One of India’s most ambitious startups, Qikpod, which raised a record amount of funding in a seed round last November, has run into trouble with a fight between its founder and an associate reaching the courts over ownership of the company.

Neeraj Ray, an early associate of serial entrepreneur Ravi Gururaj’s e-commerce locker startup, Qikpod, has filed an injunction suit against the latter, accusing Gururaj of not giving him promised equity in the startup. Injunction means a court order prohibiting a person to do something.

A Bangalore civil court has passed an interim order, a copy of which FactorDaily has reviewed, refraining Gururaj’s venture from either “allotting or issuing new shares in the company”, or from “commercially launching the Meralocker Qikpod product during pendency of the suit”.

Gururaj has approached the Karnataka High Court, which has has given an interim stay on the trial court order and asked Ray to present his case on June 3. Gururaj, who chairs industry body Nasscom’s Product Council, is a serial entrepreneur with at least two successful exits to Nadaq-listed buyers, according to his LinkedIn profile

QikPod had raised $9 million in seed funding from Accel Partners, Flipkart, Delhivery and Foxconn Mobile late last year. This was billed as the largest seed round fund raising in India. Qikpod aims to set up a network of automated electronic parcel lockers across the country to help with delivery of ecommerce orders.

“The contention of the plaintiff is that due to his innovative ideas he had important portfolios and he invented a product which would serve delivery box or locker for stoic packages delivered by the e-company such as Amazon, Flipkart, etc., and he named the product as Meralocker,” the interim order said.

“The launch of the product Qik Pod and issuance of shares in the Company is subject to court orders.  We have no other statement to make, as the matter is still pending before the court,” Ray said in a statement.

Ray, a technology industry veteran working with UK-headquartered British Telecom until few weeks ago, was involved with Gururaj’s startup idea sometime for few months, according to another person familiar with the venture.

Gururaj emailed the following comment to FactorDaily on Thursday:

A false and frivolous case has been initiated by Mr. Neeraj Ray. The allegations made and reliefs sought are false and unsustainable. We have, already, approached the Hon’ble High Court of Karnataka at Bangalore, challenging the ex-parte ad-interim injunctions granted by the Hon’ble Trial Court on 26.04.2016. The Hon’ble High Court was pleased to grant an interim order of stay; which in effect, allows us to proceed with the launch of our ‘QikPod’ product.

I would like to make no further comments on the merits of the matter, as the same is sub-judice. In any event, as things stand, the commercial launch of our ‘QikPod’ product will proceed as planned.”

The suit underscores challenges in managing expectations in founding teams at early stage startups. As many industry insiders point out, most of the startups die not for lack of funds, but misunderstanding among co-founders or early team members.

In this case, a common acquaintance of Gururaj and Ray said that the misunderstanding may be traced to failing to document expectations legally.

“Verbal agreements are not enough. No matter how well you know each other, you must have a legally binding agreement,” this person said, requesting anonymity because the matter is sub judice. “In this case, there are emails from both the individuals conflicting each other’s claims.”

Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners among its investors. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.

 

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