effect of the Petitioner's application under Section 45 of the
Arbitration Act before the Himachal Pradesh High Court. The
Respondent contends that, by filing an application under Section
45 in the civil suit, the Petitioner has “consciously not only
submitted to the jurisdiction of the High court of Himachal
Pradesh at Shimla, but had precluded from invoking the
jurisdiction of this Court”. According to the Petitioner, this
argument is contrary to the purpose and scheme of Section 45. An
application under that provision is filed to object to the Court
entertaining the dispute and to seek a reference of the parties to
arbitration in accordance with their agreement. By filing such an
application, the Petitioner is asserting that the civil Court should
not decide the dispute. It cannot be said that the Petitioner has
accepted the jurisdiction of that Court. The Respondent's
argument, according to the Petitioner, reverses the very purpose
for which Section 45 is enacted. The Petitioner submitted that the
conduct of the Respondent in initiating parallel proceedings is
evident from the relief sought in the Anti Suit Application. In that
application, the Respondent has sought initiation of contempt
proceedings against Mr. Ashwin Damera, who is the authorised
representative of the Petitioner Company, merely because he filed
the present Petition before this Court. According to the Petitioner,
this is another indication of the attempt to obstruct the
proceedings initiated in accordance with the arbitration
agreement.
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41. The Petitioner next addressed the Respondent's objection
that the disputes raised in the present Section 9 Petition and the
proposed arbitration are not arbitrable. The Respondent contends
that the dispute concerns his simultaneous positions as Vice-
Chancellor of Shoolini University and CEO of the Petitioner
Company. Since the UGC and Shoolini University are connected
with the issue, according to him, the dispute cannot be decided
through arbitration. The Petitioner submitted that this objection is
incorrect. The mere fact that the dispute refers to a statutory
authority or an educational institution does not make every
dispute arising from the Employment Agreement non-arbitrable. In
support of this submission, the Petitioner relied upon Vidya Drolia
v. Durga Trading Corporation, (2021) 2 SCC 1. In that decision,
the Supreme Court laid down four tests for deciding whether a
dispute is not capable of being decided through arbitration. The
tests are as follows:
(i) Whether the dispute relates to rights in rem, rather
than rights in personam.
(ii) Whether the dispute affects the rights of third parties
or has an effect on persons who are not parties to the
dispute.
(iii) Whether the dispute involves the exercise of sovereign
or public functions.
(iv) Whether the statute or by necessary implication
excludes such disputes from arbitration.
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42. The Petitioner relied upon A. Ayyasamy v. A. Paramasivam,
(2016) 10 SCC 386. The Supreme Court recognised that disputes
concerning rights in personam are ordinarily capable of being
referred to arbitration, unless their decision is exclusively reserved
for a particular statutory forum. Applying these principles, the
Petitioner submitted that none of the four tests laid down in Vidya
Drolia is satisfied in the present case. Firstly, the dispute arises out
of the Employment Agreement between the Petitioner and the
Respondent. It concerns their individual rights and obligations. It
is a dispute relating to rights in personam and not rights in rem.
Secondly, the Petitioner is not seeking any declaration that the
Respondent's appointment as Vice-Chancellor of Shoolini
University is invalid. Nor is it seeking any relief against Shoolini
University or the UGC. The dispute is limited to the Respondent's
employment as CEO of the Petitioner Company. Thirdly, the
question whether the Respondent's employment as CEO should
continue does not involve the exercise of any sovereign or public
function. Fourthly, the Respondent has not pointed out any
statutory provision which excludes disputes under the Employment
Agreement from arbitration. He has not identified any provision
which requires such disputes to be decided exclusively by a
particular statutory authority. The Petitioner submitted that the
disputes are arbitrable and must be resolved in accordance with
the arbitration agreement.
43. The Petitioner next addressed the Respondent's objection
regarding the territorial jurisdiction of this Court. In his Reply and
sur-rejoinder, the Respondent has contended that the Himachal
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Pradesh High Court is the proper forum for deciding disputes
concerning the termination of the Employment Agreement.
According to him, this Court does not have territorial jurisdiction
to entertain the present Petition. The Petitioner disputed this
objection and submitted that this Court has jurisdiction for the
following reasons. The Employment Agreement was executed in
Mumbai. Under Clause 2.3 of the Agreement, the Respondent was
assigned to the Mumbai office of the Petitioner Company. Further,
the Respondent's appointment letter was countersigned in
Mumbai. According to the Petitioner, these facts establish that a
substantial part of the cause of action arose within the territorial
jurisdiction of this Court. No part of the cause of action arose in
Himachal Pradesh. Therefore, the objection raised by the
Respondent is liable to be rejected.
44. The Petitioner relied upon the principles laid down by the
Supreme Court in Modi Entertainment Network v. W.S.G. Cricket
Pte. Ltd., (2003) 4 SCC 341. According to the Petitioner, the three
requirements for granting an anti-suit injunction are satisfied in
the present case. Firstly, the Respondent is subject to the personal
jurisdiction of this Court because the Employment Agreement was
executed and was required to be performed in Mumbai. Secondly,
if the injunction is refused, the agreed arbitration mechanism may
be defeated. This would cause injustice to the Petitioner because
the Respondent would be permitted to continue proceedings in
other forums in relation to the same dispute. Thirdly, the principle
of comity between Courts must be respected. However, an
injunction directed against a person who is subject to the
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jurisdiction of this Court does not amount to interference with the
functioning of another Court. The Petitioner submitted that the
present case satisfies all the requirements for granting an anti-suit
injunction. The Petitioner submitted that, if the Respondent is not
restrained, he may continue to initiate or pursue parallel
proceedings before different Courts. This would defeat the
arbitration agreement and may result in several proceedings and
inconsistent decisions on the same question, namely whether his
employment as CEO has come to an end. On the other hand, the
Respondent would suffer no prejudice if he is directed to pursue
his remedies through arbitration, which is the dispute resolution
mechanism agreed upon by both parties. Therefore, according to
the Petitioner, granting the injunction would protect the agreed
procedure without taking away any legitimate remedy available to
the Respondent.
45. The Petitioner submitted that an injunction is necessary to
prevent the Respondent from making statements which may
damage its reputation. According to the Petitioner, its
apprehension is supported by the Respondent's recent conduct.
The Respondent made a public post on LinkedIn, which is a
platform having more than 74,000 followers. In that post, he
stated that his most recent 'startup' had been 'hijacked'. The
Petitioner contends that the statement refers to the Petitioner
Company, which is shown as his venture on his LinkedIn profile.
According to the Petitioner, such public statements are likely to
harm the Company's reputation and its relationship with persons
dealing with it.
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46. Mr. Sood, learned Senior Advocate appearing for the
Respondent, submitted that the Respondent is working as the Vice-
Chancellor of Shoolini University of Biotechnology and
Management Sciences, situated at Solan, Himachal Pradesh. The
University has been established and is governed by the Shoolini
University of Biotechnology and Management Sciences
(Establishment and Regulation) Act, 2009 and the First Statutes of
the Shoolini University of Biotechnology and Management
Sciences, Solan, Himachal Pradesh. Learned Senior Advocate
submitted that Shoolini University is one of the highly ranked
private universities in the country. The Respondent is a well-known
and respected academician who has received recognition from the
Government of India. In the year 2023, the Government of India
decided to permit foreign universities to enter the higher
education sector in India, subject to the conditions prescribed
under Regulation 7 of the University Grants Commission (Setting
up and Operation of Campuses of Foreign Higher Educational
Institutions in India) Regulations, 2023. Accordingly, the
University Grants Commission (UGC) introduced these Regulations
to make it possible for Foreign Higher Educational Institutions
(FHEIs) to establish their presence and operate in India. The
Respondent submitted that Shoolini University and he himself
were interested in taking advantage of this opportunity. Their
object was to bring changes in the higher education system in
India through collaboration with foreign universities. This
intention is reflected in the proceedings of the 84th meeting of the
Academic Council of Shoolini University held on 30 December
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2023. In furtherance of this object, on 12 January 2024, the
Respondent applied to the competent authority of Shoolini
University seeking permission for two purposes. Firstly, he sought
permission to establish a new company for undertaking
consultancy work and entering into partnerships and joint ventures
with Foreign Higher Educational Institutions. Secondly, he sought
permission to undertake consultancy work or employment, as may
be required for that purpose. On 16 January 2024, the Chancellor
of Shoolini University, who was the competent authority, granted
the requested permission. Thereafter, on 10 April 2024, the
Respondent sought specific permission to establish Daskalos
Technologies Private Limited, which is the Petitioner Company in
the present proceedings. That permission was granted. After
obtaining these permissions, the Respondent incorporated the
Petitioner Company. He became its promoter, founder and whole-
time Director. In January 2025, EruLearning Solutions Private
Limited (EruLearning) invested capital in the Petitioner Company.
As a result, EruLearning holds 80% of the shares of the Petitioner
Company. The remaining shares are held by the Respondent, who
continues to be its promoter, founder and whole-time Director.
47. On 19 June 2025, the Respondent again approached the
competent authority of Shoolini University and sought specific
permission to accept the position of Chief Executive Officer (CEO)
of the Petitioner Company. That permission was granted.
Thereafter, on 1 July 2025, the Respondent was appointed as the
CEO of the Petitioner Company under the Employment Agreement
of the same date. Learned Senior Advocate submitted that the
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basic commercial understanding between the Respondent,
EruLearning and Mr. Ashwin Venkata Damera, who is the majority
shareholder of EruLearning, was clear. EruLearning and the
investor were required to provide the necessary funds. The
responsibility of managing the day-to-day affairs, developing the
business and looking after the operations of the Petitioner
Company was placed upon the Respondent. The Respondent
submitted that the commercial arrangement between the parties
and his actual performance under that arrangement must be
considered before examining the allegations now made against
him.
48. According to the Respondent, there is no allegation in the
Section 9 Petition that he failed to devote “substantial time” to the
Petitioner Company, failed to perform his part of the commercial
arrangement or failed to achieve the agreed targets. The Term
Sheet contemplated the establishment of eight branch campuses in
collaboration with foreign universities by the year 2034. However,
within only two years of incorporation of the Petitioner Company,
the Respondent had secured eight Letters of Intent. Further, seven
branch campuses had been established in collaboration with the
following foreign universities: (i) University of New South Wales;
(ii) University of Liverpool; (iii) Illinois Institute of Technology;
(iv) University of York; (v) University of Aberdeen; (vi) University
of Bristol; and (vii) Victoria University. Admissions to these
campuses had commenced. The Respondent submitted that his
performance was very good and was much ahead of the target
originally fixed under the Term Sheet.
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49. The Respondent submitted that throughout his engagement,
the Petitioner Company was fully aware of three important facts.
Firstly, he continued to hold the position of Vice-Chancellor of
Shoolini University at Solan. Secondly, he was mainly residing at
Solan and was carrying out his activities and duties from there.
Thirdly, he was travelling extensively, both within India and
abroad, whenever required for the business of the Petitioner
Company. Despite having full knowledge of these facts, the
Petitioner never complained that the Respondent was not devoting
sufficient time to the Company, was not achieving the agreed
targets or that his location at Solan was affecting the Company's
work.
50. Learned Senior Advocate pointed out that even in the
original Section 9 Petition, the Petitioner had not alleged that the
Respondent failed to devote “substantial time” or “sufficient time”
to the Company. There was no allegation that his other
responsibilities or his location had affected the performance of his
duties. Such an allegation was introduced for the first time in the
Rejoinder. According to the Respondent, this was a later attempt to
improve the Petitioner's case. The allegation was delayed,
unsupported by material and without any substance. The
Respondent denied the same. The Respondent submitted that he
had successfully achieved the targets and responsibilities entrusted
to him under the commercial arrangement. Therefore, he had
become entitled to the benefit of the shares held by him, including
their reverse vesting at a date earlier than originally contemplated.
According to him, the time had now come for the Petitioner
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Company, EruLearning and Mr. Ashwin Venkata Damera to fulfil
their own obligations under the commercial arrangement. The
Respondent submitted that the period during which he was
required to perform his duties under the Employment Agreement
was connected with the lock-in period and the reverse vesting
arrangement relating to his shares. These arrangements were part
of the understanding recorded in the Employment Agreement.
51. Learned Senior Advocate explained the circumstances in
which differences arose between the parties. According to the
Respondent, disputes started sometime during the second quarter
of 2026, particularly around the end of March and beginning of
April 2026. Differences arose between the Respondent on one side
and EruLearning and Mr. Ashwin Venkata Damera on the other.
The Respondent alleged that the intention behind the subsequent
actions of EruLearning and Mr. Damera was to deprive him of the
benefits due to him under the commercial arrangement and avoid
sharing those benefits with him. The Respondent submitted that
the complaint allegedly made against him by an employee in April
2026 must be examined along with the events which followed.
According to him, the sequence of events raises serious doubts
about the genuineness of the complaint. The complaint was
received on 6 April 2026 but was not disclosed to the Respondent
for about one month, until 8 May 2026. It came to light only after
the Respondent had approved the funding arrangements towards
the end of April 2026. On 8 May 2026, a Board meeting was called
for 16 May 2026 to consider the complaint. Even before that
meeting could take place, the Petitioner Company filed caveats on
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11 May 2026. According to the Respondent, these caveats were
filed in anticipation of his suspension. The Respondent requested
an adjournment of the meeting because of his ill health. However,
that request was rejected. The meeting was then held in the
Respondent's absence and, according to him, without the required
quorum. In that meeting, the Board simultaneously decided to
suspend him from the position of CEO and appoint an outside
Third-Party Expert to conduct an inquiry into the allegations. The
Respondent expressed his belief that Mr. Ashwin Venkata Damera
and certain other persons in the Petitioner Company had
deliberately arranged for a false and fabricated complaint to be
made against him by an employee. According to the Respondent,
this was done to create a ground for removing him from the
Petitioner Company. He submitted that the complaint was used as
an excuse to suspend him from the position of CEO. As a result of
these events, the Respondent filed Civil Suit No. 50 of 2026 before
the Himachal Pradesh High Court. On 18 August 2026, that Court
granted protective orders and restrained the Third-Party Expert
from proceeding with the inquiry. The Respondent submitted that
the dispute concerning his suspension and the inquiry is pending
before the Himachal Pradesh High Court and that Court is seized
of the matter.
52. Learned Senior Advocate next dealt with the correspondence
addressed to the UGC, on which the Petitioner has mainly relied
upon to justify the termination. According to the Respondent,
immediately after the protective orders were passed by the
Himachal Pradesh High Court on 18 August 2026, Mr. Aayush
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Mitruka, Advocate, addressed a letter dated 24 August 2026 to Dr.
Gopi Chand Merugu, Joint Secretary of the UGC. By that letter, he
sought clarification on the following question:
“whether a person serving as the Vice Chancellor of a
University, whose governing statutes provide that the Vice
Chancellor shall be a “whole time salaried office”, is
permitted to hold a dual employment to simultaneously
serve as the Chief Executive Officer of a private limited
company.”
53. The Respondent questioned the manner in which this
clarification was sought from the UGC. He submitted that the
following important aspects have not been explained. Firstly, the
authority or interest of Mr. Mitruka in seeking such a clarification
is not known. Secondly, it is not clear in what capacity the
clarification was sought from the UGC or in what capacity the UGC
issued its response. Thirdly, the complete facts regarding the prior
permissions obtained by the Respondent from the competent
authorities of Shoolini University under its governing Statutes
were not placed before the UGC. According to the Respondent,
these were important facts which ought to have been disclosed
before seeking any opinion from the UGC.
54. The UGC issued its clarification on 23 September 2026.
However, the Respondent questioned the legal basis and
correctness of that clarification on several grounds. Firstly, the
clarification does not mention the specific statutory provision or
authority under which it was issued. Secondly, it was not issued
under the authority contemplated by Section 11 of the UGC Act.
Thirdly, it was based on incomplete and insufficient information
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supplied to the UGC. Fourthly, the UGC did not consider Section 38
of the First Statutes of Shoolini University. Fifthly, it did not take
into account the permissions granted to the Respondent by his
parent University. The Respondent submitted that the clarification
issued by the UGC cannot be treated as an authentic, authoritative
or binding decision against him or the Petitioner Company.
According to him, it is only an opinion given on the basis of
incomplete facts and without hearing his side of the matter. No
opportunity was given to him to explain the permissions granted
by Shoolini University or to place his version before the UGC. The
Respondent submitted that the clarification was issued without
following the basic principles of natural justice. He reserved his
right to challenge the legality and validity of the said clarification
before an appropriate forum.
55. Learned Senior Advocate questioned the termination of the
Respondent's employment. According to the Respondent, the UGC
clarification dated 23 September 2026 is the only real basis on
which the Petitioner decided to terminate his employment and
filed the present Petition. The Respondent submitted that the
Petitioner relied upon that clarification and put forward the
following alternative grounds in its termination letter. (a) The UGC
letter allegedly clarifies that the Respondent could not hold the
positions of Vice-Chancellor of Shoolini University and CEO of the
Petitioner Company at the same time. On that basis, the Petitioner
claimed that the Employment Agreement was contrary to law and
was void under Section 23 of the Contract Act. (b) In the
alternative, relying upon the same alleged clarification, the
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Petitioner claimed that the Respondent had made a
misrepresentation under Section 18 of the Contract Act regarding
his legal capacity to enter into the Employment Agreement.
Therefore, under Section 19 of the Contract Act, the Petitioner
claimed that it had the choice either to avoid the Agreement or to
insist upon its performance. The Petitioner chose to treat the
Agreement as void. The Petitioner took a alternative position. It
stated that even if the Employment Agreement was valid, the
Respondent had committed breaches of its terms and conditions.
On this basis, the Petitioner claimed that it was entitled to rescind
the Agreement.
56. Learned Senior Advocate advanced submissions on the legal
invalidity of the termination. The Respondent submitted that while
considering a Petition under Section 9 of the Arbitration and
Conciliation Act, 1996, the Court is required to form only a prima
facie opinion. It is not required to finally decide all the disputed
questions at this stage. A prima facie opinion must be based on
what appears from the material available on record. A detailed
examination of disputed facts and evidence would be required at
the appropriate stage of adjudication. Keeping this principle in
view, the Respondent advanced his submissions. The Respondent's
first submission was that the alleged termination of his
employment is void from the beginning and has no legal effect.
According to the Respondent, the termination was made in
violation of the Companies Act, the Rules framed under that Act
and the Articles of Association of the Petitioner Company.
Therefore, the termination is beyond the authority of the persons
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who issued it.
57. The Respondent submitted that there is no dispute that his
appointment and removal from the position of CEO are governed
by the following provisions: (i) The Companies Act, 2013. (ii) The
Companies (Meetings of Board and its Powers) Rules, 2014. (iii)
The Articles of Association of the Petitioner Company.
58. Section 2(51) of the Companies Act, 2013 includes a Chief
Executive Officer within the definition of “key managerial
personnel”. The Respondent relied upon Section 179(3) of the
Companies Act, 2013. This provision specifies the powers which
the Board of Directors must exercise on behalf of the Company by
passing resolutions at meetings of the Board. Clause (k) of Section
179(3) refers to “any other matter which may be prescribed”. The
first proviso to the said sub-section permits delegation only in
respect of the powers mentioned in Clauses (d) to (f). According to
the Respondent, this means that the other powers mentioned in
Section 179(3), including the powers under Clause (k), cannot be
delegated and must be exercised by the Board through a
resolution.
59. The Respondent relied upon Rule 8 of the Companies
(Meetings of Board and its Powers) Rules, 2014. The said Rule
provides as follows:
“Rule 8: In addition to the powers specified under sub-
section (3) of section 179 of the Act, the following powers
shall be exercised by the Board of Directors only by means of
resolutions passed at meetings of the Board:
(2) to appoint or remove key managerial personnel (KMP)”
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60. The Respondent relied upon Article 76 of the Articles of
Association of the Petitioner Company, which provides as follows:
“Subject to the provisions of the Act (i) A chief executive
officer, manager, company secretary or chief financial officer
may be appointed by the Board for such term at such
remuneration and upon such conditions as it may think fit
and any chief executive officer manager company secretary
or chief financial officer so appointed may be removed by
means of a resolution of the Board (ii) A director may be
appointed as chief executive officer manager company
secretary or chief financial officer.”
61. According to the Respondent, Section 179(3) of the
Companies Act, Rule 8(2) of the Rules and Article 76 of the
Articles of Association must be read together. When these
provisions are read together, it becomes clear that the removal of a
Chief Executive Officer, who is a key managerial personnel, can be
done only by passing a resolution at a meeting of the Board of
Directors. Passing such a resolution is a mandatory requirement
and must take place before the termination is communicated.
62. The Respondent submitted that the Petitioner has admitted
that no Board resolution was passed on 29 September 2026, when
the termination was communicated to him. Therefore, according to
the Respondent, his removal as CEO was communicated without
the decision of the Board in the manner required by the
Companies Act, the Rules, and the Articles of Association. Such an
action was beyond the authority of the persons who issued the
letter. It was void from the beginning and had no legal effect.
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63. The Respondent next submitted that the defect in the
termination cannot be cured by subsequently ratifying the action
of the persons who issued the letter. According to the Respondent,
the law makes a distinction between an irregular act and an act
which is void from its very beginning. Ratification may cure an
irregularity in an act which was otherwise within the authority of
the person who performed it. However, ratification cannot give
legal validity to an act which was without authority or jurisdiction
from the beginning. In support of this submission, reliance was
placed on The Agriculture Produce Market Committee v. The State
of Maharashtra and Ors., 2025:BHC-AUG:17243. 99. In that case,
an order determining a lease was passed by the Director of
Marketing, although the power to decide the matter was vested in
the Marketing Committee of the APMC. A learned Single Judge of
this Court held that the Director had no jurisdiction to pass such
an order. Therefore, the order was void from the beginning and
could not be made valid by subsequent ratification. The
Respondent relied upon the decision of this Court in College of
Engineering of Yeshwant Rural Education Society v. Asmita Basole
& Others, (1998) 1 LLJ 95 (Bom). In that case, a notice
terminating the services of an employee was issued by the
Chairman of the Governing Body. However, the Governing Body
was the appointing authority and was empowered to terminate the
employee. Although the Governing Body subsequently ratified the
action of its Chairman, the Court held that such ratification could
not make the termination valid. The Court found that the
Chairman had no independent authority to terminate the
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employee. Since the original act was beyond his jurisdiction, it was
void and could not be subsequently validated by the Governing
Body.
64. The Respondent submitted that the above decision is
relevant to the present case. In that matter, the Chairman was
himself part of the Governing Body and was the Chairman of the
very body which later attempted to ratify his action. Even then, the
Court held that the Chairman could not exercise the powers which
were vested in the Governing Body as a whole. According to the
Respondent, the position is similar here. Individual directors
cannot be treated as the Board. The fact that they are members of
the Board does not give them the authority to exercise powers
which the law requires to be exercised by the Board through a
resolution.
65. The Respondent explained the difference between an
irregular act and an illegal act, particularly in the context of
subsequent ratification. According to the Respondent, the Supreme
Court has explained which defects can be corrected by ratification
and which defects cannot be corrected. An irregularity may be
cured where the act was otherwise within the authority of the
person who performed it. However, where the act is illegal because
the person had no authority to perform it, subsequent ratification
cannot make it valid. In support of this submission, reliance was
placed on Government of A.P. & Ors. v. K. Bharmanandam, (2008)
5 SCC 241. Applying this principle to the present case, the
Respondent submitted that the Board of the Petitioner Company
never met and never took any decision to terminate his
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employment on 29 September 2026. There was no resolution
recording such a decision. The Petitioner has admitted that no such
resolution existed when the termination letter was issued.
Therefore, according to the Respondent, the termination was made
without following the mandatory procedure prescribed by law. It
was not a case of some defect in an existing Board decision. There
was no Board decision at all. The termination was consequently
void from the beginning and could not be cured by subsequent
ratification.
66. The Respondent submitted that individual nominee directors
cannot substitute their own decision for a decision which the law
requires the Board to take collectively. Just as the Chairman of a
Governing Body cannot be treated as the entire Governing Body,
individual directors cannot be treated as the Board of Directors.
According to the Respondent, the decision of individual directors
cannot later be converted into a decision of the Board by
describing it as a ratifiable irregularity. The decision in College of
Engineering of Yeshwant Rural Education Society makes it clear
that even a subsequent decision of the competent body cannot
validate an act which was originally performed without authority.
67. The Respondent submitted that the Petitioner's reliance upon
Sri Parmeshwari Prasad Gupta , is misplaced. In that case, there
was an underlying decision of the Board to terminate the
employee. The Chairman had acted on behalf of the Company to
communicate that decision. The defect related to the Board
meeting at which the decision had been taken, as one of the
directors had not received notice of the meeting. The Board
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ratified the Chairman's action at a properly convened meeting. In
those circumstances, the Supreme Court accepted the subsequent
ratification. According to the Respondent, that decision does not
permit a subsequent Board resolution to replace a corporate
decision which never existed in the first place. The Respondent
submitted that the facts of the present case are entirely different.
There was no prior decision of the Board, whether properly or
improperly taken, authorising his removal. The letter dated 29
September 2026 was not issued merely to communicate or
implement an existing Board decision.
68. In the Section 9 Petition, the Petitioner described the letter
dated 29 September 2026 as the termination letter. When this
Court called upon the Petitioner to produce the Board resolution
authorising the termination, no such resolution was produced.
Instead, the Petitioner sought to justify the action by relying upon
a subsequent ratification of what the Respondent claims was an
illegal and void act. The Respondent relied upon Ghanshyam
Malhotra & Ors. v. Vithalnagar Co-operative Housing Society Ltd.,
2023:BHC-AS:33609 . According to him, this decision of the
Bombay High Court distinguishes between ratification of an
irregular exercise of an existing authority and ratification of an act
performed by a person who had no authority to perform it at all.
69. The Respondent submitted that the Petitioner attempted to
overcome the absence of a Board resolution only after the present
Petition was filed and the Respondent, as well as this Court,
pointed out the defect. It was only during the pendency of the
proceedings that the Petitioner claimed that the Board had
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confirmed or ratified the termination on 19 October 2026.
According to the Respondent, the Petitioner's own statement that
the Board had "confirmed what had been done" shows that the
termination letter was issued before any Board decision was taken.
A decision which did not exist on 29 September 2026 cannot
subsequently be treated as though it existed on that date. The
Respondent submitted that such an attempt is contrary to Section
200, Illustration (b), of the Contract Act. On these grounds, the
Respondent submitted that the termination notice dated 29
September 2026 is void from the beginning and has no legal effect.
70. The Respondent next dealt with the question whether a
separate declaration from a competent Court is necessary to treat
the termination as void. He addressed the Petitioner's reliance
upon the Duomatic Principle. In this regard, the Respondent relied
upon Dhurandhar Prasad Singh v. Jai Prakash University, (2001) 6
SCC 534. The Supreme Court in that decision explained the
difference between an act which is void and an act which is
voidable. An act which is wholly without jurisdiction is void from
the beginning. It has no legal existence and does not require a
separate declaration from a Court to make it ineffective. Such an
act can simply be ignored when its validity arises for consideration
in another proceeding. On the other hand, an act which is voidable
continues to operate unless it is challenged and set aside by a
competent Court. Applying this distinction, the Respondent
submitted that the letter dated 29 September 2026 was issued by
individual directors and was not based on any decision of the
Board passed through a resolution. It was beyond their authority
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and contrary to the Companies Act, the Rules and the Articles of
Association. According to the Respondent, the termination is void
and does not require any separate declaration to make it
ineffective.
71. The Respondent disputed the Petitioner's reliance upon the
Duomatic Principle. According to him, that principle cannot
override the express requirement under Section 179(3) of the
Companies Act, Rule 8(2) of the Companies (Meetings of Board
and its Powers) Rules, 2014 and Article 76 of the Articles of
Association. These provisions require the appointment or removal
of key managerial personnel to be decided through a resolution
passed at a meeting of the Board. The Respondent submitted that
these requirements are not mere formalities. They are safeguards
intended to ensure that important decisions concerning the
Company are taken collectively and in accordance with law. The
requirement cannot be avoided by relying upon an informal
agreement between some directors.
72. The Respondent submitted that the validity of the
subsequent Board resolution dated 19 October 2026 and the
corporate actions taken on its basis are matters which fall within
the jurisdiction of the NCLT. This Court, while considering the
present Petition under Section 9 of the Arbitration Act, is not
required to finally decide those company law disputes. At this
stage, the Court is required to form only a prima facie opinion.
According to the Respondent, the Petitioner's own case establishes
that no Board resolution authorising his removal existed on 29
September 2026. This admission is sufficient, at least at the
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interim stage, to show that the termination was not made in the
manner required under the Companies Act, Rule 8(2) and the
Articles of Association. Whether the subsequent resolution could
cure the defect and whether it was validly passed are questions
which may require final adjudication on evidence. For the purpose
of the present Section 9 Petition, the Respondent submitted that
the termination must, at least prima facie, be treated as void and
having no legal effect. Without prejudice to his above submissions,
the Respondent contended that even on the merits of the dispute,
the termination is unsustainable on each of the three alternative
grounds relied upon by the Petitioner.
73. The Respondent dealt with the permissions granted by
Shoolini University. According to the Respondent, the entire case
of the Petitioner is based on the allegation that he was not
permitted to accept employment as CEO while continuing as Vice-
Chancellor. However, the Petitioner has failed to consider an
important fact. Before accepting the appointment as CEO, the
Respondent had obtained prior written permission from the
competent authority of Shoolini University. The Respondent
submitted that the relevant permissions were obtained well before
the Employment Agreement dated 1 July 2025. These included
permission dated 16 January 2024 to explore joint ventures,
consultancy and employment opportunities; specific permission
dated 10 April 2024 to establish the Petitioner Company; and
permission dated 19 June 2025 to accept the position of CEO of
the Petitioner Company. According to the Respondent, the
Academic Council and the Chancellor of Shoolini University
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considered these proposals and granted the necessary approvals
through separate decisions taken during 2024 and 2025. The
Respondent submitted that none of these permissions has been
cancelled, withdrawn or declared invalid by Shoolini University or
by any Court or other competent forum. The Petitioner has not
sought any relief for setting aside these permissions. Therefore,
according to the Respondent, the permissions continue to remain
valid. At the stage of considering a prima facie case under Section
9 of the Arbitration Act, the Respondent's engagement with the
Petitioner Company cannot be treated as illegal or contrary to law.
Consequently, the Employment Agreement cannot be treated as
void under Section 23 of the Contract Act merely on the basis of
the Petitioner's own interpretation. The Respondent submitted that
the Petitioner, being a private contracting party, cannot unilaterally
declare that the permissions granted by the University are invalid
and then rely upon its own conclusion to terminate the Agreement.
74. The Respondent relied upon Section 38(12) of the First
Statutes of Shoolini University. According to him, this provision
permits a person to undertake trade, business or employment
outside his official duties after obtaining prior written permission.
The Petitioner, according to the Respondent, has relied only upon
the expression “whole time salaried officer” appearing in Section
6(1) of the First Statutes. It has ignored Section 38(12) and the
permissions actually granted to the Respondent under the
University's governing provisions. The Respondent submitted that
Section 6(1) cannot be read in isolation while considering the
entire scheme of the First Statutes. Even assuming that Section
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38(12) does not apply to him, there is no specific provision
prohibiting a Vice-Chancellor from undertaking any outside
engagement after obtaining the required permission. The
judgments relied upon by the Petitioner merely explain the
distinction between a Vice-Chancellor and an ordinary employee
under different university statutes. They do not hold that a Vice-
Chancellor can never be permitted to undertake any outside
engagement. In support of his contention that a Vice-Chancellor
can be treated as an employee of the University, the Respondent
relied upon the decision of the Karnataka High Court in The
Chancellor of Universities in Karnataka and His Excellency, the
Governor v. Prof. H.B. Walikar, Vice Chancellor, Writ Appeal No.
100035 of 2015. According to the Respondent, the Court in that
case has held that a Vice-Chancellor of a University is an employee
of that University.
75. The Respondent disputed the Petitioner's argument that
Section 38(12) applies only to employees and not to officers.
According to him, the Petitioner has incorrectly treated these two
expressions as mutually exclusive categories. He submitted that a
reading of Section 11 of the Shoolini Act and Section 3 of the First
Statutes shows that several officers of the University are its
employees. Even the Librarian is described as an officer of the
University. Merely because the Librarian is designated as an officer,
it cannot be said that he is not an employee of the University. The
Respondent submitted that an officer of the University may be an
employee. The distinction sought to be made by the Petitioner
cannot be accepted merely on the basis of the use of these two
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expressions.
76. The Respondent submitted that the present proceedings are
not the proper forum for the Petitioner to question the
interpretation adopted by the competent authorities of Shoolini
University. The University's authorities themselves treated Section
38(12) as applicable, considered the Respondent's applications
under that provision and granted the necessary permissions.
According to the Respondent, the Petitioner is only a private party
to the Employment Agreement. It is neither Shoolini University nor
an authority responsible for administering or interpreting its
Statutes. It cannot substitute its own interpretation for the decision
of the competent University authorities and present that
interpretation as an authoritative determination of the law in the
present proceedings. The Respondent submitted that the Petitioner
did not disclose the earlier permissions granted by Shoolini
University when it approached the UGC for clarification. These
permissions were relevant to the question referred to the UGC.
According to the Respondent, withholding such important facts
makes the clarification unreliable and deprives it of any value
against him.
77. The Respondent submitted that the UGC letter dated 23
September 2026 suffers from several defects. It was issued on the
basis of incomplete facts. Neither the Respondent nor Shoolini
University was given any notice or opportunity to present their
case. The UGC did not consider the relevant permissions and the
provisions of the First Statutes. Further, the letter is not an
adjudication between the parties. It is not an order passed under
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Section 11 of the UGC Act, nor has it been issued while exercising
the functions contemplated under Section 12 or framing
regulations under Section 26 of the UGC Act. The Respondent
submitted that the UGC letter dated 23 September 2026 does not
have the force of law and is not binding upon either party. It
cannot be treated as a statutory order prohibiting the Respondent
from holding the position of CEO. Consequently, any action taken
by the Petitioner on the basis of that letter, including termination
of the Respondent's employment, is unsustainable.
78. The Respondent next dealt with the Petitioner's allegation
that he had made false representations regarding his legal capacity
to enter into the Employment Agreement. According to the
Respondent, once it is shown that valid permissions had been
obtained from Shoolini University, the allegation of
misrepresentation has no basis. He submitted that the Petitioner
has created this allegation by relying upon an incorrect
interpretation of the First Statutes and the subsequent UGC
clarification. The Respondent submitted that the Petitioner was
fully aware that he was holding the position of Vice-Chancellor of
Shoolini University when the Employment Agreement was entered
into. This fact was publicly known and could easily have been
verified. The Petitioner entered into the Employment Agreement
after the necessary permissions had been obtained. The
Respondent submitted that the Petitioner has not identified any
particular false statement made by him which induced the
Petitioner to enter into the Agreement. There was no concealment
of his position as Vice-Chancellor.
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79. The Respondent submitted that the subsequent
communication issued by the UGC cannot convert a fact which was
known to the Petitioner into a misrepresentation. The Petitioner
cannot rely upon a later opinion of the UGC to claim that the
Respondent had made a false representation at the time when the
Agreement was executed. He disputed the Petitioner's reliance
upon Section 203(3) of the Companies Act, 2013. According to
him, Shoolini University is a statutory University and is not a
company. Further, Section 203(5) of the Companies Act provides
for the consequences of default under that provision. It does not
declare the Employment Agreement void.
80. Without admitting that Section 19 of the Contract Act
applies, the Respondent submitted that even the proviso to that
section goes against the Petitioner's case. The alleged truth about
his position and the permissions obtained by him could have been
discovered by the Petitioner through ordinary diligence. In support
of this submission, reliance was placed upon Chander Kanta Bansal
v. Rajinder Singh Anand, (2008) 5 SCC 117. The Supreme Court
explained that due diligence means taking all reasonable steps
which a prudent person would ordinarily take. It does not mean
doing everything which may be possible. The Respondent
submitted that the Petitioner knew that he was working as Vice-
Chancellor of Shoolini University. It knew that prior permissions
had been obtained from the University. Only after these facts were
known and the necessary permissions were secured did the
Petitioner proceed with his appointment. Further, the Employment
Agreement contemplated that the Respondent would devote a
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“substantial portion” of his time and “sufficient time” to the affairs
of the Petitioner Company. The Term Sheet permitted him to
devote reasonable time to Shoolini University and his family
ventures. According to the Respondent, these conditions were
consciously accepted by the Petitioner while entering into the
commercial arrangement. The Petitioner accepted his services and
continued the employment without raising any objection regarding
his position as Vice-Chancellor or the time devoted by him to the
Company. In these circumstances, the Petitioner cannot now rely
upon facts which were known and accepted at the time of entering
into the Agreement to claim that it was induced by
misrepresentation. The essential requirements of Section 19 are
not satisfied, even prima facie.
81. The Respondent accordingly submitted that the UGC
communication dated 23 September 2026 cannot support the
allegations of misrepresentation, illegality or invalidity of the
Employment Agreement. The prior permissions granted by
Shoolini University continue to remain in force. The Petitioner was
aware of the Respondent's position as Vice-Chancellor and
consciously accepted the arrangement. The Petitioner has failed to
establish even a prima facie case for invoking Sections 19 or 23 of
the Contract Act or for terminating his employment on these
grounds.
82. The Respondent disputed the Petitioner's allegation that he
had committed breaches of the Employment Agreement.
According to the Respondent, Clauses 3.1(g) and 12.4 require him
to devote sufficient time and a substantial portion of his time to
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the affairs of the Petitioner Company. These provisions do not
require him to devote his entire time exclusively to the Company.
The Agreement nowhere states that he must give up his position at
Shoolini University. The Respondent submitted that the Term Sheet
permitted him to devote reasonable time to Shoolini University.
Therefore, the Petitioner cannot now read an obligation of
exclusive employment into the Agreement when no such condition
was agreed upon. The Respondent disputed the Petitioner's
reliance upon Clause 12.5. According to him, this clause is a non-
compete and non-solicitation condition intended to prevent
involvement in another business, brand or venture which competes
with the business of the Petitioner Company. Shoolini University is
a statutory University which existed even before the Petitioner
Company was incorporated. The Petitioner was fully aware of the
Respondent's position in the University. Shoolini University is not a
competing business venture of the Petitioner Company. Therefore,
according to the Respondent, Clause 12.5 cannot be interpreted as
imposing a general restriction on his continued association with
the University. The Respondent submitted that the allegation
regarding violation of Clause 2.3, relating to his assignment to the
Mumbai office, was raised for the first time in the Rejoinder. Until
23 October 2026, the Petitioner had never relied upon this clause
to allege any breach. On the contrary, the Petitioner had been
reimbursing the Respondent's travelling and hotel expenses. This
conduct shows that the Petitioner knew about his travel
arrangements and had accepted the manner in which he was
performing his duties. In any event, even assuming that there was
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any breach relating to his place of work, the Respondent submitted
that such a breach was capable of being corrected under Clause
9.3(a) of the Employment Agreement.
83. Without prejudice to his earlier submissions, the Respondent
contended that even if any breach had occurred, which he denied,
the Petitioner was required to give him thirty Business Days to
correct the alleged breach before terminating the Agreement under
Clause 9.3(a). According to the Respondent, the Agreement
provides that termination can follow only if the breach is not cured
within the stipulated period. However, the Petitioner did not issue
any notice calling upon him to cure the alleged breach. No
opportunity was given to him for this purpose. The Petitioner
cannot avoid this requirement by describing the alleged breach as
material or by taking an alternative plea of rescission. Unless the
stipulated opportunity to cure the breach is given and the
Respondent fails to do so, no right to terminate the Agreement
arises under Clause 9.3(a).
84. The Respondent submitted that the disputes raised in the
present Petition are connected with proceedings pending before
the Himachal Pradesh High Court. Before the present Petition was
filed, the Respondent had approached the Himachal Pradesh High
Court by filing Civil Suit No. 50 of 2026. That suit concerns the
Board's action dated 16 May 2026, his suspension from the
position of CEO and the inquiry proposed to be conducted through
the Third-Party Expert. The Himachal Pradesh High Court has
passed protective orders in those proceedings. The Petitioner
Company has participated in those proceedings. Therefore, the
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Respondent submitted that the said Court is dealing with the
disputes arising out of his suspension and the subsequent action
taken against him. According to the Respondent, the letter dated
29 September 2026 is only a step in the same chain of events. The
interim reliefs sought in the present Section 9 Petition would
immediately give effect to the disputed termination and would
affect the issues pending before the Himachal Pradesh High Court.
The Respondent submitted that the Petitioner cannot divide the
same dispute into separate proceedings before different Courts and
thereby create a possibility of conflicting orders. The Respondent
disputed the territorial jurisdiction of this Court. According to him,
the alleged termination was communicated during the pendency of
the dispute before the Himachal Pradesh High Court and was part
of the same course of action arising from his earlier suspension.
85. The cause of action relating to the suspension arose when
the suspension was communicated and the consequences of that
action were sought to be imposed upon him. The mere issuance of
the termination letter dated 29 September 2026 cannot create
territorial jurisdiction in favour of this Court under Section 20(c)
of the Code of Civil Procedure. The Respondent submitted that the
Petitioner cannot create territorial jurisdiction by its own unilateral
act of issuing or communicating the disputed termination letter,
when no part of the cause of action otherwise arose within the
territorial jurisdiction of this Court.
86. The Respondent submitted that the prayer for an anti-suit
injunction under Prayer Clause (c) is independently barred by
Sections 41(a) and 41(b) of the Specific Relief Act, 1963.
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According to him, the Petitioner is seeking to restrain the
Respondent from instituting or continuing proceedings before
Courts and authorities which are not subordinate to this Court.
These include the Himachal Pradesh High Court and the NCLT. The
prayer is not restricted to any particular proceeding which is
shown to be vexatious or oppressive. If granted in its present form,
it would prevent the Respondent from approaching other Courts
and statutory authorities for remedies available to him under law.
The Respondent submitted that such a broad injunction would
unlawfully restrict his right to seek legal remedies. The
Respondent submitted that the Petitioner has failed to satisfy the
requirements laid down by the Supreme Court in Modi
Entertainment Network for granting an anti-suit injunction.
According to him, the Petitioner has not shown how continuation
of the proceedings before the Himachal Pradesh High Court would
defeat the ends of justice or result in injustice. The Respondent
had instituted those proceedings even before the disputed
termination letter dated 29 September 2026 was issued. The
Petitioner had actively participated in the proceedings before the
Himachal Pradesh High Court. It had filed FAO (OS) No. 18 of
2026 before that Court and obtained a consent order dated 11
September 2026 for expeditious disposal of its application under
Section 8 of the Arbitration Act. Thereafter, the Petitioner filed an
application under Section 45 of the Arbitration Act in the same
proceedings. In these circumstances, the Respondent submitted
that the Petitioner cannot now seek to restrain the continuation of
proceedings before the very Court whose jurisdiction it had
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invoked and before which it had actively pursued its remedies. The
Respondent submitted that granting an anti-suit injunction in such
circumstances may result in conflicting orders being passed by two
High Courts. Therefore, the requirements for granting such an
injunction are not satisfied.
87. The Respondent addressed the requirements which the
Petitioner must satisfy for obtaining interim protection under
Section 9 of the Arbitration and Conciliation Act, 1996. According
to the Respondent, the Petitioner's request for interim protection is
based on the assumption that the termination dated 29 September
2026 is valid and that the Respondent is creating an immediate
threat to the functioning of the Company. Both these assumptions
are disputed. The Respondent submitted that he has a strong
prima facie case because the necessary permissions were obtained
from Shoolini University and those permissions have not been
cancelled. The Petitioner was fully aware of his position as Vice-
Chancellor and accepted his performance under the Employment
Agreement. The UGC letter is neither an adjudication nor a
statutory prohibition. No Board resolution authorising his removal
existed when the termination was communicated. Further, no
opportunity was given to him to cure the alleged breaches.
According to the Respondent, these facts are sufficient to show
that the Petitioner's claim of valid termination is seriously
disputed. The Respondent submitted that the absence of a Board
resolution raises a substantial question as to whether the
termination was ever validly authorised by the Company. The
subsequent ratification dated 19 October 2026 is disputed and
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cannot be treated as conclusive at the interim stage. While
exercising jurisdiction under Section 9, this Court is required to
form only a prima facie opinion. It is not required to finally decide
disputed questions relating to the validity of corporate decisions
under the Companies Act on the basis of the limited material
available at the interim stage.
88. On the question of balance of convenience, the Respondent
submitted that it would not be proper to immediately give effect to
a disputed termination. He continues to be the founder, promoter,
shareholder and Whole-Time Director of the Petitioner Company.
The wide interim orders sought by the Petitioner would
substantially change the existing position and would effectively
decide the dispute in favour of the Petitioner even before the
validity of the termination is examined. According to the
Respondent, the balance of convenience is in his favour. The
Respondent submitted that the Petitioner has failed to establish
any irreparable injury which would justify the wide restraints
sought in the Petition. The reliefs sought would effectively enforce
the disputed termination and prevent him from approaching other
forums even before the validity of that termination is decided. The
principal ad-interim reliefs sought by the Petitioner were declined
by this Court on 15 October 2026. According to the Respondent,
no subsequent material has been placed before the Court which
would justify granting wider interim protection at this stage. The
Respondent submitted that even the limited ad-interim reliefs
granted under the order dated 15 October 2026 had become
infructuous, as there was no relevant material in his possession to
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comply with the directions in the manner alleged by the Petitioner.
89. The Respondent pointed out that the Petitioner had not
disclosed the filing of FAO (OS) No. 18 of 2026 before the
Himachal Pradesh High Court or the consent order dated 11
September 2026 while filing the present Petition. According to the
Respondent, these were important facts relating to the earlier
proceedings between the parties. A party seeking discretionary and
equitable relief from a Court is required to disclose all relevant
facts and the complete procedural history. The Petitioner, having
failed to disclose these material facts, is not entitled to seek
equitable protection. The Respondent finally submitted that
Section 9 of the Arbitration Act is intended to preserve the subject
matter of arbitration and grant necessary interim protection. It
cannot be used to grant the Petitioner the substance of the final
relief even before the dispute is decided. In the present case, the
Petitioner seeks to give immediate effect to the disputed
termination and prevent the Respondent from approaching other
forums. If such reliefs are granted, the main controversy regarding
the validity of the termination would substantially stand decided at
the interim stage. The Respondent pointed out that the Petitioner
has not identified any specific communication, contract or third-
party transaction which was actually affected by his conduct after
29 September 2026. The principal ad-interim reliefs were declined
on 15 October 2026. No subsequent change in circumstances has
been shown to justify taking a different view.
90. On the basis of the above submissions, the Respondent
opposed the grant of any interim protection to the Petitioner. The
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Respondent submitted that the Petitioner has failed to establish
any case for grant of interim measures under Section 9 of the
Arbitration and Conciliation Act, 1996. He prayed that this Court
dismiss the Petition in its entirety with costs. He sought an order
vacating the ad-interim protection granted to the Petitioner under
the order dated 15 October 2026, except to the extent such
protection is strictly necessary for preserving the Company's
property and confidential information. He requested that the Court
suitably clarify the scope of the existing ad-interim order.
REASONS AND FINDINGS:
91. I have heard Mr. Darius Khambata, learned Senior Advocate
appearing for the Petitioner, and Mr. Sood, learned Senior
Advocate appearing for the Respondent. The submissions made by
both sides raise different questions. Though these questions are
connected with each other, each question will have to be
considered separately.
The Scope Of The Present Petition And Jurisdiction Of This Court:
92. At the beginning, it is necessary to remember that the
present Petition has been filed under Section 9 of the Arbitration
Act. At this stage, this Court is not deciding the entire dispute
between the parties finally. The Court has to see whether the party
asking for protection has made out a prima facie case. It must
consider whether the balance of convenience is in favour of
granting the relief and whether refusal of protection may cause an
injury which cannot be properly compensated at a later stage. At
the same time, care has to be taken that an interim order does not
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practically decide the whole dispute before the arbitral tribunal
gets an opportunity to consider it. Both parties accept that their
relationship is governed by the Employment Agreement dated 1
July 2025. Clause 14 of the Agreement provides that disputes
between the parties will be decided through arbitration under the
SIAC Rules and that Singapore will be the seat of arbitration. The
Agreement is governed by Indian law. The Respondent has
objected to the jurisdiction of this Court. According to him, since
the parties have selected a place outside India as the seat of
arbitration, the Company cannot file an application under Section
9 of the Arbitration Act before this Court.
93. This objection cannot be accepted. In PASL Wind Solutions
Private Limited v. GE Power Conversion India Private Limited,
(2021) 7 SCC 1, the Supreme Court considered a case where two
Indian companies had agreed to hold arbitration outside India.
The Supreme Court explained that, for the purpose of the proviso
to Section 2(2) of the Arbitration Act, the words “international
commercial arbitration” have to be understood by considering the
place of arbitration being outside India. The Supreme Court held
that in such a case an application under Section 9 could be
maintained. In paragraph 70, the Supreme Court held that the
Section 9 application before it was maintainable. Therefore, only
because both parties to the present Agreement are Indian, the
power of this Court to consider interim protection under Section 9
does not come to an end. The parties have selected Singapore as
the seat of arbitration. But the dispute is between an Indian
Company and an Indian individual. The Company and its business
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activities are in India. The property and business records for which
protection is asked are stated to be in India. The relief is sought
against the Respondent, who is within the jurisdiction of this
Court. There is no material to show that the parties had agreed
that Indian Courts would have no power to grant interim
protection.
94. The Respondent has raised an objection regarding the
territorial jurisdiction of this Court. According to him, the dispute
regarding his suspension and the appointment of the Third Party
Expert was pending before the Himachal Pradesh High Court. He
says that the Company cannot claim jurisdiction at Mumbai only
because the termination letter was issued from Mumbai. This
submission will have to be considered. However, the entire
Employment Agreement and the other relevant facts will have to
be looked into. The Employment Agreement records that it was
made at Mumbai, Maharashtra. Under Clause 2.3, the Respondent
was assigned to the Mumbai office of the Company. The Company's
office is situated at Mumbai. The letter dated 29 September 2026
communicates a decision regarding the rights and duties arising
from this Agreement. Therefore, the cause of action is not arising
only at the place where the Respondent resides or where he says
that he performed some part of his duties. A part of the cause of
action has arisen within the territorial jurisdiction of this Court.
Therefore, at this stage, the objection under Section 20(c) of the
Code of Civil Procedure, 1908, cannot be accepted. It is true that
Civil Suit No. 50 of 2026 is pending before the Himachal Pradesh
High Court. That suit concerns the earlier action of the Board
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dated 16 May 2026, the suspension of the Respondent and the
appointment of the Third Party Expert. The Respondent says that
on 18 August 2026, the Himachal Pradesh High Court passed a
protective order preventing the Third Party Expert from
proceeding with the enquiry. These proceedings were filed before
the present Petition. The Company has taken part in those
proceedings. This earlier background is certainly important,
particularly while considering the Company's request for an anti-
suit injunction. However, only because an earlier proceeding is
pending before another High Court, this Court does not lose its
jurisdiction to consider a separate application under Section 9
arising from the Employment Agreement.
Arbitrability of the dispute:
95. The Respondent has questioned whether the dispute
between the parties can at all be referred to arbitration. According
to him, the question whether he could hold the positions of Vice-
Chancellor and Chief Executive Officer at the same time concerns
Shoolini University and the UGC. Both are statutory bodies or
authorities. Therefore, according to the Respondent, this dispute
cannot be decided by an arbitral tribunal.
96. In Vidya Drolia , the Supreme Court has explained in
paragraph 76 a fourfold test for deciding whether a dispute cannot
be referred to arbitration. These tests relate to disputes concerning
rights in rem, disputes which affect the rights of third parties or
have an effect against the world at large, disputes concerning
sovereign and public functions of the State, and disputes which are
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or necessarily kept outside arbitration by a mandatory law.
Paragraph 76.5 explains that these tests should not be considered
separately and in isolation. They have to be applied together. If
these principles are applied to the present dispute, the main
questions are whether the Employment Agreement is valid,
whether the Respondent committed any breach of its conditions,
whether the Company properly cancelled or terminated the
Agreement and whether the Respondent can claim that he
continues to be its Chief Executive Officer. These questions arise
from a private Agreement between the Company and the
Respondent. They concern the rights and duties of these two
parties. Therefore, they are rights in personam. The arbitral
tribunal cannot pass any order which will bind the UGC or
Shoolini University because neither of them is a party to the
Employment Agreement. The tribunal cannot decide the
independent rights of the University or prevent the UGC from
exercising its statutory powers. But this does not mean that the
Company and the Respondent cannot refer their own dispute to
arbitration. For deciding the rights between these two parties, the
tribunal can consider the effect of the First Statutes, the UGC letter
and the permissions which the Respondent says he had obtained.
Therefore, the objection that the entire dispute cannot be referred
to arbitration cannot be accepted. The dispute regarding the
validity and termination of the Employment Agreement can be
decided through arbitration. However, any question which
concerns the independent statutory rights of Shoolini University or
the UGC will remain outside the decision of the arbitral tribunal,
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unless the law otherwise permits.
The Nature Of The Employment Agreement And The Relief
Sought:
97. The Company has relied upon the settled principle that a
contract of personal service cannot ordinarily be enforced. Its
submission is that the Respondent cannot be allowed to continue
as Chief Executive Officer against the wish of the Company.
According to the Company, even if the termination is later found to
be wrong, the Respondent may claim damages, but he cannot
obtain an order for reinstatement through an injunction.
98. The principle relied upon by the Company is well recognised.
In Executive Committee of Vaish Degree College , the Supreme
Court considered the exceptions to the general rule that a contract
of personal service cannot be enforced. In paragraph 18, the Court
observed:
“18. On a consideration of the authorities mentioned above,
it is, therefore, clear that a contract of personal service
cannot ordinarily be enforced and a court normally would
not give a declaration that the contract subsists and the
employee, even after having been removed from service can
be deemed to be in service against the will and consent of
the employer. This rule, however, is subject to three well
recognised exceptions. (i) where a public servant is sought
to be removed from service in contravention of the
provisions of Article 311 of the Constitution of India; (ii)
where a worker is sought to be reinstated on being dismissed
under the Industrial Law; and (iii) where a statutory body
acts in breach or violation of the mandatory provisions of the
statute.”
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99. In paragraph 19, the Supreme Court held that the case
before it did not come within any of these exceptions because the
Executive Committee of the College was not a statutory body. In
paragraph 20, the Court held that granting relief under the
Specific Relief Act is a matter of discretion. Such relief can be
refused where the ends of justice do not require it. In the present
case, the Petitioner is a private limited company. The Respondent
was appointed as its Chief Executive Officer under a private
Employment Agreement. He is not a public servant whose service
is protected by Article 311 of the Constitution. There is no material
to show that he is a workman who can claim reinstatement under
industrial law. The Company is not a statutory body. Therefore,
only because the Respondent disputes the legality of his
termination, he cannot claim that he must be reinstated as Chief
Executive Officer. The general rule stated in Vaish Degree College
applies to the present relationship. Sections 14(c) and 14(d) of the
Specific Relief Act, 1963 are relevant. Section 14(c) concerns a
contract which depends upon the personal qualifications of a party
and where its important terms cannot be enforced. Section 14(d)
concerns a contract which by its nature can be brought to an end.
Section 41(e) provides that an injunction cannot be granted to
prevent the breach of a contract whose performance cannot be
enforced. However, this principle will have to be considered by
looking at the actual relief asked for in the present Petition. The
Company is not asking the Court to direct the Respondent to work
as its Chief Executive Officer. It is asking the Court to prevent him
from claiming or representing that he continues to be the
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Company's Chief Executive Officer and authorised representative
after the Company has communicated its decision to end his
engagement. An order preventing a person from representing that
he has authority to bind a company is not necessarily the same as
an order directing specific performance of a contract of personal
service. At the same time, such an injunction cannot be granted
only because the Company has issued a letter stating that the
Agreement has been terminated. The Court must examine whether
there is a prima facie basis to accept that the Company took this
decision through an authority which was competent to do so. This
question is important in the present case because the Respondent
has seriously contended that no Board resolution was passed on 29
September 2026.
The First Statutes Of Shoolini University And The UGC Letter:
100. The main issue raised by the Petitioner is about the
Respondent's appointment as Vice-Chancellor of Shoolini
University. The Petitioner says that under the First Statutes of the
University, the Vice-Chancellor must be a whole-time salaried
officer. Therefore, according to the Petitioner, the Respondent
could not take employment as Chief Executive Officer of a private
company. In support of this, the Petitioner relies upon the letter
dated 23 September 2026 issued by the University Grants
Commission. It is his submission that UGC is an expert statutory
authority and its clarification should be given proper importance.
101. The Respondent does not agree with this submission. He says
that the First Statutes themselves permit an employee to take
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outside employment, if prior written permission of the concerned
authority is obtained. For this purpose, he relies upon Section
38(12) of the First Statutes. According to him, such permission
was obtained much before the Employment Agreement was
signed. In support of this, he has relied upon the documents at
pages 96, 105 and 120 of his Reply.
102. These documents are required to be seen separately. They
are not all of the same nature. Each document shows a different
part of the permission which is claimed by the Respondent. The
document at page 96 of the Reply is a letter dated 16 January
2024 issued by the Chancellor of Shoolini University to the
Respondent. This letter refers to the Respondent's letter dated 12
January 2024. The subject mentioned in the letter is approval for
establishment and consultancy or employment. The Chancellor has
stated:
“With reference to your letter dated 12-01-2024 on the
subject cited above, and taking into consideration the
potential benefits to Shoolini University through
collaborative engagements with reputed foreign universities,
as well as the contribution of the proposed initiative towards
furthering the University's vision, approval is hereby
accorded under Section 38(12) of the Statutes of Shoolini
University for the establishment, promotion, and
participation in a new company, including undertaking
consultancy/employment, as may be considered necessary.”
103. This is a written letter issued by the Chancellor. Therefore,
its contents have to be considered. It shows that the University was
aware of the Respondent's proposal to establish a company and to
undertake consultancy or employment in relation to that work. It
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shows that permission was given in general words for establishing,
promoting and participating in a new company. The permission
included consultancy or employment, as may be considered
necessary.
104. The document at page 105 of the Reply is a letter dated 10
April 2024 written by the Respondent to the Chancellor. The
subject of this letter is approval for establishment of Daskalos
Technologies Private Limited. In this letter, the Respondent
informed the Chancellor that the proposed company would
undertake partnerships, joint ventures and consultancy services.
The purpose was to help foreign universities in establishing and
running their campuses in India. He stated that this proposed work
would help the internationalisation objectives of the University
and would not affect his work as Vice-Chancellor. This letter, if
seen alone, does not contain any endorsement showing that the
Chancellor had granted approval. But this letter is required to be
read along with the other University record. The proceedings of
the 59th meeting of the Board of Management held on 4 April
2024 show that the proposal given by the Vice-Chancellor and
approved by the Chancellor was placed before the Board. The
Board took note of the proposal for establishing a separate
company. The company was to provide academic, administrative,
operational, strategic, consultancy and professional support to
foreign universities. The proceedings record that the Vice-
Chancellor would continue to do his existing duties and that the
proposed work would support the internationalisation objectives of
the University. Thus, the Respondent's submission that the
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University knew about the proposed business activity is supported
by the documents prepared at that time. The approval dated 16
January 2024 and the proceedings of the Board of Management
dated 4 April 2024 were there much before the present dispute
started. Therefore, these documents cannot be said to have been
prepared after the termination letter was issued.
105. The document at page 120 of the Reply stands on a different
position. It is a letter dated 19 June 2025 written by the
Respondent to the Chancellor. The subject of this letter is a request
for approval to be appointed as Chief Executive Officer of Daskalos
Technologies Private Limited and to sign the Employment
Agreement. In that letter, the Respondent stated:
“With reference to the approval previously accorded by you
under Section 38(12) of the Statutes of the University, and
the intimation shared regarding the incorporation of
Daskalos Technologies Private Limited on 30 April 2024, I
respectfully seek your approval to take up employment as
the Chief Executive Officer (CEO) of the Company and to
sign the requisite employment contract.”
106. In this letter also, the Respondent gave assurance that he
would continue to do his duties as Vice-Chancellor. He stated that
his proposed employment with the Company would not affect his
duties and responsibilities towards the University or come in the
way of doing them. Therefore, the document at page 120 is a
request made by the Respondent for getting approval. The copy
placed before the Court does not contain any endorsement or
separate written letter from the Chancellor granting specific
approval for his appointment as Chief Executive Officer. The
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Respondent relies upon the earlier approval dated 16 January
2024. His case is that the earlier permission was wide enough and
it covered his employment as CEO. This submission will have to be
considered. But the letter dated 19 June 2025,, cannot show that
separate approval was actually granted on that date.
107. There is a difference between getting permission to establish
or participate in a new company and getting permission to hold a
whole-time executive post in that company. The earlier permission
is given in wide words. It refers to consultancy or employment as
may be necessary. But the later letter of the Respondent asks for
approval to take employment as CEO and to sign the employment
contract. The Respondent has not produced any separate written
approval given in reply to this request. Therefore, the documents
show that prior permission was given for establishing and
participating in the proposed company. But from these documents,
it is not finally shown that specific approval was given for his
appointment as CEO.
108. The next question is whether Section 38(12) of the First
Statutes applies to the office of Vice-Chancellor also. The relevant
part of that provision reads:
“No employee shall, except with the prior written permission
of the concerned authority, engage himself directly or
indirectly, in any trade or business or undertake any
employment outside his official assignments.”
109. The Respondent relies upon this provision. His case is that
this provision allows outside employment, if prior written
permission is taken from the concerned authority. According to
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him, the University had given such permission. Therefore, his
employment with the Petitioner Company cannot be said to be
unlawful.
110. The Petitioner relies upon Section 6(1) of the First Statutes.
It provides that:
“The Vice-Chancellor shall be a whole time salaried officer.”
111. According to the Petitioner, the Respondent is an officer of
the University and not an employee under the First Statutes.
Therefore, the Petitioner says that Section 38(12), which is part of
the Code of Conduct for Employees, cannot be used by the
Respondent in support of his case.
112. The First Statutes define the word "employee" to mean all
teaching and non-teaching employees of the University. The words
"Officer or Officers" are separately defined to mean the Officer or
Officers of the University. The Vice-Chancellor is described as an
officer. Section 6 separately deals with the service conditions,
powers and functions of the Vice-Chancellor. Under this provision,
the Vice-Chancellor is required to be a whole-time salaried officer.
This difference between the two words is required to be noticed.
The First Statutes have not used the words "employee" and
"officer" to mean the same thing. Both are separately defined. The
Vice-Chancellor is put in the category of officers. Section 38 is
given the title "Code of Conduct for Employees". Sub-clause (12)
uses the word "employee". It does not separately mention the Vice-
Chancellor or officers. The Respondent has relied upon the
decision of the Madras High Court in Dr. P. Vijayan . In paragraph
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78, the Madras High Court observed that under the statute
considered in that case, the Vice-Chancellor was appointed as an
officer and not as an employee. The Court observed:
“When the petitioner was first appointed as the First Vice
Chancellor of the University, he was not appointed as a new
employee of University. The appointment of the petitioner as
the First Vice Chancellor was not as an 'employee' as defined
in Section 2(m) of the Act. The petitioner's appointment was
as an 'officer' of the University.”
113. The Respondent relies upon this judgment to show that
officer and employee are two different things. However, this
judgment does not directly decide whether Section 38(12) of the
First Statutes of Shoolini University applies to its Vice-Chancellor.
The Madras High Court was considering the Indian Maritime
University Act and the rules made under that Act. The law
considered by that Court was different. The judgment is useful for
understanding that there can be a difference between an officer
and an employee. But what effect this difference will have in the
present case has to be decided by reading the First Statutes of
Shoolini University.
114. The Respondent has relied upon Rajendra Kumar Nagda ,
particularly paragraph 19. The Rajasthan High Court observed:
“19. In short, a reading of Section 23 of the Act of 2010
wherein list to various officers of the University read with
the definition of the teacher as given in Section 2(zh) of the
Act of 2010 along with the definition of the employee in the
Legal Glossary leaves no doubt in mind that a teacher,
employee and an officer are three separate categories.
Section 49(4) gives protection only to a teacher and an
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employee but no such relaxation is provided for an officer.
The petitioner was entitled only to the protection under
Section 24(3)(b) and not 24(3)(a) as Section 24(3)(b) refers
to experience as teacher alone. Thus, the petitioner by virtue
of Section 49(4) was able to get the relaxation for his
appointment on the various posts and promotions given to
him in the capacity of a teacher but cannot claim the same
relaxation while seeking appointment to the post of Vice-
Chancellor.”
115. This judgment supports the general position that if a statute
separately defines a teacher, an employee, and an officer, then all
three cannot be treated as one category. What result will follow
from this difference will depend upon the words used in the
concerned statute. In the present case also, the First Statutes
separately define an employee and an officer. The Vice-Chancellor
is placed in the category of officers. Section 38(12), when read in
its ordinary meaning, refers to an employee.
116. The Respondent says that Section 6(1) and Section 38(12)
should be read together. According to him, when Section 38(12)
allows outside employment after permission is obtained, Section
6(1) should not be understood as completely stopping such
employment. There is some force in the general submission that
provisions of the same statute should be read together. One
provision should not be read in a way that another provision
becomes without any use. But the difficulty in accepting the
Respondent's submission is that Section 38(12) speaks about
employees, whereas the Respondent holds the office of Vice-
Chancellor as an officer. When the First Statutes themselves
separately define these two categories, the word "employee"
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cannot be taken to include every officer without looking at the
actual words used in the Statutes.
117. The permission dated 16 January 2024 shows that the
University had given approval for establishing and participating in
the proposed company, including consultancy or employment. But
this permission was given under Section 38(12). If that provision
does not apply to the Respondent as Vice-Chancellor, then this
permission cannot be treated as giving exemption from the
requirement under Section 6(1) that the Vice-Chancellor must be a
whole-time salaried officer. No other provision has been shown
under which the Chancellor could remove or relax this
requirement. At the same time, Section 6(1) does not say in those
exact words that the Vice-Chancellor can never do any outside
work or hold any other position in every situation. It only says that
the Vice-Chancellor shall be a whole-time salaried officer. What
effect this requirement will have on his separate employment as
CEO of a private company has to be seen by considering the nature
of both positions and the duties attached to them. The main
question is whether the Respondent could perform the whole-time
duties of Vice-Chancellor and take up the responsibilities of CEO of
the Petitioner Company.
118. The UGC communication dated 23 September 2026 is
required to be considered in this connection. It was issued by the
Under Secretary, University Grants Commission, in reply to a letter
dated 24 August 2026 addressed by Mr. Aayush Mitruka. The
query mentioned the Respondent's position as Vice-Chancellor of
Shoolini University and his appointment as CEO of a private
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limited company. The UGC referred to Clause 7.3 of the UGC
Regulations of 2018 and the First Statutes of Shoolini University. It
noticed that the Vice-Chancellor "shall be a whole-time salaried
officer". Thereafter, it stated:
“Therefore, in light of the aforementioned provision, the
Vice-Chancellor functioning on a part-time basis in relation
to the university would not be legally permissible under the
said Statutes.
Hence being employed by a private company whilst being a
vice chancellor would not be legally permitted.”
119. The Petitioner says that UGC is an expert body under the
UGC Act, 1956. For this purpose, the Petitioner relies upon Rajbir
Singh Dalal , paragraph 29, where the Supreme Court observed:
“Thus, this is the view of UGC, which is an expert in
academic matters, and the Court should not sit in appeal
over this opinion and take a contrary view.”
120. The principle stated by the Supreme Court is required to be
given proper respect. UGC is an expert body in matters relating to
standards of higher education. Its opinion on academic matters
and educational standards cannot be ignored without proper
reason. But the question before this Court is not whether two
academic subjects can be treated as the same or whether a
particular qualification is suitable for a post. The question here is
about the meaning of the First Statutes of Shoolini University and
what effect is to be given to the earlier written permission granted
by its Chancellor. It is about the legal effect of the Respondent
taking employment in a private company.
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121. The UGC communication was issued on the basis of a query
made by the Petitioner's counsel. Before issuing this
communication, neither the Respondent nor Shoolini University
was heard. The letter dated 24 August 2026, on the basis of which
the clarification was asked, did not place before the UGC the
complete effect of the permission dated 16 January 2024 or the
proceedings of the Board of Management dated 4 April 2024. The
UGC communication does not discuss Section 38(12) or the
difference between an employee and an officer under the First
Statutes. It does not consider the later letter dated 19 June 2025
by which the Respondent had asked for specific approval to be
appointed as CEO.
122. There is nothing on record to show that the UGC was
exercising any power to decide the contractual rights between the
Petitioner and the Respondent or to finally decide whether the
Employment Agreement was valid. The letter does not refer to any
proceeding in which the Respondent was made a party. It does not
declare the Employment Agreement to be void. It does not cancel
or set aside the permission earlier given by the Chancellor. The
letter only gives the understanding of the UGC about the
requirement that the Vice-Chancellor must work as a whole-time
salaried officer.
123. Therefore, the UGC communication is an important opinion
given by an expert body and it cannot be ignored. But it is not a
final decision given after hearing both sides. Only on the basis of
this letter, the Employment Agreement cannot be treated as void
from the beginning. The actual effect of the First Statutes has to be
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understood by reading the words used in them. The UGC opinion
is relevant, but the Court still has to interpret the Statutes.
124. After considering the First Statutes, the permission dated 16
January 2024, the letter dated 19 June 2025 and the UGC
communication together, I find that the Respondent has not
established his defence that Section 38(12) permitted him to hold
the office of CEO. That provision speaks about employees, whereas
the Respondent holds the office of Vice-Chancellor as an officer.
The permission dated 16 January 2024 is relevant, but it cannot be
treated as an exemption from the requirement under Section 6(1)
that the Vice-Chancellor must be a whole-time officer. The letter
dated 19 June 2025 is only a request for approval. The Respondent
has not produced any separate written approval given in reply to
that request before this Court. At the same time, the Petitioner has
not established that merely because of the UGC letter, the
Employment Agreement becomes void under Section 23 of the
Contract Act. The UGC letter is not an order declaring the
agreement to be void. The Petitioner has to show that the object or
consideration of the agreement was forbidden by law or was of
such a nature that allowing it would defeat the provisions of law.
The requirement that the Vice-Chancellor must be a whole-time
officer is certainly an important matter. However, what legal effect
is to be given to the Respondent's outside employment and the
earlier approval given by the Chancellor still requires
consideration. On the material available, a final finding that the
Employment Agreement is void under Section 23 cannot be
recorded.
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The Allegation Of Misrepresentation And Rescission Under Section
19:
125. As another ground, the Company relies upon Sections 18
and 19 of the Contract Act. According to the Company, the
Respondent had represented that he was qualified and entitled to
accept the appointment as Chief Executive Officer. He had
represented that performing his duties under the Agreement would
not violate any law or require any permission. The Company says
that these statements were not correct because the Respondent
was holding the post of Vice-Chancellor. For this purpose, the
Company relies upon Clauses 4.1(a), 4.1(c), 4.1(d), 4.1(e) and
4.1(f) of the Employment Agreement. These clauses contain
statements and assurances regarding the Respondent's capacity to
enter into the Agreement, his legal eligibility, the validity of the
Agreement and the absence of any conflict with law or any other
binding obligation. The Company has referred to the Respondent's
consent letter dated 25 July 2025 and the appointment letter
dated 5 August 2025. According to the Company, these documents
again confirmed that the Respondent was eligible to hold the
position of Chief Executive Officer.
126. The Respondent does not deny that these representations
and warranties are part of the Employment Agreement. His answer
is that the Company knew that he was the Vice-Chancellor of
Shoolini University. He says that he never concealed this fact.
According to him, the Company entered into the Agreement after
the necessary permissions had been obtained from the University.
Therefore, he submits that the Company cannot now describe a
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fact which was known to it from the beginning as a
misrepresentation. The Respondent has relied upon the proviso to
Section 19 of the Contract Act. This proviso becomes relevant
where the party whose consent was obtained by misrepresentation
had the means of finding out the truth by using ordinary diligence.
In Chander Kanta Bansal , the Supreme Court explained the
meaning of “due diligence” in paragraph 16 in the following
words:
“Due diligence” means doing everything reasonable, not
everything possible. “Due diligence” means reasonable
diligence; it means such diligence as a prudent man would
exercise in the conduct of his own affairs.”
127. This principle will have to be applied to the facts of the
present case. The Respondent's position as Vice-Chancellor was not
a secret or private fact. The Employment Agreement mentions his
address at Solan, Himachal Pradesh. The Respondent says that the
Company knew about his position in the University. He says that
the Term Sheet permitted him to give reasonable time to Shoolini
University and his family ventures. The Schedule of Identified
Entities in the Employment Agreement refers to certain entities
connected with Shoolini. These circumstances give some support
to the Respondent's case that his association with Shoolini
University was not hidden from the Company. However, knowing
that the Respondent was the Vice-Chancellor and knowing the
legal effect of holding that post are two different things. The
Company may have known about his position in the University. But
its case is that the Respondent had represented that he was
entitled to accept the post of Chief Executive Officer. Whether the
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Company entered into the Agreement because of that
representation, and whether it could have discovered the legal
position by using ordinary diligence, will have to be examined by
considering the negotiations between the parties, the Term Sheet,
the permission letters and their conduct. At this stage, the
Company has not established that the Respondent concealed his
position as Vice-Chancellor. The Company has not shown what
reasonable steps it took to verify the legal position before entering
into the Employment Agreement, though the Respondent's office
as Vice-Chancellor could have been discovered. On the other hand,
the Respondent has not produced the actual permission letters to
show that the Company knew their exact terms and scope.
Therefore, on this issue, neither side has so far established its
complete case.
128. It is necessary to consider that the Company continued the
arrangement for a considerable period. The Respondent says that
the Company accepted his work, reimbursed his travelling and
hotel expenses and never complained that his presence at Solan
was affecting its business. According to him, the issue was raised
only after disputes started between the parties in March and April
2026. The Company's answer is that the legal difficulty became
clear only after it received the UGC letter dated 23 September
2026. The UGC letter issued later cannot prove that the
Respondent had made a false statement when the Employment
Agreement was entered into. The letter may support the
Company's understanding of the legal position. But whether the
Respondent made a false representation, whether he knew it to be
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false and whether the Company entered into the Agreement
because of that representation will have to be decided after
considering the complete evidence. On the material available, the
ground of rescission under Section 19 has not been established
with sufficient clarity to grant the wide interim reliefs sought by
the Company on that ground alone.
The Alleged Breach Of Clauses 12.4 And 12.5:
129. The Company has alleged that the Respondent committed
breaches of Clauses 12.4 and 12.5 of the Employment Agreement.
Clause 12.4 provides as follows:
“The Executive shall dedicate a substantial portion of his
time, resources, expertise, experience and effort in building
the Company. The Executive agrees that unless his
employment with the Company is terminated by the
Company in accordance with the terms of this Agreement,
the Executive shall continue to be employed with the
Company as its chief executive officer until the expiry of the
Lock-in Period.”
130. The Respondent submits that this clause does not require
him to give all his time exclusively to the Company. It only requires
him to give a substantial part of his time and efforts to the
Company's work. According to him, the Term Sheet had considered
that he would continue to give reasonable time to Shoolini
University and his family ventures. He says that the Company
knew from the beginning that he was continuing as Vice-
Chancellor and had accepted this arrangement. The Respondent
has relied upon the work done by him for the Company. According
to him, the Company's target was to establish eight branch
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campuses in association with foreign universities by the year 2034.
He says that within about two years, eight Letters of Intent were
obtained, and seven branch campuses were established in
association with foreign universities. He has referred to the
University of New South Wales, University of Liverpool, Illinois
Institute of Technology, University of York, University of Aberdeen,
University of Bristol and Victoria University. He says that
admissions had started or were in the process of starting. The
Company has not placed any clear material before this Court to
show that the Respondent failed to give substantial time to its
business or that the Company's work suffered because he
continued as Vice-Chancellor of Shoolini University. The
Respondent has stated that during the period when he was
working as Chief Executive Officer, the Company never made any
complaint that he was not giving sufficient time. The Company has
not given a satisfactory answer to this particular submission at this
stage.
131. The performance figures relied upon by the Respondent do
not prove that he followed every condition of the Employment
Agreement. A person may achieve business targets and still commit
a breach of some other obligation. However, these figures are
relevant for examining the allegation that the Respondent failed to
give sufficient time and effort under Clause 12.4. On the material
available, the Company has not made out a strong prima facie case
that Clause 12.4 was breached.
132. Clause 12.5 is different. It places restrictions upon the
Respondent's involvement in other organisations and business
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ventures. The relevant part of the clause provides:
“For the avoidance of doubt, it is hereby clarified that
nothing under Clauses 12.3(b) and 12.3(d), shall apply to
the functioning and reasonable involvement of the Executive
in the Identified Entities, as long as the Executive is not, or
indirectly, acting in the capacity of a 'chief executive officer
(or any other similar leadership or managerial position)' at
any of these organizations and provided that such
involvement, does not adversely impact, affect or impede
any of the obligations, responsibilities, undertakings and
covenants of the Executive towards the Company and/or
Eruditus, as set forth in the Transaction Documents.
Save and except as provided hereinabove, the Executive
agrees that, on and from the Execution Date, he shall not, or
indirectly, establish, launch, promote, or otherwise be
involved in any manner in any other business, brand or
venture other than the Business without obtaining the
consent of Eruditus…”
133. This clause is wider than an ordinary condition requiring the
Executive to give sufficient time to the Company. It refers to the
position of Chief Executive Officer or any other similar leadership
or managerial position in another organisation. It restricts the
Respondent from becoming involved in another business, brand or
venture without obtaining the consent of Eruditus, except in those
cases which are permitted under the clause.
134. The Respondent's position as Vice-Chancellor is certainly a
leadership position in Shoolini University. The fact that he was
holding that position before entering into the Employment
Agreement does not by answer whether he could continue in that
position after the Agreement came into force. Clause 12.5 will
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have to be read along with the meaning of “Identified Entities” and
the Schedule attached to the Agreement. The Schedule refers to
“Acic Shoolini University” and certain other entities connected with
Shoolini. However, from the wording of the Schedule, it is not
shown that Shoolini University of Biotechnology and Management
Sciences was included as an Identified Entity.
135. The Respondent says that Shoolini University is a statutory
University and not a competing business venture. He says that the
University was in existence and the Company knew about it. The
Company's answer is that Clause 12.5 is not limited only to a
business which competes with the Company. According to the
Company, this clause prevents the Respondent from holding any
other leadership or managerial position without obtaining the
consent of Eruditus.
136. The Company's interpretation finds some support from the
words used in Clause 12.5. The clause refers to a “chief executive
officer (or any other similar leadership or managerial position)”.
Therefore, it cannot be read as if it only prevents the Respondent
from establishing a competing company. At the same time, the
entire clause and the Schedule of Identified Entities will have to be
considered together. Whether the continued office of Vice-
Chancellor falls within the restriction relating to an “other
business, brand or venture”, and whether the University or any
related entity was covered by the Identified Entities exception, will
require examination of the complete documents and the
negotiations between the parties.
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137. The Respondent's submission that the Term Sheet permitted
him to give reasonable time to Shoolini University is relevant.
However, a general understanding recorded in the Term Sheet
cannot prevail over the clear terms of a later written Employment
Agreement. It will have to be shown that the Employment
Agreement or the other surrounding documents permitted the
earlier understanding to continue. This issue will have to be
examined by the arbitral tribunal.
138. The question of consent is important. The Respondent relies
upon permission said to have been given by the Chancellor of
Shoolini University. If proved, such permission may show that the
University allowed him to accept outside employment under its
Statutes. But it does not by establish that Eruditus had given its
consent under Clause 12.5 of the Employment Agreement. The
permission of the University and the consent of Eruditus arise from
different documents and different legal relationships. The
Respondent will have to establish the terms of both, if he relies
upon them. Therefore, the Company's case under Clause 12.5
raises a more serious issue than its case under Clause 12.4. The
post of Vice-Chancellor is a leadership position. Clause 12.5 places
restrictions on holding such positions in other organisations in the
circumstances mentioned there.
139. The Respondent has submitted that under Clause 9.3(a) of
the Employment Agreement, he was required to be given thirty
Business Days to correct a breach of a Material Provision. The
relevant part of the clause provides for termination where there is
a breach of a Material Provision which is not corrected within
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thirty Business Days after receiving a written notice describing the
breach. According to the Respondent, the Company did not give
him any such notice and did not provide him an opportunity to
correct the alleged breach.
140. The Company's answer is that these breaches were not
capable of being corrected by the Respondent. According to the
Company, he could not hold two whole-time offices at the same
time. It says that if any warranty was wrong at the time when it
was given, his later conduct cannot make that warranty correct.
The termination letter dated 29 September 2026 states:
“These breaches cannot be cured. A warranty that was
untrue when given cannot be made good by later conduct.
The breaches of covenant by you, which form the basis of
your engagement, have continued throughout, and go to the
root of the basis on which you were engaged.”
141. This submission of the Company will have to be considered
along with the actual words used in Clause 9.3(a). Under this
clause, some time is required to be given for correcting a breach of
a Material Provision. The meaning of Material Provisions is
important. The Shareholders' Agreement considers the non-
compete and non-solicit conditions of the Employment Agreement
as Material Provisions. These restrictions are contained in Clause
12.5. Therefore, the Respondent's objection that he was entitled to
thirty Business Days to correct the alleged breach cannot be
ignored. At this stage, the Company has not explained why the
time given under the Agreement for correcting a breach could be
ignored in respect of the alleged breach of Clause 12.5. Merely
saying that the breach was continuing or could not be corrected is
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not enough to avoid the requirement of Clause 9.3(a). The
Company will have to show that the termination was justified
under some other condition of the Agreement or under the
Contract Act. It will have to show that the nature of the breach
comes within the meaning of “Cause” used in the Agreement.
142. The Company has relied upon Sections 23 and 19 of the
Contract Act as other grounds for taking its action. These grounds
do not depend upon the correction period in the same manner as a
termination for breach under Clause 9.3(a). However, the grounds
under Sections 23 and 19 involve disputed facts and legal
questions. At this stage, the Company has not shown that the
objections raised by the Respondent are without any substance.
Therefore, at this stage, there is not enough material to support
the allegation that the Respondent committed breach of Clause
12.4. The allegation concerning Clause 12.5 raises a serious
question. However, what will be the effect of the correction period
and what is the actual meaning and extent of this clause will have
to be decided in arbitration. This Court will not finally decide these
questions in the present Petition.
On The Validity And Effect Of Subsequent Ratification By The
Board Of Directors:
143. The Respondent has objected to the ratification made by the
Board of Directors on 19 October 2026. According to him, when
the letter dated 29 September 2026 was issued, there was no
resolution of the Board authorising such termination. His case is
that the Company could not first terminate his employment by a
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letter signed by two Directors and thereafter call a Board meeting
by giving less than eight hours' notice only for making that letter
valid. Therefore, according to him, the meeting so called cannot be
considered as a proper meeting of the Board. In support of this
objection, he has relied upon Section 173(3) of the Companies Act,
2013, Rule 8(2) of the Companies (Meetings of Board and its
Powers) Rules, 2014, Article 76 of the Articles of Association and
Clauses 3.4(b), 3.4(c) and 3.4(d) of the Shareholders' Agreement.
144. The Petitioner submits that the letter dated 29 September
2026 was issued by the Company through its Directors and in the
name of the Company. It was not a personal communication of the
two Directors. According to the Petitioner, the Board had the
power to terminate the employment of the Chief Executive Officer.
Even if it is accepted that a prior resolution of the Board was
necessary, the defect could be corrected by the Board giving its
approval afterwards, since the Board had the required power.
Accordingly, the Board held its meeting on 19 October 2026 and
approved and ratified the decision taken in the letter dated 29
September 2026. Therefore, the Petitioner submits that the
Respondent cannot now say that there is no decision of the Board
for terminating his employment.
145. I have considered the submissions of both sides and the
documents placed before the Court. In my view, two matters are
required to be seen separately. First, whether the letter dated 29
September 2026 was issued by the Directors while acting for and
on behalf of the Company. Second, whether the Board which
approved that action afterwards had the power to give such
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approval and whether the meeting dated 19 October 2026 was
properly called and held. If these requirements are not satisfied,
the Petitioner cannot rely upon the principle of ratification.
146. The letter dated 29 September 2026 is addressed to the
Respondent in the name of Daskalos Technologies Private Limited.
In paragraph 1 of the letter, the Company has stated that the
communication is being issued to the Respondent on behalf of the
Company. It refers to the Employment Agreement dated 1 July
2025. Thereafter, the Company has stated that the agreement is
void ab initio under Section 23 of the Contract Act and is liable to
be rescinded under Section 19 of the said Act. In the alternative, it
has stated that the agreement is terminated with immediate effect.
The letter is signed by Ashwin Damera Venkata and Chaitanya
Kalipatnapu as Directors and authorised representatives acting for
and on behalf of the Company. These facts are required to be kept
in view. The letter was not issued by any outsider or by any person
who had no connection with the Company. It was not issued by a
person who had ceased to hold office or had no role in the
management of the Company. It was issued by two Directors in the
name of the Company and for the purpose stated to be protecting
the Company's interest. Whether these Directors had obtained
prior approval of the Board before issuing the letter is another
question. But only because such prior approval was not obtained,
the act does not become an act of a different nature. The Directors
had claimed to take the action for and on behalf of the Company.
This is the first matter which is required to be considered for
applying the principle of ratification.
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147. For deciding this issue, it is not in dispute that the Board has
the power to remove the Chief Executive Officer. Section 2(51) of
the Companies Act, 2013 includes the Chief Executive Officer in
the definition of key managerial personnel. Rule 8(2) of the
Companies (Meetings of Board and its Powers) Rules, 2014
provides that the power to appoint or remove key managerial
personnel is to be exercised by the Board by passing a resolution in
its meeting. The Respondent has relied upon this provision. He has
referred to Article 76 of Part A of the Articles of Association,
which, according to him, requires removal of the Chief Executive
Officer through a Board resolution. Clause 9.3(a) of the
Employment Agreement refers to the power of the Board to
terminate the employment of the Executive when the stated
termination events arise.
148. Thus, the authority to take a decision regarding removal of
the Respondent from the post of Chief Executive Officer was with
the Board of Directors. There is nothing on record to show that the
Board had lost this power or had given up such power. The Board
continued to exist and the Directors continued to hold their
respective offices. It continued to have the authority to conduct the
business of the Company under the Companies Act, the Articles of
Association and the Shareholders' Agreement. Therefore, this is not
a case where an outsider or a person having no connection with
the Company assumed the power to terminate the Respondent.
The position is that two Directors issued the letter in the name of
the Company and on its behalf, but the formal decision of the
Board was required to be recorded thereafter.
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149. The difference between an act which cannot be ratified and
an act which can be approved by ratification afterwards has been
explained by the Supreme Court. In Maharashtra State Mining
Corpn , paragraph 7, the Supreme Court held:
“7. The High Court was right when it held that an act by a
legally incompetent authority is invalid. But it was entirely
wrong in holding that such an invalid act cannot be
subsequently “rectified” by ratification of the competent
authority. Ratification by definition means the making valid
of an act done. The principle is derived from the Latin
maxim ratihabitio mandato aequiparatur, namely, “a
subsequent ratification of an act is equivalent to a prior
authority to perform such act”. ratification assumes an
invalid act which is retrospectively validated.”
150. The Supreme Court applied the same principle in paragraph
10 of that judgment and observed as follows:
“10. In the present case, the Managing Director's order
dismissing the respondent from the service was admittedly
ratified by the Board of Directors on 20-2-1991 and the
Board of Directors unquestionably had the power to
terminate the services of the respondent. On the basis of the
authorities noted, it must follow that since the order of the
Managing Director had been ratified by the Board of
Directors such ratification related back to the date of the
order and validated it.”
151. The principle explained in these paragraphs applies to the
present matter. The Board had the authority to take a decision for
removal of the Chief Executive Officer. The action which is now
sought to be ratified was taken by the Directors in the name of the
Company and for the Company. It may be that on the date when
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the letter dated 29 September 2026 was issued, there was no
formal resolution of the Board. Because of this, the action may not
have been properly authorised at that time. But that does not
mean that the Board, which had the power to take such decision,
could not approve the action afterwards. The same principle has
been explained by the Supreme Court in Parmeshwari Prasad
Gupta , paragraph 14. The Supreme Court held:
“Even if it be assumed that the telegram and the letter
terminating the services of the appellant by the Chairman
was in pursuance to the invalid resolution of the Board of
Directors passed on 16-12-1953 to terminate his services, it
would not follow that the action of the Chairman could not
be ratified in a regularly convened meeting of the Board of
Directors. The point is that even assuming that the Chairman
was not legally authorised to terminate the services of the
appellant, he was acting on behalf of the Company in doing
so, because, he purported to act in pursuance of the invalid
resolution. Therefore, it was open to a regularly constituted
meeting of the Board of Directors to ratify that action which,
though unauthorized, was done on behalf of the Company.
Ratification would always relate back to the date of the act
ratified and so it must be held that the services of the
appellant were validly terminated on 17-12-1953.”
152. The important point in this judgment is that though the
Chairman had acted without proper authority, he had acted for
and on behalf of the Company. The Board, which was properly
constituted and had the necessary power, thereafter approved that
action. The Supreme Court held that such later approval would
relate back to the date when the original action was taken. The
same principle is applicable here. The two Directors who signed
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the letter dated 29 September 2026 had claimed to act for
Daskalos Technologies Private Limited. Thereafter, the Board
considered that very letter and approved and ratified the decision
stated in it.
153. The Respondent has submitted that there was no earlier
resolution of the Board and that the Petitioner has not produced
any such resolution. In my view, this submission alone cannot
make the subsequent ratification ineffective. It may be accepted
that no formal resolution of the Board was passed before issuing
the letter dated 29 September 2026. But the resolution passed on
19 October 2026 does not require that some earlier resolution
must be in existence. The very purpose of ratification is to approve
an act which was done without proper authority at the time when
it was done. If an earlier Board resolution was necessary to be in
existence, there would be no need to apply the principle of
ratification to an act which was originally done without authority.
Therefore, merely because no earlier resolution was passed, the
subsequent ratification cannot be held to be ineffective.
154. The Respondent has relied upon Dhurandhar Prasad Singh ,
paragraph 22. The Supreme Court has explained the difference
between an act which is completely void and an act whose legal
effect can be avoided by taking proper legal steps. The relevant
observation is as follows:
“One type of void acts, transactions, decrees are those which
are wholly without jurisdiction, ab initio void and for
avoiding the same no declaration is necessary, law does not
take any notice of the same and it can be disregarded in
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collateral proceeding or otherwise.”
155. The Supreme Court has held that there can be other acts
which are not complete nullities and whose legal effect may be
avoided by obtaining an appropriate declaration or by taking
proper legal proceedings. Therefore, merely because an act suffers
from some defect, it cannot in every case be treated as an act
which is completely without jurisdiction and which can never be
corrected.
156. In the present case, the letter dated 29 September 2026 was
issued by the Directors of the Company claiming to act for and on
behalf of the Company. The subject of the letter was a matter
which the Board had the power to decide. The objection of the
Respondent is that no earlier resolution of the Board was passed.
Thus, the defect pointed out by him is regarding the manner in
which the internal authority of the Company was exercised. This is
not a case where an outsider, having no authority in the Company,
took upon himself the power of the Board. It is not a case where
the Board had no legal power to decide about the employment of
the Chief Executive Officer. When the competent Board approved
the action by passing a formal resolution in its meeting, the earlier
defect in exercising the authority could be corrected. I am unable
to accept the Respondent's submission that the letter dated 29
September 2026 was such a nullity that it could never be ratified.
157. The Respondent has relied upon the judgment in The
Agriculture Produce Market Committee , paragraph 34. In that
case, the Court considered Section 52B and held that the power to
pass an eviction order was given to the Market Committee. The
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Dispute Sub-Committee had no jurisdiction under the statute to
pass such an order. Therefore, the Court held that the order passed
by the Dispute Sub-Committee was void ab initio and non est.
Such an order could not be made valid by subsequent ratification.
The Court described such an order as a “still born child to which
life cannot be infused”.
158. However, the facts of that case are different from the facts of
the present matter. In that case, the authority which passed the
eviction order had no power under the statute to pass such an
order. The Market Committee, which was the authority having the
necessary power, could not make an order passed by an authority
having no jurisdiction valid merely by approving it afterwards. In
the present case, the Board has the power to take a decision
regarding removal of the Chief Executive Officer. The letter was
issued by the Directors in the name of the Company and for the
Company. The Board has not tried to ratify an act which was
outside its own legal powers. It has approved an act which was
done for the Company, though the required formal approval was
not obtained at the earlier stage. Therefore, the principle laid
down in The Agriculture Produce Market Committee is not
applicable to the facts of the present case.
159. The judgment of this Court in Ghanshyam Malhotra , does
not support the Respondent. In paragraphs 53, 55 and 57 of that
judgment, this Court considered the difference between a case
where an officer of an organisation acts beyond the power given to
him and a case where the person taking the decision had ceased to
hold the office in which he was acting. In that case, the Court
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found that the Administrator had ceased to have authority as an
Administrator. He had no power to take the policy decision
regarding termination of the lease of a member. On this basis, the
Court held that the later ratification could not make such decision
valid. The difference is that the Administrator in Ghanshyam
Malhotra had ceased to hold the office in which he had acted. He
had no authority to take the policy decision in question. In the
present case, the persons who issued the letter dated 29
September 2026 continued to be Directors of the Petitioner
Company. They acted in the name of the Company and for the
Company. The Board had the power to take a decision regarding
the Respondent's employment. Therefore, the facts of the present
case are nearer to the decisions in Maharashtra State Mining
Corpn . and Parmeshwari Prasad Gupta , and not to the facts
considered in Ghanshyam Malhotra .
160. The Respondent has relied upon the principles regarding
ratification explained by this Court in Pravinkumar R. Salian . The
principle stated there is that the person whose act is to be ratified
must have acted for and on behalf of another person; the person
who gives ratification must have the authority to perform that act;
and the ratification must be given with knowledge of the act which
is being approved. I agree that these requirements are required to
be examined. However, in the present case, all these requirements
are satisfied. The letter dated 29 September 2026 states that it was
issued on behalf of the Company. The Board had the authority to
decide about the employment of its Chief Executive Officer.
Further, the agenda for the meeting dated 19 October 2026
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referred to the letter dated 29 September 2026, and a copy of that
letter was attached to the notice. Thus, the Board knew about the
particular action which was placed before it for approval.
161. The resolution dated 19 October 2026 does not contain any
general or uncertain approval. It states:
“The Board notes, confirms, and ratifies its decision in the
letter dated 29 September 2026, amongst others,
terminating the employment agreement dated 1 July 2025 of
Mr. Atul Khosla.”
162. The resolution records that the Respondent was not entitled
to vote on the said resolution. It refers to the filing of the present
Petition under Section 9 of the Arbitration and Conciliation Act,
1996, and the ad-interim order passed by this Court on 15 October
2026. Therefore, the question of ratification was placed before the
Board. The Board did not merely approve some general action
taken by its Directors. It clearly approved and confirmed the
decision which was contained in the letter dated 29 September
2026.
163. The Respondent has questioned the validity of the Board
meeting dated 19 October 2026 on the ground that the notice of
the meeting was sent by email at 9:37 a.m. on the same day,
whereas the meeting was fixed at 5:30 p.m. He has relied upon
Section 173(3) of the Companies Act, 2013, which ordinarily
requires not less than seven days' notice in writing to every
Director at the address registered with the Company. He has relied
upon Clause 3.4(c) of the Shareholders' Agreement. This clause
provides for seven days' prior written notice, unless the majority of
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the Directors have given written consent for holding the meeting at
shorter notice. According to the Respondent, he had not given such
consent. Therefore, he submits that the meeting dated 19 October
2026 was not a valid meeting.
164. The objection regarding notice is required to be considered
by reading the complete provision of Section 173(3), and not only
the first part of it. The same provision permits a Board meeting to
be called at shorter notice when there is urgent business. The
provisor equires that at least one independent Director, if any,
should be present at such meeting. If no independent Director is
present, the decision taken at the meeting is required to be
circulated to all Directors and it becomes final only after
ratification by at least one independent Director, if any. The words
“if any” are important. They show that this requirement will apply
only where the Company has an independent Director. The Board
composition disclosed in the Shareholders' Agreement consists of
the Founder Director and the Directors appointed by Eruditus.
There is no material to show that the Company had any
independent Director on its Board.
165. The notice dated 19 October 2026 was sent to the Directors
through electronic means. The Respondent himself has accepted
that he received the notice and had sent a detailed reply to it.
Therefore, this is not a case where the Respondent had no
knowledge of the meeting or where the notice was not received by
him. In his letter dated 19 October 2026, he himself referred to the
notice sent at 9:37 a.m. and the meeting fixed at 5:30 p.m. The
notice was accompanied by the agenda and notes to the agenda.
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The notes informed the Directors that the meeting was being
called at shorter notice and that the Board was required to take
note of the proper circulation of such notice.
166. The Respondent has submitted that there was no urgency for
calling the meeting at shorter notice. I am unable to accept this
submission. The notes to agenda item 6 record that the Company
had filed the present Petition under Section 9 of the Arbitration
and Conciliation Act and that this Court had passed an ad-interim
order on 15 October 2026. The Petition was fixed for final disposal
on 23 October 2026. Thus, the Board meeting was called on 19
October 2026, only four days before the next date fixed by this
Court. The Company was required to place before this Court the
formal decision of its competent Board regarding termination of
the Chief Executive Officer. Therefore, there was a real need to
consider the question of authority of the Company before the next
hearing of the Petition. This urgency was not created without any
reason after calling the meeting. In the facts of the present case,
the Board was entitled to consider the matter as urgent business
under Section 173(3).
167. Clause 3.4(c) of the Shareholders' Agreement is required to
be read together with Clauses 3.4(b) and 3.4(d). Clause 3.4(b)(i)
provides that the presence of an Eruditus Director and the Founder
Director is necessary for quorum, so long as the Founder continues
to be employed as the Chief Executive Officer. On the other hand,
Clause 3.4(d) provides that the Founder Director shall not be
entitled to vote on a resolution relating to his own employment
without Eruditus Consent. These clauses show that the Founder
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Director was not given an independent right to stop a decision
concerning his own employment only by refusing to attend the
meeting or by not giving his vote.
168. The letter dated 29 September 2026 had terminated the
Employment Agreement with immediate effect. Thereafter, the
Board meeting dated 19 October 2026 was called for confirming
and ratifying that decision. Once the Board ratified the decision
afterwards, such ratification related back to the date of the original
act. Therefore, while considering Clause 3.4(b)(i), the Respondent
cannot rely upon the alleged absence of an earlier resolution and
say that he continued in employment for every purpose. At the
same time, he cannot say that the decision which the Board had
the authority to take could never be ratified. The requirement
regarding presence of the Founder Director was connected with his
employment as Chief Executive Officer. Once the Board ratified the
decision, his employment stood terminated from 29 September
2026. In these circumstances, his presence was not necessary for
completing the quorum of the subsequent Board meeting.
169. The Respondent continued to be a Director of the Company,
subject to the provisions of the Shareholders' Agreement.
Therefore, he was entitled to receive notice of the Board meeting.
The record shows that he received the notice by email and gave his
reply. However, his right as a Director to receive notice cannot be
treated as a right to stop the Board from passing a resolution
concerning his own employment. His right to vote on that matter
was restricted by Clause 3.4(d) of the Shareholders' Agreement
and Clause 9.4 of the Employment Agreement. The two Directors
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appointed by Eruditus formed the majority of the Board. The
notice was issued by Chaitanya Kalipatnapu and the certified
resolution was signed by Ashwin Damera Venkata. The agenda
placed before the Board the question of taking note of proper
circulation of the shorter notice. Thereafter, the Board passed the
resolution approving and ratifying the decision contained in the
letter dated 29 September 2026. On the material available before
me, I find that the requirement for holding the meeting at shorter
notice was complied with by the majority of Directors who were
competent to take the decision.
170. The Respondent has submitted that the meeting should have
been held physically at the registered office of the Company. This
submission cannot be accepted. Clause 3.4(e) of the Shareholders'
Agreement permits the Directors to take part and vote through
telephone, video conferencing or other means of communication
which allow them to communicate at the same time, in the manner
permitted by law. The notice dated 19 October 2026 informed the
Directors that the meeting would be held through video
conferencing. There is no material placed before the Court to show
that holding the meeting through video conferencing was not
permitted for the business which was placed before the Board.
171. I have considered the submission that the notice did not
contain the complete text of the Board resolution dated 17
February 2025. That resolution was regarding the general
authority given to the Directors for signing contracts, affidavits and
other documents for the Company. It is true that such general
authority could not take the place of the resolution required under
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Rule 8(2) for removing a key managerial person. However, the
Petitioner is not relying upon the resolution dated 17 February
2025 as the final authority for removing the Respondent. The
formal decision regarding his removal is based upon the
subsequent resolution dated 19 October 2026. The earlier
resolution is relevant only for showing that the Directors who
issued the letter dated 29 September 2026 were acting in the
name of the Company and for the Company, and not in their
personal capacity. Thereafter, the Board passed the resolution
adopting and ratifying that decision.
172. The Respondent has referred to the earlier order passed by
this Court on 15 October 2026. He has relied upon the observation
that the material then available did not show whether a separate
or corresponding Board resolution had been properly passed in a
meeting for removing him as Chief Executive Officer. This
observation was made on the basis of the documents which were
available before the Court at that time. The certified resolution
dated 19 October 2026 came into existence thereafter. It records
that the Board met on 19 October 2026 and ratified the letter
dated 29 September 2026. Therefore, the earlier order cannot be
read as a final finding that such ratification could never be made.
At that stage, the Court had only noticed that the Board resolution
was not available on record. The subsequent resolution is required
to be considered separately for deciding its legal effect.
173. I am conscious that the certified copy of the resolution dated
19 October 2026 is the main document produced by the Petitioner
for showing the decision of the Board. The complete minutes and
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attendance record of that meeting have not been separately placed
before the Court in the material relied upon. However, the certified
copy states that it is a true copy of the resolution passed by the
Board in its meeting held on 19 October 2026. It is signed by
Ashwin Damera Venkata as Director and contains the exact
resolution regarding the letter dated 29 September 2026. The
notice of the meeting and the notes to the agenda mention the
date, time, mode of meeting and the business which was proposed
to be considered. The Respondent has produced his objection to
the notice. However, he has not produced any material to show
that the certified resolution was fabricated or that the Board had
not passed such resolution. His objection regarding shorter notice
has been considered and rejected for the reasons stated above.
174. The judgment in Runciman , has been placed before the
Court. In that case, the Court considered whether the service
contract of a Director had been determined by the other Directors
in the manner required under the Articles of Association. The
Court observed that when the Directors know about the matter
and have an opportunity to object, but agree to the decision, the
law does not in every case insist that their consent must be
expressed in one particular form. The Court observed:
“That directors, provided they act unanimously, can act
informally appears clearly established.”
175. The facts of that case are not similar to the present matter.
Here, there is no need to depend upon any informal or implied
consent in place of a formal decision of the Board. The Petitioner
has produced a written resolution passed in a Board meeting. The
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judgment in Runciman is relevant only for showing that the
internal decision-making of a Company has to be considered with
reference to its Articles of Association and the agreement between
its members. It does not mean that a Company can ignore any
mandatory requirement of law. In the present case, the
requirement under Rule 8(2) was complied with by the subsequent
resolution passed by the Board.
176. The Respondent has referred to the Duomatic Principle
considered by the Supreme Court in Mahima Datla , paragraphs 25
to 28. The Supreme Court explained that under this principle, a
matter which could have been approved by a formal resolution of
the members in a general meeting may, in certain circumstances,
be approved informally if all the members who were entitled to
attend and vote give their consent. The Supreme Court has made it
clear that this principle applies only to bona fide transactions and
that fraud is an exception.
177. In the present case, there is no need for the Court to apply
the Duomatic Principle. The Petitioner is relying upon a formal
resolution passed by the Board in its meeting dated 19 October
2026. The validity of that resolution is required to be considered
under the Companies Act, the Articles of Association and the
Shareholders' Agreement. This is not a case where the Petitioner
wants the Court to treat an informal understanding between
shareholders as a substitute for a Board resolution which is
required under law. At the same time, the allegation of fraud or
conspiracy made by the Respondent cannot make the ratification
invalid. There must be some material to show that the ratification
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was fraudulent or that the Board had acted for some improper
purpose. Such a finding cannot be made only because the
Respondent disputes the allegations made against him in the
termination letter.
178. The UGC letter dated 23 September 2026 states that the
Vice-Chancellor of Shoolini University is a whole-time salaried
officer and thereafter says that he cannot be employed by a private
company while holding that office. The Respondent has disputed
the authority, basis and legal effect of this communication.
According to him, the letter was issued in reply to a
communication made by a third person and without giving him or
the University an opportunity of being heard. The Petitioner relies
upon this letter as an expert clarification given by the UGC.
However, for deciding the question of ratification, it is not
necessary to decide the complete effect of this letter. Whether the
Employment Agreement was prohibited by law, whether any
representation made by the Respondent was false and whether the
Company entered into the agreement on the basis of such
representation are separate questions. The subsequent resolution
of the Board cannot prove these allegations. Similarly, the dispute
about the meaning of the University Statutes does not take away
the power of the Board to ratify an act done on behalf of the
Company.
179. The Respondent has relied upon Clause 9.3(a) of the
Employment Agreement. According to him, under this clause, if
there is a breach of any Material Provision, the Company must first
give a written notice and allow 30 Business Days to correct the
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breach. Only if the breach is not corrected within that period, the
Company can terminate the agreement on that ground. This is an
important submission. The later resolution of the Board cannot be
used for removing or avoiding a condition which the parties
themselves had agreed upon in the Employment Agreement. If the
Petitioner wants to justify the termination on the ground of breach
of a Material Provision, it will have to show that the requirement
of written notice and opportunity to correct the breach was
followed. Alternatively, it will have to establish some other
separate legal ground for termination. The ratification by the
Board may establish the corporate authority of the Company to
issue the letter. But it does not prove that every alleged breach had
taken place, that such breach could not be corrected, or that the
agreed period for correcting the breach was not required. In the
same manner, the subsequent ratification by the Board does not
establish that the Employment Agreement was void under Section
23 of the Contract Act or that it was properly rescinded under
Section 19. These questions depend upon the actual prohibition
under law, if any, the representations made by the Respondent,
what was known to the Company and the material on the basis of
which the Company entered into the agreement. The Board could
approve the act of issuing the letter on behalf of the Company. But
merely by passing a resolution, the Board could not make an act
which was legally permitted into an illegal act. It could not prove a
misrepresentation unless the necessary facts were established.
These questions are separate from the question whether the
corporate action was validly ratified by the Board.
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180. Therefore, the validity of the ratification and whether the
grounds mentioned in the termination letter are correct have to be
considered separately. The Respondent's submission that the
absence of a Board resolution on 29 September 2026 makes later
ratification impossible cannot be accepted. The Petitioner has
shown that the letter was issued by two Directors acting for and on
behalf of the Company. The Board had the authority to take a
decision regarding removal of the Chief Executive Officer.
Thereafter, on 19 October 2026, the Board passed a formal
resolution adopting and ratifying the decision contained in the
letter dated 29 September 2026. Therefore, the requirements
explained by the Supreme Court in Maharashtra State Mining
Corpn. and Parmeshwari Prasad Gupta are satisfied.
181. I hold that the resolution dated 19 October 2026 is a valid
ratification made by the competent Board of Directors. Such
ratification will relate back to the date of the original act, namely,
29 September 2026. The fact that no formal Board resolution was
passed before issuing the letter dated 29 September 2026 does not
make that action incapable of being ratified. Therefore, the
objection of the Respondent that the Board had no power to make
the action valid is rejected. However, this finding is limited to the
legal effect of the subsequent ratification made by the Board. It
establishes the corporate decision and the authority of the
Company to issue the letter dated 29 September 2026. It does not
prove that every allegation made against the Respondent is true. It
does not establish that every alleged breach of the agreement has
taken place or that Sections 18, 19 or 23 of the Contract Act apply.
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Those questions will have to be decided on the basis of the
evidence and the terms of the agreements. The resolution of the
Board cannot be treated as proof of facts which are still required to
be established.
182. In view of the above discussion, my findings are that the
action stated in the letter dated 29 September 2026 was taken by
the Directors for and on behalf of the Company and was capable of
being ratified; the Board of Directors had the authority to take a
decision regarding removal of the Chief Executive Officer; the
meeting held on 19 October 2026 and the resolution passed
therein validly approved and ratified the earlier decision; such
ratification relates back to 29 September 2026; and the objection
of the Respondent based only upon the absence of an earlier Board
resolution cannot be accepted. Therefore, the subsequent
ratification is held to be valid and binding as a corporate decision
of the Petitioner Company. At the same time, both parties will have
the right to place their evidence before the Arbitral Tribunal on the
separate questions as to whether the grounds stated in the
termination letter are proved on facts and under law, whether the
conditions of Clause 9.3(a) of the Employment Agreement were
followed, and whether the Employment Agreement was void,
rescinded or validly terminated on the main grounds stated by the
Petitioner. The findings made above regarding ratification shall not
be treated as deciding those separate questions only because the
Board has subsequently approved the letter dated 29 September
2026.
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Whether The Respondent Can Continue To Hold Himself Out As
Chief Executive Officer:
183. The Petitioner has stated that the Respondent is still showing
his name as Chief Executive Officer on his LinkedIn profile. It is its
case that, during the period of his suspension, he attended a
launch programme with a partner university and there showed
himself as the Chief Executive Officer of the Company. The
Respondent has denied these allegations. According to him, merely
because his LinkedIn profile shows that designation or he attended
the said programme, it cannot be said that he was claiming any
unauthorised power to act for the Company. He has denied that
any third party entered into any transaction with him believing
that he had authority to bind the Company. According to the
Respondent, the Petitioner has not shown any actual loss, liability
or confusion caused to it on this account.
184. From the material which is placed before me, it appears that
in his letter dated 30 September 2026, the Respondent has stated
that he would “continue to hold office as CEO of the Company”.
This shows that he has not accepted the decision taken by the
Company and his stand is that he continues to hold the said office.
He is entitled to take this stand in the present proceedings and say
that the termination is not legal. But only by making such
statement, he does not get the authority to act for the Company or
to make the Company bound by his acts. The question which is
required to be seen is whether he can make such statements before
third parties in a manner that they may understand that he is still
authorised to act as the present Chief Executive Officer of the
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Company.
185. There is a difference between saying that the termination is
disputed and claiming that one still has authority to act for the
Company. The Respondent can state that he was appointed as
Chief Executive Officer, that the Company issued the termination
letter dated 29 September 2026 and that he is disputing the
legality of that termination. He can say that his contractual rights
are still pending for decision. He may describe himself as the
former Chief Executive Officer and may take all legal remedies
available to him, including claiming damages or other reliefs as
permitted by law. But merely because he says that the termination
is not valid, he cannot continue to give instructions to the
employees, sign documents as Chief Executive Officer, make
commitments for the Company or represent before any third party
or public authority that he has authority to bind the Company. This
difference is required to be kept in mind having regard to the facts
of the present case. The Company has placed on record the formal
resolution passed by its Board on 19 October 2026. By this
resolution, the Board has ratified the decision which was recorded
in the letter dated 29 September 2026. Thus, there is a record
showing that the Company has taken a decision not to continue
the Respondent's employment as Chief Executive Officer. The
Respondent is still entitled to dispute the contractual grounds on
which this decision was taken. But unless the said resolution is set
aside, stayed or otherwise affected by an order of a competent
forum, the Company is entitled to state its own corporate position
and carry on its business through the persons whom it considers as
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authorised representatives. The Respondent cannot create another
or competing executive authority only by continuing to claim that
he holds the designation of Chief Executive Officer.
186. The balance of convenience requires that some limited
restraint should be imposed. The Company is having business
dealings with foreign universities, investors, employees, vendors,
regulators and other persons. All such persons should be in a
position to know who has authority to give instructions and make
commitments on behalf of the Company. If the Company considers
the Respondent as no longer being its Chief Executive Officer,
while the Respondent continues to show himself publicly as the
present Chief Executive Officer, there may be confusion about
whose instructions are to be followed and who can bind the
Company. The Company is not required to wait until some third
party enters into a transaction with the Respondent or suffers any
loss before approaching the Court for protection. The possibility of
two different persons claiming executive authority itself requires a
limited preventive order. However, such order should not decide
the disputed contractual rights of the parties.
187. The submission of the Respondent that he continues as
Whole-Time Director is correct to the limited extent discussed
above. The present restraint cannot prevent him from performing
his lawful duties as Director or exercising his rights as shareholder.
It cannot prevent him from receiving notices of Board meetings,
attending and participating in such meetings or asking for
information which he is entitled to receive as Director. The
Company will have to respect any separate right of access which
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the Respondent may have under law in that capacity. But his
position as Director cannot be used as a reason for exercising the
separate executive powers which belong to the Chief Executive
Officer.
188. I have therefore considered separately the question whether
the termination is valid and whether the Respondent can represent
himself as having authority to act for the Company. So far as the
first question is concerned, I find that the Petitioner has not been
able to establish a prima facie valid termination under Clause
9.3(a) on the ground of breach of Clauses 12.4 and 12.5. This is
because the agreed notice of 30 Business Days and opportunity to
cure the alleged breaches were not given to the Respondent. The
record does not show any final decision of the Third-Party Expert
or the other authority mentioned in the agreement holding that
Cause had occurred. The separate grounds under Sections 19 and
23 of the Contract Act do raise serious questions for consideration.
However, the permissions given by the University, the fact that the
Company knew about the Respondent's existing office and the
limited nature of the UGC communication do not permit me to
treat those grounds as finally established at this stage. The later
ratification by the Board does not remove these defects in the
substantive grounds on which the termination was made.
189. So far as the second question is concerned, I find that the
Board has passed a formal resolution which, for the reasons
recorded in the earlier part of this opinion, has been held to be a
valid corporate act. This resolution gives a prima facie corporate
record that the Company has adopted the decision to bring the
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Respondent's employment as Chief Executive Officer to an end.
The Respondent has a right to challenge the termination. But that
right does not give him unrestricted authority to represent before
third parties that he is authorised to represent and bind the
Company. Therefore, a limited injunction is required to be granted.
Such injunction will not mean that this Court has finally held the
termination to be legal or that the Respondent has no contractual
remedy. It will only regulate the manner in which the Respondent
can describe his position and exercise authority while the dispute
is pending. In view of the above findings, the Respondent shall not
represent himself before any third party, public authority,
employee, university, investor, vendor or business partner as a
person who is authorised to act as the Chief Executive Officer of
Daskalos Technologies Private Limited. He shall not give
instructions, sign documents, make commitments, enter into
transactions or otherwise make the Petitioner Company bound by
his acts by claiming authority as its present Chief Executive Officer,
employee, authorised signatory or authorised representative. At
the same time, the Respondent will be entitled to describe himself
as the former Chief Executive Officer of the Petitioner Company.
He may state that he is disputing the termination dated 29
September 2026 and that his contractual rights are pending for
decision before the competent forum. Nothing in this order will
prevent him from continuing the proceedings before the High
Court of Himachal Pradesh, the arbitral tribunal, the NCLT or any
other competent forum in accordance with law. He will be entitled
to produce all documents relating to the permission given by the
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University and the Employment Agreement before those forums.
190. The above restraint will not affect the separate position of
the Respondent as Founder Director, Whole-Time Director or
shareholder of the Petitioner Company. The Company cannot rely
upon this order for denying him any separate right which he may
have in these capacities under the Companies Act, the Articles of
Association or the Shareholders' Agreement. His right to attend
and participate in Board meetings, obtain records as Director and
exercise other corporate rights will continue to be governed by the
applicable law and the relevant documents. The present restraint is
only in respect of claiming or exercising the executive authority of
the Chief Executive Officer. The prayer of the Petitioner for
restraining the Respondent from showing himself as the present
Chief Executive Officer is therefore allowed, but only to the limited
extent stated above. It is made clear that this order does not finally
decide whether the Employment Agreement was void under
Section 23 of the Contract Act, whether it was properly rescinded
under Section 19, or whether the Company will be able to prove
any contractual breach after following the procedure agreed
between the parties. The Respondent's claim that his termination
was wrongful and the defence of the Company to that claim will
remain open for decision in the appropriate proceedings. On the
material available, the Petitioner cannot treat the later ratification
by the Board as proof that all the substantive grounds stated for
termination have been established.
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Prayer For Restraining Interference With The Management Of The
Company:
191. Under prayer clause (b), the Company seeks an order
preventing the Respondent from or indirectly interfering with,
obstructing, delaying, vetoing or frustrating the management of
the Company. According to the Company, unless such an order is
passed, the Respondent may continue to interfere with the
Company's working by claiming that he still holds the post of Chief
Executive Officer.
192. The Respondent submits that this prayer is too wide. He says
that he continues to be a director and shareholder of the Company
and is entitled to exercise his rights under the Companies Act and
the Shareholders' Agreement. He says that the Company has not
shown any particular act of interference which would justify such a
wide order.
193. The prayer, as it is worded, is not limited to the Respondent's
conduct as Chief Executive Officer. It may prevent him from
exercising his lawful rights as a director or shareholder. It may
affect his right to receive notice of Board meetings, take part in
such meetings, express his views, exercise his voting rights
wherever permitted and take legal steps for protecting his
shareholding. These rights cannot be taken away only because his
employment as Chief Executive Officer has been terminated. The
Company has not placed sufficient material to show that, after the
termination letter, the Respondent has committed any particular
act of interference with its management apart from claiming that
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he continues to be Chief Executive Officer. That particular concern
is taken care of by the limited injunction granted under prayer
clause (a). There is no need to pass another wide order which may
create confusion regarding the Respondent's separate rights as a
director and shareholder. Prayer clause (b) is rejected. This does
not give the Respondent any permission to act as Chief Executive
Officer or to bind the Company. It only means that his rights, if
any, as a director and shareholder are preserved and may be
exercised in accordance with law.
Prayer For An Anti-Suit Injunction:
194. The Company has asked for an order preventing the
Respondent from filing or continuing any suit, writ petition,
application, complaint or other proceeding before any Court,
tribunal, statutory or regulatory authority in relation to the subject
matter of the present Petition. The Company's case is that the
Respondent has approached different forums and has in this
manner tried to avoid the agreed arbitration process. The
Company relies upon the proceedings before the Himachal Pradesh
High Court, the proceedings before the NCLT and the Respondent's
application seeking to restrain the Company from continuing the
present proceedings. It relies upon the fact that the NCLT petition
filed under Sections 241 and 242 of the Companies Act was
dismissed on 28 October 2026.
195. The Respondent submits that Civil Suit No. 50 of 2026 was
filed before the present Petition. According to him, that suit
concerns the Board action dated 16 May 2026, his suspension and
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the appointment of the Third Party Expert. He relies upon the
protective order passed by the Himachal Pradesh High Court on 18
August 2026. He says that the Company approached the Himachal
Pradesh High Court in FAO (OS) No. 18 of 2026 and obtained a
consent order dated 11 September 2026 for early disposal of its
application under Section 8 of the Arbitration Act. He points out
that the Company filed an application under Section 45 of the
Arbitration Act. Therefore, according to him, the Company cannot
now ask this Court to restrain the very proceedings in which it has
taken part.
196. The Company answers that its application under Section 45
was only an objection to the jurisdiction of the civil Court and a
request to refer the parties to arbitration. It says that filing such an
application does not mean that it accepted the jurisdiction of the
Himachal Pradesh High Court to decide the dispute on merits. This
submission is correct to that extent. An application under Section
45 does not, merely because it is filed, mean that the party has
accepted the jurisdiction of the civil Court to decide the dispute on
merits. It is a request that the dispute be referred to arbitration.
197. However, the fact remains that the Himachal Pradesh High
Court was dealing with proceedings concerning the earlier
suspension and the appointment of the Third Party Expert. The
Company has taken part in those proceedings and has asked for
the dispute to be referred to arbitration. The present Petition
concerns the later letter dated 29 September 2026. There may be
some common issues in both proceedings, but the material does
not show that both proceedings are the same. In Modi
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Entertainment Network , the Supreme Court has explained in
paragraph 24 the principles which have to be considered before
granting an anti-suit injunction. The Court must be satisfied that
the person against whom the injunction is sought is subject to its
personal jurisdiction. It must consider whether refusal of the
injunction would defeat the ends of justice and cause injustice. The
principle of comity between Courts must be kept in mind. The
party seeking the injunction must establish that the other forum is
forum non conveniens or that the proceedings before that forum
are oppressive or vexatious.
198. The Company says that the Respondent is subject to the
jurisdiction of this Court and that the parallel proceedings are
defeating the arbitration agreement. However, all the other
requirements must be fulfilled. The Respondent had filed the
proceedings before the Himachal Pradesh High Court before the
present Petition was filed. The Company has taken part in those
proceedings and has filed applications asking for reference to
arbitration. Therefore, the earlier proceeding cannot be described
as vexatious only because the Company does not agree with the
relief claimed by the Respondent.
199. The Company has relied upon the Anti-Suit Application filed
by the Respondent before the Himachal Pradesh High Court. In
that application, the Respondent has asked to restrain the
Company from continuing parallel proceedings, including the
present Petition. This conduct is relevant. It shows that both sides
are seeking orders against each other in different proceedings. But
this fact alone does not establish that the proceedings before the
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Himachal Pradesh High Court are oppressive or vexatious, or that
the ends of justice require this Court to restrain them.
200. Section 41(a) of the Specific Relief Act provides that an
injunction ordinarily cannot be granted to prevent a person from
continuing a judicial proceeding which was pending when the
injunction was sought, unless such restraint is necessary to prevent
multiplicity of proceedings. Section 41(b) provides that an
injunction cannot be granted to prevent a person from filing or
continuing proceedings before a Court which is not subordinate to
the Court granting the injunction. The relief sought by the
Company is very wide. It wants to prevent the Respondent from
approaching any Court, tribunal, statutory authority or regulatory
authority in relation to the subject matter of the present Petition.
Such an order may prevent the Respondent from pursuing
statutory or constitutional remedies, or from taking other legal
steps which may be necessary to protect his rights. The prayer is
not restricted to any particular proceeding which has been shown
to be vexatious or oppressive.
201. The Company has not established that the proceedings
before the Himachal Pradesh High Court are causing such injustice
that an anti-suit injunction is necessary. That High Court is dealing
with the earlier dispute. The Company has approached that Court
and asked for the dispute to be referred to arbitration. There is no
reason to pass a general order preventing the Respondent from
approaching the NCLT or any statutory authority where such
authority has jurisdiction under law. The NCLT petition is stated to
have been dismissed on 28 October 2026. Therefore, on the
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material shown, there is no pending proceeding before that forum.
But this does not justify an order preventing the Respondent from
filing any future proceeding which may be permitted by law.
202. The Court is not satisfied that the conditions laid down in
Modi Entertainment Network have been fulfilled. The principle of
comity requires the Court to act with care. The Company can place
its application for reference to arbitration before the Himachal
Pradesh High Court and seek proper orders there. If there is any
conflict between the proceedings, the respective Courts can deal
with it in accordance with law. This Court cannot pass a general
order preventing the Respondent from filing or continuing
proceedings before other Courts or authorities. Prayer clause (c) is
rejected.
Prayer For Non-Disparagement:
203. The Company has asked for an injunction preventing the
Respondent from making or publishing any statement which is
disparaging or is likely to harm the reputation of the Company, its
affiliates, investors, directors, officers, or employees. For this
purpose, the Company relies upon a LinkedIn post allegedly
published by the Respondent for his followers. In that post, he
referred to his recent start-up as having been “hijacked”. The
Company says that this statement refers to the Petitioner Company
and is likely to affect its reputation.
204. The Respondent disputes the meaning given by the Company
to the post. He says that he has not made any false statement and
is entitled to explain his grievance. He submits that the injunction
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asked for by the Company is too wide and may prevent him from
making statements in legal proceedings or from approaching
authorities in accordance with law.
205. Clause 11 of the Employment Agreement contains an
obligation relating to non-disparagement. Therefore, the Company
can rely upon that clause and ask for protection if there is a proved
or threatened breach. However, the Court must examine the actual
statement and the nature of the relief asked for. The word
“disparaging” can have a wide meaning. Every statement which
contains criticism of the Company cannot be prohibited. The Court
must be satisfied that the statement is false, malicious or otherwise
unlawful and that an injunction is necessary to prevent continuing
or threatened injury. The material placed before the Court shows
one LinkedIn post containing the expression “hijacked”. The
context and meaning of that statement are disputed. The Company
has not placed sufficient material to establish at this stage that the
statement was false or that it caused actual damage to its business
or reputation. A general order preventing every statement which
may harm the Company's reputation would be too wide. Such an
order may prevent the Respondent from making truthful
statements or placing his case before Courts and authorities.
However, the Respondent continues to be bound by the
confidentiality obligations and other obligations under the
Employment Agreement, to the extent they remain applicable. He
cannot publish confidential business information or make
statements which he knows to be false with the intention of
harming the Company. But, on the material available, the Court
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does not find it necessary to pass a separate and general non-
disparagement injunction in the terms asked for by the Company.
Prayer clause (d) is rejected in its present form. This does not
mean that either party is permitted to publish false statements or
disclose confidential information in breach of law or any obligation
which continues to apply. It does not prevent either party from
making truthful statements in legal proceedings or before lawful
authorities.
Protection of company property and confidential information:
206. The Company has asked for an injunction preventing the
Respondent from accessing, using, disclosing or publishing its
confidential information, business information, financial
information, records, data, communications, and other material
belonging to the Company. It has asked for a direction that the
Respondent should hand over all company assets, property,
records, books, and documents which are in his possession or
control.
207. The Employment Agreement contains provisions regarding
confidential information. Clause 7 requires the Respondent to
protect and preserve the confidential information of the Company.
Clause 10.1 requires him, after termination of employment, to
hand over his responsibilities, documents, and the property of the
Company. The termination letter dated 29 September 2026 called
upon the Respondent to return the Company's property,
documents, data and devices and to disclose the access credentials
which remain with him. These obligations are separate from the
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dispute regarding the validity of termination. Even if the
Respondent disputes the termination, he cannot use or disclose the
Company's confidential information for any purpose which is not
connected with his lawful rights and obligations. He cannot keep
or use the Company's passwords, access credentials or records for
interfering with its business. Protection of the Company's property
and confidential information is necessary because any misuse or
disclosure may cause injury which may be difficult to calculate or
compensate at a later stage.
208. The Company has stated that an Apple MacBook laptop
supplied to the Respondent for official use has not been returned.
The Respondent, by his email dated 17 October 2026, has stated
that no company-owned device, access credential or other
company property is in his possession. Thereafter, by a letter
through its advocate dated 29 October 2026, the Company again
stated that the laptop had not been handed over.
209. There is a dispute about who is having the laptop. The
Company has not placed sufficient material before this Court to
conclusively show that the laptop is in the Respondent's
possession. The Respondent has denied having any company
property. In these circumstances, it would not be proper to record
a finding that he has deliberately disobeyed the earlier ad-interim
order. Such a finding can be made only when there is clearer
material about the earlier direction, the laptop supplied and its
present possession. However, the Respondent is required to make a
clear statement on oath regarding all company property,
documents, devices, and access credentials which remain in his
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possession or control. If any property of the Company is with him,
he must return it. If the Apple MacBook laptop is in his possession
or control, it must be returned. If it is not with him, he must state
this fact in his affidavit. This will remove the uncertainty and will
protect the Company's property.
210. The ad-interim protection granted by this Court on 15
October 2026, to the extent that it relates to preservation of the
Company's property and confidential information, deserves to
continue. The Respondent shall not access the Company's systems
or use or disclose its confidential information. This direction will
not prevent him from using the limited information necessary for
obtaining legal advice or pursuing legal proceedings, subject to
proper confidentiality safeguards. It will not prevent him from
preserving documents which are necessary for his defence in
arbitration or other lawful proceedings.
211. It is made clear that the findings recorded above are only for
deciding the present application under Section 9 of the Arbitration
Act. They shall not be treated as final findings regarding the
validity of the Employment Agreement, the legality of the
Respondent holding two positions, the validity of the permissions
allegedly given by Shoolini University, the allegation of
misrepresentation, the alleged breaches or the final validity of the
Board resolution dated 19 October 2026. All these questions are
kept open for decision by the arbitral tribunal or the competent
forum, as may be applicable. Both parties will be free to rely upon
all documents and evidence in the arbitration proceedings.
Nothing stated in this order will prevent the arbitral tribunal from
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independently deciding the merits of the dispute. The Agreement
provides for arbitration at Singapore under the SIAC Rules.
Therefore, the Petitioner shall take steps to commence the arbitral
proceedings in accordance with Clause 14 of the Employment
Agreement. Under Section 9(2) of the Arbitration and Conciliation
Act, 1996, the arbitral proceedings must be commenced within
ninety days from the date of this order, if they have not
commenced, unless this Court grants time.
212. In view of the foregoing discussion and for the reasons
recorded hereinabove, the following order is passed.
213. The Arbitration Petition is partly allowed in the following
terms:
(a) Until the arbitral proceedings are commenced and
concluded, the Respondent is restrained from representing
himself before any third party, employee, customer, bank,
authority or any other person as the present Chief Executive
Officer, authorised signatory or authorised representative of
the Petitioner Company. He shall not sign any document,
give any instruction or enter into any transaction in the
name of the Petitioner Company in his capacity as Chief
Executive Officer or authorised representative;
(b) The above direction shall not prevent the Respondent
from stating that he disputes the termination dated 29
September 2026 or from pursuing his remedies before the
arbitral tribunal, competent Court or any other lawful
authority. It shall not affect his rights, if any, as a director or
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shareholder of the Petitioner Company. Such rights shall be
exercised in accordance with law and the documents
governing the Company;
(c) Prayer clause (b), (c) and (d) are rejected;
(d) The Respondent shall not access, use, disclose, publish,
transfer or retain the confidential information, business
information, financial information, records, data,
communications or other proprietary material of the
Petitioner Company. This direction will not prevent him from
using the limited material necessary for obtaining legal
advice or pursuing lawful proceedings, subject to proper
confidentiality safeguards;
(e) Within seven days from the date of this order, the
Respondent shall return to the Petitioner Company all its
property, documents, records, data, devices, keys and access
credentials which are in his possession or control. If the
Apple MacBook laptop supplied for official use is in his
possession or control, the same shall be returned within that
period;
(f) Within the same period, the Respondent shall file an
affidavit before this Court giving details of the company
property, devices, documents and access credentials which
were in his possession or control on the date of the
termination letter. He shall state which of them have been
returned. If the Petitioner claims that any item is with the
Respondent but the Respondent says that it is not in his
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possession, he shall give a specific statement about that item
on oath;
(g) If the arbitral proceedings have not commenced, the
Petitioner shall commence them under Clause 14 of the
Employment Agreement within ninety days from the date of
this order, subject to Section 9(2) of the Arbitration and
Conciliation Act, 1996;
(h) All other claims and objections regarding the merits of
the Employment Agreement, the termination letter dated 29
September 2026, the permissions allegedly given by Shoolini
University and the Board resolution dated 19 October 2026
are kept open for decision in the appropriate proceedings;
214. The Petition is disposed of in the above terms. There shall be
no order as to costs.
(AMIT BORKAR, J.)
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