Both MOSL and Intellect Software Solutions informed the court that they have resolved their differences amicably by negotiation and the matter has been settled permanently
By Mohd Ujaley
The Mumbai High Court has quashed the FIR against six employees of Motilal Oswal Securities (MOSL) in a matter related to stealing the source code of trading software.
The court quashed the FIR against four programmers—Dushyant Joshi, Harsh Kansara, Dhara Pandya and Mandar Jambhulkar—and Ajay Menon, CEO — Broking & Distribution, and Pankaj Purohit, IT head of MOSL.
Intellect Software Solutions, a Mumbai-based software development company had filed an FIR against six employees of Motilal Oswal Securities (MOSL) for allegedly stealing the source code of trading software it developed for the brokerage firm.
Both MOSL and Intellect Software Solutions informed the court that they have resolved their differences amicably by negotiation and the matter has been settled permanently. Therefore, the court has quashed the FIR registered against the employees of MOSL.
“Due to some misunderstanding and also due to misinterpretation of the Statement of Work (SOW), Intellect Software Solutions had filed a FIR against the employees of MOSL. However, both MOSL and Intellect Software Solutions have resolved their differences by negotiation and the matter has been settled permanently,” Ajay Menon, CEO, Motilal Oswal Securities told EC.
In the FIR registered at the cyber crime police station at Bandra Kurla Complex in Mumbai, the IT firm had alleged that the source code was stolen by four of its employees who joined Motilal Oswal Securities. The company also filed a case in Mumbai HC demanding Rs 25.5 crore as payment for the use of its software. However, the brokerage firm MOSL had denied the allegations terming it “baseless and false.”
According to Devesh Negandhi, managing director, Intellect Software Solutions, Motilal Oswal wanted to develop customised trading solution with charting analysis tools and faster broadcast optimisation for their front end trading terminal. So they approached his company in December 2013. Subsequent to signing of statement of work (SoW), Motilal Oswal initiated the work by giving Intellect Software Solutions an advance payment of Rs15 lakhs towards the development.
As per the agreement, MOSL was supposed to pay Rs 600 per license upto 5000 licenses, Rs 550 per license for 5001-7000 licenses, Rs 400 per license for 7001-10000 licenses and Rs 300 for above 10,000 licenses. According to the agreement, the license would have two years lock-in-period and a 5% increment in cost every year to adjust annual inflation.
Intellect Software Solutions developed the software and MOSL started to release the software to its clients, sub-franchisees and sub-brokers from August 2014. Simultaneous and subsequent testing and bug fixes continued till December 2014 and by the same time, all the clients of MOSL were migrated to the new software which uses intellectUtility.DLL claimed Intellect Software Solutions.
According to the annual report for the year 2014-15 MOSL had 8,44,289 registered clients. As per the commercials discussed in the SoW, the benefit accrued to Motilal Oswal is Rs. 25 crores, 50 Lakhs. As against this, Intellect has received only Rs. 15 Lakhs as advance. And subsequent payments as agreed were not made.
However, the major twist came in May 2015, when Dushyant Joshi, Harsh Kansara, Dhara Pandya and Mandar Jambhulkar, who were working on this project resigned from Intellect Software Solutions and join Motilal Oswal as software developers.
According to the FIR, these techies took away the source code and data and created a new DLL by the name of HelperUtility.DLL for Motilal Oswal in place of IntellectUtility.DLL. Upon investigation by Intellect Software Solutions and decompiling of HelperUtility.DLL, the company found out that the HelperUtility.DLL had the same source code as IntellectUtlity.DLL with minor modifications and additions.
On comparing ‘SpreadWatch’ module, it was found out that of 1424 lines in HelperUtility.DLL, 1390 lines were completely matching with IntellectUtility.DLL. The company also said that almost all of the function names used in HelperUtility.DLL exactly matched with IntellectUtility.DLL
Such and many more evidences substantiated that the four developers who left Intellect Software Solutions, conspired in connivance and collusion with Motilal Oswal, stole the invaluable source code of Intellect Software Solutions and deployed the same at Motilal Oswal. Motilal Oswal facilitated the theft of the source code by engaging these programmers at its place together with the deployment of the stolen source code, the company said in the FIR.
Earlier, MOSL said that they had engaged with Intellect to develop a trading software but the company failed to deliver it. MOSL said the allegations against the company were “false and baseless” and that it was considering a defamation suit against Intellect. Company also claimed that MOSL had taken permission from Intellect before interviewing the four programmers for jobs. Negandhi on the other hand denied the claimed and said MOSL did not tell him it was hiring the four programmers.