Delhi High Court - Orders
Muthoot Finance Limited vs Shalini Kalra & Ors on 13 September, 2021
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~21
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 431/2021
MUTHOOT FINANCE LIMITED ..... Plaintiff
Through Mr. Krishnan Venugopal,
Senior Advocate and Mr. Vivek Chib,
Senior Advocate with Mr. Kuriakose
Varghese, Mr. V. Shyamohan, Mr. Surya
Prakash, Mr. Shivendra Singh and Ms.
Anisha Mathur, Advocates
versus
SHALINI KALRA & ORS. ..... Defendants
Through
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
ORDER
% 13.09.2021
(Video-Conferencing)
IA 11715/2021 (Section 151 CPC for exemption)
1. Subject to the plaintiff filing legible copies of any illegible and dim documents on which it may seek to place reliance within a period of four weeks from today, exemption is granted for the present.
2. The application is disposed of.
CS(COMM) 431/2021 & IA 11714/2021 (Order XXXIX Rules 1 and 2 CPC) Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 1 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13
3. The plaintiff is a non-banking financial institution, providing personal and business loans, secured against deposit of gold jewellery. In the very nature of its business, the plaintiff has to maintain confidential and proprietary information relating to its clients and customers, which it maintains in the form of a database.
4. The plaint asserts that this database constitutes an original "literary work" in terms of the Copyright Act, 1957. Prima facie, this submission has substance, in view of the definition of "literary work", as contained in Section 2(o) of the Copyright Act, 1957, which reads thus:
"Section 2(o): "literary work" includes computer programmes, tables and compilations including computer databases"
5. It is also asserted, in the plaint, that the aforesaid confidential information and the database on which it is maintained by the plaintiff constitute tradesecrets of the plaintiff, which cannot be divulged to any third party.
6. Defendant No. 1 to 4 are former employees of the plaintiff and Defendant No. 5, it is stated, is a company engaged in providing financial services, similar to those provided by the plaintiff.
7. Defendant Nos. 1 to 4, at the time of joining employment with the plaintiff, were bound by the covenants of their Appointment Letters, and also undertook to abide by the Honor Code of the plaintiff, apart from which they subscribed to a Declaration of Fidelity Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 2 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13 and Secrecy. These documents have been placed on record, for each individual defendant.
8. The plaint alleges that, during the course of their employment with the plaintiff, the Defendant Nos. 1 and 4 illegally and unauthorisedly downloaded, copied, extracted and transmitted the confidential information relating to the plaintiff's customers and clients to Defendant Nos. 2 and 3 and other employees of Defendant No. 5. This information, it is alleged, is being used by Defendant No. 5 to further its business to the prejudice of the business of the plaintiff. There is, it is further alleged, commonality of the customer base between the plaintiff and Defendant No. 5, some of the customers of the plaintiff have now diverted to Defendant No. 5.
9. In support of these allegations, the plaint avers that on 30th October, 2017, Defendant No. 1, downloaded, copied and extracted the customers list and the confidential and proprietary information, of the plaintiff's customers, belonging to the plaintiff and forwarded the said information from her official email ID to her personal email ID. From here, it is alleged that the said information was forwarded to Defendant No. 2, at Defendant No. 2's email ID, [email protected].
10. On 9th November, 2017, Defendant No. 1 resigned the employment of the plaintiff.
11. On coming to know of the above transgressions by Defendant Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 3 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13 No. 1, the plaintiff lodged a criminal complaint against Defendant No. 1 at PS Rani Bagh on 11th and 17th November, 2017 and, on 16th November, 2017, terminated her employment. It is stated that, thereafter, Defendant No. 1 joined the employment of Defendant No. 5.
12. Defendant No. 2 and Defendant No. 3 were appointed as Customer Care Executive and Accounts Assistant in various branches of Plaintiff.
13. The plaint further alleges that, during the course of his employment with the plaintiff, between 1st November, 2017 and 4th November, 2017, Defendant No. 3 illegally downloaded, copied and extracted the confidential and proprietary information belonging to the plaintiff's customers, from his official email ID, and transmitted it to third party outside the office after forwarding the information to the ID [email protected].
14. On 12th December, 2017, the plaintiff terminated the services of Defendant No. 3, whereafter Defendant No. 3 joined employment with Defendant No. 5.
15. Further criminal complaint was lodged by the plaintiff with the Joint Commissioner of Police, Crime Branch, New Delhi against Defendant Nos. 1 to 5 on 27th November, 2017. Preliminary investigation resulted, following which FIR 59/2018 was registered against the defendants under Section 66 of the Information Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 4 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13 Technology Act, 2000, at PS Special Cell (Economic Offences Wing, Mandir Marg) on 11th May, 2018. Investigations, consequent thereupon, are stated to be in progress.
16. Apropos Defendant No. 4, the plaint asserts that Defendant No. 4 was working at the Mubarakpur Dabas Branch of the plaintiff and that, on 27th February, 2019, Defendant No. 4 gained access to the confidential information of 384 customers of the plaintiff by extracting the said information from the KYC (Know Your Customer) register maintained by the plaintiff. This information, it is alleged, was sent by Defendant No. 4 through his phone to Defendant No. 3, who by then, was an employee of Defendant No. 5, against monetary recompense. Defendant No. 4 was later intercepted, whereupon it is alleged that he admitted the above transgression, receipt of monetary consideration and the fact that he had clicked photographs of the KYC register of the plaintiff and forwarded it to Defendant No. 3 via the whatsapp application.
17. Consequent thereon, the plaintiff terminated the employment of Defendant No. 4 and, later, lodged a criminal complaint against Defendant No. 4 at PS Prem Nagar on 27th February, 2019. A copy of the complaint was also forwarded, by the plaintiff, on 5th March, 2019, to the Investigating Officer investigating FIR 59/2018 supra.
18. It is further alleged that similar instances of divulging of the plaintiff's confidential information by the defendants were espied at other branches of the plaintiff. In the process, it is alleged that the Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 5 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13 defendants have purloined the list of gold loan customers of the plaintiff by securing illegal access to the plaintiff's data and computer resources. This, it is further asserted, has resulted in a loss to the plaintiff, till date, of approximately ₹ 9 crores.
19. On 19th August, 2021, the plaintiff lodged FIR 22/2021 at PS Special Offences and Cyber Crime, Jaipur Police under Sections 408 and 120-B of the Indian Penal Code, 1860 (IPC) read with Sections 43, 66, 72 and 72A of the Information Technology Act, 2000.
20. As a result of the information, thus, illegally obtained, it is stated that Defendant No. 5 is "poaching" the plaintiff's customers and employees. It is also alleged that various complaints have been received, by the plaintiff, from its customers, in the above connection. At page 216 of the documents filed with the plaint, the plaintiff has provided a list of the customers in Delhi, who have shifted their accounts from plaintiff to Defendant No. 5.
21. It is in these circumstances, the plaintiff has moved this Court, for a decree of permanent injunction, restraining the defendants and any person acting through them, with the following prayers:
"a) A decree for permanent injunction restraining the Defendants and any person acting through them including employees, relatives, partners, directors, agents, consultants, representatives, assigns, heirs, successors and all others (by whatever nomenclature called) acting for, or on behalf of the Defendants from disclosing or using in any manner whatsoever, directly or indirectly, any confidential information, trade secrets or any other information pertaining Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 6 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13 to the business and operations of the Plaintiff Company including but not limited to and ancillary purposes or for any purpose whatsoever;
b) A decree for permanent injunction restraining Defendants and any person acting through them including employees, relatives, partners, directors, agents, consultants, representatives, assigns, heirs, successors and all others acting (by whatever nomenclature called) for or on behalf of the Defendants from using any nature of proprietary content, including copyright and other intellectual property rights of the Plaintiff Company or doing any acts or deeds that will infringe the Plaintiff Company's copyrights;
c) A decree for permanent injunction restraining Defendants and anybody acting through them including employees, relatives, partners, directors, agents, consultants, representatives, assigns, heirs, successors and all others acting for or on behalf of the Defendants from directly or indirectly approaching or soliciting any customer of the Plaintiff Company;
d) A decree for permanent injunction restraining Defendants and anybody acting through them including employees, relatives, partners, directors, agents, consultants, representatives, assigns, heirs, successors and all others acting for or on behalf of the Defendants from directly or indirectly, unlawfully approaching, luring or inducing or encouraging any employee to quit the employment (in contravention of the binding contract/covenant) of the Plaintiff Company or to join any business of the Defendants or anyone acting for them;
e) A decree for damages of Rs.2,00,01,000/- payable to the Plaintiff Company jointly and severally by all the Defendants together with interest thereon at the rate of 18% per annum till the date of payment;
f) An order of Mandatory Injunction against the Defendants and/or their agents, servants, assigns, officers, representatives and/or nominees to deliver up all confidential information, trade secrets, data pertaining to the Plaintiff Company and its business and operations and all information/materials in which the Plaintiff Company's copyrights subsist, stored in any manner or form whatsoever;Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 7 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13
g) For the costs of the suit;
h) For such other reliefs as the nature and circumstances
of the case may require."
22. Alongside the suit, the plaintiff has also filed IA 11714/2021, seeking interlocutory injunctions. The prayer clause in the application read thus:
"In the facts and circumstances mentioned herein above, the Plaintiff Company most respectfully pray that this Hon'ble Court may graciously be pleased to:
a) Pass an injunction in favour of the Plaintiff Company and against the Defendants restraining the Defendants and/or any person acting through them including employees, relatives, partners, directors, agents, consultants, representatives, assigns, heirs, successors and all others acting (by whatever nomenclature called) for or on behalf of the Defendants from disclosing or using in any manner whatsoever, directly or indirectly, any confidential information, trade secrets or any other information, pertaining to the business and operations of the Plaintiff Company;
b) Pass an injunction in favour of Plaintiff Company and against the Defendants restraining the Defendants and/or any person acting through them including employees, relatives, partners, directors, agents, consultants, representatives, assigns, heirs, successors and all others acting (by whatever nomenclature called) for or on behalf of the Defendants from using proprietary content of any nature, including copyright and other intellectual property rights of the Plaintiff Company or doing any acts or deeds that will infringe/dilute the Plaintiff Company's intellectual property rights;
c) Pass an order restraining Defendant Nos. 1 to 4 Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 8 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13 from using or revealing any confidential information obtained illegally or otherwise during the course of employment with the Plaintiff Company in future to any other third parties or for their own purposes.
d) Pass an order to freeze the bank accounts of Defendant No. 5 to the extent of Rs.2,00,01,000/-
during the pendency of the present suit.
e) Pass ad interim ex-parte injunction and orders in terms of prayer clause (a), (b) and (c) above;
f) Pass such other and further order(s) as this Hon'ble Court may deed just, fit and proper in the facts and circumstances of the case in favour of the Plaintiff Company."
23. In the circumstances, issue summons in the suit to the defendant, returnable on 12th November, 2021 before the Joint Registrar for completion of pleadings, admission and denial of documents and marking of exhibits.
24. Written statement, if any, be filed within a period of four weeks accompanied by an affidavit of admission and denial of the documents filed by the plaintiff with advance copy to learned counsel for the plaintiff, who may file replication thereto, if any, within a period of two weeks thereof accompanied by an affidavit of admission and denial of the documents filed by the defendant.
25. Issue notice in IA 11714/2021, returnable before the Court on 18th November, 2021. Till the next date of hearing, there shall be an ad interim injunction against the defendants, in terms of prayers (a) to (c) in the application.
Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 9 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:1326. The plaintiff is directed to comply with the provisions of Order XXXIX Rule 3 of the CPC within the time stipulated in that regard. Compliance for the present may be made by electronic means.
C. HARI SHANKAR, J.
SEPTEMBER 13, 2021 r.bararia Signature Not Verified Digitally Signed CS(COMM) 431/2021 Page 10 of 10 By:SUNIL SINGH NEGI Signing Date:16.09.2021 21:36:13