The main legal point established is that a company can be held liable for circumventing court orders through the actions of its shareholders or directors, justifying piercing the corporate veil.

Mukta Gupta, J.

1. The plaintiff which is a private limited company incorporated under the Companies Act, 1956 has filed the present suit against the defendants, inter alia, praying for restraining them from infringing the plaintiff’s copyright in e-tendering solution and from marketing, publishing, producing, distributing, selling and publicly releasing or dealing with the said software in any manner whatsoever. The defendant No.1 is also a private limited company incorporated under the Companies Act and defendant No.2 is the Chief Operating Officer (in short ‘COO’) of the defendant No.1 whereas the wife of defendant No.2 is the Director of defendant No.1 company. In the year 2000 the plaintiff was appointed as the sole representative in India and countries in SAARC region for a multinational company, Commerce One which was a global leader and pioneer in the business of E-commerce solution. The promoters of Commerce One were some of the largest companies in the world, which include SAP which is the second largest software company in the world. Through its products, portals and services, Commerce One creates access to worldwide markets, allow anyone to buy from anyone, at anytime from anywhere. Commerce One specializes in automating the process of buying and selling thereby making the process more efficient. Its services extend across all industries, including vertical strategic sectors such as banking, oil and gas, metals and mining, energy, aviation, telecom and the government sector. Commerce One’s suite of E-procurement solutions are robust and scalable. Most of the Government organizations are user of Commerce One’s solution. The plaintiff company offered the Commerce One solution to some of the largest corporates in India in the field of energy, textile, consumer, manufacturing etc. The plaintiff was the first and only company to build State Government owned solution www.fuelxs.comfor buying and selling of fuel online. The plaintiff company is also the first company to do an e-procurement transaction for any PSU. As the Commerce One solution did not meet the requirement of the Indian Government process, the plaintiff company started the research and development for an e-procurement solution (Tender Management Solution) to suit the process of Indian Government in 2001. That around the same time, Government of Andhra Pradesh envisaged its e-procurement project. This project was awarded to the plaintiff company being the lowest bidder. The plaintiff company became the first and the only company to set up an e-procurement infrastructure for any State Government in India www.eprocurement.gov.inin May 2002. The e-Procurement platform set up by the plaintiff company for the Government has already processed transactions more than Rs. 36,000 crores within the first two years of its implementation, making it the largest e-Procurement platform in the world and one of the largest portal based e-Commerce projects in the world. It is stated that the plaintiff is the owner of intellectual property rights in all its computer software including the copyright in the Electronic Tender Management Software apart from being protected under Common Law and Trade Secrecy Laws. The relevant computer software developed by the plaintiff is known in the market as Electronic Tender Management System. The plaintiff is also the owner and proprietor of all the brochures, technical material and manual concerning the abovementioned software. All these documents are literary and artistic work under the Copyright Act. The same have been designed and created by the employees of the plaintiff and the first copyright in the said work vests with the plaintiff company.

2. The Government of Madhya Pradesh, Department of Public Relations invited the tenders for e-procurement and e-tendering software in and around 2003. The defendant No.2 was then the Director of M/s Applitech Tendercity.com (Pvt.) Ltd. (in short ‘Tendercity’) and approached the plaintiff c