Delhi District Court
M/S Amadeus India Pvt. Ltd vs M/S Easy Trip Planners Pvt. Ltd on 12 March, 2014
IN THE COURT OF SHRI A.S. JAYACHANDRA: ADDITIONAL
DISTRICT JUDGE-I: SHAHDARA DISTRICT: KARKARDOOMA
COURTS: DELHI.
MCA No.18/2013
Unique I.D No. 02402C0374492013
M/s Amadeus India Pvt. Ltd.
A Company Incorporated Under
the Indian Companies Act 1956
having its registered office at
E-9, Connaught House,
Connaught Place, New Delhi-110001
Through its Authorised Attorney,
Ms. Kriti Wadhawan
( By ld. counsel Shri R. K. Mehta) ............... Appellant
Versus
1. M/s Easy Trip Planners Pvt. Ltd,
registered office at 460, First and
Second Floor, F.I.E. Patparganj,
Industrial Area, New Delhi-110068
2. Shri Nishant Pitti,
Director
M/s Easy Trip Planners Pvt. Ltd,
Registered Office at 460, First and
Second Floor, F.I.E. Patparganj,
Industrial Area, New Delhi-110068 ........ Respondents
( By ld. Sr. Counsel Shri Amit chadda
a/w Shri Vivek Sarin, advocate)
Date of Institution : 20.11.2013
Order reserved on : 11.03.2014
Order passed on : 12.03.2014
ORDER
1. This is an appeal under Order 43 Rule (1) (r) of CPC. The plaintiff in the trial court is aggrieved by the order dated 25.10.2013 in C.S. No. 258/2012 on the files of Ld. ASCJ, Shahdara District wherein the application filed by the plaintiff under Order 39 rr 1 & 2 of CPC was dismissed without any costs.
MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page1/11
2. The plaintiff had sought for an ad interim injunction against the defendants seeking restraining them from using any other GDS of a third party other than that of the plaintiff. The suit of the plaintiff was for a perpetual and mandatory injunction against defendant no.1-company and its director the defendant no.2.
3. The grounds urged in this appeal is that the findings of the trial court is based on surmises, conjectures and on whimsical grounds and is liable to be set aside. It is the respondent who approached the appellant for enhancement of business and agreement provided for injunctions as per clause 7.5. The grounds of appeal also quoted a judgment of our Hon' High Court in Frank Simoes Advertising Pvt. Vs. Hada Leasing 35 ( 1998) DLT 283, and other rulings reported in AIR 1967 SC 1098, AIR 1995 SC 2372. It also contended that there are admissions by the other side in para 9 of written statement and that the findings of the trial court that the appellant did not pay the incentive is contrary to record. The review period provided in the agreement is misunderstood. The ld. court below mistook the words "block of six months" as found in the agreement. The ld. court below had not properly applied the provisions of section 27 and 42 of the Specific Relief Act. There are factual errors in the order of the court below.
4. Notices were ordered on this appeal. The trial court records were required. Respondent appeared through the counsel. Heard MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page2/11 the arguments of ld. counsel on either side.
5. The ld. counsel Shri R. K. Mehta appearing for the appellant has taken pains to urge that the ld. court below had misread the agreement, the correspondence and the terms contained in the agreement. Had there been a proper application of mind, the ld. court below ought to have granted the relief of temporary injunction. He relied on:
a. Niranjan Shankar Golikari Vs. Century Spinning AIR 1967 SC 1098 to urge that " negative covenants operative during the period of contract of employment are generally not regarded as restraint of trade and therefore do not fall under Section 27 of the Contract Act. He further submits that by the ruling, it is held that the courts have wide discretion to enforce injunction in a negative covenant.
b. He also relies on Gujarat Bottling Company Vs. Coca Cola Company AIR 1995 SC 2372 to urge that excepting the cases where the contract is one sided, the doctrine of restraint of trade is not attracted where the restriction is to operate during the subsistence of agreement.
c. In Frank Simoes ( quoted in the grounds of appeal), our Hon' High court granted injunction where the plaintiff has made out a case for enforcement of negative agreement.
6. On the other hand, the ld. Senior counsel Shri Amit Chaddha MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page3/11 assisted by Shri Vivek Sarin submits that the words used in the agreement have been properly understood by the court below. He submits that words upfront means the advance incentive. He further submits that for evaluating the concept of prima facie case, in this particular situation is to be viewed from the common trade practices in the field and the manner in which such contracts are operated. The correspondence between the parties and the agreement if read in the context of common trade practice, any common man would come to a conclusion that the plaintiff was in default. Therefore no prima facie case is made out. He also vehemently submits that the suit itself is not maintainable in view of Section 14 (1) (c & d) of the Specific Relief Act. Thus, he submits that the injunction was rightly denied as not being in consonance with the main prayer. He further submits that the agreement is terminated as per clause 8.2 (II) for non payment by the plaintiff and therefore the agreement is not in force. Page no. 55 of the documents produced by the defendant before the trial court had spoken of about a new proposal for fresh modalities to be worked out. The agreement is itself breached by the acts of plaintiff. The respondent prays for dismissal of the appeal.
7. In the wake of rival submissions, the only question that arises for determination in this appeal is ' whether the order of the ld. court below is perverse, opposed to law and not justified in the MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page4/11 circumstances of the case or not?'.
8. For answering the above question, apart from keeping in mind the arguments advanced, the entire record summoned is perused. The defendant in the trial court has filed voluminous records of correspondence under E-mails between the parties.
9. The grant of injunctions is discretionary and the principles governing the grant of same are the matter of common prudence. The principles are pithily stated by the concepts of prima facie case, the balance of convenience and the loss and hardship.
10. It is the case of the plaintiff before the court below, that the plaintiff company offers Global Distribution System (GDS) round the clock to travel agents. They have developed the GDS which the defendant company undertook to employ in its operations while booking the air tickets which are termed as "segments". The plaintiff company offers a consideration to its subscriber (defendant) a sum of Rs. 1 crore at the time of the agreement which is called 'upfront incentive' for booking the tickets at the minimum of 90,000 segments in every review period. If the subscriber failed to book this minimum segments, the plaintiff is entitled for liquidated damages. The review period is mentioned as a block of every six months at clause-I. The ld. counsel for the appellant submits that they have paid the advance amounts and that in violation of the agreement, the defendant had resorted to MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page5/11 use some other system and are contemplating to carry out their business with a third party while the agreement is still in force. The prayer of the plaintiff in the trial court is for perpetual injunction restraining them from using any other GDS other than that of the plaintiff and a perpetual injunction restraining them from shifting to some other GDS other than that of the plaintiff and for a mandatory injunction to use the GDS of plaintiffs only.
11. The ld. court below after going through the entire material available on record had come to the conclusion that the plaintiff had not made out a prima facie case for grant of injunction and if at all there being a remedy the plaintiff may file a suit for damages. It is also felt that the plaintiff has offered the number of segments which the defendant had utilized more than the prescribed quantity intimating the plaintiff through its E-mails dated 31.5.2012, 01.06.2012, 06.06.2012 to 08.06.2012 and 28.07.2012. Therefore, the ld. court below came to the conclusion that the balance of convenience lies in favour of the defendant.
12. In order to find the balance of convenience as to in whose favour it lies, this court has once again perused the trial court records, the various E-mails furnished on record. The ld. Sr. Counsel submits that from the E-mails, it could be understood that the plaintiff had not paid the agreed incentives from time to time regularly and that the plaintiff had breached the agreement. From MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page6/11 E-mails found on the trial court record dated 21.1.2011, the plaintiff himself has returned to the defendant no.2-Shri Nishant Pitti that "
below are stats. We will be able to finish the complete advance loyalty front by mid Feb-2012 ( on present numbers/elc January-2012 end, if numbers improve). Once the present advance loyalty incentive upfront gets utilized as discussed between us, we will work on the new up front and the modalities associated with it. It also state as per the new agreement stats are intimated. It is also forthcoming from the E-mail by the plaintiff at page 60 of theE- mails produced in the trial court notes " below are your June, 2011 and July, 2011 final net productivity numbers. You have utilized 54 lacs in two months. At this rate you will finish the entire up front by September, 2011 and (or mid) I can than process for next up front in October, 2011 (once I have access to final net productivity)". By this E-mail, it is clear that the defendants have been glutton some and were working in quick succession which had broken the review period also. Such breaking of the review period is also in the knowledge of the plaintiff who appreciated to fix next up front from October, 2011 since the earlier up front period was finished by September, 2011.
13. Another E-mail dated 20.9.2011 by the plaintiff himself recognizes that till August-2011 productivity, EMT still needs to burn 20 lac odd INR (i.e. which I am sure you will be able to burn MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page7/11 with September-2011 productivity).
14. It is also seen from the record that the defendant no.2 by his E-mail dated 18.09.2011, had mentioned that their upfront had been exhausted and requested for process of upfront of 2 crores this time since they require additional funds for marketing the activities of B 2C.
15. It is seen from the documents namely the E-mail sent by the defendant no.2 to the plaintiff that by 25.04.2012, it is mentioned that " if you are not able to make the payments in May month even Pl clear the same in a day or two so that we can arrange alternate funds which you had committed in April month". This E-mail also said that the defendants have reduced the number of segments since they have been not paid from February-2012 and that the plaintiff was obligated to provide 8 -10 months advance as per their need and that the payments are due with the plaintiff for February to April pending. This E-mail is to be understood in the context of the parties with regard to their conduct of business between them. It is clear from the E-mail dated 21.12.11, there was proposal between the parties for new modalities to be worked out. The agreement between the parties provides for termination of the contract also, though the agreement is for three years. Clause 8.2 provides for termination of the agreement during the contract period under some peculiar circumstances. The documents MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page8/11 filed by the defendant before the trial court to establish that by 25.04.2012, by sending an E-mail, the defendant had notified to the plaintiff that the segments are reduced for non payment of the agreed amounts in time, even though the defendants had been complying the expected targets. In fact, it is seen from the voluminous E-mails, the defendants have been glutton-some in churning out the segments and reaching the target very early for which upfront incentive was fixed.
16. The arguments advanced by the appellant that there was a dispute regarding the segments and that the amounts were settled by 24.05.2012 shows that there has been no timely payments made by the plaintiff and that there was a proposal to re-adjust the terms of the agreement by 21.12.11 itself. Therefore, it cannot be said the agreement is still in force between the parties. The E-mail dated 28.09.2012 shows that there was a new agreement ( page 45 of the E-mail correspondence found on the trial court file). Hence, it cannot be said the entire case of the plaintiff in the trial court is to be looked into the agreement dated 01.07.2011. From the entire correspondence between the parties, it is clear that defendants had terminated the agreement for non payment of the loyalty of upfront which is to be paid in advance and the initial agreement provided for such termination as per clause 8.
17. After going through the correspondence and the contention of MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page9/11 the parties, there is no infirmity or perversity in the finding of the ld. court below to have arrived at the finding as to the plaintiff having not made out a prima facie case. It is also clear that the finding of the ld. court below that the balance of convenience is with the defendant cannot be faltered or altered.
18. As regards the legality, the ld. counsel appearing for the appellant submitted that section 42 of the Specific Relief Act was wrongly invoked. He relied on the ruling of the Hon' Supreme Court in Niranjan Shankar (supra). The Hon' Supreme Court no doubt made clear that there is a wide discretion to grant injunction in a negative covenant. Here the Hon' Supreme Court was dealing with a situation where the employer and employee is concerned. The agreement between the parties was in force and the covenant was operated during the period in which the enforcement was sought in a negative covenant. The case on hand establishes that the parties were working out fresh modalities and that the covenant no longer was binding between the parties which was also notified by the defendant by the various E-mails discussed above. Hence, this court with utmost regard and law laid down, is constrained to note that the facts of the case do not call for applying the above principles of law. In Gujarat Bottling (supra) relied by the appellant, it is made clear that grant of injunction is purely equitable in nature, the parties invoking the relief has to show that MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page10/11 he himself was not at fault and that he was not responsible for bringing about the state of things complained of. This ruling, thus is also not helpful to the appellant. The ld. counsel for the appellant further relied on the ruling of Frank Simoes (supra). In the said case, it is held that the plaintiff cannot be precluded from enforcing the negative agreement. The case before the Hon' High Court was one where the balance of convenience was found to be in the favour of plaintiff and that the defendant was not allowed to take advantage of his own wrong. The defendant had acknowledged that he was liable to pay certain amounts to the plaintiff and the various cheques given by the defendant were dishonored. In the present case, the plaintiff has no balance of convenience nor a prima facie case in their favour for seeking temporary injunction. After careful examination of entire material available on record, this court does not see any spec of perversity or illegality in the order of the court below in rejecting the application of the plaintiff. Hence, the following order:
ORDER The appeal filed by the appellant stands dismissed. There shall be no order as to costs. TCR be sent back alongwith a copy of this order. Appeal file be consigned to Record Room. Pronounced in the open court ( A.S. JAYACHANDRA) 12.03.2014 Addl. District Judge-I:
Shahdara District: KKD Courts Complex:Delhi MCA No. 18/13 M/s Amadeus India Pvt. Ltd. Vs. M/s Easy Trip Planners Pvt. Ltd. Page11/11