Indian Kanoon - Search engine for Indian Law

Delhi High Court - Orders

Ripple Effect Learning Solutions Pvt. ... vs Vikas Ahlawat on 2 June, 2022

Author: Prateek Jalan

Bench: Prateek Jalan

                          $~18
                          *    IN THE HIGH COURT OF DELHI AT NEW DELHI

                          +     O.M.P.(I) (COMM.) 178/2022

                                RIPPLE EFFECT LEARNING
                                SOLUTIONS PVT. LTD.                     ..... Petitioner
                                              Through: Mr. Ekansh Bansal, Mr. Rajat
                                                       Arora & Ms. Renu Bhandari,
                                                       Advocates.

                                                           versus

                                VIKAS AHLAWAT                                    ..... Respondent
                                            Through:            Mr. Ankur Mahindro, Mr. Abhinav
                                                                Garg, Mr. Arjun Narang & Mr.
                                                                Rohan Taneja, Advocates.
                          CORAM:
                          HON'BLE MR. JUSTICE PRATEEK JALAN
                                            ORDER

% 02.06.2022 I.A. 9211/2022(exemption) Exemption allowed, subject to all just exceptions. The application stands disposed of.

O.M.P.(I) (COMM.) 178/2022

1. By way of this petition under Section 9 of the Arbitration and Conciliation Act, 1996 ["the Act"], the petitioner seeks interim measures of protection, pending arbitration proceedings for the adjudication of disputes between the parties under an agreement dated 10.06.2021.

2. The petitioner is engaged in the business of providing coaching classes to candidates for the Civil Services Examination. By the aforesaid agreement, the respondent agreed to provide classes in History to the Signature Not Verified Digitally signed O.M.P.(I)(COMM.) 178/2022 Page 1 of 5 By:SHITU NAGPAL Signing Date:03.06.2022 19:15:20 petitioner's students. The consideration payable to the petitioner is enumerated in Clause 7 of the agreement. The termination clause is provided in Clause 12, which is in the following terms:-

"12 TERMINATION AND ITS CONSEQUENCES 12.1 It is agreed by both the Parties that for the first 3 (Three) years of the operation of this instant agreement, any of the Parties shall not be entitled to terminate this instant arrangement in any manner.

12.2 In the event of breach of the terms and conditions stipulated herein, the Parties may terminate this Agreement by giving a written notice under clause 12.1 to the party at fault in the event the Party at fault is unable to rectify the breach within 2 months from the date of receipt of the breach notice.

12.3 Upon the termination of this Agreement either by way of efflux of time or prior termination of the Agreement, both the Parties shall ensure the due completion of the Program for all· the Students who have already enrolled in the ongoing batches including announced batches for the Program. Further in case of notice by the Second Party in terms of clause 12.2 all fresh enrolments even during the notice period shall be served by second party.

12.4 On the termination of this Agreement, the Second Party shall cease to use and return the Intellectual Property Rights or Confidential information of the First Party.

12.5 Upon termination of this agreement the First Party shall be free to use the classes, lecture videos/content/notes of the Second Party for the services to students as enrolled during the validity of this instant Agreement including notice period.

12.6 It is agreed by the Second Party that in case of termination of this instant agreement, in any manner whatsoever, the Second Party shall not whether directly or indirectly approach/hire/associate/employ /have any business relations, whether directly or indirectly, with any past/present licensee, business associate, employee, retainer, third party resource of the First Party, serving on the date of notice as served by any Party to this Agreement in compliance of the terms of this Agreement, with the intent of employing their services in competition with the businesses of First Party. It is agreed by the Second Party that in case of breach by Second Party to the terms of this clause including other terms of this Agreement, the Second Party shall be liable to pay/compensate/indemnify to First Party with all losses and damages, be that the same be direct or indirect consequences to the acts/omissions by the Second Party.

12.7 The Parties shall continue to abide by such terms of the Agreement that are intended to survive its Term or termination. And in no case termination will impact the students already enrolled for the course."

3. In clauses 13.3 and 13.4 of the agreement, the parties have provided for arbitration of disputes [barring disputes arising out of intellectual property rights and of the breach of confidentiality], and for the jurisdiction of the courts in New Delhi.

4. The facts, as pleaded in the petition, are that the respondent has alleged non-paid of consideration in terms of the agreement, and therefore, invoked the arbitration clause by way of a communication from counsel dated 10.05.2022, from the respondent to the petitioner. By the same communication, the respondent purported to terminate the agreement also.

5. Mr. Ekansh Bansal, learned counsel for the petitioner, submits that the termination is not in terms of Clause 12 of the agreement, inasmuch as the respondent was obliged to await the lapse of the rectification period of two months provided in Clause 12.2 of the agreement, before terminating the agreement. Learned counsel further submits that the respondent, after purporting to terminate the agreement, has set up a competing institution, and has approached its employees, as well as its students for availing the services of the new institution. He relies upon Clause 12.6 extracted above to submit that the respondent's actions in approaching the business associates, employees, retailers and third party resources of the petitioner are liable to be injuncted at this stage. He further submits that the respondent is also not entitled to solicit the petitioner's students for his business venture.

6. Mr. Ankur Mahindro, learned counsel, appears on advance notice on behalf of the respondent, and submits that respondent is agreeable to reference to arbitration in these proceedings, and the question of interim measures may be left open for consideration before the learned Arbitrator. He further submits that the respondent has not, and will not, act in any manner, violative of Clause 12.6 of the agreement.

7. Mr. Bansal is also agreeable to a reference to arbitration being made in these proceedings itself, and requests that the present petition be treated as an application under Section 17 of the Act before the learned Arbitrator.

8. Having heard learned counsel for the parties, and with their consent, the petition is disposed of with the following directions:-

a. Hon'ble Mr. Justice Manmohan Singh, a former Judge of this Signature Not Verified Digitally signed O.M.P.(I)(COMM.) 178/2022 Page 4 of 5 By:SHITU NAGPAL Signing Date:03.06.2022 19:15:20 Court [Mobile No.:- 9717495001] is appointed as the arbitrator to adjudicate the respective claims and counter claims of the parties. b. The arbitration will be held under aegis of the Delhi International Arbitration Centre, Delhi High Court, Shershah Road, New Delhi. c. The fee of the Arbitrator will be computed in accordance with Schedule IV of the Act.

d. The present petition will be treated as an application under Section 17 of the Act, and be placed before the learned Arbitrator for further directions. Learned counsel for the petitioner may approach the learned Arbitrator for expeditious disposal of the Section 17 application, which the learned Arbitrator may consider.

e. For the present, the respondent is bound down to the statement made on his behalf, recorded in paragraph 6 above. f. It is made clear that this Court has not entered into the merits of the controversy between the parties, and the parties are free to approach the learned Arbitrator for such interim orders, as they may consider appropriate. The ad interim directions contained in this order may also be varied, vacated or modified by the learned Arbitrator.

9. The petition is disposed of with these observations.

10. A copy of the order also be given dasti.

PRATEEK JALAN, J JUNE 2, 2022 'pv'/ Click here to check corrigendum, if any Signature Not Verified Digitally signed O.M.P.(I)(COMM.) 178/2022 Page 5 of 5 By:SHITU NAGPAL Signing Date:03.06.2022 19:15:20