Intellectual Property Assignment Agreement – Commercial suit & Criminal Complaint

The Petitioners are Directors of Laxmi Dental Limited and established division of “Vedia Solutions”.   Respondent No.2 was providing research and development services since October, 2017 as “work made for hire”.  As per the agreement, the respondent no.2 and his father assigned all their rights in the trade mark / brand / domain name to the Company as per the Intellectual Property Assignment Agreement of 2019.

However, in March, 2022, the respondent no.2 and another former employee had set up another business entity, selling and dealing with the products similar of the Company.   Respondent no.2 misused confidential information, proprietary data and other trade secrets.

Commercial suit in 2022 was filed Rs.25 crores damages, temporary injunction and appointment of Court receiver to make inventory was filed.  Court Receiver was appointed. Arbitration was invoked.

On 17.10.2024, the respondent no.2 filed complaint.   FIR was registered for offences under Sections 420 and 406 of IPC.

HELD that the entire controversy revolves around the performance, non-performance and breach of the terms and conditions of the Intellectual Property Assignment Agreement.  However, the respondent no.2 has given criminal profile to a matter which at best could be a civil and commercial dispute.

The ingredients of cheating as defined under Section 415 and criminal breach of trust under Section 405 of IPC are not made out even after accepting the allegations in the complaint at their face value.

Initiation / filing of criminal complaint by the respondent no.2 amounts to abuse of process and the records indicate that the said criminal proceedings are initiated with malice for wreaking vengeance.   If the criminal proceedings are allowed to continue against the petitioners, the same will be abuse of process of law and result in miscarriage of justice. 

Judgment dated 9.5.2025 of the High Court of Bombay in Writ Petition No.430 of 2025 of Rajesh Khakar and others   Vs.   The State of Maharashtra and others