Karnataka High Court Refuses To Quash FIR Against MyFitness Founders Over Alleged Misrepresentation On Brand Use

Justice M. Nagaprasanna, in an order dated October 16, held that the existence of parallel arbitration and company law proceedings did not prevent an investigation into the alleged suppression of material information.

The case concerns an agreement signed in November 2019 between Paradise Nutrition Inc. and Tanvi Healthcare, which restricted the use of the “MyFitness” trademark to specified products, principally peanut butter and allied goods.

Mensa Brand Technologies later acquired a 51% stake in Tanvi Fitness Private Limited under an investment agreement dated August 25, 2022.

Mensa alleged that the founders, Mohammadabbas Naushadali Patel and Rahilabbas Aliraja Virani, represented that the company could use the MyFitness brand across nutrition product categories, without disclosing the earlier agreement.

It claimed that it invested approximately ₹142 crore on the strength of these representations and suffered losses after discovering the restrictions.

The founders argued that the dispute arose from contractual and intellectual property issues already being pursued through arbitration and proceedings before the National Company Law Tribunal, and that the FIR lacked the ingredients of cheating and criminal breach of trust.

Rejecting their plea to quash the FIR, the Court observed that the allegations warranted investigation, even though similar issues were being raised in civil proceedings.

“Mere existence of an arbitration proceedings and National Company Law Tribunal proceedings would not bar investigation into an independent allegation of misrepresentation and suppression,” the Court said.

It also relied on earlier Supreme Court precedents holding that an FIR need not contain every detail of an alleged offence and that courts should not prematurely halt an investigation where the allegations disclose a possible cognisable offence.

The Court clarified that it was not deciding the merits of the allegations and left the founders free to approach the appropriate forum as the investigation progressed.

The criminal petition was dismissed, and the interim protection operating in their favour was dissolved.

For Petitioners: Senior Advocate Aditya Sondhi with Advocate Angad Kamath

For Respondents: HCGP Waheeda M.M. for R-1; Senior Advocate S.Basavaraj, with Advocate Sachin Chandrahasa for R-2