Mumbai court passes ex-parte restraining order against Unacademy in civil fraud suit

A Mumbai court on Monday granted an ex-parte ad-interim relief in favour of civil suit petitioner Medical Joyworks LLC (MJL) against PrepLadder Pvt. Ltd. and Sorting Hat Technologies Pvt. Ltd. (Unacademy) and other respondents. .MJL had founded and developed an innovative application, “Prognosis: Your Diagnosis”, a first of its kind simulation based tool aimed at providing evidence-based learning for medical students and other healthcare professionals worldwide. The application purportedly had a distinguishable user interface..However, around July 2021, MLC reliably learnt that PrepLadder had been misrepresenting and defrauding the public at large by systematically usurping the Prognosis application user interface and showing the same on the latter's application. Unacademy had acquired PrepLadder in July 2020 with a pre-deal valuation of USD 50,000,000.00 and was its parent organisation..In light of the information, MLC filed a suit in the City Civil Court of Mumbai against Unacademy, PrepLadder and a string of other defendants including international financial backers such as Blume Venture Advisors, Sequoia Capital India, the SoftBank Vision Fund, and Temasek Holdings..The matter was taken up for hearing on Monday upon request for urgent hearing. Advocate Pradeep Gandhy appearing for MLC, informed the Court that due to the illegal activities being carried out by the defendants, MLC is suffering tremendous loss and damage to its reputation which will have a severe impact on its business..He submitted that PrepLadder and Unacademy were indulging in illegal acts of malfeasance and deceit by using the entirety of the Prognosis application and systematically replicating, altering and presenting the same on PrepLadder application without any authorisation or permission. .After hearing Gandhy briefly, Additional Sessions Judge AH Ladhad also perused the reply filed by PrepLadder wherein they admitted to have copied the contents of the Prognosis application. "Prima facie it appears that they have admitted that they have copied the contents of the plaintiff (MLC) app. I am of the view to grant ex-parte ad-interim relief," the Court observed..Looking at the nature of the suit and the allegations in the matter, the Court proceeded to pass the order ex-parte, without hearing the defendants.In light of the order, PrepLadder has been restrained from using the contents of the Prognosis application and its contents till the disposal of the notice of motion in the suit..The notice of motion has been posted for hearing on October 18, 2021..Gandhy was briefed by Advocates Amit Vyas, Akshay Mehta and Kaustubh Patil from Vertices Partners.