A Case Comment on Arjan Dugal vs. Shubham Gandhi

Abstract

The Delhi High Court’s decision in Arjan Dugal v. Shubham Gandhi sits precisely at the uneasy intersection of confidentiality protection and legitimate competition. While the order strongly protects customer databases, trade dress, and commercial information in the fashion industry, it also raises deeper concerns about employee mobility, springboard injunctions, and the possibility of confidentiality law functioning as an indirect non-compete regime. This case comment examines the Court’s expanding approach to equitable relief and questions when does protection of confidential information quietly begin restraining ordinary market freedom?

Case Name: Mr. Arjan Dugal & Anr. v. Mr. Shubham Gandhi & Anr.

Citation: CS(COMM) 918/2025, order dated 29 August 2025

Court: High Court of Delhi

Coram/Judges: Justice Tejas Karia

Introduction

In India, trade secret disputes are rarely litigated as standalone claims. They are pleaded through breach of confidence, contract, fiduciary duty, unfair competition, passing off, and related intellectual property actions providing commercial context. In the present case, the plaintiffs framed their grievance not only as copying of garments and aesthetic features, but as misappropriation of confidential business assets acquired during employment. While Indian law protects confidential information post-employment, it also resists disguised non-competes. The order strengthens protection against misuse, yet blurs the boundaries between secrecy and competition, between unfair advantage and legitimate employee mobility.

Facts

Plaintiff is a designer who alleged that his former employee, Shubham Gandhi, used confidential business information, client databases, and distinctive design elements acquired during employment to launch a competing menswear label, “So.Man.” The plaintiffs claimed that Gandhi had access to proprietary garment-construction techniques, trade secrets, and a client network developed over years of commercial investment. After resigning, he allegedly reproduced garments bearing striking similarities to the plaintiffs’ collections and continued soliciting their clients through social media and other channels. The plaintiff filed an application for ad-interim injunction against the defendants.

Issues

1. Whether the plaintiffs’ client database and business information constituted protectable confidential information and trade secrets under Indian law.

2. Whether the defendants’ alleged use of customer relationships, design knowledge, and commercial information exceeded permissible use of general skill, experience, and know-how acquired during employment

Reasoning

First, the Court accepted that the defendants had replicated specific garments and appropriated their artistic works and trade dress. It accordingly restrained dealing in identified product lines corresponding to the plaintiffs’ “Vertical Aari,” “Vertical Dori,” and “The Shacket,” and in garments bearing the plaintiffs’ trade dress, get-up, “overall look and feel,” embroidery work, silhouettes, accents, linings, colour schemes, motif placement, layout, arrangement, and similar features.

The key move was the Court’s explicit restraint against using, accessing, reproducing, soliciting, or misappropriating the plaintiffs’ proprietary client database or customer data, and against contacting, soliciting, or poaching the plaintiffs’ clients. The order also permitted the client database to be filed in sealed cover on the ground that it was commercially sensitive.

The Court further reinforced the confidentiality claim through the Local Commissioner mechanism. The Commissioner was authorised to inspect and seize not only garments and promotional materials but also the plaintiffs’ confidential client database if stored at the defendants’ premises or on computers or software, and to obtain passwords and commercial records tied to the allegedly infringing conduct.

Critique

The order is at its strongest when recognising that customer data can legitimately deserve protection. Indian law has long accepted that confidential information need not be statutory property to receive equitable protection. Diljeet Titus v. Alfred A. Adebare is a leading authority to affirm that client-related material and documents generated within a professional set-up may be restrained from misuse when they are not part of the employee’s personal stock of knowledge but belong to the employer’s business system.

In American Express Bank Ltd. v. Priya Puri, the Court rejected the assumption that every customer list becomes confidential merely at the employer’s assertion. It distinguished genuine secret compilations from information that is publicly ascertainable, remembered by employees, or inseparable from ordinary commercial relationships. In this case, the order accepts the plaintiffs’ client database as commercially sensitive, but it does not fully undertake the doctrinal analysis required to classify it as confidential information. The Court records the existence of a 6,000-client database but never examines what it actually contained, whether access was restricted, whether confidentiality obligations existed, or whether parts of the information could be independently reconstructed through market knowledge or social media.

The Court’s reliance on the “springboard” doctrine is also commercially attractive but doctrinally underdeveloped. A springboard injunction is meant to remove the unfair head start gained through misuse of confidential information, not block ordinary market entry altogether. Yet the order never clearly identifies the precise advantage allegedly obtained, its duration, or why such broad restraints were necessary. By failing to calibrate the relief to the alleged misuse, the injunction begins to look less like springboard equalisation and more like a wide anti-competition restraint imposed under the language of confidentiality protection.

The critique nowhere means that plaintiffs lacked serious grievance. They may well have had a strong confidentiality claim, especially if the database contained non-public client preferences, measurements, and purchase histories accessed after the defendants’ exit. In such circumstances, robust protection is justified. The problem is that the order never clearly separates misuse of confidential data from ordinary client familiarity. Instead, it treats multiple alleged harms as one composite wrong, offering commercial urgency but little doctrinal clarity on Indian trade secret doctrine.

Impact

The order rightly recognises that customer databases can deserve protection as confidential information. Yet its implications for employee mobility are harder to ignore. Creative industries thrive on movement, learning, and entrepreneurial spin-offs. If courts do not clearly distinguish stolen databases from remembered client relationships, anti-solicitation orders may begin operating as indirect non-competes despite Section 27 Contract Act restrictions.

Conclusion

The decision strengthens the practical enforceability of confidential information claims in India, but it does not yet strengthen the doctrine with the same confidence. The Court recognises legitimate confidentiality concerns but leaves unresolved the doctrinal boundaries between trade secret misuse and ordinary commercial familiarity acquired through experience. That distinction matters enormously in industries driven by creativity, networking, and entrepreneurial movement. Without clearer standards, anti-solicitation and springboard injunctions risk evolving into indirect restraints on employee mobility despite the limitations imposed by Section 27 of the Indian Contract Act. The case therefore represents both an important step in Indian trade secret jurisprudence and a warning about the elasticity of equitable relief.

References

Mr. Arjan Dugal & Anr. v. Mr. Shubham Gandhi & Anr. CS(COMM) 918/2025, order dated 29 August 2025

Diljeet Titus vs. Alfred A. Adebare 2006(32)PTC609(DEL)

American Express Bank Ltd. vs. Priya Puri 2006 SCC OnLine Del 638