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Fitness service provider, Book Your Gym (BYG) has obtained an ex-parte interim injunction from a Bangalore Court restraining new entrant Curefit (and its subsidiary Cultfit) from launching services akin to those offered by BYG.
The Principal City Civil and Sessions Court passed an interim order to this effect on a suit brought by BYG alleging the fraudulent termination of a proposed acquisition deal between Curefit and BYG. Senior Advocate Dhyan Chinappa appeared for BYG.
Started in 2016, BYG offers subscribers access to various gyms/fitness centres affiliated with the app without membership in each gym/fitness centre. The app also provides software management solutions for gyms and fitness centres.
As per the plaint filed through Advocates Arjun Rao and Maitreyi, Curefit had proposed to acquire BYG on the following terms, i.e.
The formalities pertaining to the deal were to be completed by the third week of June. A Term Sheet was also executed between BYG and Curefit. During the course of discussions, BYG also claims to have parted with confidential information pertaining to its business model, research concerning its competitors etc to Curefit, apart from assimilating its employees with Curefit.
BYG further submitted that the plan was for Curefit to acquire the business of BYG and thereafter relaunch the same services offered by BYG as its own. To this end, a venture dubbed ‘Gym.fit’ was proposed to be launched. Curefit is alleged to have insisted on BYG redirecting its focus from its own activities and growth. Further, BYG submits that it was asked to cease providing management services to its clients and terminate some of its employees on Curefits insistence.
While this was the case, BYG contends that Curefit abruptly intimated its unwillingness to carry forward the deal by an e-mail sent in July. Following BYG’s response, Curefit sent another allied e-mail in August. Through this correspondent, BYG argues that Curefit also admitted to having possession of confidential information held by BYG. Further, it contends that only a paltry compensation amount was offered for there termination of the deal. In ensuing interaction, BYG also claims to have been threatened against approaching the court over its dispute by a Curefit representative.
Owing to the deal negotiations with Curefit, BYG claims to have a lost a potential acquisition deal with Medifit Consultants Private Limited, Bangalore.
“…due to the advanced progression of the transaction, the Plaintiff ceased all discussions with Medifit and had lost the said opportunity due to the promises, enticement and performance of the Term Sheet by the Defendants till such date.”
In this backdrop, BYG had approached the Court, contending that,
“The line of business created by the Plaintiff after having painstakingly built the same over four years is simply recreated by the Defendants using the knowledge, know-how, proprietary information and intellectual property of the plaintiff…
… The Defendants did not have any product similar to that of the Plaintiff and used the…information, etc. and the skills, time, effort of the Plaintiff to hectically reproduce and copy the Plaintiff’s product which is being hastily launched. The entire scheme of the Defendants to defraud the Plaintiff is apparent….
… the Plaintiff’s valuable body of work has fallen into the hands of the Defendants… The Defendants are taking hasty steps to launch their own product tentatively named ‘Gym.fit’ on the basis of the Plaintiff’s body of work. The Defendants are also in possession of precise plans and methods to execute the business, and also a host of entities to approach to further their business. The Defendants have received huge sums of investment exceeding thousands of crores. The Defendants will indulge in anti-competitive unfair trade practices through abuse of dominance by engaging in predatory pricing etc. to immediately acquire the customers, clients, suppliers etc. of the Plaintiff and seek to monetise the very product of the Plaintiff. As such, it is imperative that the Defendants be restrained from launching a product similar to the Plaintiff’s product.“
While issuing the interim injunction order, the City Civil and Sessions Judge also issued notice to the Defendants, returnable by September 11.
[Read the Interim Injunction order]