Delhi High Court
Fitzee Ltd. vs Brilliant Tutorials (P.) Ltd. on 28 February, 2011
Author: V.K. Jain
Bench: V.K. Jain
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 24.2.2011.
Judgment Pronounced on: 28.02.2011.
+ CS(OS) No. 661/2005
FITZEE LTD. .....Plaintiff
- versus -
BRILLIANT TUTORIALS (P.) LTD. .....Defendant
Advocates who appeared in this case:
For the Plaintiff: None.
For the Defendant: Mr. K.K. Rohtagi, for Defendant
No.1.
CORAM:-
HON'BLE MR JUSTICE V.K. JAIN
1. Whether Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported Yes
in Digest?
V.K. JAIN, J
1. This is a suit for permanent injunction.
2. The plaintiff company is engaged in imparting
specialized coaching to students for the purpose of enabling
them to get through JEE examination conducted by various
CS(OS)No. 661/2005 Page 1 of 16
IITs all over the country. The plaintiff claims to have
attained immense goodwill and reputation on account of
constant good results in the aforesaid examination. The
plaintiff company has been appointing faculty members for
conducting class room training and coaching of students. It
is claimed that the faculty members are given training so as
to maintain uniform standard of teaching, culture etc.,
which is imparted on regular basis. It is further claimed
that the training to the faculty members includes lectures
by the persons possessing high skill and expertise, who give
teaching tips to the faculty members, and is imparted for a
minimum period of three months. The plaintiff company
claims to be incurring substantial expenditure on the
aforesaid training.
3. Defendant No.1 is also a company engaged in
coaching the students, who want to appear in JEE
examination conducted by IITs. Defendant No.1 also
imparts coaching to students for other competitive
examinations such as IIT-JEE, AIEEE, MBBS, IAS etc. It
has been alleged by the plaintiff that defendant No.1 has o
infrastructure to train faculty and is dependent on the
trained faculty members of the plaintiff company and,
CS(OS)No. 661/2005 Page 2 of 16
therefore, it has been indulging in poaching so as to take
away trained faculty members of the plaintiff company in
the middle of sessions leaving the students in a lurch and
causing immense loss to the plaintiff company. It is alleged
that besides offering lucrative salary package and other
monetary benefits, defendant No.1 also represents the
faculty members of the plaintiff that their chances of growth
are minimal with the plaintiff company.
It is also alleged that defendant No.2 was targeted
by defendant No.1 for this purpose but he refused to accept
the unethical offer given to him and he was compelled to
write a letter to the plaintiff company informing him about
the disturbance created by defendant No.1. It is further
alleged that defendant No.3 was also approached by
defendant No.1 in the similar manner with the object of
getting trained faculty members without imparting training
to them.
4. The plaintiff has sought permanent injunction
restraining defendant No.1 from poaching the factually
members of the plaintiff company including defendant Nos.
2 and 3, or from instigating them to quit the plaintiff
company and join them. It has also sought injunction
CS(OS)No. 661/2005 Page 3 of 16
restraining defendant Nos. 2 and 3, from joining defendant
No.1 in the act of poaching triggered by defendant No.1.
5. Defendant No.1 has contested the suit. It has
taken a preliminary objection that since the injunction
claimed by the plaintiff would have the effect of curtailing
the freedom given to its employees to improve their future
prospects and service conditions by changing their
employment, no such injunction can be granted to the
plaintiff. On merits, defendant No.1 has denied that the
plaintiff company is imparting any training to its faculty
members. Defendant No.1 has denied the alleged poaching
and having caused any loss to the plaintiff company.
6. Defendant No.2 was proceeded ex-parte vide order
dated 25th February, 2009 whereas the name of defendant
No.3 was deleted from the array of defendants vide order
dated 9th April, 2009.
7. The following issues were framed on the pleadings
of the parties:-
"1. Whether the plaintiff has any
right to injunct the defendant from
poaching its faculty members? OPP.
2. Whether the plaintiff has trained
its faculty & incurred any costs in
training, if so to what effect? OPP.
CS(OS)No. 661/2005 Page 4 of 16
3. Relief."
Issues No. 1 and 2
8. The plaintiff has filed the affidavit of Col. K.C.
Oberoi (Retd.), Senior Manager (HRD) by way of evidence
whereas defendant No.1 has filed the affidavit of his
Manager (HRD), Mr. D.K. Gupta by way of evidence.
9. In his affidavit by way of evidence, Mr K.C. Oberoi
has stated that all faculty members and staff of the plaintiff-
company are required to undergo training to maintain
uniform standard of teaching, philosophy of the company
and to work cohesively as a team. The training is imparted
in terms of manual Ex.P-4. He has further stated that
substantial expenditure involved in training the faculty
members so that success rate of students is remarkably
good with more chances of success. He has also stated that
the defendant-company indulges in taking away their
trained faculty members, by enticing them and by offering a
little more salary perks, etc. According to him, this is done
in the middle of the session, thereby leaving the students in
a lurch. He has further stated that defendant No.2 was
CS(OS)No. 661/2005 Page 5 of 16
approached by defendant No. 1, but he refused to accept the
offer given to him and wrote a letter Ex.P-5 in this regard.
According to him, Ex.P-7 is the letter which defendant No. 3
had written to the plaintiff-company.
10. In rebuttal, Mr D.K. Gupta of defendant No.1-
company has stated that defendants 2 and 3 are not the
faculty members of the plaintiff-company and, in fact, they
do not exist. He has further stated that defendant No.1-
company never approached either defendant No. 2 or
defendant No. 3 with any offer, for any purpose. He has also
stated that two false and frivolous cases have been filed by
the plaintiff-company against defendant No. 1 before MRTP
Commission with a view to destroy the energies of defendant
No. 1-company and to harass it.
11. The first question which comes up for
consideration in this regard is as to whether the plaintiff
has been able to prove that defendant No. 1 had made any
attempt to instigate or entice its employees, to quit the
service of plaintiff and join defendant No. 1-company. No
employee has been produced by the plaintiff-company to
prove that any officer/official of defendant No. 1-company
had approached him and offered employment with
CS(OS)No. 661/2005 Page 6 of 16
defendant No. 1-company. The case of the plaintiff in this
regard is based wholly upon three documents Ex.P-5, Ex.P-
6, Ex.P-7. Ex.P-5 is the letter purporting to be written by
defendant No. 2 to Mr Partha Haldar, Centre In-charge (NW)
of the plaintiff-company, whereas Ex.P-6 is the letter
purporting to be written by Mr Partha Haldar to the
Chairman of the plaintiff-company. Ex.P-7 is the letter
purporting to be written by defendant No. 3 to the Managing
Director of the plaintiff-company. The letter Ex.P-6 only
refers to the offer alleged to have been made by defendant
No. 1-company to defendant No. 2 Ateet Mittal, to join
defendant No.1-company on a big salary. No offer is alleged
to have been made by defendant No.1-company to Mr
Partha Haldar himself, nor does he claim to be a witness to
Mr Ateet Mittal, being approached by defendant No.1-
company to join its service on a higher salary. Therefore,
this document does not prove the alleged pouching by
defendant No.1. As regards the letters Ex.P-5 and P-7,
neither Mr Ateet Mittal, who purports to have been written
the letter Ex.P-5, nor Dr P. K. Sharma, who purports to
have been written the letter Ex.P-7, have not been produced
in the witness-box. Even if it is assumed that the
CS(OS)No. 661/2005 Page 7 of 16
documents Exs.P-5 and P-7 have been duly proved by the
plaintiff-company, that by itself, does not amount to proving
the contents of these documents. It is a settled proposition
of law that mere proving a document does not prove its
contents and a document by itself is not an evidence of the
facts stated therein. The fact in issue before the Court
cannot be proved merely by proving the signature and
handwriting on a document since the document, by itself,
does not constitute truthfulness of its contents. The
truthfulness or otherwise of the contents of a document can
be proved only by legally admissible evidence, i.e., the
evidence of a person who is in a position to vouchsafe for
the truthfulness of those contents.
12. In Judah v. Isolyne Bose, AIR 1945 PC174, the
issue before the Court was whether the testatrix was so
seriously ill as would result in impairment of her
testamentary capacity. To substantiate the degree of illness,
a letter and two telegrams written by a nurse were tendered
in evidence. The question was whether in the absence of any
independent evidence about the testamentary capacity of
the testatrix the contents of the letter could be utilized to
prove want of testamentary capacity. In these
CS(OS)No. 661/2005 Page 8 of 16
circumstances, the Privy Council observed that the fact that
a letter and two telegrams were sent by itself would not
prove the truth of the contents of the letter and, therefore,
the contents of the letter bearing on the question of lack of
testamentary capacity would not be substantive evidence. It
was held that the contents of the letter and telegram were
not the evidence of the facts therein and mere proof of
handwriting of a document would not tantamount to proof
of all the contents or the facts stated in the document
therein.
In Malay Kumar Ganguly v. Dr. Sukumar
Mukherjee (2009) 9 SCC 221, Supreme Court observed that
a document becomes admissible in evidence unless its
author is examined and that the contents of a document
cannot be said to have been proved unless he is examined
and subjected to cross-examination in a Court of law.
In Narbada Devi Gupta v. Birendra Kumar
Jaiswal (2003)8 SCC 745, Supreme Court, inter alia,
observed as under:
"The legal position is not in dispute that
mere production and marking of a
document as exhibit by the court cannot
be held, to be a due proof of its contents.
Its execution has to be proved by
CS(OS)No. 661/2005 Page 9 of 16
admissible evidence that is by the
evidence of those persons who can
vouchsafe for the truth of the facts in
issue."
In the absence of production of the author of
Exs.P-5 and P-7 in the witness-box, the allegations of
poaching contained in these documents, cannot be said to
have been proved by the plaintiff-company. It is, therefore,
difficult to dispute that no evidence has been led by the
plaintiff-company to prove the alleged pouching.
13. Assuming that defendant No.1-company had
approached the employees of the plaintiff-company and
offered better salaries to them, no legal right of the plaintiff-
company has been violated by defendant No.1-company by
such an act on its part. There is no contract between the
plaintiff-company and defendant No.1-company not to
pouch on the employees of each other. In the absence of any
such contract, nothing in law prevented defendant No.1-
company from approaching the employees of the plaintiff-
company and offering better service conditions to them.
Therefore, it cannot be said that any legal injury was caused
to the plaintiff-company by the alleged poaching or any legal
right, vesting in the plaintiff-company, was violated by
CS(OS)No. 661/2005 Page 10 of 16
defendant No.1-company.
14. Coming to the relief sought against defendant No.2
(defendant No.3 has already been deleted from the array of
defendants), no employer can perpetually prevent its
employee from quitting its service and joining another
employer. If, however, the employment is for a specified
period and there is an agreement between the employer and
the employee, whereby the employee undertakes to serve
the employer during that period and not to join the services
of any other employer during that period, it would be
permissible in law for the employer to seek enforcement of
the negative agreement. Even if such a term is agreed by an
employee, it would be wholly unconscionable and cannot be
enforced. The plaintiff-company does not claim that the
employment of defendant No.2 was for a specific period and
it had an agreement with him not to leave the services of the
plaintiff-company during that period.
15. If there is a covenant between the employer and
the employee, whereby the employee is required to serve the
employer in perpetuity, such a restraint on the right of the
employee to engage in any trade of his choice would be
wholly unreasonable and unnecessary for the protection of
CS(OS)No. 661/2005 Page 11 of 16
the employer. To press a negative covenant not to leave the
services or not to serve any other employer would be wholly
unlawful if it is not restricted to a specified reasonable
period and would constitute an unreasonable and
unconscionable restraint on his legal right to engage himself
into any trade, business or employment. The contract to
serve a particular employer either in perpetuity or for a
specified period cannot be enforced by a Court.
The negative agreement between the employer and
the employee, whereby the employee undertakes not to
serve any other employer during the period of his
employment provided it is a specified and reasonable period
as also not to join any other employer engaged in a
competing business would be valid and enforceable so long
as it is for a specified period which is not found to be
unreasonable or excessively harsh.
In Superintendence Company Of India (supra),
the Supreme Court, inter alia, observed as under:
"A contract in restraint of trade is one by
which a party restricts his future liberty to
carry on his trade, business or profession
in such manner and with such persons as
he chooses. A contract of this class is
prima facie void, but is becomes binding
upon proof that the restriction is justifiable
CS(OS)No. 661/2005 Page 12 of 16
in the circumstances as being reasonable
from the point of view of the parties
themselves and also of the community."
16. In Niranjan Shankar Golikari vs The Century
Spinning and Mfg. Co., (1967) 2 SCR 378, there was a
contract of employment for five years. The employee
Niranjan Shankar left the services of the respondent-
company four years before the expiry of the contract,
whereupon the respondent-company filed a suit for
enforcing the negative covenant which restrained him from
engaging in or carrying on competing business or serving in
any capacity with an employer engaged in competing
business. The injunction sought by the plaintiff was
confined to the period ending 15th March, 1968 which was
the last day of the five year term of the contract. Supreme
Court was of the view that restraints during the period of
contract are generally not regarded as restraints on trade
and, therefore, are outside the purview of Section 27 of the
Contract Act. It was also of the view that the restrictions
operating from the term of the contract may be void if they
are excessively harsh or unconscionable.
17. In Superintendence Company of India vs
CS(OS)No. 661/2005 Page 13 of 16
Krishan Murgai (1981) 2 SCC 246, Supreme Court had an
occasion to deal with a post service restraint. Clause 10 of
the Contract of employment placed the employee Krishna
Murgai under post-service restraint that he shall not serve
in any other competing firm for two years at the place of his
last posting. Clause 10 was operative for a period of two
years after the employee leaving the company. The services
of the employee were terminated by the employer. Supreme
Court held that the negative covenant against working
during the term of the contract is not in restraint of trade
and that the doctrine of restraint on trade never applies
during the continuance of the contract. In W.H. Milsted
and Son Ltd. v. Hamp: (1921) 2 AC 158, the contract of
service was terminable only by notice of the employer. The
contract was held to be bad in law on account of being
wholly one sided.
18. The plaintiff, therefore, is not entitled to any
injunction even against defendant No.2. In any case, this is
not the case of the plaintiff that defendant No.2 was likely to
join the service of defendant No.1. The case of the plaintiff
is other way round and according to the plaintiff-company,
CS(OS)No. 661/2005 Page 14 of 16
defendant No.2 firmly declined the offer made by defendant
No.1 to join its services. Therefore, the plaintiff had no
cause of action to file the present suit against defendant
No.2. The issues are decided against the plaintiff and in
favour of the defendants.
Issue No. 3
In view of my findings on issue No. 1 and 2, the
plaintiff is not entitled to any relief.
ORDER
For the reasons given in the preceding paragraphs, the suit is dismissed with costs. I am satisfied that the suit was false and vexatious to the knowledge of the plaintiff and the plaintiff had no legal right to claim the relief sought in this suit and it appears that the suit was filed only with a view to harass a competitor and drag it into litigation. Defendant No.1, therefore, is entitled to compensatory costs in terms of Section 35A of the Code of Civil Procedure. In view of the provisions contained in sub-Section (2) of Section 35A of CPC, the amount of compensatory costs cannot exceed Rs 3,000/-. I, therefore, in addition to usual costs of the suit, also award compensatory costs amounting CS(OS)No. 661/2005 Page 15 of 16 to Rs 3,000/- to defendant No.1.
Decree sheet be prepared accordingly.
(V.K. JAIN) JUDGE FEBRUARY 28, 2011 vk/bg CS(OS)No. 661/2005 Page 16 of 16