Bangalore District Court
M/S.Indo Mim Pvt. Ltd vs Mr.Pabitra Kumar Swain on 2 March, 2023
KABC010049192018
IN THE COURT OF THE LII ADDL. CITY CIVIL &
SESSIONS JUDGE, BANGALORE (CCH-53)
Dated this the 2nd day of March, 2023
PRESENT
Sri.B.G.Pramoda, B.A.L., LL.B.,
LII Addl. City Civil & Sessions Judge,
Bangalore.
O.S.N o.1324/2018
Plaintiff : M/s.INDO MIM Pvt. Ltd.
Having its Registered Office at
No.12, Sanjeev Basappa Building,
Cunningham Crescent Road,
Bengaluru, Karnataka - 560052.
Represented by its
Deputy General Manager- HR,
Mr. Venkataramana Pade.
(By Sri.Diwakara K., Advocate)
-V/S-
Defendants: 1. Mr.Pabitra Kumar Swain
S/o Pravata Kumar Swain,
Kamakanti Post, Via Balanga,
Puri District, Odisha- 752105.
2. M/s Kalyani Technoforge Ltd.
Pune, Mundhwa Industrial Area,
2 O.S.No.1324/2018
Mundhwa, Pune,
Maharashtra- 411036.
(D.1 (Exparte)
D.2 by Sri.J.P.K., Advocate)
Date of institution of the suit: 17.02.2018
Nature of the suit: Injunction
Date of commencement of
recording of evidence: 06.08.2021
Date on which Judgment was 02.03.2023
pronounced:
Duration: Yea Years Months Day
05 00 13
JUDGMENT
The plaintiff company has filed the present suit under Sec.26 and Order VII Rule 1 and 2 of CPC, praying for the relief of perpetual injunction against defendants and for damages of Rs.2,00,000/- from the defendants.
2. The brief facts of the case of the plaintiff company as averred in the suit plaint are as follows:-
The plaintiff is a leading company under Companies Act 1956. The plaintiff is an enterprise involved in the field of supplying metal injection molded (MIM) products. The plaintiff is a leading global supplier of precision-engineered products using metal injection molding (MIM) as the core manufacturing technology. The defendant No.1 had been 3 O.S.No.1324/2018 appointed in the services of plaintiff company as trainee with effect from 06.09.2013 as per the terms and conditions as set out in the letter of appointment dated 06.09.2013. The defendant No.1 had also executed a confidentiality agreement on 06.09.2013. The said confidentiality agreement contained specific clause regarding the purview and ambit of non-solicitation and non-disclosure amongst other terms. The defendant No.1 was appointed and deputed to department of medical room D&S hired to work as Graduate Engineer Trainee with effect from 06.09.2013 in medical room department. The defendant No.1 was promoted as specialist engineer from 01.09.2015. During the course of defendant No.1's duties, the defendant No.1 had complete access to all the confidential information of the plaintiff company relating to the papers, patents, report etc. The defendant No.1 was privy to all sensitive information relating to his job and duties assigned during the course of employment with the plaintiff company. The defendant No.1 had voluntarily approached the plaintiff and choose to resign from the services of the plaintiff company on 13.01.2017. The defendant No.1 was relieved on 01.02.2017. The defendant No.1 resigned from the services of the plaintiff company by sending email dated 23.01.2017. The plaintiff company has noticed that the defendant No.1 after 4 O.S.No.1324/2018 resigning from the plaintiff company has taken up employment with defendant No.2 who is engaged in business which is in direct with the plaintiff's line of work.
The defendant No.1 had also been actively persuading/ soliciting the current employees rendering their services in the plaintiff company to take up employment with the company in which the defendant No.1 is employed with currently. The defendant No.1 has also soliciting importuning and beseeching the customers of the plaintiff company to do business with the defendant No.2. The action of the defendant No.1 is a clear breach of the agreement dated 06.09.2013 which had been executed by the defendant No.1. The said inaction from the defendant is willful and seems to be aimed at an unlawful financial gain at the cost of the plaintiff. On 17.11.2017, legal notice was issued to the defendant No.1. The defendant No.1 has replied the to the said legal notice by denying his liability. Hence, the plaintiff company has stated that cause of action arose for it to file the suit and prayed to decreee the suit.
3. After service of the suit summons, the defendants No.1 did not appeared before the court and he was placed exparte. The defendant No.2 has apperaed through its counsel and filed its written statement. The defendant No.2 in the written statement has contended 5 O.S.No.1324/2018 that it is not proper and necessary party to the present suit and as such, the suit is bad for mis-joinder of parties. The defendant No.2 has further contended in its written statement that it is not party to the agreement between the plaintiff and defendant No.1. No breach of a contract is committed by the defendant No.2. Prayer No.2 as sought for by the plaintiff is against to the law and judgment of the Hon'ble High Court of Karnataka and Hon'ble Supreme Court of India. It is further contended in the written statement that the business carried on by it is different from the business of the plaintiff company and as such, the question of poaching customers of the plaintiff does not arise. The specialist engineer cannot have access to patents and the same is not correct submission. The patents have no role in day to day working and are handled only by the research department. The defendant No.2 is not doing the business of MIM. It is further contended in the written statement that the plaintiff company has not mentioned the name of any single client who was doing the business with it and who has shifted the business to the defendant No.2 after resignation of defendant No.1. If any customer of plaintiff company, if have been any chance approached the defendant No.2 it would be by their own volition and not due to any overt act by defendant No.2. The defendant No.2 has not been 6 O.S.No.1324/2018 cause of any loss to the plaintiff company. The defendant No.2 has denied all other averments and allegations made in the suit plaint. On these among other grounds, the defendant No.2 has prayed to dismiss the suit filed by the plaintiff company.
4. Based upon the pleading of both the parties, following three issues came to be framed and the same was posted the matter for evidence.
ISSUES
1. Whether the plaintiff's company proves that the defendant No.1 had executed a Confidentiality agreement dated 06.09.2013 having specific clause regarding non-
solicitation and non-disclosure and defendant had committed breach of agreement dated 06.09.2013 by soliciting the current employees of plaintiff's company and by soliciting customers of plaintiff's company as alleged in the suit plaint?
2. Whether the plaintiff's company is entitled for the relief as prayed for?
3. What order or decree?
5. The plaintiff in order to prove his case has adduced the oral evidence of its General Manager HR and IR as P.W.1. P.W.1 has produced 9 documents and got them marked as Ex.P.1 to P.9 and closed his side. Then the matter was posted for evidence of defendant No.2. The 7 O.S.No.1324/2018 defendant No.2 inspite of granting sufficient time has not adduced any oral evidence on its behalf and placed exparte. Hence, the oral evidence of defendant No.2 was taken as nil. Then the matter was posed for arguments.
6. Heard the arguments of Learned counsel for the plaintiff and defendant No.2. The Learned counsel for plaintiff and defendant No.2 have filed their written arguments. Perused the pleadings, oral and documentary evidence adduced on behalf of both the parties, written arguments and other materials on record.
7. Having done so, my answer to the aforesaid issues are as follows:
Issue No.1 : In the Negative
Issue No.2 : In the Negative
Issue No.3 : As per final order,
for the following :
REASONS
8. ISSUES NO.1: The plaintiff company in order to prove Issue No.1 has adduced the oral evidence of its General Manager HR as P.W.1. P.W.1 in his examination-in- chief has deposed that the plaintiff company is the registered company under the Companies Act 1956. It is involved in the field of supplying metal injection molded 8 O.S.No.1324/2018 (MIM) products. P.W.1 has further deposed in his examination-in-chief that the defendant No.1 had been appointed in the services of plaintiff company as trainee with effect from 06.09.2013 as per the terms and conditions as set out in the letter of appointment dated 06.09.2013. P.W.1 has further deposed in his examination-in-chief that the defendant No.1 had also executed a confidentiality agreement on 06.09.2013. P.W.1 has further deposed in his examination-in-chief that the said confidentiality agreement contained specific clause regarding the purview and ambit of non-solicitation and non-disclosure amongst other terms of employment. P.W.1 has further deposed in his examination-in-chief that Clause 4 of the Confidentiality agreement contains the provision relating to unfair competition. P.W.1 has further deposed in his examination- in-chief that the defendant No.1 during the course of his duty, has complete access to all the confidential information of the plaintiff company relating to the papers, patents, report etc. The defendant No.1 was privy to all sensitive information relating to his job and duties assigned during the course of employment with the plaintiff company. P.W.1 has further deposed in his examination-in-chief that the defendant No.1 had voluntarily approached the plaintiff and choose to resign from the services of the plaintiff company on 13.01.2017 and also forwarded resignation letter dated 9 O.S.No.1324/2018 13.01.2017 to the plaintiff company. P.W.1 has further deposed in his examination-in-chief that the defendant No.1 after resigning from the plaintiff company has taken up employment with defendant No.2 who is engaged in business which is in direct with the plaintiff's line of work. P.W.1 has further deposed in his examination-in-chief that the defendant No.1 had also been actively persuading/ soliciting the current employees rendering their services in the plaintiff company to take up employment with the company in which the defendant No.1 is employed with currently. P.W.1 has further deposed in his examination-in- chief that the defendant No.1 has also soliciting importuning and beseeching the customers of the plaintiff company to do business with the defendant No.2. P.W.1 has further deposed in his examination-in-chief that the action of the defendant No.1 is a clear breach of the agreement dated 06.09.2013. P.W.1 has further deposed in his examination- in-chief that the inaction from the defendant No.1 is willful and seems to be aimed at an unlawful financial gain at the cost of the plaintiff company. P.W.1 has further deposed in his examination-in-chief that the plaintiff company has to be compensated for the business loss caused by it and poaching customers by the defendants and due to loss of business. Hence, P.W.1 has prayed to decree the suit as prayed for.
10 O.S.No.1324/20189. P.W.1 apart from adducing his oral evidence, has also produced certain documents. Ex.P.1 is the authorization letter issued to him by the plaintiff company to represent the case on its behalf. Ex.P.2 is the appointment letter of defendant No.1 with the plaintiff company dated 06.09.2013. Ex.P.3 is the confirmation letter dated 01.09.2015 confirming the appointment of the defendant No.1. Ex.P.4 is the confidentiality agreement executed by defendant No.1 with plaintiff company. Ex.P.5 is the resignation letter issued by the defendant No.1. Ex.P.6 is the memo dated 25.01.2017 issued by the plaintiff company to the defendant No.1. Ex.P.7 is the office copy of legal notice dated 17.11.2017. Ex.P.8 is the postal receipt and Ex.P.9 is the postal acknowledgement.
10. The defendant No.1 has not appeared before the court inspite of service of suit summons and he has not contested the suit of the plaintiff. The pleadings, oral and documentary evidence adduced on behalf of the plaintiff company remained unchallenged by the defendant No.2. Whereas the defendant No.2 has appeared before the court and it has filed it written statement by denying all the allegations made by the plaintiff company against it. The defendant No.2 has specifically contended that there is no privity of contract between the plaintiff company and defendant No.2 and the defendant No.2 has not solicited 11 O.S.No.1324/2018 any customer of the plaintiff company. The defendant No.2 has specifically contended that it is not doing the same business as the plaintiff company is doing and as such, the question of soliciting the customers of the plaintiff company to the defendant No.2 company does not arises. Further the defendant No.2 has also contended that the defendant No.1 has left the job with it and he is nowhere connected to the defendant No.2 company. Hence, the defendant No.2 has prayed to dismiss the suit filed by the plaintiff company. In order to prove the averments made in the written statement, the defendant No.2 has not adduced any oral evidence on its behalf.
11. But only on the ground that the defendant No.1 has not contested the suit and only on the ground that the defendant No.2 has not adduced any oral evidence to prove the averments of the written statement, it cannot be come to the conclusion that the plaintiff company has proved its case. It is established principle of the law that the plaintiff cannot take advantage of the weakness of the case of the defendant or weakness of the defence of the defendant. The plaintiff has to prove its case independently by adducing its own independent oral and documentary evidence. As such, the plaintiff company has to prove its contention that the defendant No.1 has executed the confidentiality agreement dated 06.09.2013 with it and the 12 O.S.No.1324/2018 defendant No.1 has committed breach of the agreement dated 06.09.2013 by violating the non-soliciting and non- disclosure of clause. The oral evidence adduced on behalf of P.W.1 and Ex.P.2 appointment letter and Ex.P.3 confirmation letter are sufficient to prove the fact that the defendant No.1 was the employee of plaintiff company and he was appointed as Graduate Engineer Trainee by the plaintiff company with effect from 06.09.2013. The defendant has not denied Ex.P.2 and 3 produced by plaintiff company. As such, I do not find any ground to disbelieve Ex.P.2 and 3 documents. As such, it can be come to the conclusion that the plaintiff company has proved that the defendant No.1 had been appointed by it as Graduate Engineer Trainee with effect from 06.09.2013.
12. The plaintiff company has produced confidentiality agreement executed by defendant No.1 at Ex.P.4. As it is rightly contended by the Learned counsel for the plaintiff and as it is stated by P.W.1 in his examination-in-chief, confidentiality agreement contain the non-disclosure and non-solicitation clause and unfair competition etc. There is also the signature of the defendant No.1 in the said agreement. The defendant No.1 has not disputed the said document by contesting the suit. As such, I do not find any grounds to disbelieve the 13 O.S.No.1324/2018 document Ex.P.4 produced by the plaintiff company. Execution of the said confidentiality agreement by defendant is not denied. Ex.P.5 is the resignation letter dated 13.01.2017 given by the defendant No.1 to the plaintiff company. According to the plaintiff company, the defendant No.1 was permitted to retired from his service from plaintiff company with effected from 13.01.2017. As such, I am of the opinion that the plaintiff company has also proved the fact that the defendant No.1 has left his job with plaintiff company.
13. It is the allegation of the plaintiff company that the defendant No.1 during the course of his employment had complete access to all the confidential information of the plaintiff company relating to the papers, patents, report etc and the defendant No.1 was privy to all sensitive information relating to his job and duties assigned during the course of employment with the plaintiff company. It is further allegation of the plaintiff company that the defendant No.1 is actively persuading/ soliciting the current employees rendering their services in the plaintiff company to take up employment with the defendant No.2 and the defendant No.1 is also soliciting importuning and beseeching the customers of the plaintiff company to do business with the defendant No.2. It is also allegation of the 14 O.S.No.1324/2018 plaintiff company that the defendant No.1 has committed breach of the agreement dated 06.09.2013.
14. The plaintiff company has not furnished any document to show the nature of work with which the defendant No.1 was entrusted by it after inducting him as Graduate Engineer Trainee as per appointment letter dated 06.09.2013. The plaintiff company has not produced any materials to show that the nature of work the entrusted to defendant No.1 will enable defendant No.1 to have access to all the confidential information of the plaintiff company relating to the papers, patents, report etc. In the appointment letter produced by the plaintiff company at Ex.P.2, the nature of the work entrusted to him is not mentioned. Further in the confirmation letter issued by the plaintiff company also the nature of the work to be carried out by the defendant No.1 is not mentioned. In Ex.P.2, it is stated that the defendant No.1 was appointed as Graduate Engineer Trainee. Further in Ex.P.3 confirmation letter, designation is shown as specialist of medical room. Except the oral evidence, there are no documentary evidence to show that the the nature of the job which the defendant No.1 was doing with plaintiff company will enable him to access access to all the confidential information of the plaintiff company relating to the papers, patents, report etc., as alleged by the plaintiff company.
15 O.S.No.1324/201815. As per the contention of the plaintiff company, the defendant No.1 after resigning the job from plaintiff company had joined the company of the defendant No.2. The defendant No.2 in the written statement has specifically contended that the defendant No.1 is not working with it. During the course of cross-examination of P.W.1 also it was suggested that in the year 2018 itself, the defendant No.1 has left the company of defendant No.2 and as such, the defendant No.2 is not liable to give any compensation to the plaintiff. Even though the said suggestion was denied by P.W.1 in his cross-examination and even though the plaintiff company has specifically contended that the defendant No.1 is working with defendant No.2, the plaintiff company has not produced any materials to show that the defendant No.1 is still working in the company of defendant No.2. When the plaintiff company has failed to prove its contention that the defendant No.1 is working with defendant No.2, the question of defendant No.1 persuading or soliciting the current employees of plaintiff company to take up employment with defendant No.1 does not arises. Further the question of defendant No.1 soliciting, importuning and beseeching the customers of the plaintiff company to do business with the defendant No.2 company does not arises. As it is rightly contended by the Learned counsel for the defendant No.2, the plaintiff company has 16 O.S.No.1324/2018 not adduced any evidence to show that after the defendant No.1 left the job with plaintiff company, same of its employees have left their job in view of persuation or solicitation alleged to have been made by the defendant No.1 and they have joined the company of defendant No.2. The plaintiff company has failed to show any such incident that had happened in its company. Further the plaintiff company has also not adduced any evidence to prove that some of its customers have been solicited by defendant No.1 to do the business with defendant No.2. The plaintiff company has not mentioned the name of any of its employees who have left their job from the plaintiff company and who have joined the company of defendant No.2 in persuasion or solicitation made by the defendant No.1. Further the plaintiff company has failed to mention the name of any of its customer who have doing business with it and who have shifted their business with defendant No.2 company in view of persuasion and solicitation made by the defendant No.1.
16. The defendant No.2 has specifically contended that it is not doing the similar business which the plaintiff company is doing and as such, the question of solicitation of customers of plaintiff company does not arises. During the course of cross-examination of P.W.1, the defendant No.2 has also suggested the said fact. The plaintiff 17 O.S.No.1324/2018 company has not produced any document to show that the defendant No.2 is also doing the similar business as that of plaintiff company. P.W.1 during the course of cross- examination had admitted the fact that the defendant No.2 company is older company than the company of plaintiff company. P.W.1 during the course of cross-examination had admitted the fact that he has not produced any document to show that the plaintiff company has sustained loss on account of defendant No.2 company. P.W.1 during the course of cross-examination had admitted the fact that he has not produced any document to show that the defendant No.2 company has solicited customer of plaintiff company and on account of it, the plaintiff company had sustained loss. Since the plaintiff company is seeking the relief of damages of Rs.2,00,000/- from the defendants No.1 and 2 for breach of Clause 4(ii) and 4(iii) of Confidentiality agreement dated 06.09.2013, it is for the plaintiff company to adduce substantial evidence to prove that on account of breach of the said conditions by defendant No.1, the plaintiff company had actually sustained loss of Rs.2,00,000/-. But the plaintiff company has failed to adduce any satisfactory materials before the court to prove the fact that the defendant No.1 after resigning his job from the plaintiff company had joined the company of defendant No.1 and after he joined the 18 O.S.No.1324/2018 company of defendant No.2, he has solicited / persuaded the employees of plaintiff company to take up employment with defendant No.2 and also solicited the customer of plaintiff company to do business with defendant No.2 company and on account of the said act of defendants No.1 and 2, the plaintiff company has sustained actual loss of Rs.2,00,000/-.
17. As it is rightly contended by the Learned counsel for the defendant No.2 in his written arguments that there is no contract between the plaintiff company and defendant No.2. Further the plaintiff company has failed to prove that the defendant No.1 has solicited his customers and employees and made them to join defendant No.2 company and to do business with the defendant No.2 company. Further the plaintiff company has failed to adduce any evidence to show that on account of said act it has sustained loss of Rs.2,00,000/-. Further the plaintiff company has failed to adduce any sufficient evidence to show that the defendant No.1 is still working with the defendant No.2 and to prove that the defendant No.2 is doing similar business as that of plaintiff company and the defendant No.1 is disclosing the confidential information with the defendant No.2 company relating to the papers, patents, report etc of plaintiff's company and on account of the same, the plaintiff company has sustained loss in the 19 O.S.No.1324/2018 business. Further the plaintiff company has failed to adduce any satisfactory evidence to show that the defendants No.1 and 2 are making unlawful gain for themselves. Though the plaintiff company proved that the defendant No.1 had executed a confidentiality agreement with the plaintiff company dated 06.09.2013 containing non-solicitation and non-disclosure of clause. But plaintiff company has failed to adduced sufficient evidence to prove that defendant No.1 had committed the breach of agreement dated 06.09.2013 by soliciting the current employees of the plaintiff company and by soliciting the customers of plaintiff company. Hence, the plaintiff company has failed to prove Issue No.1. Accordingly, I answer Issue No.1 in Negative.
18. The plaintiff company has sought for perpetual injunction restraining the defendants from recruiting, hiring, employing the employees working or on the notice period of the plaintiff company as well as poaching of customers of the plaintiff company, until expiry of the two years period of non-solicitation of employees and customers i.e., from 01.02.2017 to 31.01.2019. The period of perpetual injunction for which the plaintiff company has sought for is already completed. As such, the prayer No.1 for the relief of perpetual injection as prayed for by the plaintiff company became infructuous. Further as it is discussed earlier, the 20 O.S.No.1324/2018 plaintiff company has failed to prove that the defendants are soliciting the employees of plaintiff company and they are persuaded them to join the company of defendant No.2. Further as it is discussed earlier, the plaintiff company has failed to prove that the defendants are poaching the customers of plaintiff company and on account of the same the plaintiff company had sustained loss of Rs.2,00,000/-. Further the plaintiff company has also failed to prove that the defendant No.1 has committed breach of confidentiality agreement dated 06.09.2013 and on account of the same, the plaintiff company has sustained loss of Rs.2,00,000/-. Under these facts and circumstances, I am of the opinion that the plaintiff company is not entitled for the relief of perpetual injection as prayed for and for the relief of damages of Rs.2,00,000/- as prayed for. As such, the suit filed by the plaintiff company is deserves to be dismissed. Accordingly, I answer Issue No.2 in Negative.
19. Issue No.3:- For the discussions made above in issues No.1 and 2, I proceed to pass the following:
ORDER The suit filed by the plaintiff company under Sec.26 and Order VII Rule 1 and 2 of CPC is hereby dismissed.21 O.S.No.1324/2018
No order as to costs.
Draw decree accordingly.
(Dictated to the Stenographer, transcribed by her, corrected and then pronounced by me in the open court on this the 2nd day of March, 2023). Digitally signed by PRAMODA PRAMODA B G BG Date: 2023.03.04 14:39:22 +0000 (B.G.Pramoda) LII Addl. City Civil & Sessions Judge, Bangalore.
ANNEXURE List of witnesses examined for the plaintiff :
P.W.1 : Venkatramana P. List of the documents marked for the plaintiff :
Ex.P.1 Authorization letter Ex.P.2 Original Appointment letter Ex.P.3 Original confirmation letter Ex.P.4 Original confidentiality letter Ex.P.5 Original Resignation letter Ex.P.6 Original memo dated 25.01.2017 Ex.P.7 Office copy of legal notice dated 17.11.2017 Ex.P.8 Postal receipt Ex.P.9 Courier receipt
List of the witnesses examined for the defendants:
NIL List of the documents marked for the defendants:
NIL
PRAMODA Digitally signed by
PRAMODA B G
BG Date: 2023.03.04 14:39:35
+0000
(B.G.Pramoda)
LII Addl. City Civil & Sessions Judge,
Bengaluru.
22 O.S.No.1324/2018
23 O.S.No.1324/2018