Employment dispute with ancillary business covenants was not a commercial dispute and survived the Section 430 jurisdiction bar.

An employment dispute did not become a commercial dispute merely because the agreement contained ancillary business covenants; the court held that allegations of breach of service obligations, confidentiality, non-compete and director-related duties remained rooted in a contract of employment, so the Commercial Courts Act, 2015 and mandatory pre-institution mediation were not attracted. Section 430 of the Companies Act, 2013 also did not bar the suit because the reliefs sought were civil claims not shown to fall within the exclusive competence of the NCLT or NCLAT. The court further held that a plaint cannot be rejected partially under Order VII Rule 11(d) where a substantial civil cause of action survives, so rejection was unwarranted and the matter was left for trial.

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Issues: (i) Whether the suit arising from an employment agreement was a commercial dispute so as to attract the Commercial Courts Act, 2015 and the bar under mandatory pre-institution mediation; (ii) Whether the suit was barred by Section 430 of the Companies Act, 2013 and liable to rejection under Order VII Rule 11(d) of the Code of Civil Procedure, 1908.

Issue (i): Whether the suit arising from an employment agreement was a commercial dispute so as to attract the Commercial Courts Act, 2015 and the bar under mandatory pre-institution mediation.

Analysis: The plaint was examined on its own averments. The dispute was found to arise primarily from an employment agreement and from alleged breaches of personal service obligations, confidentiality covenants, non-compete obligations, and director-related duties. The mere presence of clauses touching business interests did not convert a contract of employment into a shareholders' agreement or a commercial agreement. The court applied the settled distinction between a contract of service and a commercial transaction, and held that the composite-document argument did not justify recharacterising the suit as one falling within the commercial court regime. Since the dispute was not held to be a commercial dispute, the mandatory pre-institution mediation objection also did not arise.

Conclusion: The objection under the Commercial Courts Act, 2015 failed and the suit was not barred on that ground.

Issue (ii): Whether the suit was barred by Section 430 of the Companies Act, 2013 and liable to rejection under Order VII Rule 11(d) of the Code of Civil Procedure, 1908.

Analysis: The court held that Section 430 bars civil jurisdiction only where the relief claimed falls within the powers specifically conferred on the NCLT or NCLAT. The principal reliefs sought in the plaint concerned employment-related breaches, misuse of confidential information, non-compete and non-solicitation obligations, and consequential civil reliefs. Those claims were not treated as matters exclusively reserved for the NCLT. The court also reiterated that a plaint cannot be rejected partially under Order VII Rule 11(d) and that if a substantial cause of action survives within civil jurisdiction, the suit must proceed. The objections raised were treated as involving issues requiring trial rather than threshold rejection.

Conclusion: The bar under Section 430 of the Companies Act, 2013 was not made out and rejection of the plaint was unwarranted.

Final Conclusion: The suit was held to be maintainable as a civil action, and the application seeking rejection of the plaint was dismissed, leaving all substantive defences open for trial.

Ratio Decidendi: An employment dispute does not become a commercial dispute merely because it contains ancillary business covenants or refers to a related transaction, and civil jurisdiction is excluded under Section 430 of the Companies Act, 2013 only when the reliefs claimed fall within the exclusive statutory competence of the NCLT or NCLAT.

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