Karnataka High Court
Mr Sudip Bhattacharjee vs Symphony Services Corp Having Its ... on 11 April, 2008
Bench: Manjula Chellur, L.Narayana Swamy
PRESENT
THE HON'BLE MRSJUSTICE MANJULA CHELLUR
BETWEEN
Mr Sudip Bhattacharjee.
Aged aiioiii 44 years,
S/o Late R.C.Bhattachar,|ee.
F-1169, SF, Chittaranjan Park,
New 110 01.9, A. . E-LLANT
ll IYI
s mversai Legai. Advocate)
'I... ..__.J.I_ A
{Pry Sri G.L.'v'i'nw'au Ill. 6? I'
AND :
1. - Symphony Services Corp.(IIldia) Pvt.Ltd..
P-ei.-ig a ruri-«ate iiTniie-:4: eoruipiiiy iiworporaieti
Under the provisions ofCompan1es Act. 1956
_ Having ita Registered Office at Symphony
Teclmoloy Centre, No.13, Magrath Road;
Bangalore-560 025 represented by its
up um-I an... H...
mreetor. Pris-.AuIutuvu nuy.
2. Mr.Amitava Roy,
Director, .
Symphony Services Corp (India) Pvt.
M3
Ltd. No.13. Magrath Road.
Bangaior-e 566 625.
3. Mr. Gordon Brooks,
Director,
Clo Symphony Services Corporation,
USA, 4915, :'v'iiriiidn Aveniie,
2"" Floor, Palo Alto,
4. Mr Jeff Van Lenten,
Clo Symphony Services Corp.USA,
4915. Miranda Avenae,
2"' Floor, Palo Alto.
A 94304 USA. .. RESPONDENTS
(By Sri K.G.Ragl1avan. Sr.Counse! for M/s Dua Associates. Adv
nun.-.4.-um D'l\
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ram
I.'-VI
TTTTS MFA TS TTLED U/SEC' 37 (1) of Arbitration &
, Conciliation Act against the order dated.12.9.20i}'7 passed in
A.A.No.l3l/07 on the file of the VI Addl.(I'ity Civil Judge,
Bangaiere (€399.11) 3-ejec'..irg the F-ti%n i'iie*'u we 9 of the
Arbitration & Conciliation Act for interim order pending
arbitration.
This Misc. First Appeal having been RESERVED. coming
vDn~oeNceM.F.m* oz? -.I""'1F'-M'"\.TT a-.:.-. da",
I. L'!!! 'I 'J II'! I-'lal.VI-I-HI.
MANJULA CI-IELLURJ. delivered the foiiowing:--
J_IlD£_E.M_E_N_'[
all "na-
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This appeal is directed against the orders in Arbitration
Case No.131fiW on the file of the VI Add! City Civil Judge.
2. The facts in brief which led to filing of this appeal are as
under:
The appellant hereunder was appointed by the
tau-r -n I4-I and-In-...I ...._.......... .
respondent-conapmq -- a n'fi.|u.-I1 u mu u up :3 m u- -
I":-esident and Chief Finance Oilicer in terms of the oifer of
employment issued to him. Respondent Nos.2 to 4 are the '
representatives of the first respondent. He was appointed to the
said post by the first respondent-company on account of his
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experience "'"" Xena "--"e
important possessions in ECL group. According to the appellant,
a separate Confidential Information and Invention Assignment
Agreement was entered into between the appellant and the first
respondent for non---disclosure of confidential information which
appeiiant by the respondent-company. After assuming office
by the appellant in October 2006. during November 2006.
appellant came across certain transactions of the respondent -
company being carried out which were not tenable according to
law of .he 'and
l.---II ;. q, u \.;;; guy.
2007. this was brought to the notice of the highest authorities of
the respondent and ultimately. the services of the appellant came
to be terminated by paying two months' salary. According to the
Trnifi "t' the facts. therefore. he got issued a 'iegai notice
which was replied by the first respondent.
it is co t ned 'n heh'f of the appeiiant that two
540
agreements dated.5.9.2006 i.e. offer of employment to the
appellant and another agreement dated.27.9.2006 i.e.
Confidential Information and Invention Assignment Agreement
are inextricably linked pertai_n_i_-g to enm vment oi' ..he
respondent. he brought to the notice of the first respondent that
the disputes pertaining to the illegal termination from the
employment has to be adjudicated and accordingly. he moved the
Court ufs 9 of the Arbitration and Conciliation Act, 1996
uni .1 4.8.... I...
99 1' (I.
""' "" " }. 1"' iii? it' IlU'l..I'L' . u
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nominated the name of Mr Raltesh Munjai. Senior Advocate.
Supreme Court as the sole arbitrator and consent of the
respondent was sought for such nomination. But no consent was
given by the respondent company. Subsequently. in August 2007,
the first respondent not reply notice issued contending that there
um: nn nnnfv-an!' lsnfnynnn n ncnnflna an 'IVA 1.n-vajuvn, in null"--Ivnl-Inn
. u u u 1. ya man nu aununuaa.-up mu an Inn anvil.
and the Confidentiaiity Agreement is independent of the
employment contract. therefore. both operate in diiferent fields.
Hence. he had to approach the Court for the appointment of Sr!
Rakesh Munjal as sole arbitrator. The respondents contested the
crores of rupees in the account of the respondent company with
HSBC bank. Aggrieved by the same. the matter came up in Writ
Petition No.1212'7/07 wherein the order was modified as the first
respondent undertook to maintain a balance of
arbitration case. The trial court was directed to hear the interim
application as well within fifteen days.
5. The pleadings of the parties were to the above effect and
based on the same. the following six points came to be framed:
1. Whether the petition as filed we 9 of
Arbitration and Conciliation Act, 1996 is
run-Iunlnd-nn'nIn
Illilllllillllulllc 0
2. Whether R1 company is liable to deposit
Rs.2,00,00,000/- before this Court and
liable to pay monthly remuneration
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3. Whether the order of termination of the
petitioner is liable to be stayed ?
'III: 115'-Inn I-'In nnflflnnnn In nnflfinfl in
'II V V IICWIICI Ill-C PWIIIIUIIVI I1! VIIUIUICII WU
temporary injunction to restrain the
respondents from aiienating the properties
mentioned in 1.48.! ?
Ell
'vhnfhnm I-II _ 1; nnrslvn nvulnn tenancy. nu I A T!
VVIIGWIICI. WI 'rm I'll-I. Ur: 'll "cl PCIWBWWK 'III. 1.0"'!-ll
is liable to be confirmed ?
6. What order 1'
6. Perusal of the orders of the trial court shows the matter
came to be disposed of on the maintainability of the petition as
.!1- respendmts eont..nr.! the. the employment -.'..ntra-- b-tI.-1--..
the parties did not provide for reference of the dispute. ii' any.
regarding the termination of employment for arbitration. The
learned Judge after referring to the two agreements ultimately
\\r\
held that the Confidentiality agreement is diiferent from the offer
of employment under which the appellant came to be employed.
7. Aggrleved by the said order. the present appeal is filed
questioning the orders of the learned Single Judge contending
that on facts, the learned Judge was not Justified in rejecting the
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learned Judge failed to exercise the jurisdiction vested in him
under the Act. It is further contended that the opinion of the
learned Single Judge that termination of service of the appellant
did not raise a dispute required to be adjudicated by arbitration,
agreement dated.§.9.06 and 2'7.l'I9.06 are inextrieaiaiy linked to
each other as both pertain to the employment of appellant and
they had to he read in conjunction with each other. He further
contended that the lower Court ought not to have gone into the
Innrlfu nf f A non
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8. The arguments of the Counseis appearing for both the
sides were heard.
9. As could be ascertained train the contentions of the
parties. two agreements dated.5.9.06 and 27.09.06 are not in
dispute. The contention oi' the appellant whether the lower court
.9.-...I.l I........ ......... Ind-..». I-I... gun!-. ..I-...'I.lIId-r n9 A-In... n--I _
Ulllll» I VU g I III") 'III'! I llrnl.ll'.i1ll.Il.l.ll«J' Ul. ll!!! illlflll. IIUII
consider an application filed we 9 of the Act for interim relief.
has to be rejected tor the simple reason that in the absence of any
contract between the parties for referring the matter to
arbitration. no purpose would be served to consider the
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even to grant reiief we 9 of the Act. if the maintainahiiity of the
application is raised. the Court is bound to dispose of the matter
first considering the maintainability and then the relief sought
under the Special enactment. Therefore. in view of the parties
was justified in referring to these two agreements to see whether
the dispute regarding termination of appellant from service by
the first respondent shond be adjudicated by an arbitrator.
10. The first agreement which is in the form of Offer letter
of employment is dated 5.9.2006. The ibllowing are the important
-erI.r2I.s'..:u|. coudi..- -. --.. _ - .
1. You receive a totoi compensation
package of Rs.4500488/- per annum. The
breakup of the compensation and
benefit; eppfieobie to you is es per
annexure 1. You are expected to treat
iiifo-rinafion ans': any ehinges 'l"I'Iii'u':
therein from time to time as personal and
confidential. The benefits are detailed in
the u_IuI.es:u_re. In addition you will also be
eligible for a one time joining Bonus of
$.14: l.iih'i. vriiieii will be payabie to you
upon joining us. Please note that the
joining bonus will be recovered if you
leave the services of the Company before
completing 12 months of service. '
2. In addition. subject to necessary
approvals, you shell' be eligible to
participate in the Symphony Service
Cox-p.USA Employee Stock Option Plan
and be entitles'. w receive l%'J'J number
of options.
XXIX!
xxxxx I
XXXXX 1
i.I'Il"'II!'l"II(I' nntnnnnnuflen in aflvlnfllr
IIUIVIIIIIIII IyIJIII.llIuIIh'llI-Iv]. I9 DEVI-I. 8%?"
between yourself and the company. It has
been determined based on numerous
factors such as job. skills - specific
background and professional merit. This
i..':fe"--....atioua! and any changes made
S"!-"':"*E-""
7
13.
14.
15!
16.
1|'?
11'.
therein should be treated as personal and
- ,___m.I__4.s...I
'0ll.[lllUllI.ll.lo
to 12 xxxxxx
The notice period applicable for
aeptu-ating', fiom the Company's services
is 60 days. You will ilnd more details on
the so-pa:-ation pi-was-'..a.-'-e.'p. VII-II»-'llD' w am
HR policy section of the Intranet.
XXX!
xxx;
xxxx
Non diselosm-e Agr%r.*.-.e:-.t:=
"Company" for all purposes shall mean
Symphony Services Corp (india)
Pvt.Ltd., Bangalore.
a) You shall not at any time, disclose to
myone any '.s:i'ors:-..a-.%:-.. !:..':e.-.-.--......;
knowledge, secrets. methods'. plans.
drawings, etc. of the
company. Also yonslull not take any
teitlllfifly dam i ' or informntioni
*'-e-mt' |.:e'.o:-J.-,i..-ag to the V
are nnnlnn
Ill IAIPIWIU I41»;-wv
company outlide the ' unless
specific entrusted to you in writinuz.
' In) You will not undertake business of
similar nature with any other
eon:-,.an_*,v du.-'i.-eg Ines-iod of you
employment with this company.
.c) If', during the course of your
employment with the Company. you
are provided with any Company
asen, you shall n1.a.i.ntaLnt!1e same in
good working condition and you
silaii return the items of this
Company prior to your ceasing to he
in the employment of the Company.
Azey dues to he paid to you on your
ceasing to he in the employment is
ll
liable to be withheld by the Company
if ti:-e said items w my}-='..-a'. hy the
"Company are not returned to the
Company, apart from the
Company's right to proceed against
you as per the pmvisionsoi'law.
, You shall surrender all the records,
correspondence and such of the
papers connected with the business
in the eventuality of your ceasing to
be in the employment of this
'i
C.-I_|!!!Il!£l.!_',-'=
e) During your employment with the
Company, you be subject to and
have to abide by the rules and
regulations stipulated by the
Comparyt The C£.'!.'.'.pa!'.._',' may, at its
discretion. modify tron: time to time,
the fies and reguiations as it deems
fit. without notice. '
S3:
11. There is one more document entered into between
the parties which refers to employment service conditions that
are general in nature.
12. None of these documents refer to any arbitration
clauses. The important document upon wlI..-h the res_oond..a.s w
Sub: Termination as Vice President &
Chief Financial Gm-eer,' Sysnrshony
Scwioes Corp (India) Pvt.Ltd
nu
C't'fompany")
Dear Mr Bhattacharjee,
"This is with reference to the above
mentioned subject. In accordance with
Point No.13 of the Offer Letter dated
September 5, 2006. issued to you. we
herelzy tern-.iI.-.ate yew' as-vices %n~. the
Company with immediate effect. Please
find enciosed a cheque hearing
No.146282 dated April 11. 2007 drawn
on HSBC Ltd., for the sum oi'
R.s:.7i5il,0i'.P.?..!- (Rupees Seven Lflths Fiity
Thousand and Eighty Two only) towards
the two months saiary payable to you in
lieu» oi' the notice period thereof. As per
Point No.14 of the said Offer Letter.
upon tcrnI_i!I.o.tt!on of your are!-cos,-, you
are required to return all assets and
property of the company that are in your
possession back to the Company. Please
- hand over the laptop, cell phone and
other documents and data of the
company that are in your custody.
We also think it pertinent to remind you
that are under obligation to hold in
strictest confidence and not to disclose;
utilize or otherwise make use of any
Cfiiii]'u'ii'I5? related infomiafion gathered
by you during your tenure with the
Company, directly or indirectly and in
any manner iior torn; whatsoever,' Any
violation of your confidentiality
obligation shall entitle the Company to
.....l.i....I.' 2.. .... ............._..._.i...1... .l.'...._..... .. Id.
FISIIUI III III! Ill-7!-Il'\llllllI-I-U lllllllll II! II
deems necessary".
13. After this termination letter. the real controversy
unnntn in llnurn nilnnnnll nun llninrnnn I-'Ia I-Inlvllnn urinal'-Inn
§§¢"I»§ 'N' G DIVPPW 'Iv IUCWVVVGII VII.' III!-Kw ""II$"II$I
dispute reaartiing termination is a matter of reference for
arbitration or not 'P Both the parties admit this confidentiality
agreement dated.2'7.09.2006. The following terms and conditions'
relied upon by the parties are relevant:
1:}
1 ,,I!Ill'IlnI1'lI'InI'II' ('nah-nnfnln nit nnunl nu flalnflnnuh no
' FIW "IWIIW' '-1'-VIIWI WIITWVI 'II I
t
2. "onfidentiai information:
a) Non-disclosure
b) bIIODIIIl
flu: _
'II?' I
T") Nor:-compete. Non-solicitation and Gtiter Activites
b) Non--Solicitation of Company clients
c) Conflicts.
d) Voluntary Exectdion
91 Return
-, _-- ---.p---w
.l\ "'I'Y__.._.l_.. _.u.I_
u I. efflflllflfl fl C ruficaiion
2) Notice to Third Parties
in) Facilitation of Agreement
. General Provisions.
:1) Goveming low: The va!!.-!tv. .nter_o.-ta....:'.., coasts-.:...o::
and 1-:erf*r""1e* -i' 'his Agreement shall be governed by
the laws of India. excluding conflict of law provisions.
b) Remedies.
i) I acknowledge that the services to be
rendered under this Agreement and the
items desciihed as C0!!f!!!9!!!L'.l
Information and trade secrets are of a
\m
15
special. unique and extraordinary
€}:':fi'fi6i'vi='i' that it vioiiid be c'iii'i"iciiit or
impossible to replace such services or to
compensate the company or applicable
company client in money danI.e.ges for a
breach of this Agreement. Accordingly, I
agree that if! vielate or threaten to violate
any of the provisions of this Agreement. or
the Company or a Company Client
reasonably believes that my vieletion may
be imminent. the Company and/or the
Cenapeny ifltent. in et'ut'uitien to any other
rights and remedies available under this
Agreement or otherwise, shall be entitled to
temporary and permanent mterirn or
injunctive relief from any court of
'.'9t't't%tt:'fit jnrtedtetien. tvttheat the
necessity of proving actual damages and
without the necessity of posting any band
other undertaking in connection therewith. '
ii) A:-.5' dispute arising oiit of or in
connection with this Agreement, including
any question regarding existence. validity
or termination. shall be referred to and
finally resolved exclusively by arbitration
in In-.'!ia and in acct.-réance wits': the
provisions of the Arbitration and
Conciliation Act.,1996. _
iii) The arbitral tribunal shall consist of a
sale arbitrate-r who will be a,*s,'=t-i.'etet'. -refit}:
the Company's and my consent. In the
event the Company and i are unable to
settle on a mutually acceptable sole
arbitrator within iii'teen(15) days from the
receipt of request m do so the ether
party (the "First Selection Period"), the
\r\
arbitral tribunal shall comprise of three
arht ramrs each that the Coiiipaiit/' anti I
shall each appoint one (1) arbitrator within
live (5) days subsequent to the First
Selection Period (The "Section Selection
Period") and the two appointed arbitrators
shah appoint the third arhttrator withiii ten
(10) days subsequent to the Second
Selection Feriod. The third arbitrator shall
act as the presiding arbitrator. The place of
arbitration will be Bangalore. and all
arhitra'. pmceezliags shall he eondaetea in
English. The company and I shall each hear
our own legal fees and expenses. other
costs of undertaking the arbitration
including the fees and expenses of the
arhitramrs an. -.-.'itr.e-.$, will % shared
equally between the company and me. The
arhitrai award shall be final and binding
on the company :u1d me.
is) Neither the cashew-.3' he I will he
liable to the other party for any special,
indirect or consequential damages
whatsoever and we waive any right luuler
agreement or at law to claim such damages
from the ems,-r partyi
(c) Entire Agreement : This Agreement sets forth the
entire agreement and I -ders an M ..et-seen the
C'-'rnpany and me relating to the subject matter herein
and merges all prior discussions between us. No
modification or amendment to this Agreement. nor any
waiver of any rights tmder this Agreement. will be
effective unless in writing signed by both parties. Any
subsequent change or changes in my duties, obligations.
ri.,,.ahts or eoznmnsatien wifl not attest the validity 6" se"fi
of this Agreement.
d) Severabllity: If one or more of the provisions in this
Agreement are deemed void by law. then the remaining
provisions will continue in hill force and effect.
A55". V' I V' '1' II E931»
fur' h
"in kindly:
L ....eeswrs and Assig.-r-.s: This e uul mg
'Trn "y heirs. executors. administrators and other legal
representatives and my successors and assigns and will be
for the benefit of the Company. its successors and its
assims.
Survival : The pro _,i__.s of --.is Agmenlunt sha. stsrvi-.*e
iii' "T"1'i1"i"ii"'i of iii' R""io"'"p and the assignment of
this Agreement by the Company to any successor in
interest or other assimee.
g) Advice of Counsel: I acknowledge that. in executing this
agreement. I have had the opportn_n_ity to s-.-h ..!ie s..v!-e
of independent legal counsel and I have read and
understood all the terms and provisions of this
Agreement. This Agreement shall not be construed
gamgt any i"e::JIt.I'r by man nfllon d-gnfl-I-nu l\ _ .. .........fl...i
an
H
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=
C I-
E H hereof;
I!) Miscellaneous: For the purpose of this agreement.
"Affiliate" means any undertaking that holds ten percent (10%) of more of the equity in the Company or any .,.. W . . . . .. upon the eontro'v'ers"
when: r we f'fi'll§ "d conditions referred to at Clause (53) ofthe agreement would apply to the termination of service of the appellant and the related issues. According to the Appeilanfls Counsel. they are interlinked and the second agreement forms integral nart oi' the !|.rst agreements Eat aeeordingv to the E
-*"""'iidents, u: C'*fide'%"t§* Agreement is entirely different and the arbitration clauses under Clause(5) of the said agreement has no application on the matters covered under or arising out of the offer of employment.
15. When we go through the Confidentiality agreement dated.2'7.9.2006_. it is very clear that the said agreement comes into effect subsequent to the ter'_m_|nation of the t *f the respondent company. The very title of the agreement and the other clauses oi' the agreement would indicate that if any dispute arises regarding the terms and conditions of the Confidentiality Agreement. then.
the clauses of arbitration would become operative. The empioyment had come into operation. The Confidentiality agreement at clause 4(a) of the agreement is of relevance which .
reads as tmder:
4. Representations and Covenants.
4(a) N:-.a4C'c:awtc. Non-Selicitation and Other Activities: I represent that during the term of my Reiationship with the Compalay, I will not, without the Company': express written consent. engage in any employment, cc-nsI.a!ting. cents-ae.ting or otiser hast:-am activity other than for the Company or for \\ the Company Clients on behalf of the Cesssg.-my es ..i.-'e-steel by the Company. I also represent that during the term of my 'Relationship with due Conipmy a.'.-at fer twelve (12) months after the date of termination oi' my Relationship by the Cempsny fer any reason, I will not directly or indirectly solicit, induce, recruit, encourage or take away, or attempt w licit, induce, recruit, encourage or take away employees, contractors or consultants of the Company to terminate. their relationship with the Company-either for myself or for any other iieison or entity' {ii} %%it fie business of any client or customer of the Company or Company Clients (other than on !!£'!|.&|.!!' and for the benefit of the Company or Company Clients; or (iii)otherwise interfere with er disrupt any heshness relationship of the Company or Company clients.
16'. The ah-ye cimse would indicate the. seve....l ...str!cti-ns were imposed regarding non-compete. non-soiicitation and other ;
activities to be maintained by the employee to safeguard the interest of the employer's company because of the position he h-ldt lie was required to adhere to the terms and conditions of this ofireemeht ti1'ii':' was not erly "able .or su..h _reech in accordance with the terms and conditions of the a2ree'i"it h"t also for next 12 months after the date of termination by the Company. He was required to act and also not to act as stated above. Then sub-section 5(b)(il) makes it very clear that the arbitration agreement was with re--- -nee t. W dis:n.-e ..r|.»....-eg at I 41 n ....._.....n.... -...ul. {"t_._n.I__4.¢ o 0': r in -2 ll.ll -: I an , Iuu uaiity Agreement alone including the controversy regarding its existence, validity or termination. The word "termination" here is with reference to termination of the agreement and not termination of services of the employee. In other words, it' there is any violation .1' -ail..-_.
I-n fnll II Iv'-7 I U36"! W6! I-'IA 'an:-In I' 'Kn ufl';-g-flu'.--II.-ll'.-
dispute regarding such issue were agreed to he adjudicated by arbitration. The begimting of clause (I) of the agreement also refers to the fact that the Confidentiality Agreement shall not alter. amend or explain any right on which the employee to
17. Therefore. the reading of this Confidentiality Agreement .2: e..z-..ie..-2-.'I.ion with -efler--def -e.-neleyn-eat are ....u.. we any the Confidenfiflfty Agreement is integral part..oi"
the otter of employment. The arbitration clause under' the Confidentiality Agreement applies only with regard to the breach 22 of terms and conditions of Confidentiality Agreement and it does not extend to the disputes regarding the termination or other connected issues. In that View of the matter, the learned Judge _..,.... :....un...: s... Iuaflh. that arbitration clause pertaining to the termination of employment. no decision could be given on the application filed 11/5 9 of the Act.
17. The other points need not he answered in View of the non-maintainability of the application filed ufs 9 of the Act.
18. Viewed from any angle. we are of the opinion that the present appeal does not survive for consideration. The appeal is dismissed.
Sd/-
Judge Sdf-
mask 9