Delhi District Court
M/S Stonex India Pvt. Ltd vs Ms. Sakshi Bhardwaj on 15 December, 2021
IN THE COURT OF SH. VINOD KUMAR GAUTAM
ADJ-07 (WEST DISTRICT) : DELHI
Suit No. 758/19
M/s Stonex India Pvt. Ltd.
D-176, Mansarover Garden,
New Delhi - 110015.
(Through AR Sh. Amresh Kumar Jha) ..........Plaintiff
Versus
Ms. Sakshi Bhardwaj
D/o Mr. Ashok Kochhar
29D, Evershine Appartments,
D-Block, Vikaspuri, West Delhi- 110018. ........Defendant
Date of filing of the suit : 14.10.2019
Date of reserving judgment : 11.10.2021
Date of pronouncement of judgment : 15.12.2021
EX-PARTE JUDGMENT.
1.The present suit has been filed by the plaintiff for damages of Rs. 3,17,162/- which includes principal amount of Rs.3,00,000/- and pendente lite interest @ 18% per annum Rs. 17,162/- up to 31.07.20219.
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2. Brief facts of the case are that the plaintiff is a company registered under the Companies Act 1956 and is engaged in the business of supply and trading of the imported Marbles, Composite Marbles, Marbles Granites and other kinds of stones/flooring etc. The present suit has been instituted and verified by Sh. Amresh Kumar Jha, who is authorized representative of the plaintiff company. The defendant was a employee of the plaintiff company and was working as Manager Showroom since 22.08.2016. The defendant also entered into service agreement dated 08.04.2018 with the plaintiff company. It was agreed by the defendant that she shall not leave the company before three years from the date of signing of the agreement and that the defendant would not participate directly or any other business or employment or vocation. The salary of the defendant at the time of resignation was around Rs.70,000/- excluding incentives. It is submitted that the plaintiff company is a market leader in the field of trading of marble, Granites, tiles etc., and in order to capture the market the plaintiff company used to conduct various innovative training programs from time to time for their employees to make them skillful in their respective fields and the defendant agreed to participate in such training programs on Sales and Marketing, Technical Skills and personality grooming training. It is further submitted that on 14.03.2019, the defendant sent her formal resignation to the plaintiff company through e-mail. It is further submitted that the plaintiff was shocked and surprised on her resignation as the plaintiff has invested a lot in her in different seminars and programs for her professional development etc. It is further submitted that the defendant after resignation, joined and resumed her services with the competitor company of the plaintiff in contravention of the clauses 3 and 4 of the service agreement. It is further submitted that the defendant has breached the conditions of the clauses 2, 3 M/s Stonex India (P) Ltd. vs Sakshi Bhardwaj Suit No. 758/19 Page No. 2 of 6 and 4 of the said agreement and is liable to pay Rs.3 lacs along with pendente lite interest @ 18% up to 31.07.2019. The plaintiff also sent a notice dated 15.04.2019 to the defendant for claim of damages for breach of service contract to which the defendant sent reply dated 03.05.2019. The plaintiff also made replication dated 27.05.2019 to the defendant's reply dated 03.05.2019. Hence, the plaintiff filed the present suit.
3. Summons of the suit was served upon the defendant. Initially, the defendant appeared with her Counsel but no written statement was filed by her. Thereafter, the defendant failed to appear in the present case. The defendant was proceeded ex-pare vide order dated 26.02.2020.
4. In order to prove its case, the plaintiff company got examined its Authorized Representative, Sh. Amresh Kumar Jha, as PW-1, who has tendered his affidavit in evidence as Ex.PW1/A and has proved his signatures at points 'A' and 'B' therein. He has also reiterated the case of the plaintiff and has relied upon the following documents:
1. Board Resolution as Ex. PW1/1.
2. Copy of service agreement as Ex. PW1/2 (OSR).
3. E-mail regarding resignation mailed by the defendant to the plaintiff as Ex. PW1/3.
4. Certificate under Section 65-B of Indian Evidence Act as Ex.
PW1/4.
5. Copy of replication and reply as Mark A and B. Ex-parte plaintiff evidence was concluded and closed.
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5. I have heard learned Counsel for the plaintiff and have gone through the record.
6. It is a settled law that for the validity of the contracts containing restrictive covenants, the organization has to show that it has spent significant resources on personnel training or skills enhancement of the employee. In a case titled as "Toshnial Brothers (Pvt.) Ltd., vs E Eswarprasad & Ors.", it has been held by the Hon'ble Madras High Court that the existence of a legal injury accruing as a consequence of breach is a pre-requisite for claiming liquidated damages in accordance with Section 74 of Indian Contract Act, 1872. In other words, the employer must show a legal injury automatically resulting from the breach of the commitment to serve for a minimum period. It was further observed with respect to arising of presumption of legal injury as follows "where the employer or the management concerned was shown to have either incurred any expenditure or involved itself into financial commitments to either give any special training either within the country or abroad or in having conferred any special benefit or favour to the detriment of the claimant in favour of the violator involving monetary commitments."
7. Therefore, it is clear from the above decision for enforceability of the employment bonds, the employer must prove that the employer has actually spent money on the employee and the employee was the beneficiary of special favour or training or concession at the expense of the employer. Otherwise, actual injury accruing as a result of the breach would have to be proved. It is also a settled law that the liquidated damages must not be in the nature of penalty.
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8. Now, coming to the present case, the plaintiff has failed to prove that it has incurred any such expenses towards the training of the defendant for the upgradation of technical skills or for personality grooming training programs for the defendant. The plaintiff has not led any evidence to prove that the plaintiff has provided such training to the defendant on particular period of time or what was the training module or schedule and by whom such training was imparted. The plaintiff has not filed any document to show any such training was imparted to the defendant nor the same has been proved on record. The plaintiff has even not specified as to what was the exact amount of expenses incurred by it for imparting any such training to the defendant.
9. Section 27 of the Contract Act, 1872, prohibits a contract that debars an employee from carrying on an employment with a competitor after serving an employer, with whom the employment bond has been signed. The same preposition of law has been affirmed in a case titled as "High Polymers Labs Pvt. Ltd. Vs R. K. Mutreja, ILR 1983 Delhi 213 and in case titled as "Le Passage to India Tours vs Deepak Bhatnagar, decided by Hon'ble High Court of Delhi". In case titled as "Pepsi Foods Ltd. Vs Bharat Coca Cola Holdings (P) Ltd.", it has been held by the Hon'ble High Court of Delhi that a negative covenant that restrained employees from undertaking employment for 12 months after they left the plaintiff's service amounted to a violation of Section 27 of Indian Contract Act, 1872. It was further held that such contracts are unenforceable, void and against public policy.
10. Therefore, the In view of my above discussion, the plaintiff is not entitled to any relief and the present suit is hereby dismissed.
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11. Decree sheet be prepared accordingly.
12. File be consigned to Record Room.
Announced in the open Court today on 15th December, 2021 (VINOD KUMAR GAUTAM) ADJ-07 : WEST DISTRICT TIS HAZARI COURTS, Delhi Digitally signed by Vinod Vinod Kumar Gautam Kumar Date:
Gautam 2021.12.15
16:48:14
+0530
M/s Stonex India (P) Ltd. vs Sakshi Bhardwaj
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