Commercial Dispute/ Shareholder / Partnership fraud Dispute.
The Client: A co-founder and 50% shareholder of a digital marketing agency in Banglore with 45 employees and annual revenue of approximately ₹8 crore.
What Happened: Two friends started a digital marketing agency together in 2017. Both were equal shareholders (50%-50%), both were directors, and both had unlimited access to the company's bank accounts. The business run smoothly for five years. Then problem started.
Our client found out that his partner had been secretly diverting company revenue to a separate business entity, it was a consulting firm registered in his wife's name. Over ₹2.3 crore was transferred over 18 months. On top of that, he had been creating fake vendor bills from companies that didn't exist and pocketing the difference. In total, approximately ₹4.5 crore was stolen over two years.
When our client questioned his partner with the evidence, the partner denied everything. But his partner didn't stop there. He quickly changed all the company's bank account passwords, blocked our client from the company's email and files, and told the employees that our client had quit. All of this happened in just 48 hours. Our client had built the company from scratch now he couldn't even walk into the office anymore.
He came to us on day 3. He was angry, worried, and had no idea if the law could even help him get his company back.
What Made This Case Difficult:
- Both partners were equal shareholders on 50-50 basis — no one had a majority
- They had never signed any agreement — no exit clause, no dispute resolution mechanism
- The Partner of our client had taken control of the bank accounts, company emails, and even the office keys
- Employees were confused, they didn't know whom to listen to, our client or his partner. Some employees had already started following the partner’s instructions
- ₹1.2 crore active client contracts were at risk of being moved to Partner’s wife company
- The hardest part of this story? Our client still saw his partner as a friend. He kept thinking, "Maybe we can fix this without lawyers."
How SPJ Advocates Handled It:
Day 1–3 — Emergency Protection
- Filed an urgent application before the National Company Law Tribunal (NCLT) under Sections 241-242 of the Companies Act, 2013 — requesting the court to step in because our client parter was misusing his power and harming the company
- Obtained an interim order that immediately stopped the Partner from:
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- Transferring any company funds
- Removing any directors
- Signing any new deals on behalf of the company
- Accessing or deleting company data without our client permission
- At the same time, we filed a criminal complaint under Section 420 (cheating) and Section 406 (criminal breach of trust) of the IPC at the Gurgaon Cyber Crime Police Station for cheating and misusing company funds
Week 1–2 — Evidence Collection
- Hired a forensic accountant to track every payment made to the fake consulting firm and the fake vendors
- Obtained the company's bank statements through the NCLT court order and traced every diverted payment one by one
- Recovered Google Workspace access through the NCLT's data preservation order
- Spoke to 8 employees who confirmed that the Partner had instructed them to route certain client invoices through his wife's consulting firm instead of the main company
Month 1–3 — NCLT Proceedings
- The independent auditor's report confirmed the diversion and recommended that Partner B be held accountable
- Presented a detailed forensic accountant's report to the NCLT showing exactly how ₹4.5 crore was diverted from the main company— with full proof of every transaction
- Proved that Partner wife consulting firm was a shell company — no staff, no office, no real business — it existed only to take money from the main company
- The NCLT appointed an independent auditor to double-check everything
- The auditor confirmed that the money was diverted
Month 4 — Mediation and Settlement
- The NCLT referred the matter to mediation after both parties expressed willingness to settle
- SPJ Advocates led the mediation strategy with a clear objective: our client keeps the company and his Partner exits with a fair amount minus the diverted amount
- After three mediation sessions, a settlement was reached
The Settlement:
- The Partner agreed to transfer his 50% shareholding to our client for a amount of ₹1.8 crore (fair value of his share was approximately ₹4 crore MINUS the ₹2.2 crore reduction accounted for the diverted funds)
- The Partner resigned as director and signed a 3-year non-compete agreement (not to start any competing business in Delhi NCR) covering digital marketing services
- The criminal complaint was withdrawn as part of the settlement terms
- Our client retained all employees, all clients and full ownership of company
The Result: Our client now has 100% ownership of a company doing ₹18+ crore in annual revenue. The whole matter was settled in under 5 months — and not a single client was lost. All employees stayed, all projects kept running, and the business faced very little disruption. What could have easily dragged on for 3 years in NCLT was resolved through aggressive legal action and smart negotiation.
