KPMG cloned Digi Yatra app during illegal visit to Hyderabad office: Data Evolve tells Delhi High Court

Data Evolve Solutions on Thursday told the Delhi High Court that KPMG conducted an “illegal visit” to its Hyderabad premises and cloned the Digi Yatra app, later deploying it in 28 airports despite the underlying agreement permitting use only at 4 airports. (Digi Yatra Foundation v. Data Evolve Solutions)

The allegation arose during arguments on whether additional issues should be added to the ongoing Digi Yatra ownership suit.

The submission was made before Justice Subramonium Prasad, who questioned whether any of the six new issues sought by Data Evolve actually emerged from the pleadings.

During the hearing, Data Evolve sought the inclusion of six further issues, submitting that certain factual aspects - including the KPMG visit, deployment of the application and the timeline of its development - ought to be part of the trial record. Counsel stated that the application was originally developed in 2020, prior to the signing of the minimum viable agreement (MVA) with Digi Yatra Foundation (DYF).

The Court examined each of the proposed issues and asked counsel to identify where the corresponding assertions appeared in the plaint. Justice Prasad reiterated that issues can be framed only when they arise from the pleadings filed by both sides.

When Data Evolve referred to outstanding payments, the Court clarified that monetary claims must be raised through the appropriate procedural mechanism:

“Issues arise when there is an assertion in the plaint and denial in the written statement. Where does this come in the plaint? Otherwise, you file a counterclaim. Pay court fees and then go ahead with that.”

Justice Prasad ultimately observed that most of the proposed issues were either already covered by the issues framed on October 29 or did not arise from the plaint.

The Court granted time for DYF to file its reply to the application for additional issues and listed the matter for further hearing on December 10.

DYF has also moved a similar application for framing additional issues.

The Delhi High Court had on October 29 framed the following issues:

• Whether DYF is the rightful owner of the Digi Yatra Central Ecosystem under the 2021 Minimum Viable Product Agreement;

• If so, whether DYF also holds intellectual property or other rights over the software and services created by Data Evolve;

• Whether Data Evolve infringed DYF’s rights; and

• Whether DYF, in turn, misused any intellectual property belonging to Data Evolve

DYF - a Section 8 not-for-profit company formed under the Ministry of Civil Aviation’s Digi Yatra Policy, 2021 - selected Data Evolve Solutions through a startup challenge in May 2021. The parties executed an MVA on November 17, 2021. DYF maintains that the MVA clearly vests in it all intellectual property in the Digi Yatra platform, including all developed software, modifications and derivative works, while only pre-existing software owned by Data Evolve remains with the developer.

DYF began disengaging from Data Evolve after allegations emerged in late 2023 regarding diversion of ₹36.53 crore in traffic fines by the developer’s promoter. DYF sought clarifications in November 2023 and, dissatisfied with the response, issued a disengagement letter in January 2024 directing Data Evolve to hand over the Digi Yatra Central Ecosystem, the Digi Yatra app and all operational credentials.

Data Evolve, however, claims that DYF withheld payments and insists that it owns the IP in Digi Yatra’s software architecture. The company has also approached a Hyderabad court seeking protection of its claimed IP. In March 2024, DYF moved the Delhi High Court, which granted an ad-interim ex parte injunction restraining Data Evolve from using or copying any Digi Yatra passenger data.