Home | Legal Advice | Civil Law Cases | Ex-employee started business with employer’s clients

Ex-employee started business with employer’s clients

Estimated Reading Time:

My employee started his own business without my consent and he converted my business to his firm. He used all my clients data and relations he built up as my employee for his personal benefit. While he is doing so, he enjoys all benefits like salary allowance. Can I file a criminal case against him? If possible, which section in IPC?

Question from: Kerala

You can sue him for the loss you suffered from the breach of contract and fraud. He has breached the terms of agreement when he used the data of clients. As per the standard agreement between the employer and employee the employee cannot do business with the clients of the employer. If he does so he shall be liable to compensate the employer. 

As you said that he has used your clients data for establishing business relations with them. This act constitutes fraud under Section 17 of the Indian Contract Act.

File a civil suit

You should file a civil suit for the damages or compensation for the loss you suffered due to fraud and breach of your ex-employee. He is bound to compensate because he has deceived you by stealing data of clients and doing business with them. 

Section 73 of the Indian Contract Act gives you a right to claim damages for the loss. It is an undisputed fact that he was your client. Before joining he had no business with your clients. After quitting the job he has started his own business and dealing with your clients. These facts are sufficient to prove that he has deceived you by stealing data of your clients.

Latest Advice

Exam has not been conducted on OMR sheet

The exam has not been conducted on an OMR sheet. I am working at CLW/Chittaranjan under the ministry of Railways as a Technician. This month I appeared in a promotional exam of Inter stage J.E. (LDCE). I was shocked in the exam hall to see the answer sheets, which...

Tenant has promised to clear the dues shortly

I rented my house in March 2021 through a rental agreement. Police verification was done at that time but I couldn't collect the same because of being out of Station due to Corona. Now the man of property dealer who had dealt with this case has all of sudden left the...

Tenant has not been paying rent – Eviction of tenant

My tenant has not been paying rent since November 2019. I am a 68 year old person from Visakhapatnam. I gave my shop on rent to a person for tailoring. He paid the rent for the last time in Aug 2019 through phonepe. From Nov 2019 he stopped paying current bills also....

Tenant owns a house in the same city: Eviction of tenant

Question: Our father had purchased three houses together in a colony, more than 50 years ago. Two on the ground floor, in which we were already living there on rent. And One house is on top of these two houses. A tenant family was on rent, the time we purchased it....

Kanoonirai established in 2014. It provides a facility to consult a lawyer through online media, telephonic consultation and video conferencing.