Delhi High Court
Huntsman International (India) Pvt Ltd vs Kleur Speciality Chemicals Pvt Ltd ... on 9 October, 2018
Equivalent citations: AIRONLINE 2018 DEL 1745
Author: S.Ravindra Bhat
Bench: S. Ravindra Bhat, A.K.Chawla
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Judgment: 09.10.2018
+ FAO(OS) (COMM) 109/2018, CM Nos. 20510/2018 & 20512/2018
HUNTSMAN INTERNATIONAL (INDIA) PVT LTD ..... Appellant
Through : Mr. Darpan Wadhwa, Sr. Adv. with Mr.
Shravan Sahny and Mr. Nakul Gandhi,
Advs.
versus
KLEUR SPECIALITY CHEMICALS PVT LTD (ABISS TEXTILE
SOULUTIONS PVT LTD) & ORS ........ Respondents
Through : Mr. Dayan Krishnan, Sr. Adv. with Ms.
Soumya Kumar, Mr. Sanjeevi, Mr.
Sanyam Khetarpal, Mr. Armaan Grover
and Mr. Asutosh Lohia, Advs. for R-1 to
4 along with R-4 in person.
Ms. Palak Nenwani, Adv. for R-5, 6 and
10.
Mr. Sreenath S. and Mr. Anshul
Kulshrestha, Advs. for R-9 & 13.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE A.K.CHAWLA
S.RAVINDRA BHAT, J.
1. This is an appeal by the unsuccessful plaintiff for return of the plaint, on the ground that this court lacks territorial jurisdiction. The suit was filed against fifteen defendants, namely (i) Abiss Textile Solutions Private Ltd; (ii) Shree Pushkar Chemicals & Fertilisers Limited; (iii) Gautam Gopikishan Makharia; (iv) Puneet Gopikishan Makharia; (v) Ajay Kanwar; and other individual defendants FAO(OS) (COMM) 109/2018 Page 1 of 12 (who are not named for the purpose of this judgment). The suit claimed various reliefs, including permanent injunction restraining disclosure and use of plaintiff's confidential and proprietary information including for manufacturing, marketing and selling any product as being manufactured by the plaintiff; and mandatory injunction directing the defendants to reveal the particulars of the third parties to whom the defendants have parted with or revealed the confidential information of the plaintiff. Other consequential injunctive reliefs were sought.
2. At the stage of issue of summons and notice for interim reliefs, an ad interim ex parte temporary injunction order was issued. After the proceedings commenced, the learned single judge noted that all defendants had been served and the seventh defendant had been proceeded ex parte. The defendants had filed applications for return of plaint under Order VII Rule 10 of the Code of Civil Procedure, 1908 (CPC), i.e. IA No.10808/2016 and IA No.8693/2016. The ld. Single Judge heard these applications on 13th February, 2018. During the course of that hearing, the applicant Defendant Nos.1 to 4 had contended that the ex parte relief was obtained by making false averments, to wit, that the plaintiff's office was at 14/5, Main Mathura Road, New Delhi-110008 as mentioned in the memo of parties with the plaint. It was urged that the Pin Code No.110008 pertains to Patel Nagar and property No.14/5, Main Mathura Road falls in Faridabad and does not fall in New Delhi as was wrongly represented to this Court. The plaintiff's counsel then stated that "No.14/5, Main Mathura Road is situated in Faridabad and states that the office of the plaintiff earlier was in property No.14/5, Main Mathura Road, Faridabad but had been shifted to Jasola, New Delhi and the plaintiff mistakenly in the plaint pleaded the office to be at 14/5 Main Mathura Road, New Delhi". The ld. Single Judge then recorded that one Mr. Avinash Kumar, plaintiff's legal counsel was present in the Court and he stated that "the office of the plaintiff at Jasola is not owned by the plaintiff but is in a Business FAO(OS) (COMM) 109/2018 Page 2 of 12 Centre and was taken in September, 2016." The ld. Single Judge noted that the suit was filed in May, 2016, and then recorded that:
"11. While this order is being dictated, Mr. Avinash Kumar, Legal Counsel states that he was mistaken in this respect also and now states that in September, 2016, the office of the plaintiff was at Noida. However, on further enquiry, since when was it at Noida, he states that he was not even in the employment of the plaintiff at that time.
12. It is quite obvious that the plaintiff and its Directors including Mr. Anuraag Kothari who has instituted this suit and has filed the affidavit accompanying the plaint have not been making a clean breast of the facts before this Court.
13. Let Mr. Anuraag Kothari, Senior Commercial Counsel of the plaintiff appear before this Court on 21st February, 2018."
A copy of the affidavit of Mr. Anurag Kothari, plaintiff's Senior Counsel verified on 20th February, 2018 along with documents was handed over in the Court.
3. The ld. Single Judge, after considering the submissions of the parties and the explanation given by the plaintiff, was of the opinion that the averments made and the documents on record, showed that the suit was not maintainable before this court; he therefore, directed it to be returned, on the ground that the alleged cause of action based on which the suit was filed (i.e. that the defendant nos. 5 to 15 had conspired and obtained confidential information, which they gave to defendant nos.2 to 4) as made out in the plaint, could not have arisen, because the plaintiff's office was in Mumbai and that the averments made, i.e. that it had an office within the territorial jurisdiction of this court, were plainly false. The ld. Single Judge also directed initiation of perjury proceedings, through Section 340, Criminal Procedure Code (hereafter "Cr.P.C.").
FAO(OS) (COMM) 109/2018 Page 3 of 124. It is argued on behalf of the plaintiff, by Mr. Darpan Wadhwa, learned senior counsel that the plaintiff is a part of Huntsman Corporation Group of Companies, a global manufacturer and marketeer of differentiated chemicals in more than thirty countries; the second defendant is a supplier of dye intermediaries to the plaintiff which it uses as raw-material for the manufacture of its products. It was submitted that defendant Nos.3 and 4 are the Managing Director and Director, respectively, of the second defendant and that the defendant nos.5 to 15 are the plaintiff's former employees. Those defendants, were privy to the plaintiff's confidential and proprietary information; the second defendant as a supplier of key raw-materials to the plaintiff was also privy to confidential and proprietary information. A Confidential Disclosure Agreement dated 8th September, 2015 was entered into between the plaintiff and the second defendant by which the latter agreed not to disclose the confidential information of the plaintiff to any third party. The first defendant was a creation of defendant nos. 2 to 4. All defendants in collusion with each other created the first defendant, for using the confidential technical know-how, to manufacture the products. It was highlighted that the ld. Single Judge completely ignored the contents of the affidavit of 20th February, 2018, which explained the inadvertence with respect to the plaintiff's address. It was argued that the emails exchanged between the defendants, inter se, proved complicity and conspiracy on their part. Learned counsel highlighted that the information which each of the defendant nos. 5 to 15 possessed could not have been shared without conspiracy between them, as well as defendant nos. 2 to 4.
5. Learned counsel submitted that the plaintiff had expressly stated that the suit was not premised on the breach of confidentiality agreement (which contained an exclusive jurisdiction clause) but upon a conspiracy, that was quite apart from the contractual relationship with the plaintiff. Therefore, the condition in the confidential agreement, which bound the parties to the exclusive jurisdiction FAO(OS) (COMM) 109/2018 Page 4 of 12 condition (i.e. Mumbai courts) was not attracted. Highlighting that the plaintiff had its Delhi office, Mr. Wadhwa referred to the affidavit of 20th February, 2018 and the documents attached with it, especially the claim made before the Payment of Gratuity authorities by the fifth defendant (upon the cessation of his employment). In that claim, the said defendant had admitted that the plaintiff had a Delhi office; in fact the claim for gratuity dues was made on the basis of the employee's past service in that Delhi office. Learned counsel also submitted that the plaintiff had extended the lease deed and produced a copy of the extension document. This too, was overlooked by the learned single judge.
6. Learned senior counsel for the defendant/respondents, Mr. Dayan Krishnan, argued that this court should not interfere with the impugned order. Highlighting that the parties (i.e. the plaintiff and Defendant nos. 5 to 15) had entered into confidentiality agreements which expressly stipulated that in the event of disputes, the competent court in Mumbai alone would have exclusive jurisdiction, it was argued that the plaintiff cleverly sought to split the cause of action against the said defendants into a contract breach event and a non- contractual cause. Such splitting of the cause of action was impermissible, since the relationship between the parties was contractual and the occasion which led to the cause of action was the alleged sharing of confidential information accessed during the course of employment. As regards the first four defendants, it was argued that since there was nothing on the record to suggest that any part of the cause of action, or the whole of it, arose against them, in Delhi, the courts could not entertain and try the disputes.
7. Learned counsel also submitted that the plaintiff had secured interim orders against the defendants on false submission, to the effect that since its office was located in Delhi, from where confidential information was obtained illegally, courts in Delhi had jurisdiction. Once it was apparent that the address - where the FAO(OS) (COMM) 109/2018 Page 5 of 12 plaintiff claimed its office to be located- was of a place not in Delhi, the question of entertaining the dispute did not arise. Learned senior counsel took exception to the contents of the affidavit, submitting that these were damage control exercises and post event rationalizations, to escape what was obviously an untenable situation. He urged this court not to interfere with the order of the ld. Single Judge initiating proceedings under Section 340 Cr. PC.
8. The jurisdictional paragraph of the plaint, (para 89) states as follows:-
"89. Thus cause of action arose within the territorial jurisdiction of this Hon'ble Court and this Hon'ble Court has the jurisdiction to try, entertain and decide the present matter. It is submitted that the Plaintiff has its office and business operations within the territorial jurisdiction of this Hon'ble Court from where part of the Confidential and Proprietary Information in respect of which the Plaintiff has intellectual property rights including copyright has been illegally obtained by the Defendants. Further, the Defendant Nos. 8 is based in the territorial jurisdiction of this Hon'ble Court. It is further stated that since 2014 till the end of Defendant No.5's employment with the Plaintiff, the Defendant No.5 was based in the Delhi office of the Plaintiff. The conspiracy was hatched by the Defendants and concrete plan was made during their meeting on December 15, 2015 which was held within the territorial jurisdiction of this Hon'ble Court. The Defendant No.8 executed the conspiracy by facilitating various tests from his office based within the jurisdiction of this Hon'ble Court. The Plaintiff has disclosed Confidential and Proprietary Information to the Defendant Nos.2,3 and 4 within the territorial jurisdiction of this Hon'ble Court. The conspiracy hatched by the Defendant Nos. 5 to 15 whereby Confidential and Proprietary Information pertained to the Plaintiff being transferred to the Defendant Nos. 2 to 4 are all actions which do not have redressal within the contours of the employment agreements. Since the conspiracy with strangers and outsiders is not capable of enforcement only through the terms of the employment agreements which has otherwise been terminated. The Plaintiff also has several major dealers who are based in the territorial jurisdiction of this Hon'ble Court, and who were approached by the Defendants while trying to solicit them into breaching their exclusivity with the Plaintiff. The action of Defendant No.2 is further FAO(OS) (COMM) 109/2018 Page 6 of 12 in breach of the confidentiality agreement in force since August 2015 where under data exclusivity of the Plaintiff has been breached in violation of the express terms and conditions of the said agreement. It is further stated that the several meetings of the Defendants were also conducted within the territorial jurisdiction of this Hon'ble Court. Therefore, the cause of action arose within the territorial jurisdiction of this Hon'ble Court."
9. The conditions in the agreement between the plaintiff and defendant nos. 5 to 15 reads as follows:
"15. Jurisdiction This contract of employment shall be governed by the laws of India and the same shall be deemed to have been made in Mumbai and any dispute arising from this contract shall be subject to the exclusive jurisdiction of the competent court in Mumbai in all matters arising out of this agreement."
10. The basic reasoning of the ld. Single Judge is extracted below:
"19. When a question of territorial jurisdiction was likely to arise, as the counsel for the plaintiff also was aware on the date of admission of the suit, as is evident from a reading of para 12 of the order dated 13th February, 2018 reproduced above, such statements by the plaintiff in the plaint cannot be said to be innocuous or inadvertent and have to be necessarily held to be with an intent to not arouse the suspicion of the Judge reading the file before hearing, that the plaintiff is based out of Delhi only and is thus entitled to maintain the suit at Delhi, even against the defendants situated at Mumbai. Once the counsel for the plaintiff was conscious of the aspect of territorial jurisdiction likely to arise, it was incumbent upon the plaintiff to make a clean breast of the state of affairs concerning territorial jurisdiction and inform the Court that though the plaintiff is also based out of Mumbai as the defendants no.2 to 4 against whom the relief was directed and though as per the Agreement which was under enforcement, there was a jurisdiction clause of Mumbai but the plaintiff was otherwise entitled to invoke the territorial jurisdiction of this Court. As is evident, not only was the same not done but an attempt to not allow true facts to come before the Court was made. Merely filing documents before the Court running in several volumes amounts to paying lip service to the requirement of full disclosure I am therefore of the view that de FAO(OS) (COMM) 109/2018 Page 7 of 12 hors the applications under Order VII Rule 10 of the CPC, the plaintiff is liable to be non suited for the reason of having abused the process of the Court and having obtained interim order by non disclosure of complete facts.
20. As far as the contention of the senior counsel for the plaintiff, of the Court at the stage of Order VII Rule 10 of the CPC being required to see the contents of the plaint only and nothing beyond the plaint is concerned, when it is found that the case pleaded by the plaintiff in the plaint is contrary to the documents filed by the plaintiff itself along with the plaint and which documents have in Liverpool & London S.P. & I. Association Ltd. Vs. M. V. Sea Success (2004) 9 SCC 512, Vikram Chandhok Vs. Rashmi Skadegaard (2015) 220 DLT 597 (DB) and Anita Kumari Gupta Vs. Ved Bhushan 2014 SCC OnLine Del 2895 (DB) been held to be entitled to be read for the purpose of Order VII Rule 11 of the CPC. It is thus not open to the plaintiff to contend that even though it has pleaded contrary to its own documents but the Court should ignore the said documents and proceed to try the suit and by end of which time, the objection to territorial jurisdiction would lose its efficacy inasmuch as a defendant also would not like to have a second round of full litigation before the Court which actually has jurisdiction.
23. Section 62 of the Copyright Act merely extends the jurisdiction in which suits of the nature described in Section 62 may be filed in addition to that under Section 20 of the CPC, as also held in Sanjay Dalia and Exphar supra as also in Wipro Ltd. Vs. Oushadha Chandrika Ayurvedic India (P) Ltd. AIR 2008 Mad 165 (DB) entitling the plaintiff to, in addition to invoking jurisdiction of the Court under Section 20, also invoke the jurisdiction of another Court under Section 62 and which may not be the Court which the plaintiff could approach under Section 20 of the CPC. Once that is so, I am unable to fathom any reasons and none have been suggested, as to why what has been held in relation to Section 20 of the CPC i.e. that the same does not come in the way of the parties agreeing to limit the territorial jurisdiction to one of the several Courts which may have jurisdiction to entertain the suit, would not apply to Section 62as well. I find, this Court in Saregama India Limited Vs. Eros Digital FZ LLC 2017 SCC OnLine Del 10996 to have applied the clause in the agreement limiting territorial jurisdiction while returning plaint invoking jurisdiction under FAO(OS) (COMM) 109/2018 Page 8 of 12 Section 134 of Trade Marks Act and Section 62 of Copyright Act. It is not the plea that Mumbai Courts have no jurisdiction.
24. Coming to the interpretation to the clause, as would be noticed from enumeration hereinabove of the claims made by the plaintiff in the suit, the plaintiff, in this suit, besides claiming the injunctive relief, has also claimed the relief of recovery of damages. On same being put to the senior counsel for the plaintiff, the senior counsel states that the plaintiff is willing to give up the claim for damages and to confine the reliefs claimed in this suit to injunctive reliefs only.
25. I am afraid the same cannot be permitted at this stage. The plaintiff, not only suppressed the jurisdiction clause in the Agreement with the defendants no.2 to 4 and did not draw attention of this Court on 24th May, 2016 thereto when ex parte injunction was obtained but has continued to pursue the suit for the said reliefs even after the defendants have taken objection to the territorial jurisdiction and even after the last order on 13th February, 2018. The plaintiff, when caught on the wrong foot, if permitted to change its stand, the same would amount to giving premium on dishonesty and will send a message that the Court can be approached and the defendant harassed, by misrepresenting facts and the stand can be changed if caught and would sound the death knell of litigation.
26. The jurisdiction of the Court has to be determined on the basis of the plaint as it stands today and the plaint as stands today is admittedly for the reliefs beyond injunctive relief.
27. Though on interpretation of the Clause F titled 'Governing Law' reproduced above, in the Confidential Disclosure Agreement between plaintiff and defendant No.2 also I am unable to interpret the same as enabling institution of a suit for injunction in the nature of enforcement of the Confidential Disclosure Agreement, as this suit is, to lie in a Court other than at Mumbai and permitting institution of a suit for injunction outside the Confidential Disclosure Agreement only to be instituted in a court other than at Mumbai, but even if it were to be held that the said clause does indeed permit so, even then, the plaintiff having in this suit also joined the cause of action against defendants No.5 to 15 with whom also plaintiff had agreed to exclusive jurisdiction of Courts at Mumbai, the plaintiff cannot be permitted to sue all the defendants joined in this suit, in FAO(OS) (COMM) 109/2018 Page 9 of 12 this Court and applying the principle of Forum Conveniens, the appropriate Court to entertain the suit would be the Court at Mumbai. Cause of action as pleaded cannot be permitted to be split up. Reference may be made to State Bank of India Vs. Gracure Pharmaceuticals Limited (2014) 3 SCC 595, Raptakos Brett and Company Limited Vs. Ganesh Property (2017) 10 SCC 643 and Staples INC Vs. Staples Paper Converters Pvt. Ltd. 2014 SCC OnLine Del 2092. Similarly, the plaintiff having sued defendant No.1 along with other defendants, it is not open to plaintiff to contend that because of joinder of defendant No.1, the agreement entered into by plaintiff with defendants No.2 to 15, agreeing to exclusive jurisdiction of Mumbai Courts be given a go-bye."
11. There is no doubt that the plaintiff, when it approached the court, did so on a wrong premise. The ld. Single Judge formed the opinion (perhaps not unjustifiably) that invoking the jurisdiction of this court was on wrong assumptions and that the plaintiff had been economical with the truth. Certainly such an interpretation does appear to be natural. The plaintiff's representatives were not helpful in dispelling any doubts; as a result, the ld. Single Judge expressed his displeasure at the way proceedings were conducted. At the same time, this court cannot be unmindful of the circumstance that the defendant relied on a subsequent affidavit (dated 20th February, 2018). The materials on the record show that the fifth defendant, an employee had preferred a gratuity claim on the basis of his employment in Delhi. Now, this material became a part of the record and could well have been relied on by the plaintiff to at least establish that at the relevant time, it had an office in Delhi, from which the defendants accessed information and unauthorizedly made it over to Defendant nos. 2 to 4. The copy of the fifth defendant's claim for gratuity, clearly avers that he resigned on 12-02- 2016 and that his resignation was accepted on 22.4.2016; more importantly that "the working place of the Claimant during the last tenure of his service was at Delhi. That the claimant has submitted 90 days' notice prior to his resignation." This was, in the opinion of the court prima facie supportive of the plaintiff's FAO(OS) (COMM) 109/2018 Page 10 of 12 argument that its place of business was Delhi, from where other defendants sourced the confidential information. This court cannot be seen to approve the plaintiff's casual and cavalier conduct in approaching with a lawsuit based on inaccurate facts and obtaining interim relief; however, in the light of the facts disclosed in the affidavit of 20th February, 2018, the adverse observations of the ld. Single Judge against the plaintiff's officials are hereby set aside.
12. This court is however of the opinion that the above observations are not dispositive of the appeal. The principle enunciated in ABC Laminart (P) Ltd. Vs. A.P. Agencies, Salem (1989) 2 SCC 163 would apply to the facts of this case. The Confidential Disclosure Agreement dated 8th September, 2015 between the plaintiff and the Defendant no.2, shows the plaintiff's office at Mumbai, Maharashtra; and, the plaintiff claimed that it was enforcing the Agreement with the Defendants no.2 to 4. In these circumstances, having regard to the terms of the said Confidential Disclosure agreement, as well as the agreement with the other defendants, which too, by Clause 15 confers the courts in Mumbai exclusive jurisdiction, the suit could not have been entertained in this court. Besides ABC Laminart the effect of such ouster clauses has been reiterated in several other decisions (including judgments of this court) including in Swastik Gases (P) Ltd v Indian Oil Corporation 2013 (9) SCC 32 where it was held that:
"32. For answer to the above question, we have to see the effect of the jurisdiction clause in the agreement which provides that the agreement shall be subject to jurisdiction of the courts at Kolkata. It is a fact that whilst providing for jurisdiction clause in the agreement the words like "alone", "only", "exclusive" or "exclusive jurisdiction" have not been used but this, in our view, is not decisive and does not make any material difference.
The intention of the parties--by having Clause 18 in the agreement-- is clear and unambiguous that the courts at Kolkata shall have jurisdiction which means that the courts at Kolkata alone shall have FAO(OS) (COMM) 109/2018 Page 11 of 12 jurisdiction. It is so because for construction of jurisdiction clause, like Clause 18 in the agreement, the maxim expressio unius est exclusio alterius comes into play as there is nothing to indicate to the contrary. This legal maxim means that expression of one is the exclusion of another. By making a provision that the agreement is subject to the jurisdiction of the courts at Kolkata, the parties have impliedly excluded the jurisdiction of other courts."
13. This court is also of the opinion that there is no merit in the plaintiff's argument that the cause of action for the suit instituted in Delhi was independent of any obligation arising under the agreements. The relationship of the parties (the plaintiff on the one hand and each of the contesting defendants on the other) was entirely premised on the contractual transactions and the confidential information received by them and allegedly shared by them unauthorizedly. Clever draftsmanship cannot obscure that the plaintiff's grievance is a composite and indivisible one; by a sleight of draftsmanship, it cannot now distance and separate the facts integral and foundational to the suit, by artificially splitting up aspects of that one indivisible cause of action. That argument, is consequently rejected.
14. In the light of the above findings, the court is of opinion that subject to the observations in para 10 above, no interference is called for. The appeal is dismissed. There shall be no order on costs.
S. RAVINDRA BHAT (JUDGE) A.K.CHAWLA (JUDGE) OCTOBER 09, 2018 FAO(OS) (COMM) 109/2018 Page 12 of 12