Karnataka High Court
Minions Ventures Private Limited vs Mr. Hardik Shah on 21 July, 2022
Author: P.S.Dinesh Kumar
Bench: P.S.Dinesh Kumar
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF JULY, 2022
PRESENT
THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
COMAP. No.169/2021
BETWEEN
MINIONS VENTURES PRIVATE LIMITED
A COMPANY REGISTERED
UNDER THE INDIAN COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
WING A, GROUND FLOOR, OFFICE-1,
BLOCK A, SALARPURIA SOFTZONE,
BELLANDUR VILLAGE, VARTHUR HOBLI,
BANGALORE-560 103.
...APPELLANT
(BY SRI GURU PRASANNA, ADVOCATE)
AND
1. MR. HARDIK SHAH
R/O 401, GAYATRI JAYRAJNAGAR,
BORIVALI (WEST)
MUMBAI-400091.
2. MR.KUNAL TEKWANI
R/O 9C, ROOM NO.403,
NEELAM NAGAR, MULUND EAST,
MUMBAI-400081.
3. M/S. IKSHAVAKU SOFTWARE
2
VENTRURES INDIA PVT LTD
A COMPANY REGISTERED UNDER THE
INDIAN COMPANIES ACT, 1956
HAVING ITS REGISTERED
OFFICE AT 905, PREMIER RESIDENCIES,
KIROL ROAD, KURLA (WEST)
MUMBAI-400070.
4. MR PATHIK PARESH SHAH
#9C, ROOM NO.403,
NEELAM NAGAR, MULUND EAST,
MUMBAI-400081.
...RESPONDENTS
(BY SRI HARISH NARASAPPA, SENIOR ADVOCATE FOR
MS. RAMYA HONNEGOWDA, ADVOCATE FOR R1 TO R4)
THIS COMAP IS FILED UNDER SECTION 13(1) OF THE
COMMERCIAL COURTS ACT, 2015, PRAYING TO SET ASIDE THE
ORDER DATED: 23.12.2020 PASSED IN COM.A.A.NO.72/2019
BY THE LXXXIII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE
(CCH 84), BENGALURU AND ETC.,
THIS APPEAL COMING ON FOR ADMISSION, THIS DAY
POONACHA, J., DELIVERED THE FOLLOWING:
JUDGMENT
Application of the Appellant filed under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') having been rejected by the Commercial Court, the present Appeal is filed. 3
2. It is the case of the Appellant that it is engaged in the business of operating an Online Technology Platform. That the Respondent No.1 was an ex-employee of the Appellant. When he joined the Appellant Company, he had entered into an Employment Agreement dated 10.4.2017. At the time of leaving the Appellant, the Respondent No.1 also entered into an Exit Agreement dated 09.05.2018. Alleging violation of the terms of the said Agreements, Appellant filed a Petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') before the Commercial Court. The Commercial Court, initially granted an ex-parte ad interim order as sought for and subsequently, after hearing the parties, vide order dated 23.12.2020, dismissed the Petition. Being aggrieved by the said dismissal, the present Appeal is filed.
3. The learned Counsel for the Appellant contended that:
4
• The Commercial Court initially having granted interim relief in favour of the Appellant ought not to have dismissed the Petition filed by the Appellant.
• The Appellant has initiated the arbitration proceedings.
• The Appellant had satisfied the ingredients required under law for the grant of injunction, but the Commercial Court failed in not considering the materials produced.
4. We have considered the submissions of the learned Counsel for the Appellant and perused the material on record.
5. The question that falls for our consideration is, 'Whether the order dated 23.12.2020 passed by the Commercial Court is liable to be interfered with?'
6. It is not in dispute that the Commercial Court had initially granted interim relief in favour of the Appellant. However, after hearing the arguments on the 5 merits of the matter, in its order dated 23.12.2021 recorded the following findings:
"28. As per the arguments submitted by both the sides, it is pertinent to note that the present petition is filed in the year 2019 and the interim reliefs was granted to the petitioner restraining the respondent no. 1 & 2 from soliciting customer of the petitioner and employees and also restrained from using the confidential information during the course of their employment with 3rd respondent. Since within 90 days from the date of granting such interim relief the petitioner has not instituted any arbitration proceedings. Admittedly the interim relief was not continued and even after filing of this petition admittedly the arbitration proceeding was not instituted by the petitioner against the respondents to resolve the dispute under Arbitration & Conciliation Act.
32. It is also argued by the learned counsel of respondents relying on negative covenant which allegedly restricts the right of respondents to be engaged in trade of their choice and to work in their field of expertise is clearly illegal and even though if any such agreement is executed against the respondents in favour of petitioner undertaking that they will not engage themselves in similar profession or trade is unenforcible and the petitioner cannot impose Anti-competitive Agreement which are unenforcible against respondent no. 1 & 2 and agreement restraining trade of similar nature of petitioner is untenable as per section 3 & 4 of Competition Act 2002 as contended by the respondents. As per the provisions under the said Act the restrictive covenants are in the nature of abuse of dominant position of petitioner and have appreciable adverse 6 effects on the rights of respondent no. 1 & 2 herein and the respondent no. 1 & 2 have legal right to engage in the business of similar nature of petitioner since two years was lapsed from the date of execution of such agreement. Since the petitioner has not initiated any proceeding to resolve the dispute under Arbitration & Conciliation Act against the respondent no.1 & 2. The interim reliefs as claimed in the petition cannot be granted on the basis of proof of such allegations made by the petitioner against the respondents.
33. The essential grounds to grant such interim relief were not produced by the petitioner and the documents produced in the petition on behalf of the petitioner do not disclose about prima facie case and balance of convenience lies in favour of petitioner in granting such reliefs. Hence if the interim reliefs is granted as claimed by the petitioner the respondent no.1 & 2 will be put to hardship and respondent no. 3 & 4 who are not connected to the dispute which is arisen between the petitioner and respondent no. 1 & 2 will be put hardship. Thus it is unfair to grant interim relief as claimed by the petitioner in the present petition. The petitioner is not entitled for any of the reliefs claimed in the petition against the respondents. Hence the petition is deserves to be rejected. Accordingly, I hold point No.1 as Negative."
7. It is settled law that in a Petition filed under Section 9 of the Act, the Court is required to consider the case for grant of interim relief having regard to the principles contained in Order 39 Rules 1 and 2 of the Code 7 of Civil Procedure, 1908 (See: Adhunik Steels Ltd V/s Orissa Manganese and Minerals (P) Ltd.,1].
8. Accordingly, the Commercial Court having regard to the well settled principles governing the grant or refusal of injunction, has considered the case of the Appellant keeping in mind the three governing principles ie., prima facie case, balance of convenience and comparative hardship. The Commercial Court, on appreciation of all the relevant facts and the material on record has, vide the impugned order exercised its discretion and rejected the Petition filed by the Appellant.
9. The said order passed by the Commercial Court being a discretionary one, the scope of interference with such an order in an Appeal is limited and interference is permissible only if the discretion is shown to have been exercised arbitrarily or capriciously or perversely or where the Court has ignored the settled principles of law regulating grant or refusal of interlocutory applications 1 (2007) 7 SCC 125 8 (See: Mohd. Mehtab Khan and others v. Khushnuma Ibrahim Khan and others 2).
10. In the present case, the Appellant has failed in demonstrating that the discretionary order impugned in the present Appeal requires interference in terms of the well settled principles of law as noticed above. Further, arbitration proceedings have already commenced and the Appellant shall be at liberty to seek remedy from the Arbitral Tribunal.
11. In view of the aforementioned, the present Appeal fails and is accordingly, dismissed.
No costs.
Sd/-
JUDGE Sd/-
JUDGE nd 2 (2013) 9 SCC 221