Delhi District Court
Pb Fintech Ltd vs Amar Sharma on 6 December, 2024
DLST010074372022
In the Court of Shri Munish Bansal,
District Judge-03 (South District),
Saket Courts Complex, New Delhi.
CS No.: 534/2022
In the matter of :-
PB Fintech Ltd.,
Plot No. 119, Sector 44,
Gurugram -122001,
Haryana. .......Plaintiff
Versus
Mr. Amar Sharma,
36B, DDA MIG Flat,
Sheikh Sarai, Phase-I,
Delhi-110017. ......Defendants
Date of institution : 29.08.2022
Arguments heard on : 08.11.2024
Date of decision : 06.12.2024
SUIT FOR INJUNCTION AND DAMAGES
OF RS.1,00,00,000/-
Digitally
signed by
MUNISH
MUNISH BANSAL
BANSAL Date:
2024.12.06
17:43:49
+0530
CS/534/2022 Page 1 of 28
JUDGMENT
1. Facts as averred in the plaint are that the plaintiff company was established in the year 2008. The plaintiff is one of the prominent fin-tech marketing companies in India and is engaged in offering a wide range of services in the financial, insurance, health care and service sector through its group companies including Policybazaar Insurance brokers Pvt Ltd and Paisabazaar Marketing & Consulting Pvt Ltd. It is further submitted that plaintiff through its subsidiary, Policybazaar Insurance Brokers Pvt Ltd operates an online insurance selling platform i.e. Policybazaar.com (www.policybazaar.com) and also operates an online lending marketplace, www.paisabazaar.com through its subsidiary Paisabazaar Marketing & Consulting Pvt Ltd and the said online portals offers wide range of services such as comparison of insurance policies, facilitation and distribution of various financial products such as credit cards, loan, investment plans etc. 1.1. It is further submitted in the plaint that the plaintiff has developed and evolved very distinctive, detailed and comprehensive data, information & database pertaining to running its business. The said database include trade secrets and internal notings of the plaintiff and the plaintiff has accumulated all its experience pertaining specifically to the operations of its business and has documented the same in the form of confidential data.
Digitally signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:44:03 +0530 CS/534/2022 Page 2 of 28 1.2. It is further submitted that the confidential data, database, information and trade secrets are in the form of digital formats and are stored on computer, computer system, computer networks, computer resources and communication devices of the plaintiff including the laptops and mobile phones.
1.3. It is further submitted that due to the unique nature and size of the business of the plaintiff, the plaintiff engages the services of employees and these employees of the plaintiff got acquainted with sensitive and confidential information in ordinary course of its business. Consequently, to safeguard the confidential information, the plaintiff has stringent legal documentations that it get signed from the employees at the time when they join the plaintiff company.
1.4. It is further submitted that the defendant approached the plaintiff for a job sometime in October, 2018 and the defendant was duly interviewed by the plaintiff and after consideration, the defendant was found suitable for the position of 'Senior Manager-Human Resources' and by way of employment letter dated 03.12.2018, the defendant was offered employment of the aforesaid post with the plaintiff. The initial terms and conditions of the employment were detailed in the said letter dated 03.12.2018 and the said letter was duly signed by the defendant with his joining date 03.12.2018.
1.5. It is further submitted that thereafter, defendant Digitally signed by joining the plaintiff company on 03.12.2018, the defendant also MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:44:12 +0530 CS/534/2022 Page 3 of 28 executed a 'Employee Confidentiality Agreement' and an 'Intellectual Property Assignment Agreement' which contained all the terms and conditions regarding the employment of the defendant with the plaintiff vis-a-vis the guidelines for keeping and maintaining confidential information and intellectual property of the plaintiff.
1.6. It is further submitted that upon completion of all the joining formalities, the defendant started his employment with the plaintiff and the defendant was a part of the (human resource payroll team) and this team was concerned with the processing of salary pay-outs for the plaintiff company and its group companies. Being in the payroll team, the defendant had complete access to data related to company and its group companies CTC for all former and current employees. Moreover, being at senior position, the defendant had complete knowledge and access of the pricing strategies including but not limited to pricing discussion and finalization with vendors and third parties as well. Further, it is pertinent to mention that on account of holding a senior position in the plaintiff, the defendant had enhanced level of access to the confidential information of the plaintiff.
1.7. It is further submitted that defendant offered his resignation vide communication dated 30.11.2021 and whereby the defendant also sought for a waiver of the notice period. The resignation of the defendant was accepted, moreover the notice Digitally signed by period of the defendant was also waived off and the defendant's MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:44:17 +0530 CS/534/2022 Page 4 of 28 employment with the plaintiff was terminated with effect from 07.01.2022. Thereafter just within two months of resignation of the defendant, another employee namely Mr. Manoj Mahendru who was also working in the Human Resource Department of the plaintiff as Assistant Manager resigned from the employment of the plaintiff on 14.03.2022 and the said person was also working in the same team as of the defendant and was directly reporting to the defendant.
1.8. It is further submitted that Mr. Juber Khan, who was also working in the Human Resource Department of the plaintiff as Executive resigned from the employment of the plaintiff on 13.04.2022 and the said person was also working in the same team as of the defendant. Mr. Amarjeet Pathak, who was also working in the Human Resource Department of the plaintiff as Senior Executive resigned from the employment of the plaintiff on 13.05.2022 and the said person was also working in the same team as of the defendant. Both these employees were directly reporting to Mr. Manoj Mahendru.
1.9. It is further submitted that with the resignation of the defendant and thereafter, subsequent resignations from the same team, the plaintiff become little suspicious and conducted a preliminary enquiry by checking the social media profiles of these ex-employees and to the utter shock and dismay, he learnt that the defendant joined another organization namely lenskart.com and also learnt that he even solicited Mr. Mahendru Digitally signed by MUNISH MUNISH BANSAL and Mr. Khan in his team at lenskart.com. Even the third BANSAL Date:
2024.12.06 17:44:23 +0530 CS/534/2022 Page 5 of 28 employee namely Mr. Pathak also joined the team of the defendant at Lenskart and pertinently, the same is not a mere coincidence but a conspiracy nefariously designed by the defendant to cause harmful loss and damage to the business of the plaintiff. Thus, it is clear that the above-said three employees were induced and solicited to join the defendant's new organization in complete defiance of the non-solicitation clause of the terms and conditions agreed by the defendant.
1.10. It is further submitted that aggrieved by the ill actions of the defendant, plaintiff served a legal notice dated 31.05.2022 to the defendant calling upon the defendant to not share or to put to use the confidential information of the plaintiff not to directly involve himself with competitive business concerns and not to solicit current/ former employees of the plaintiff. Reply dated 02.06.2022 to the said legal notice was given on behalf of the defendant refuting the statements made by the plaintiff.
1.11. It is further submitted that plaintiff has come to know that defendant is continuing to induce and solicit employees of the plaintiff and has also bad-mouthed about plaintiff in industry circles and further that plaintiff came to know from social media profiles that defendant had already joined Lenskart even before he was formally relieved from the plaintiff company, though defendant disabled and deleted his LinkedIn profile pursuant to issuance of legal notice.
Digitally signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:44:29 +0530 CS/534/2022 Page 6 of 28 1.12. It is further submitted that defendant is utilizing the confidential information of the plaintiff in complete contravention and violation of the terms of employment and has caused diminishing of value and utility of confidential data, information, trade secrets including huge potential business and financial loss to the plaintiff.
By way of the present suit, the Plaintiff is seeking (I) to pass a decree for payment of damages of Rs. 1 Crore with an interest @ 18 % per annum from the date of decree/direction till the date of acutal realization (ii) pass a decree of permanent injunction restraining the defendant from soliciting the employees of the plaintiff (iii) pass a decree of permanent injunction restraining the defendant disclosing of confidential information of the plaintiff.
2. Summons of the suit were issued to the Defendants. The Defendant entered his appearance in the Court and filed his written statement before the court.
2.1. Defendant filed his written statement and submitted that defendant is a human resource (HR) professional and is a MBA and started his career in 2006 and worked with reputed companies including Hitachi System India Pvt. Ltd., before joining as Sr. Manager, HR, Band C-1 on 03.12.2018; that he was made to sign on dotted lines on certain documents and owing to the dominant position exercised by the plaintiff, he signed upon them without there being any informed consent whatsoever; that the defendant had provided the best of services whilst never giving opportunity of any grievance whatsoever and owing to his Digitally signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:44:35 +0530 CS/534/2022 Page 7 of 28 work he was also promoted; that the resignation was tendered by the defendant vide communication dated 30.11.2021 and also sought waiver of notice period and thereafter, the same was formally accepted vide communication dated 07.01.2022 with notice period also waived off and he had complied with all the exit formalities and handed over all the company assets, documents, data etc. which were in his possession and thereafter, he was issued relieving letter and experience letter both dated 24.02.2022 and full and final settlement was also shared and amount payable to the defendant was also paid; that defendant thereafter, joined Lenskart Solutions Pvt. Ltd. on 10.01.2022 which trades in eye-wear both Online and by way of offline stores and that plaintiff company and Lenskart trade in altogether different domains as plaintiff is a fintech marketing company.
2.2. It is further submitted that plaintiff got issued a frivolous and baseless legal notice dated 31.05.2022 to the defendant to which the defendant had issued a reply cum legal notice dated 02.06.2022 thereby bringing forth the true and correct position and making demands from the plaintiff; that the defendant has and is merely acting as per law but the plaintiff has leveled baseless allegation without any merits to defame and tarnish the reputation of the defendant and accordingly, the plaint is liable to be dismissed.
2.3. It is further submitted on behalf of the defendant that the plaintiff has made false and misleading statements and has Digitally signed by deliberately and purposely withheld the true facts from this court;
MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:44:42 +0530 CS/534/2022 Page 8 of 28 that as per the pleadings in the plaint, relationship between the plaintiff and defendant is commercial in nature and relief claimed are thus flowing out of commercial transaction between the parties and therefore, the suit of the plaintiff is a commercial suit in terms of Section 2 (1) (c) of the Commercial Courts Act 2015; that the appointment letter dated 03.12.2018 has been issued by Policybazaar Insurance Web Aggregator Pvt. Ltd. and not the plaintiff i.e. PB Fintech Ltd. and even the 'Intellectual Property Assignment Agreement' was also executed with the Policybazaar Insurance Web Aggregator Pvt. Ltd. and not the plaintiff, therefore, there is no privity of contract between the plaintiff and the defendant and that the plaintiff has no locus standi to present the present suit; that the plaintiff company has also failed to file its certificate of incorporation, memorandum, articles and /or any other document in this regard with the plaint and even the plaint has not been signed, verified and instituted by a duly authorized competent person; that since service of the defendant came to end from 07.01.2022 and the defendant has complied with all the exit and handover formalities and has been relieved of his duties and also received his full and final settlement amount and thus, no relationship or privity of contract subsisted and therefore, no cause of action has arisen against the defendant; that the appointment letter provides for non-solicitation clause for a period of 6 months after termination/ dismissal of his employment and since the defendant was relieved on 07.01.2022, the said 6 months period expired on 07.07.2022 while the suit has been filed on 26.07.2022 and therefore, the said clause had Digitally signed by MUNISH ceased to operate; that the said clause is restrictive in nature as it MUNISH BANSAL BANSAL Date:
2024.12.06 17:45:44 +0530 CS/534/2022 Page 9 of 28 imposes a restriction to carry on services for a period of 6 months even after cessation of services and therefore, the same is void in terms of Section 27 of the Indian Contract Act; that even the said clause in the agreement also infringe the right of other employees of the plaintiff from exercising their lawful profession, trade or business; that the enforcement of the said agreement is specifically barred by Section 14 of the Specific Relief Act, 1963 and thus, as per Section 41 (e) of the Specific Relief Act, even injunction cannot be granted to prevent the breach of such contract. On merits also, defendant has reiterated the aforesaid averments while denying the contents of the plaint in substance. On these grounds, it is prayed that present suit be dismissed.
3. The Plaintiff filed replication to the written statement of Defendant thereby denying all the contents of the written statement and reaffirming and reiterating the pleadings made in the plaint.
4. Upon completion of pleadings, following issues were framed by Ld. Predecessor of this Court on 02.06.2023:-
a) Whether the present suit has been filed without any cause of action ? OPD.
b) Whether the Plaintiff is entitled for a decree of damages of Rs. 1,00,00,000/-(Rupees) along with interest @18% per annum from the Date of decree/till the date of realization? OPP
c) Whether the Plaintiff is entitled for a decree of permanent injunction restraining the Defendant from soliciting the Digitally MUNISH signed by MUNISH BANSAL employees of the Plaintiff? OPP BANSAL Date:
2024.12.06 17:45:52 +0530 CS/534/2022 Page 10 of 28
d) Whether the Plaintiff is entitled for a decree of permanent injunction restraining the Defendant disclosing of confidential information of the Plaintiff? OPP.
e) Relief.
5. To prove his case, the Plaintiff got examined himself as PW1. Plaintiff himself stepped in witness box as PW1 and tendered his evidence by way of affidavit Ex. PW1/A whereby he made deposition on lines of his pleadings made in the plaint. He also placed reliance on certain documents :-
1. The authorization letter dated 23.08.2022 and the board resolution dated 30.11.2021 Ex. PW1/1 (Colly), (objected to by the Ld. Counsel for defendant as to mode of filing since the same have not been filed with the plaint but subsequently without seeking leave in terms of Order 7 Rule 14 of CPC).
2. Copy of certificate of incorporation of the plaintiff and the certificate pertaining to the change in the name of the plaintiff company Ex. PW1/2 (Colly), (objected to by the Ld. Counsel for defendant as to mode of filing since the same have not been filed with the plaint but subsequently without seeking leave in terms of Order 7 Rule 14 of CPC).
3. Copy of employment letter dated 03.12.2018 Mark PW1/3.
4. Copy of employee confidentiality agreement dated 03.12.2018 Mark PW1/4.
5. Copy of intellectual property assignment dated 03.12.2018 Digitally signed by MUNISH MUNISH BANSAL Mark PW1/5.
BANSAL Date:
2024.12.06 17:46:00 +0530 6. Copy of resignation email dated 30.11.2021 Ex. PW1/6.CS/534/2022 Page 11 of 28
7. Copy of follow up email dated 03.01.2022 sent by the defendant Ex. PW1/7.
8. Copy of the acceptance of resignation of email dated 07.01.2022 sent by the plaintiff Ex. PW1/8.
9. Copy of resignation and acceptance of email communication of Mr. Amarjeet Pathak Ex. PW1/9.
10. Copy of screenshot of social media profiles of the ex employee Ex. PW1/10 (Colly),
11. Copy of legal notice dated 31.05.2022 Ex. PW1/11.
12. Copy of reply dated 02.06.2022 Ex. PW1/12.
13. Copy of the details of the defendant as available on the website of www.signalhire.come Ex. PW1/13.
14. Copy of the screenshot of the deactivate linkedin profile of the defendant Ex. PW1/14.
This witness was duly cross examined by Ld. Counsel for the defendant.
Thereafter, PE was closed.
6. To prove his case, the defendant got examined himself as DW1. Defendant himself stepped in witness box as DW1 and tendered his evidence by way of affidavit Ex. DW1/A whereby he made deposition on lines of his pleadings made in the plaint. He also placed reliance on certain documents :-
1. Handover mail dated 06.01.2022 Ex. DW1/1.
2. Exit Mail dated 07.01.2022 Ex. DW1/2.
3. Clearance Mail dated 09.02.2022 Ex. DW1/3.
4. Experience certificate dated 24.02.2022 Ex. DW1/4.
5. Relieving certificate dated 24.02.2022 Ex. DW1/5.
Digitally signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:08 +0530 CS/534/2022 Page 12 of 28
6. Full & Final settlement letter Ex. DW1/6.
7. Email receipt dated 02.06.2022 Ex. DW1/7.
8. Postal receipt dated 03.06.2022 Ex. DW1/8.
9. Certificate u/s. 65B of Indian Evidence Act Ex. DW1/9. He also relies upon the following documents:
1. Resignation mail dated 30.11.2021, formal acceptance Ex.PW1/6
2. Follow up mail dated 03.01.2022 & Notice period waiver mail dated 07.01.2022 Ex. PW1/7.
3. Formal acceptance and notice period waiver mail dated
07.01.2022 Ex. PW1/8.
4. Reply cum legal notice dated 02.06.2022 Ex. PW1/12.
This witness duly cross examined by Ld. Counsel for plaintiff.
Thereafter, DE was closed.
7. I have heard arguments advanced by Ld. Counsel for the Plaintiff and perused the record. I have also considered written arguments/ submissions filed by respective Counsels for the Plaintiff and defendant. My issue-wise findings are as under:-
Issue No. (a) Whether the present suit has been filed without any cause of action ? OPD.
7.1. The onus to prove this issue was on the defendant.
Defendant has contended that the appointment letter Mark PW1/3 was issued by, and the agreements i.e. the employee Digitally signed by MUNISH confidentiality agreement Mark PW1/4 and intellectual property MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:15 +0530 CS/534/2022 Page 13 of 28 assignment agreement Mark PW1/5 were executed by, Policybazaar Insurance Web Aggregator Pvt. Ltd., but however, the suit has been filed by PB Fintech Ltd., therefore, there is no privity of contract between the plaintiff and the defendant and in that sense, no cause of action has arisen against the defendant.
7.2. Counsel for the plaintiff contends that Policybazaar Insurance Web Aggregator Pvt. Ltd. is a subsidiary company of the plaintiff company and a subsidiary company is wholly owned by a parent company which have pervasive control over it and the former acts as a hand and voice of the parent company, the subsidiary in that event would be nothing but an instrumentality rather a part of the parent company. It is further submitted that documents relied upon by the defendant i.e. full and final settlement Ex.DW1/6, experience certificate dt. 24.02.2022 Ex.DW1/4 and relieving letter dated 24.02.2022 Ex. DW1/5 have been issued by the plaintiff itself and the same have been admitted to have been received by the defendant from the plaintiff company, therefore, defendant cannot be allowed to approbate or reprobate its existence with the plaintiff. To this, counsel for the defendant further contends that no proof regarding incorporation or Policybazaar Insurance Web Aggregator Pvt. Ltd., being subsidiary of plaintiff has been filed.
7.3. In cross-examination, DW1 has stated that he joined the plaintiff company in December, 2018 and further admitted that he has received the aforesaid documents Ex. DW1/4, Digitally signed by Ex.DW1/5 and Ex. DW1/6 after leaving the employment of the MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:22 +0530 CS/534/2022 Page 14 of 28 plaintiff company. There is nothing on record to show that he ever raised any objection to the Policybazaar Insurance Web Aggregator Pvt. Ltd. regarding the said documents being issued to him by the plaintiff company. Thus, the aforesaid objections on behalf of the defendant regarding privity of contract and proof of incorporation etc. loses significance.
7.4. Another contention raised on behalf of the defendant is that plaint has not been signed, verified and instituted by duly authorized / competent person as there is no authorization or Board Resolution or minutes of meeting in favour of the Rohit Kumar, who on behalf of the plaintiff company has filed the suit and the purported Authority letter filed in favour of Rohit Kumar has no legal effect or sanctity and even there is no board resolution or any supporting minutes of board meeting in favour of Ms. Deepti Rustagi, and further that even if assuming Ms. Deepti Rustagi is a delegate of plaintiff company, she cannot further sub-delegate the power.
7.5. It is noted that out of authorization letter dated 23.08.2022 and board resolution dated 30.11.2021 Ex. PW1/1 (colly), board resolution was filed alongwith the replication to the written statement. During tendering of evidence by PW1, objection was raised by the counsel for the defendant that same cannot be allowed to be admitted in evidence as no leave of the Court has been taken in terms of Order VII Rule 14 CPC. In United Bank of India vs. Naresh Kumar AIR 1997 Supreme Digitally signed by MUNISH Court 3, it has been observed as under:-
MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:34 +0530 CS/534/2022 Page 15 of 28 "9. In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause.
There is sufficient power in the Courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by against a corporation the Secretary or any Director or other Principal officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of it's officers a Corporation can ratify the said action of it's officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by it's officer."
7.6. It is to be noted that Order VII Rule 14 CPC pertains to documents touching the merits of the case and if the said documents are not filed with the plaint, leave of the Court is required. However, the said board resolution in no way affects the merits of the case and if taken on record by the Court, no Digitally signed by MUNISH prejudice can be said to have caused to the other party. MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:42 +0530 CS/534/2022 Page 16 of 28 7.7. Perusal of the board resolution shows that Ms. Deepti Rustagi has been duly authorized by the plaintiff company to do all the needful for the institution of the suit. Further, she has also been authorized to sub-delegate all or any powers conferred on her by any letter of authority to any person as she may deem necessary and proper in the overall interest of the company. Thus, in view of the discussion, the said contention on behalf of the plaintiff does not hold much ground.
7.8. Defendant has also contended that the three ex-
employees of the plaintiff namely Manoj Mahendru, Juber Khan and Amar Jeet Kumar Pathak were fully entitled to carry on any trade, business or profession of their choice, however, plaintiff seeking enforcement of the non-solicitation clause against the defendant is seeking to put fetters in the said pursuit of the aforesaid employees also which is in violation of Section 27 of the Indian Contract Act. The present suit has been filed by the plaintiff for the breach committed by the defendant for soliciting the aforesaid employees of the plaintiff company. In the suit as well as in the evidence, there is nothing to show or prove that the aforesaid employees of the plaintiff were restrained in any form from exercising their right to pursue any lawful business, profession or trade. Perusal of the appointment letter Mark PW1/3 issued by the plaintiff as well as other agreements brought on record by the plaintiff shows that there is no liability on the employee of the plaintiff if the said employee is solicited. Rather, the restraint is with regard to solicitation of other employees by Digitally signed by an ex-employee for a period of 6 months from the date of leaving MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:48 +0530 CS/534/2022 Page 17 of 28 the company. The breach of non-solicitation clause, would be committed by a person who solicits and not who is solicited. Relevant herein is the suggestion put to PW1 by the counsel for the defendant wherein he states that 'It is correct that it is fundamental right of employees of the plaintiff to find best employment available to them'. Thus, this contention also does not hold ground.
7.9. Defendant has also contended that since the dispute between the plaintiff and the defendant as set out in the plaint is commercial in nature, the present suit is not maintainable before this Court and in the present form and in that perspective, no cause of action to file the present suit arises in favour of the plaintiff and against the defendant. It is noted from the pleadings in the written statement that though several provisions of the Commercial Courts Act have been enumerated in the written statement and also during the oral submissions, however,counsel for the defendant has failed to specify under what clause the dispute between the plaintiff as an employer and defendant being the employee, falls. Simply because there is an agreement Mark PW1/5, titled as Intellectual Property Assignment Agreement by the plaintiff company with its employee for the protection of intellectual property rights does not mean that the primary relationship between employer and employee turns out to be a commercial one. It is the primary relationship that has to be seen and any such employer-employee agreement, by whatever name called, would have to be considered as employment agreement Digitally signed by MUNISH governing the relationship between employer and employee.
MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:54 +0530 CS/534/2022 Page 18 of 28 Thus, the said objection is also without any basis.
7.10. In view of the above discussion, on the grounds/ objections raised by the defendant, the present issue stands decided against the defendant.
Issue No. (b) Whether the Plaintiff is entitled for a decree of damages of Rs.1,00,00,000/-(Rupees) along with interest @ 18% per annum from the Date of decree/till the date of realization? OPP
8. The onus to prove this issue was upon the plaintiff. Perusal of the plaint shows that said claim has been sought against the defendant for the violation of terms and conditions of the Employment Letter dated 03.12.2018 Mark PW1/3, Employee Confidentiality Agreement Mark PW1/4 and Intellectual Property Assignment Agreement Mark PW1/5, which contained exhaustive terms and conditions regarding the employment of the defendant with the plaintiff viz-a-viz guidelines for non-solicitation and confidentiality and keeping and maintaining the confidential information and intellectual properties of the plaintiff. It has been submitted on behalf of the plaintiff that defendant started his employment with the plaintiff with effect from 03.12.2018 and was a part of Human Resource (HR) payroll team which was concerned with the processing of salary pay-outs for the plaintiff company and its group companies and being in the payroll team, the defendant has complete access to data of CTC, salary and contract details for all Digitally signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:46:58 +0530 CS/534/2022 Page 19 of 28 the former and current employees of the plaintiff company and its group companies and defendant also had complete knowledge and access of the pricing strategies including but not limited to pricing discussions and finalization with vendors and third party as well. Counsel for the plaintiff has further argued that with time, defendant grew in the company and also become a part of the senior management being the Associate Vice-President of Human Resource Department.
8.1. Counsel for the plaintiff has further submitted that defendant put his resignation vide communication dated 30.11.2021 whereby he also sought waiver of notice period and the same was accepted and notice period was also waived off and his employment with the plaintiff terminated with effect from 07.01.2022. He further submits that just within two months of resignation of defendant, another employee Mr. Manoj Mahendru working in HR Department as Assistant Manager resigned on 14.03.2022 and thereafter in the month of April 2022, another employee Mr. Juber Khan resigned on 13.04.2022 and in May 2022, another employee Mr. Amar Jeet Kumar Pathak resigned on 31.05.2022 and all the said employees were working in the same team as of the defendant. Resultantly, this created major disruptions in the normal functioning of plaintiff viz-a-viz its day to day affairs and huge amount of time and resources were utilized in again creating a reliable Human Resource team which cost tremendous amount of loss and damage to the company.
8.2. Per contra, counsel for the defendant has argued that Digitally signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:47:04 +0530 CS/534/2022 Page 20 of 28 plaintiff is seeking to enforce obligations post separation of the defendant which is not permissible. He further states that the defendant is a HR professional and by very nature of his profile, he is looking out for suitable persons for various roles and therefore, putting such restrain on the defendant amounts to putting restrain on defendant from exercising his lawful profession and therefore, the said condition is void being violative of Section 27 of the Indian Contract Act.
8.3. It is noted that during the cross examination of defendant appearing as DW1 had admitted that he has signed the documents Mark PW1/3 to Mark PW1/5 and therefore, the contention on behalf of the defendant that the said documents cannot be relied upon since originals were not produced, loses its significance. The contention of the defendant that he was made to sign on the dotted lines without there being any informed consent is also without any basis since the defendant is an educated person (MBA) and prior to joining the plaintiff company, he was working with Hitachi India System Pvt Ltd., and also it has come in his cross examination that he did not made any request to go through the contents of the documents before signing.
8.4. Counsel for the defendant has argued that as six months have expired from the last working day of the defendant when the present suit was filed, the present suit is not maintainable. However, in view of this court, this contention is not sustainable as the time period of breach of agreement has to Digitally signed by MUNISH be seen which eventually give rise to cause of action to file the MUNISH BANSAL BANSAL Date:
2024.12.06 17:47:09 +0530 CS/534/2022 Page 21 of 28 present suit for the breach and the said breach may occur, even after the term of employment has expired and in this regard, relevant would be the terms and conditions of the agreement of employment. The contention that a restrictive covenant extending beyond the term of contract is void under Section 27 of the Contract Act, has to be seen in the light of terms and conditions of the contract. Though defendant has cited Sections 14 and 41
(e) of the Specific relief Act, to contend that since the contract of employment was dependent on personal qualification of the defendant, the said contract cannot be specifically enforced and therefore as per Section 41 (e) injunction also cannot be granted.
However, Section 41 (e) has to be read alongwith Section 42 wherein it is clearly provided that where contract comprises both affirmative agreement to do a certain act coupled with a negative agreement, express or implied not to do a certain act, then if the court is unable to compel the performance of the affirmative agreement, the Court shall not be prevented from granting injunction to perform the negative agreement. Seeing in the light of these provisions, non-solicitation clause, being a negative agreement, which if required in the facts and circumstances, can be enforced by the court.
8.5. Now, the question to be determined is whether solicitation of the aforesaid three employees of the plaintiff company by the defendant has been proved or not.
8.6. In cross examination, DW1 has stated that he was Digitally appointed as C-1, Designation- Senior Manager and was taking signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:47:14 +0530 CS/534/2022 Page 22 of 28 care of entire HR operations of the plaintiff company and that at the time of resignation, he was working as Associate Vice President and in the said role, he had access to general information pertaining to employees. He has denied the suggestion that the above-named three employees were working in the same team as that of him in the plaintiff company, rather states that he was working in the team of HRBP and the said three employees were part of payroll team. On suggestion put up by the plaintiff counsel, he also stated that Mr. Manoj Mahendru was interviewed at Lenskart in August 2021, before his joining but was offered the job after defendant joined the Lenskart.
8.7. On behalf of the plaintiff company, PW1 in his evidence affidavit has deposed on the same lines as pleaded in the plaint. Though copy of the screenshot of the social media profiles of the above mentioned three ex-employees Ex. PW1/10 (Colly) has been tendered in evidence. However, perusal of the same shows nothing to the effect that there was any kind of active or passive persuasion amounting to solicitation on the part of the defendant so as to persuade the above-named three ex-
employees to leave the employment of the plaintiff company. It is well settled that mere assertions of pleadings does not amount to proof and evidence have to be led to prove the pleadings. Though presumption of a certain fact can be taken on the existence of certain other facts, however, such other facts also needs to be proved for the court to take the presumption of the said fact. The plaintiff has merely pleaded in very general terms that since Digitally signed by MUNISH defendant left the plaintiff company and the above- named three MUNISH BANSAL BANSAL Date:
2024.12.06 17:47:20 +0530 CS/534/2022 Page 23 of 28 ex-employees thereafter resigning from the plaintiff company and joining the company (Lenskart) which defendant had joined, it raises a presumption that the above named the ex- employees were solicited by the defendant. Though it is not clear or apparent from the evidence coming forth in the case that the above-named three ex-employees were working in the same team of the defendant in the plaintiff company, without any a reasonable proof indicating direct or indirect solicitation, it cannot be said that there was solicitation of the above named three ex- employees by the defendant. Simply because the ex-employees left the plaintiff company immediately after defendant, does not per se proves solicitation on part of defendant. There is also a possibility that they left on their own choice for better employment prospects and the said possibility has also not been dispelled by the plaintiff.
8.8. It is also worthy to mention herein that in the present era of technological advances, where people are connected with each other through social media platforms, the details of the fellow employees and their employment details are to a large extent available through social media platforms especially catering to the employees and employment. PW1 in his cross examination has admitted to be correct that it is the fundamental right of the employees of the plaintiff to find best employment available to them. Thus, in view of the aforesaid discussion, plaintiff has not been able to prove solicitation of the above-
named three ex-employees of the plaintiff company. Digitally signed by MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:47:25 +0530 CS/534/2022 Page 24 of 28 8.9. Now, the next aspect to be considered is with regard to the disclosure of the confidential information as well as relating to intellectual property of the plaintiff company, by the defendant in violation of the employment letter Mark PW1/3 and other agreements Mark PW1/4 and PW1/5. From the pleadings in the plaint, what is gathered is that apart from very generalized averments that confidential information has been disclosed, misused and losses have been occasioned, there is no specific reference as to what the alleged confidential and proprietary information was and when and in what manner the same has been disclosed and in what manner the same has been used. It has also come in evidence and proved that proper handing over and exit formalities have been done by the defendant. No evidence has been led as to what part of the data comprising of the confidential information/ intellectual property information has been misused by the defendant to the disadvantage of the plaintiff. This Court, as already discussed above, has observed that plaintiff has failed to prove by cogent evidence the solicitation of the aforesaid three employees of the plaintiff by the defendant. Though, it is not in dispute that the plaintiff company as well as the company defendant subsequently joined, are into totally different businesses, however, counsel for the plaintiff has argued that since defendant is a HR professional and therefore, the job profile in the HR department of the various companies is practically the same and confidential information regarding the employees, their addresses, payouts etc. is a vital and confidential information and the same has been misused by the defendant to Digitally signed by the plaintiff's disadvantage. In the opinion of the Court, if one MUNISH MUNISH BANSAL BANSAL Date:
2024.12.06 17:47:31 +0530 CS/534/2022 Page 25 of 28 goes by such submission, it would be practically impossible for a HR employee to seek employment in another organization in the same HR branch/ department, as eventually the said employee would possibly be charged of violating the non-solicitation as well as confidentiality clauses, if any employee, on his own volition, joins the same company. The said employee would not be able to put his past work experience in the HR field to his advantage and for his growth. Thus, the said submission does not incur any advantage to the plaintiff.
8.10. Further, there is no mention of what disadvantage or loss has occurred to the plaintiff by the alleged misuse, if any, of the confidential information/ intellectual property information and there is also no mention of the basis for arriving at the figure of the loss claimed in the present suit. No cosmetic damages can be awarded without any proof, even on the basis of preponderance of probabilities.
8.11. Since the plaintiff has not been able to prove the breach of terms and conditions of the Employment Agreement, Employee Confidentiality Agreement and Intellectual Property Assignment Agreement qua non-solicitation as well as misuse of the confidential and proprietary information of the plaintiff, the plaintiff is held not entitled to any damages. In view of the aforesaid discussion, this issue is decided against the plaintiff.
Issue No. (c) Digitally signed by Whether the Plaintiff is entitled for a decree of permanent MUNISH BANSAL MUNISH BANSAL Date:
2024.12.06 injunction restraining the Defendant from soliciting the 17:47:38 +0530 CS/534/2022 Page 26 of 28 employees of the Plaintiff? OPP
9. The onus to prove this issue was on the plaintiff. At the very outset during final arguments, counsel for plaintiff states that she is not pressing on the said issue and the relief based on said issue prayed for in the plaint. The reason is obvious. The appointment letter provides for non-solicitation clause for a period of 6 months after termination/ dismissal of employment and since as the defendant was relieved on 07.01.2022, the said 6 months period expired on 07.07.2022 while the suit has been filed on 26.07.2022 and therefore, the said clause had ceased to operate.
This issue is accordingly, decided against the Plaintiff as not pressed for.
Issue no. (d) Whether the Plaintiff is entitled for a decree of permanent injunction restraining the Defendant disclosing of confidential information of the Plaintiff? OPP.
10. The onus to prove this issue was on the Plaintiff. As observed above, solicitation on part of the defendant has not been proved by the plaintiff. From the pleadings in the plaint, it is apparent that apart from very generalized averments that confidential information has been disclosed, misused and losses have been occasioned, there is no specific reference as to what the alleged confidential and proprietary information was and when and in what manner the same has been disclosed and in what manner the same has been used. It has also come in Digitally signed by MUNISH MUNISH BANSAL evidence and proved that proper handing over and exit BANSAL Date:
2024.12.06 17:47:43 +0530 CS/534/2022 Page 27 of 28 formalities have been done by the defendant. No evidence has been led as to what part of the data comprising of the confidential information/ intellectual property information has been misused by the defendant to the disadvantage of the plaintiff. Defendant is a HR professional and the job profile in the HR department of the various companies is practically the same and therefore, the relief of permanent injunction restraining the Defendant disclosing of confidential information of the Plaintiff, would practically amount to blanket injunction restraining the defendant to carry on his lawful profession as a HR professional, moreso, in light of above facts and circumstances when no specific detail of the data constituting the confidential information and out of the said information, what has been misused to the disadvantage of the plaintiff, has been brought on record. The said injunction, if granted, would result in unnecessary and unreasonable restriction amounting to violation of section 27 of the Indian Contract Act. This issue is accordingly, decided against the Plaintiff.
Relief
11. In view of the above discussion, this suit of the Plaintiff is Dismissed. No orders as to cost. Decree-sheet be prepared accordingly.
Digitally signedFile be consigned to record room. by MUNISH MUNISH BANSAL Date:
BANSAL 2024.12.06 Announced in the Open Court 17:47:50 +0530 on 06.12.2024 (Munish Bansal) District Judge-03 South District: Saket Courts New Delhi CS/534/2022 Page 28 of 28