Delhi District Court
Siddharth Loyal vs Wieden Kennedy India Pvt. Ltd. And Ans on 23 December, 2023
IN THE COURT OF MS. PURVA SAREEN,
ADDITIONAL DISTRICT JUDGE-01, SOUTH DISTRICT,
SAKET COURT, NEW DELHI
Civil Suit No. 183/2019.
DLST01-001827-2019.
Mr. Siddharth Loyal,
R/o D-1/42, Ground Floor,
Vasant Vihar, New Delhi-110057. ..... Plaintiff
VERSUS
1. Wieden + Kannedy India Pvt. Ltd.,
Through its Directors/Authorized Representative,
314, DLF South Court,
Saket, New Delhi.
2. Wieden + Kannedy India Pvt. Ltd.,
Though its Director/ Authorized Representative,
224 NW, 13th Avenue, Portland, OR 97209,
United States of America. ....Defendants
Date of institution : 18.03.2019.
Date for reserving orders : 16.10.2023.
Date of pronouncement of judgment : 23.12.2023.
JUDGMENT
Suit for Rendition of Accounts and Other Consequential Reliefs.
1. Brief facts as stated in the plaint are that the plaintiff is an advertising professional with a rich experience of more than 16 years and has worked for some of the most recognized brands in the world that includes but not limited to AB-InBev (Budweiser), Audi, Hyundai, Chevrolet, Kia Motors, Make-in- India (a Government of India Initiative) Cairn Energy, Mondelez, Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 1/33Indigo Airlines and Royal Enfield Motorcycles. In addition to above, plaintiff was a Head of Strategy Innocean Worldwide Australia Pvt. Ltd. for more than one and half year, Head of APG India (Account Planning Group) from November, 2011 to November, 2014 and Regional Business Director, Saatchi & Saatchi Singapore for more than one year.
2. It is stated that defendant no.1 is a company incorporated under the provisions of the Companies Act, 1956. Defendant no.1 is a wholly owned and controlled subsidiary of the defendant no.2 and defendant no.2 is a company incorporated under the laws of United States of America with registered office in the USA that controls the business of defendant no.1 including engagements of all the employees, their emoluments and terms of employment. The liability of the companies are joint and several.
3. Defendants are global companies primarily involved in the business of media, design and tech operations and for these kinds of operations, defendants at different places in the world engage services of quality business and marketing strategy professionals.
4. It is also averred that plaintiff had also worked previously with the defendant no.1 in the year 2007 and was a part of the core team that set up Wieden + Kennedy (W + K) in New Delhi, India. Defendants as such were well aware about plaintiff's credentials before entering into the contract. Based on Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 2/33this successful experience and performance of the plaintiff from 2007 to 2009, plaintiff and defendant no.1 entered into an agreement dated 01.09.2016. The agreement was entered into between the parties as the expertise of the plaintiff formed the core requirement/scope of work of defendants company. The plaintiff was appointed as Managing Director of defendant no.1 company by the then Head of emerging markets Mr. Karrelle Dixon amongst the entire global management team of defendant no.2 company which included the then Global President Mr. Dave Luhr and Global Executive Creative Director Ms. Colleen D'Courcey, Gloal Talent Director Ms. Melanie Myers and Global HR Director Sandi Hildreth among others.
5. It is further averred that as per clause B(1)(a) of the terms and conditions of the agreement, defendant no.1 was bound to provide a detailed scope of the work/key responsibility areas from time to time to the plaintiff. As per clause B(1)(a) of the terms and conditions of the agreement, it was agreed to pay fixed sum of Rs.71,98,112/- per annum to the plaintiff. In addition to above, defendant no.1 in concurrence with and on direction of defendant no.2, issued a letter dated 01.09.2016 to plaintiff for share in annual profits of the defendants, as per which, the defendants agreed to share following profits with the plaintiff:
(i) 2% of the annual profits of the Delhi office; and
(ii) 0.2% of the worldwide agency profits.
It was further agreed that plaintiff was entitled to receive profits on pro-rata basis which was to be based on the start date as Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 3/33Managing Director. The said letter dated 01.09.2016 formed an integral part of the main agreement signed by both the parties. It is further averred that plaintiff's entire sum (salary + profit) as stated above was a standard practice across all Wieden + Kennedy offices globally designed for the management teams. The terms were binding and defendants acted on the same and paid plaintiff his dues on the basis of employment agreement and letter dated 01.09.2016 during and subsistence of the agreement.
6. It is further stated that plaintiff started working at the defendant no.1 company w.e.f. 01.09.2016 and during the entire stint with defendants, plaintiff had successfully played a key and pivotal role in achieving his goals as MD of the defendant no.1 company. During this period two performance reviews of the plaintiff dated 02.02.2017 and 21.07.2017 were done by defendants with respect to his work and plaintiff was given overall remarkable reviews by the defendants which were conveyed through email to the plaintiff.
7. It is further stated that the extraordinary stint of the plaintiff continued in the financial year 2017-2018 also and the plaintiff managed to retain maximum clients of defendants thereby significantly contributing in the development of the company. Plaintiff's first year profit share (local + global) from September, 2016 to December, 2016 was Rs.33,66,575/- and in the second year from January, 2017 to December, 2017 was Rs,87,01,161/-. The bifurcations of the same was shared with the Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 4/33plaintiff by defendants via emails dated 14.03.2017 and 14.03.2018. Hence in the span of just 15 months, plaintiff was paid a total sum of Rs.1,20,67,736/- by defendants towards profit share.
8. It is further stated that in terms of clause B(b)(a) of the agreement, it was agreed that either the defendant no.1 of the plaintiff may inter alia terminate the agreement any time by giving in writing to the other party 15 calender days notice if such termination is within 3 months of the date of agreement or 30 calendar days notice after 3 months of the date of the agreement.
9. It is again stated that on 04.06.2018 Mr. Neil Christie, Global Chief Operational Officer and Mr. Kim Papworth, Regional ECD, Emerging Markets and ECD, W+ K London of the defendants without any reason informed the plaintiff that he was required to leave the company and asked him to resign immediately and while informing about the said decision, plaintiff was given two options i.e. (i) to resign immediately by taking four months salary which included one month notice period as per the plaintiff's appointment letter as a full and final settlement to all the claims or (ii) to have the agreement terminated with immediate effect. It is further submitted that plaintiff was given no option to deliberate on such serious affair and was forced to take a decision opting either of the letters then and there which were already drafted by defendant no.1. There Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 5/33was no whisper of making the plaintiff leave or any other associated issue as the affairs of the defendants as well as the profile of the plaintiff were going in healthy and desired manner. Plaintiff in such a situation extremely afraid of opting for option no.2 as the same would entail that the plaintiff was terminated from services which would have had severe impact on future job/assignment of the plaintiff. Hence, under this duress/coercion of maintaining professional excellence and reputation in the market, plaintiff was left with no option but to opt for option no.2. Further, plaintiff was then made to sign a lengthy document between the lines, forfeiting any further claims against the defendants alongwith a separate document which stated that the plaintiff is resigning from the board of directors with immediate effect. Plaintiff was also asked to send an official email thereby resigning from the employment of the defendant no.1. It is further stated that despite signing the full and final settlement on 04.06.2018, the plaintiff received its part dues only on 07.08.2018 in the sum of INR 14,16,352/- allegedly towards full and final settlement. Defendants did not pay the prorated profit share (from January, 2018 till June, 2018) of the plaintiff in terms of Profit Participation Program, which the defendant no.1 had agreed to pay to the plaintiff in addition of fixed remuneration and which was in fact paid for last 2 years. Plaintiff has stated that he is entitled to the part amount which is rightly due and payable as per the Profit Participation Program.
10. Thereafter, immediately on 09.08.2018 plaintiff lodged Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 6/33his protest by writing an email to Mr. Neil Christie informing him that plaintiff had not been paid his part profit share (global + local) which he was asked to forfeit on the pretext of four months salary. Mr. Neil Christie on 11.08.2018 replied to the email of the plaintiff informing that there will be no local profit share from Delhi office as it was losing money and defendant company did not pay profit share to office leader who left before the end of the year stating that there was no binding agreement to that effect and further that global share won't be calculated and distributed until March, 2019.
11. After this, plaintiff sent legal notice dated 14.12.2018 to defendants through email as well as courier and registered post. Reply dated 29.12.2018 to the said notice was received by the plaintiff on 01.01.2019 avoiding the liability towards the plaintiff. Hence, the present suit.
12. Written Statement: Joint written statement was filed by both the defendants stating therein that defendant no.2 is the ultimate parent company of defendant no.1 and the majority of shareholding in defendant no.1 is held by defendant no.2 through W+K International LLC, a subsidiary of defendant no.2. It is stated that defendant no.2 is a separate legal entity situated outside India therefore present suit is not maintainable against defendant no.2. The employment agreement was executed between defendant no.1 and the plaintiff and defendant no.2 was not a signatory to the said employment agreement hence no relief Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 7/33could be claimed against defendant no.2.
13. It is stated that plaintiff voluntarily resigned by email dated 04.06.2018 and accepted the amount INR 14,16,352/- alongwith salary for the month of June and July, 2018 as full and final settlement of all his dues from defendant no.1 vide settlement agreement dated 06.06.2018. It is submitted that owing to performance of defendant no.1 in February, 2018 the entire management of defendant no.1 agreed to a salary reduction, however plaintiff at the time of his exit requested for making good the amount of pay cut taken by him from February, 2018 till his last working day which was agreed to and paid to him as part of his full and final settlement. Settlement agreement clearly provides that on receipt of amounts mentioned in the Annexure A to the settlement, all claims of the plaintiff stand settled and plaintiff has no claims or any amount due and payable by defendant no.1.
14. It is further stated that the claims of the plaintiff are contrary to the defendants Global Incentive Compensation Bonus Plan (Incentive Plan) and deals with the year-end profits paid under the Profit Participation Program, which has been claimed by the plaintiff. Plaintiff was admittedly not in the service of either of the defendants at the end of the plan year i.e. December, 2018 therefore in view of specific stipulation contained in the Incentive Plan, plaintiff is not entitled to receive any amount.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 8/3315. Defendant no.1 admitted that plaintiff was under its employment as Managing Director and there were clear expectations in respect to the business of the defendant no.1. Plaintiff did not meet the expectations as Management Director during the period of his employment and lost several of its key clients accounts during his tenure. Defendant no.1 also received complaints from colleagues/co-workers about plaintiff's high headed and offensive manner at the work place but despite opportunity he did not improve. Then defendant no.1 was compelled to take decision to terminate the plaintiff's services but in order to part ways without causing any detriment to any future prospects of the plaintiff, defendant no.1 allowed plaintiff to resign within terms of employment agreement. Accordingly, plaintiff resigned voluntarily from defendant via email dated 04.06.2018 and accepted the amount INR 14,16,352/- alongwith salary for the months of June and July, 2018 as full and final settlement with no further amount payable. It is further submitted that no rendition of accounts of the defendants or passing any money decree against the defendant is made out. Present suit has been filed with malafide intentions to extract further amount from the defendants.
16. In parawise reply defendants have stated that plaintiff was in active employment of defendants till December, 2016 and he was given profit linked bonus under the Incentive Plan on a pro-rata basis calculated from 01.09.2016 till 31.12.2016 and from 01.01.2017 till 31.12.2017. However in the year 2018 the Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 9/33plaintiff was not entitled for the same as he resigned prior to 31.12.2018. Defendants have also denied all the allegations leveled by the plaintiff against them.
17. Plaintiff filed replication to the written statement of the defendants controverting the stand taken by them in their written statement and reiterated the facts of his plaint.
18. Thereafter on completion of pleadings, following issues were framed on 28.11.2020:
1. Whether the plaintiff is entitled to decree as prayed in prayer clause A? OPP.
2. Whether the plaintiff is entitled to decree as prayed in prayer clause B? OPP.
3. Whether there is any privity of contract between the plaintiff and defendant no.2? OPD.
4. Whether plaintiff is entitled to any costs?
5. Relief.
19. Plaintiff's Evidence - In support of his case, plaintiff examined himself as PW-1 and tendered his affidavit in evidence as Ex.PW1/A and relied upon following documents:
1. Email dated 16.06.2016 is Ex.PW1/1.
2. Appointment letter dated 09.06.2016 is Ex.PW1/2.
3. The employee handbook issued by the defendant is Ex.PW1/3.
4. The employee agreement dated 01.09.2016 is Ex.PW1/4.
5. Letter dated 01.09.2016 is Ex.PW1/5.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 10/336. Email dated 02.02.2017 is Ex.PW1/6.
7. Email dated 21.07.2017 is Ex.PW1/7.
8. Email dated 14.03.2017 & 14.03.2018 are Ex.PW1/8 and Ex.PW1/9.
9. Email dated 04.06.2018 is Ex.PW1/10.
10. Relieving certificated dated 02.08.2018 is PW1/11.
11. Email dated 09.08.2018 as mentioned in affidavit as Ex.PW1/12 is de-exhibited and same is marked as Mark A.
12. 6. Email dated 11.08.2018 is Ex.PW1/13.
13. Legal notice dated 14.12.2018 is Ex.PW1/14.
14. Reply to the legal notice is Ex.PW1/15.
15. Affidavit under Section 65B of the Indian Evidencr Act are Ex.PW1/16 and Ex.PW1/17.
20. PW-1 was duly cross-examined by counsel for defendants. In his cross-examination, he stated that he was the co-founder of the creative company called Brand New Type Company since August, 2019 and before that he was an independent consultant. He had been a head of strategy in Australia and moved back to India in the end of year 2015. He has served the notice as a part of the exit process and all his dues were cleared from all previous organizations. He further stated that he had signed an offer letter dated 16.06.2016 and during his employment tenure, his email ID was [email protected]. As he was employed as Managing Director of defendant no.1, his work was based on verbal conversation to help and improve the work of clients and let the office grow. He looked after senior clients Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 11/33alongwith two Executives and Creative Directors and Finance Director was senior most employee of defendant no.1. On being specifically asked if he resigned from defendant's office on 04.06.2018, he replied that he was forcefully made to resign on the said date although he identified his signatures on the said settlement Ex.PW1/DX1 (also Ex.DW1/10). He further stated that vide email dated 06.06.2018 he had received the severance pay calculation and vide email dated 08.06.2018 he wrote to Neeraj Khoobchandani for update on calculations with respect to breakup which was received by him on 09.06.2018. Witness identified the interview documents and also employee exit checklist and admitted both. On being asked about incentive plans and bonus, he stated that they had different meanings for employees and management. He admitted that he had received incentive compensation bonus for the year 2016 as it was a part of his salary structure. He further stated that his salary in India was paid by defendant no.1 and his share in vide global participation programme had to be by defendant no.2.
21. No other witness was examined by the plaintiff in support of his case and he closed the evidence.
22. Defendants' Evidence - In support of its case, defendants examined Neeraj Khubchandani, In his evidentiary affidavit, he submitted that he was the Global Director of Tax and Credit for defendant no.1 company and AR of defendant no.2. He stated that there was no privity of contract between Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 12/33defendant no.2 and the plaintiff. The Global Incentive Compensation Plan had been introduced to attract personnel of highest calibre to the company but the same was not applicable to all the employees but only to those participants who were actively employed at the end of plan year of a given year. Any participant of the Global Incentive Compensation Plan must be in employment on 31st December to be eligible for incentives which are calculated upon finalization of the books of accounts of the defendant company and its review by accountant in the United States. He further stated that incentives were paid in March of the following year. He further deposed that the plaintiff in his self appraisal had acknowledged his shortcomings vide Ex.DW1/4 and the poor performance was also intimated to him by several email exchanges. The bonus criteria of the employees was also reduced from 5% to 4% as there had been poor management of clients and employees by the plaintiff. However, on recommendation of the plaintiff, the bonus was again raised to 5%. The company had also lost several important clients and many employees had to be laid off due to significant loss of revenue. Due to plaintiff's subpar performance, defendant company could not continue to retain him and gave him options to resign or to terminate his services and the plaintiff chose to resign. Plaintiff was given Rs.14,16,352/- alongwith salary for June and July, 2018 and a settlement agreement was also executed between the parties. He stated that there was no duress or coercion and the entire management had voluntarily decided for a salary reduction due to poor performance of the company.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 13/33Despite that plaintiff was given full pay and he is not entitled to any further amount. He tendered his affidavit in evidence as Ex.DW1/A and relied upon following documents:
1) Copy of board resolution dt 12.04.2019, Mark A.
2) Copy of consent action dated 24.04.2019, Mark B.
3) Copy of global incentive compensation plan, Mark C.
4) Copy of self review for the year 2017, Ex.DW1/4.
5) Copy of e-mail dated 03.11.2017, Ex.DW1/5.
6) Copy of e-mail dated 01.02.2018, Ex.DW1/6.
7) Copy of e-mail dated 22.01.2018, Ex.DW1/7.
8) Copy of e-mail dated 24.01.2018, Ex.DW1/8.
9) Copy of e-mail dated 04.06.2018 forwarded to my e-mail inbox, Ex.DW1/9.
10) Copy of settlement agreement, Ex.DW1/10.
11) Copy of e-mail dated 06.06.2018, Ex.DW1/11.
12) Copy of e-mail dated 08.06.2018, Ex.DW1/12.
13) Copy of e-mail dated 09.06.2018, Ex.DW1/13.
14) Copy of exit interview form dated 14.06.2018, Ex.DW1/14.
15) Copy of employee exit checklist dated 14.06.2018, Ex.DW1/15.
16) Certificate u/s 65B IE Act dated 06.05.2019 and 31.10.2019, Ex.DW1/16 and Ex.DW1/17.
Defendants also relied upon document Ex.PW1/DX1 (OSR) to Ex.PW1/DX4 (OSR) in the cross-examination of PW-1.
23. DW-1 was duly cross-examined by counsel for plaintiff. During his cross-examination, he stated that he had Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 14/33joined the defendant no.1 in October 2016. He stated that at the time of his joining, he was not aware of the terms since he was not with the company but subsequently he became aware of the terms of appointment.
He was handling the Tax and Audit in October 2016 and also finance functions later. He deposed that global incentive compensation plan was formulated and adopted for the first time around 2010 or so. He further stated that the fourth amendment showed that global management team, HR and CFO had approved the global incentive policy . On being asked about the original of Global Incentive Plan, the defendant answered that he had never seen the printed copy of the same but had only seen a soft copy. He further stated that with regard to profit sharing, Ex.PW1/5 which was the letter dated 01.09.2016 was the only document shared between plaintiff and defendant and this document listed out incentive percentage that the plaintiff was eligible under the global plan. The other details around the incentive plan were accessible to all senior leaders and also discussed during the induction with the global HR lead. He also admitted that the clause regarding profit participation percentage was not mentioned in the employment agreement. He admitted that plaintiff was paid profit sharing on pro-rata basis for 2016. witness stated that he was involved in projects of Make in India, AB-InBev and Netflix and also admitted that Make in India had renewed the contract with defendant no.1 company during the tenure of plaintiff as Managing Director but at the same time stated that contract was not renewed and was suddenly Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 15/33terminated after three years. He also admitted that Netflix was not a existing client of defendant no.1 but also clarified that they had agreed to a fees with the client but after the first meeting, the client decided to fire defendant no.1 because they were not happy with the work. He did not bring any copy of correspondence with him.
24. On being asked about the interaction with AB-InBev, it was disclosed that the contract was limited to a time bound contract for promotion of their beer Budweiser and it was a retainer agreement for 12 months like any other retainership and that they typically signed but AB-InBev had two brands Budweiser and Haywards for which the negotiation took place. The first campaign on Budweiser was delivered but nothing happened with Haywards. The defendant no.1 did work but client did not pay anything.
25. He further gave details of other firms like Fab India, Dalmia Cement, Indigo Digital, Green Panel and Engineers. AI, who were the new clients of defendant no.1 but denied that they were brought by the plaintiff during his tenure. He admitted that he had not received any complaint in writing. However, people grievances were shared by them with the HR as well as with the 360 degree review. He stated that he had seen the 360 degree review forms wherein people were not happy and there were complaints against plaintiff. He denied that the plaintiff was ever threatened that his contract shall be terminated. He stated that the Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 16/33company could have very well terminated the employment in accordance with the employment agreement. However, given the seniority he was given an option to leave instead. He denied that Mr. Neil Christie and Kim Papworth coerced the plaintiff into resigning and agreeing to the settlement package. He clarified that after the meeting, he took the plaintiff through the package and calculation. Subsequently, plaintiff requested for few clarifications and changes (reinstating the paycut he took earlier in the year) which were duly considered and revised calculation was shared with him and duly accepted by him. He admitted that the settlement package which was executed between plaintiff and defendant nowhere gave a waiver of profit sharing which the plaintiff was entitled as per e-mail dated 01.09.2016, Ex.PW1/5 but also stated that the settlement package outlined the full and final payment that was agreed between the parties and duly accepted.
26. No other witness was examined by defendants in support of their case and defendants also closed their evidence.
27. I have heard final arguments on behalf of both parties and have gone through the record carefully.
My Issuewise findings are as follows:
1. Whether the plaintiff is entitled to decree as prayed in prayer clause A? OPP. and Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.Civil Suit No.183/2019. Page No. 17/33
2. Whether the plaintiff is entitled to decree as prayed in prayer clause B? OPP.
28. Both the issues are being decided together being inter connected. Onus to prove both the issues was on the plaintiff. Both the issues are related to rendition of accounts and the money decree which is being sought by the plaintiff pro-rated as per the number of months during which he was in employment.
29. It is argued that as the plaintiff was appointed by defendant no.2 as the Managing Director of defendant no.1 and at the time of appointment, only two documents were executed which were the letter of employment and the letter dated 01.09.2016 with respect to profit participation programme. Both the documents have been duly admitted by the defendants. Clause 8 of the employment agreement talks about the termination, as per which, 30 days notice was required before the plaintiff's services were terminated. As per Ex.PW1/5, which was a letter issued by defendant no.1 on directions of defendant no.2 as per which, apart from the salary the plaintiff was also entitled to 2% of profits of Delhi office and 0.2% of the worldwide agency profit. It is submitted that the defendants were bound by the terms of the said letter during the subsistence of the agreement.
30. It is argued that the plaintiff worked very diligently and as per the performance review, he was given an overall remarkable review. The plaintiff had even managed to retain Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 18/33maximum clients of the defendant no.1 and contributed significantly in the development of the company. Plaintiff's profits share in 2016 and 2017 was Rs.33,66,575/- and Rs.87,01,161/- respectively. Hence, in a period of 15 months plaintiff was paid Rs.1,20,67,736/- towards profit sharing by the defendants. The plaintiff was caught by surprise when he was forced to resign by Mr. Neil Christie, Global Chief Operational Officer and Mr. Kim Papworth, Regional ECD and he was given no option to deliberate on the decision. He was given two options and plaintiff chose to resign by taking four months salary as termination with immediate effect would have entailed serious consequences on his future prospects. The plaintiff was given his dues as per Ex.PW1/DW1 and the said document mentions full and final settlement of dues however, it is submitted by the plaintiff that the said document never provided for settlement of profit sharing plan which the plaintiff was entitled to vide agreement dated 01.09.2016. In Ex.PW1/D1 there was no waiver clause or any mention of profit sharing entitlement of plaintiff from 01.12.2018 till date of resignation i.e. 06.06.2018. The plaintiff submitted that he had not been given the pro-rated profit share in terms of Ex.PW1/5 which the defendants had agreed to pay in addition to the fixed remuneration as per the profit participation programme. The plaintiff lodged his protest stating that he was only demanding his rightful entitlement and nothing extra from the defendants. An email was sent in this regard to which reply was received which was Ex.PW1/13 stating that there was no local profit share from Delhi office as Delhi office Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 19/33was using money and defendant company did not take profit share to office leaders who left before the end of the year as there was no binding agreement to that effect and further that global share was not calculated and distributed until March, 2019. The plaintiff submitted that the defendants were trying to evade their liability as the same was against the terms of letter and employment dated 01.09.2016. Defendants had violated the terms of employment as there was no mention that profit participation programme was applicable only if the plaintiff completes the entire calendar year.
31. It is submitted that it is only the defendants who are aware of the profits for the year 01.01.2018 to 31.12.2018 therefore, rendition of accounts have been sought for calculating the total profits and pro-rata profits from the period 01.01.2018 to 06.06.2018.
32. The counsel for defendants submitted that it is an admitted fact that employment agreement had been executed between the plaintiff and defendant no.1 vide Ex.PW1/4. Ld. counsel for defendants pointed to clause of employment agreement which was the termination clause. As per clause 8 (b) of the agreement, it was postulated that the resignation had to be accepted by the company in order to become effective. As per clause 8(h):
"all payments and benefits shall cease to accrue to you from the company upon the termination from employment including Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.Civil Suit No.183/2019. Page No. 20/33
insurance benefits".
Admittedly the plaintiff resigned on 04.06.2018 and as per the employment agreement, he was not entitled to any benefit thereafter. Incentive compensation bonus as mentioned in Ex.PW1/5 which is the offer letter dated 09.06.2016 was stated to be a discretionary bonus as provided under the offer letter. Ld. Counsel for defendant pointed out to clause 2(d) of the employment agreement which was qua remuneration and other benefits reads as under:
"You will receive, as and when announced in the sole discretion of the Company, an amount towards annual qualifying discretionary bonus based entirely on the management's assessment of your performance and the Company's financial performance, during the previous year (January to December). You understand and agree that the terms and the continuity of the bonus plan are at the sole discretion of the Company and may be altered at any time without notice to you".
33. Therefore, it is clear that incentive compensation bonus is entirely the discretion of the company and could only be paid to a person who were in employment prior to bonuses being declared.
34. Further, both the profit participation letters and the offer letter stated that the bonus plans were paid on or before 15 th March of the succeeding year and profits could only be calculated after the year end i.e. 31 st December. The plaintiff had Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 21/33admittedly resigned on 04.06.2018 and was not a participant or an employee on 31st December, 2018.
35. DW-1 in his cross-examination had also stated that since profit sharing was given only to employees who were in the company till the end of calendar year, hence plaintiff was not eligible for the same.
36. Perusal of clause 4.1 and 4.6 of the Incentive Compensation Plan which has not been admitted by the plaintiff read with clause 15(f) clearly state that pro-rata grant will be only for the participants who joined the defendant no.1 in the middle of the year and was not applicable to persons who resigned or terminated in the middle of the year. There is nothing on record which confers any right to the plaintiff to claim pro-rata bonus after his exit in the middle of the year.
37. Clause 4.6 makes it abundantly clear that in order to avail profit participation of an year, the employee must be employed on 31st December of the specific year. Clause 4.6 states as under:
"Clause 4.6 states that 'A Participant who is actively employed by W+K at the end of a Plan Year will be entitled to payment of their Allocated Amount for that Plan Year, even if their employment is terminated prior to the distribution date determined under Section 5".
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 22/3338. The defendants have already proved the global incentive compensation plan has been marked as Mark C however, the court is relying upon the same as it has been accompanied by certificate under Section 65B of the Evidence Act. Ld. Counsel while tendering the said document has relied upon the judgment of Hon'ble Supreme Court titled Arjun Panditrao Khotkar v. Kailash Kushanrao Gorantya, 2020 SCC OnLine SC 571:
held as under:
"The words ".....without further proof or production of the original, as evidence or any contents of the original or of any fact stated therein of which direct evidence would be admissible.....
60. It may also be seen that the person who gives this certificate can be anyone out of several persons who occupy a 'responsible official position' in relation to the operation of the relevant device, as also the person who may otherwise be in the 'management of relevant activities' spoken of in Sub-section (4) of Section 65B. Considering that such certificate may also be given long after the electronic record has actually been produced by the computer, Section 65B(4) makes it clear that it is sufficient that such person gives the requisite certificate to the "best of his knowledge and belief".
39. The Global Incentive Plan which is Mark C has been vehemently opposed and completely denied by the plaintiff stating that the defendants failed to produce the original of the said document and the answers given by the defendants' witness during the cross-examination were not at all convincing. Ld. Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 23/33Counsel for plaintiff argued that Mark C had not been proved as neither the original was brought on record nor the witness himself had seen original and hence global incentive bonus is not an approved document and its terms and conditions qua profit sharing could not be relied upon. The defendants' witness in his cross-examination denied that the plaintiff was not aware about the incentive plan and stated that the details of the incentive plan were accessible to all senior leaders and were also discussed during the induction with the Global HR Lead. From the above arguments, it is clear that the defendants had relied upon the incentive compensation plan Mark C which has been denied by the plaintiff as not proved. The defendants have filed certificate under Section 65 B of the Evidence Act alongwith the said document to prove its veracity. The certificate under Section 65B of the Indian Evidence Act filed by the defendants marked as Mark C is the Global Incentive Plan admissible in evidence and the plaintiff cannot be allowed to take the excuse that he was not aware of the said document.
40. Moreover, on combined reading of the employment agreement and the profit participation programme which have both been admitted by both the parties, it is clear that bonus plan had to be paid on or before 15th March of the following year after the end of the year. The profit participation plan further made it clear that the incentive bonus for 2016 would be paid in March, 2017. It is evident that the terms of profit participation letter did not provide for any profit participation on pro-rata basis in the Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 24/33subsequent years and there was restricted pro-rated calculation for the year 2016 only. Therefore, keeping in view the two admitted documents and the incentive compensation plan document, the court has come to the inference that pro-rata calculation was not applicable for the year 2018 as per the plan as the plaintiff did not work till the end of the calendar year. Moreso, it is already mentioned in clause 2(d) of the employment agreement that bonus and other benefits were sole discretion of the defendants.
41. The court further cannot ignore Ex.DW1/10 which was the settlement agreement and also a document of the plaintiff was voluntarily executed between the parties. The said agreement clearly mentions that "you confirm and acknowledge that you have no claims and/or any amounts due and payable by the company". The settlement agreement was further acknowledged by the plaintiff who clearly stated that "I accept the terms contained herein ...... and that no further full and final settlement will be done in this regard". The acceptance of the plaintiff to the settlement agreement was clear, unequivocal and without any qualification or reservation.
42. Perusal of the settlement agreement shows that it was a complete document covering all the documents of plaintiff's employment and there was no further amount due and payable beyond the stipulated amount under the settlement agreement. There is nothing on record to show that plaintiff was coerced into Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 25/33executing the settlement agreement.
43. The plaintiff has submitted that settlement agreement did not mention profit share as part of the settlement and he had never waived his right to receive profit share entitlement and had even protested the non-providing the profit share in his email dated 09.08.2018 which was replied to by the defendants without relying upon the settlement agreement stating that he had not worked till the year end therefore he was not entitled to any profit participation.
44. The court is further of the opinion that it cannot be said that plaintiff signed the settlement agreement without going through the contents of the same. When he signed the full and final settlement, on 06.06.2018, he was tendered the salary of June, 2018 as well as July, 2018 which was the full and final payout. The plaintiff was also given leave balance and provident fund contribution but as there was no stipulation in the settlement agreement as to the profit participation, it is clear that that it was the sole discretion of the defendants company. Moreover, the profit participation was calculated in December every year the same was calculated only for those employees who were under the employment of the defendant company and as the plaintiff had already left the service after taking a full and final settlement amount, he could not possibly claim any more amount from the defendant.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 26/3345. When the plaintiff once signed the settlement agreement and had amicably parted ways, signing all the exit documents including the employees check list, he cannot plead coercion by any means.
46. It is also an admitted fact that employment agreement Ex.DW1/4 gave right to either of the party to terminate the agreement after giving 30 days notice period. Hence, defendants were within their right to terminate the employment agreement and no question of coercion arose.
47. The plaintiff has also confirmed receipt of all moneys vide email dated 09.08.2018 Ex.PW1/12 wherein he has stated that "thank you for helping clear my dues at WKD, I received my full and final settlement day before". The court is completely convinced by the arguments presented by counsel for the defendants who has also referred to the judgment of Vice Chairman and Managing Director A.P.S.I.D.C. Ltd. and Ors. v. R Varaprasad and Ors., (AIR 2003 SC 4050) wherein it is held that:
"When the employees have opted for VRS on their own without any compulsion knowing fully well about the Scheme, guidelines and circulars governing the same, it is not open to them to make any claim contrary to the terms accepted. It is matter of contract between the Corporation and the employees. It is not for the courts to re-write the terms of the contract, which were clear to the contracting parties, as indicated in the guidelines and circulars governing them under which Voluntary Retirement Schemes floated".
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 27/3348. Keeping in view the above, to allow any further claims would amount to rewriting the contract which is not permissible.
49. The plaintiff willingly and voluntarily accepted payment of Rs.14,16,352/- and having received the same, the plaintiff is estopped from resiling from the terms and conditions of the settlement agreement. The defendants have relied upon the judgment of Cauvery Coffee Traders, Mangalore v. Hornor Resources (Intern.) Company Ltd., (2011) 10 SCC 420 wherein it is held that:
"In case, final settlement has been reached amicably between the parties even by making certain adjustments and without any misrepresentation or fraud or coercion, then, acceptance of money as full and final settlement/issuance of receipt or vouchers etc. would conclude the controversy and it is not open to either of the parties to lay any claim/demand against the other party.
A party cannot be permitted to "blow hot and cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of a contract or conveyance or an order, is estopped to deny the validity or binding effect on him of such contract or conveyance or order. This rule is applied to do equity, however, it must not be applied in a manner as to violate the principles of right and good conscience".
50. In order to counter the arguments of ld. counsel for the defendants qua estoppel, ld. counsel for plaintiff has relied on the judgment of Bennett Coleman and Co. v. Punya Priya Das Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 28/33Gupta, AIR 1970 SC 426. On perusal of the said judgment this court is of the view that the facts of that case were entirely different as in the Bennett case (supra) the resignation was accepted however the acceptance was not communicated to the party and in the meantime, the party was informed that there was no termination of his service in the absence of a month's notice and in the meantime, he had joined the Indian Express. The court had held that:
"Under S. 115 of the Evidence Act, the representation which estops a person making it from acting contrary to it is one on the belief of which the, other person acts in a manner he would not have done but for it and on believing it to be true,. But such a conclusion could not be drawn in face of the uncontradicted statements in the letter of the respondent dated 21st November that the management would not give him the letter of acceptance of his resignation unless he signed the receipt in full settlement of all his claims. When he received the letter dated November 19, the respondent could not rest content without jeopardizing his interests on the mere oral intimation of acceptance of his resignation and so be went to the appellant's Office to secure the written acceptance. He was then told that it would not be given unless he passed a receipt in full settlement of his claim and he signed the receipt under the stress of circumstances".
51. This court is of the view that the said judgment is not applicable to the facts of the present case as there was amicable settlement and the defendant was given all his dues and there does not seem to be any stress of circumstances.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 29/3352. It is evident that the plaintiff has received the entire amount due and payable under the settlement agreement and is estopped from resiling from the terms thereof. Accordingly, any further claims are wholly untenable. The payment of any monies over and above the settlement agreement will amount to rewriting the terms of the binding contract between the parties and will undermine the entire concept of a 'full and final settlement'. This may also have the effect of setting a precedent whereby ex-employees who have already exited the company and have received their full and final settlement amounts will bring forth additional claims over and above the settlement amount. This will open the floodgates for unscrupulous parties seeking unjust enrichment beyond what is contractually permissible.
53. Further, there is no document on record which confers any legitimate right upon the plaintiff to seek rendition of account for ascertaining the gross income. There is no contractual relationship between the parties which entitle the plaintiff to ascertain the gross income of defendants. The plaintiff was merely an employee of defendant no.1 and was entitled to profit participation on terms and discretion of the defendants during the subsistence of employment. The court is further of the opinion that after cessation of the employment and execution of full and final settlement plaintiff was not to any further claim or benefits whatsoever.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 30/3354. Ld. counsel for the defendants has quoted the judgment passed by the Hon'ble Supreme Court in case of K C Skaria v. Govt. of Kerala and Anr., (2006) 2 SCC 285, wherein it was clearly observed that rendition of accounts can be maintained only if the person suing has a right to receive an account from the defendant. It was also observed that:
"17. To summarise, a suit for rendition of accounts can be maintained only if a person suing has a right to receive an account from the defendant. Such a right can either be (a) created or recognized under a statute; or (b) based on the fiduciary relationship between the parties as in the case of a beneficiary and a trustee, or (c) claimed in equity when the relationship is such that rendition of accounts is the only relief which will enable the person seeking account to satisfactorily assert his legal right. Such a right to seek accounts cannot be claimed as a matter of convenience or on the ground of hardship or on the ground that the person suing did not know the exact amount due to him, as that will open the floodgates for converting several types of money claims into suits for accounts, to avoid payment of court fee at the time of institution.
18.....If the employer for some reason does not co-operate or prevents the contractor from taking a physical measurements, the contractor can seek appropriate legal remedy which will enable him to take measurements or to secure the information from the measurement book in the custody of the employer. Therefore, either the fact that the measurement book is maintained by the employer, or the fact that the contractor does not possess the exact measurements, will not entitle the contractor to file a suit for rendition of accounts against the employer.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.Civil Suit No.183/2019. Page No. 31/33
It is evident that the plaintiff's prayer for rendition of accounts for ascertaining the 'gross income' of the respondent is wholly untenable and ought not to be granted by this court".
55. Hence, keeping in view the above discussion, the plaintiff has not been able to prove that he is entitled to a decree of rendition of account, thereby issues nos.1 and 2 stand decided against the plaintiff and in favour of the defendants.
3. Whether there is any privity of contract between the plaintiff and defendant no.2? OPD.
56. Onus to prove this issue was on the defendant. Plaintiff has submitted that defendant no.1 was wholly owned and controlled by defendant no.2 and as per the profit participation programme, the plaintiff was entitled to 0.2% of the worldwide agency profit, therefore, there was privity of contract between plaintiff and defendant no.2 also.
57. On the other hand, it has been argued by defendants that the offer letter clearly shows that the plaintiff was offered a position of Managing Director for defendant no.1 therefore, plaintiff's employment was only with defendant no.1. The offer letter also had the name of defendant no.1 and plaintiff signed the said offer letter with full knowledge that he was under the employment of defendant no.1 only. Defendant no.2 was never a signatory to any document and no agreement was executed between plaintiff and defendant no.2. No payment was ever made by defendant no.2 to plaintiff, therefore, no claim can be made Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 32/33against defendant no.2 as no contractual relationship has been observed. The court therefore holds that there was no privity of contract between plaintiff and defendant no.2. Hence, this issue is also decided in favour of the defendants and against the plaintiff.
4. Whether plaintiff is entitled to any costs?
58. As all the issues have been decided in favour of the defendants and against the plaintiff, hence, this issue is also decided against the plaintiff and in favour of the defendants and plaintiff is not entitle to any cost.
Relief:
59. In view of above finding on all the issues against the plaintiff, the present suit is dismissed. Decree sheet be prepared accordingly. No order as to cost. File be consigned to record Digitally room after due compliance. signed by Purva Purva Sareen Sareen Date:
2023.12.23 Announced in open court 15:30:24 On 23rd December, 2023. (Purva Sareen) +0530 Additional District Judge-01, (South) Saket District Courts, New Delhi.
Mr. Siddharth Loyal v. Wieden + Kannedy India Pvt. Ltd. & Anr.
Civil Suit No.183/2019. Page No. 33/33