Urgent interim relief granted to NXTQUANTUM Shift Technologies against misleading online content
In a significant decision, the Delhi High Court has issued an interim injunction against defendants, including John Doe, restraining them from spreading misleading information that disparages the products of NXTQUANTUM Shift Technologies India Private Limited, trading as AI+ Smartphones. Justice Tushar Rao Gedela presided over the matter, granting urgent relief to the plaintiffs who sought protection against unverified allegations adversely impacting their brand reputation and financial interests.
The case, CS(COMM) 429 of 2026, revolves around videos published by defendants on YouTube, asserting false claims about AI+ Smartphones' data security and links to foreign entities. These videos, titled "This Indian Phone Is A Marketing Disaster!" and "FAKE Indian Company - Needs to STOP," have garnered significant viewership, further exacerbating the potential damage to the plaintiffs' commercial interests.
The plaintiffs, represented by Senior Advocate Mr. Ashim Vachher and his team, successfully argued that the content in question contained unsubstantiated defamatory remarks aimed at lowering the plaintiffs' credibility in the eyes of the public, thereby constituting commercial disparagement. The court acknowledged the urgency of the matter, exempting the plaintiffs from Pre-Institution Mediation under Section 12A of the Commercial Courts Act, 2015, due to the immediate threat posed by the disparaging content.
Justice Gedela, referencing prior judgments on commercial disparagement, underscored the necessity for plaintiffs to demonstrate that the statements were misleading, maliciously made, and resulted in special damage. The court found that the defendants' videos failed to provide a technical basis for their claims, thus prima facie meeting the threshold for disparagement. Consequently, the balance of convenience was deemed to favor the plaintiffs, as they stood to suffer irreparable harm if the injunction was not granted.
The court's order restrains the defendants from publishing or spreading any content amounting to disparagement against AI+ Smartphones or its founder Madhav Sheth across digital platforms, including YouTube. The decision signifies the judiciary's role in safeguarding commercial entities against baseless attacks in the digital age, ensuring that freedom of speech is not misused to cause unwarranted harm.
The defendants have been directed to file a reply within four weeks, with compliance of Order XXXIX Rule 3 of CPC to be carried out within ten days. The matter is scheduled for further proceedings before the Joint Registrar on August 3, 2026, and before the court on October 5, 2026.
Bottom line:-
Commercial disparagement - Prima facie case of disparagement established by plaintiff where defendants published unverified and misleading content about the plaintiff's product, negatively affecting its credibility and causing potential financial losses.
Statutory provision(s): Commercial Courts Act, 2015 Section 12A, Order XXXIX Rules 1 and 2 of CPC, Sections 148, 149, 151 of CPC, Companies Act, 2013.
