Delhi District Court
M/S Idbi Trusteeship Services Ltd vs Sameer Trikha on 7 February, 2026
IN THE COURT OF MS. RICHA GUSAIN SOLANKI,
DISTRICT JUDGE-02, SOUTH-WEST DISTRICT, DWARKA
COURTS, NEW DELHI
CS DJ ADJ No. 447/2017
CNR No. DLSW010048322017
IN THE MATTER OF:
M/S IDBI TRUSTEESHIP SERVICES LTD.
J-1, Virajanand Marg, Vikas Puri, New Delhi
Registered Office:
Asian Building, Ground Floor, 17,
R. Kamani Marg, Ballard Estate,
Mumbai-400001 ........Plaintiff
Versus
SAMEER TRIKHA
Flat No. 75, Promise Apartments,
F-Block, Vikaspuri, New Delhi
Also at:
C/o Catalyst Trusteeship Ltd.
2nd Floor, 213 Naurang House,
21, Kasturba Gandhi Marg,
New Delhi-110001 .......Defendant
Date of institution 08.05.2017
Date of reserving judgment 08.01.2026
Date of pronouncement of judgment 07.02.2026
JUDGMENT
This is a suit for declaration, permanent injunction and recovery of damages of ₹25 lakhs. The brief facts of the case are:
PLAINT 1 The plaintiff is a trusteeship company jointly promoted by IDBI Bank Limited, Life Insurance Corporation of India, and General Insurance Corporation of India. The defendant joined the CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 1/20 plaintiff company as a Trainee Officer vide appointment letter dated 23.04.2008. Subsequently, the defendant was appointed as Manager Grade-I with effect from 01.08.2008 on a monthly salary of ₹25,000/-. The appointment letter was duly signed by the defendant after fully understanding and accepting the terms and conditions governing his employment. It was expressly agreed that the defendant's employment would be governed by the Human Resources Manual of the plaintiff company, as amended from time to time. The defendant thereafter duly signed and accepted the Human Resources Manual (Revised) 2008 and the Code of Conduct, which detailed the terms and conditions of his employment.
2 The Human Resources Manual was amended from time to time, and in the year 2015, the Human Resources Manual, 2015 was formulated and approved by the Board of Directors in its meeting dated 20.03.2015. Clause 15 of the Human Resources Manual, 2015 reads as under:
"All candidates recruited for ITSL as well as all employees of ITSL shall give an undertaking that in case he/she resigned from the services for any reason whatsoever, then he/she shall not join any trustee company for a period of six months after being relieved by ITSL..."
3 The defendant was employed as a Manager and did not initially possess the requisite acumen for marketing or business development for the plaintiff company. The plaintiff company specifically trained the defendant for business development and imparted extensive training relating to the business model at its own cost and expense. By virtue of his job requirements, the defendant was provided training and full exposure to the legal, operational, and compliance aspects of the trusteeship business. 4 The plaintiff company commenced its business operations CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 2/20 in India in the year 2001 and, in order to utilise the services of trained employees for a reasonable period and to safeguard its confidential information and trade secrets from competitors, framed the Human Resources Policy, 2008, the Code of Conduct, and the Human Resources Manual, 2015.
5 On 03.11.2016, the defendant tendered his resignation from the services of the plaintiff company. The resignation was accepted vide letter dated 02.02.2017, and the defendant was informed that such acceptance was subject to the condition that he shall not join any other trustee company for a period of six months from the date of the said letter, in accordance with the terms of the contract of employment and the Human Resources Policy. The acceptance letter was duly acknowledged by the defendant.
6 In February 2017, it came to the knowledge of the plaintiff that the defendant, in complete violation of the terms and conditions of his appointment letter and the Human Resources Policy, had joined the services of M/s Catalyst Trusteeship Services Limited, a direct competitor of the plaintiff. It is stated that the defendant deliberately joined a competing entity with the intent to disclose the plaintiff's business secrets, know-how, and confidential information and to capture the plaintiff's market, which had been developed after considerable effort. It is stated that M/s Catalyst Trusteeship Services Limited is directly and substantially engaged in the same line of business as that of the plaintiff.
7 On 22.02.2017, the plaintiff company issued a cease-and- desist notice to the defendant, calling upon him to immediately stop working with M/s Catalyst Trusteeship Services Limited and CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 3/20 to furnish proof thereof within seven days, failing which appropriate legal action was warned.
8 After joining M/s Catalyst Trusteeship Services Limited, the defendant has been passing on and/or compromising the plaintiff's confidential information, knowledge, technology, know-how, trade secrets, documents, and information relating to the plaintiff's business operations and activities. It has also come to the knowledge of the plaintiff that the defendant has been approaching customers of the plaintiff with whom he had dealings during his employment with the plaintiff company. 9 It is stated that upon breach of contract, the party suffering such breach is entitled to receive compensation for the loss or damage caused thereby.
10 Accordingly, the plaintiff seeks damages to the tune of ₹25,00,000/- along with interest against the defendant. The plaintiff further seeks a declaration that the act of the defendant in joining M/s Catalyst Trusteeship Services Limited is contrary to the terms and conditions of the appointment letter, the Human Resources Policy, and the Code of Conduct. The plaintiff also prays for a restraint order against the defendant from working with M/s Catalyst Trusteeship Services Limited. WRITTEN STATEMENT 11 The defendant has filed a written statement admitting his employment with the plaintiff company and the execution of the appointment letters. It is stated that the clause of the Human Resources Manual relied upon by the plaintiff is hit by the provisions of the Indian Contract Act. The defendant submits that the Hon'ble Supreme Court has consistently held that freedom of employment cannot be unreasonably curtailed and that any CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 4/20 contract in restraint of trade is opposed to public policy and unenforceable. It is further stated that the Human Resources Policy relied upon by the plaintiff is unconstitutional and unenforceable. The defendant contends that negative covenants cannot operate after the termination of employment and that any covenant restraining competition after cessation of employment is void. It is further stated that the letter dated 01.04.2015 relied upon by the plaintiff was merely informatory in nature and did not amount to acknowledgment or acceptance of the Human Resources Manual by the defendant. The defendant has denied having passed on or compromised any confidential information, technology, know-how, or trade secrets of the plaintiff, and has further denied approaching any customers of the plaintiff with whom he had previously dealt.
REPLICATION 12 The plaintiff filed a replication reiterating the contents of the plaint and denying the averments of the written statement. ADMISSION-DENIAL OF DOCUMENTS 13 The defendant admitted the following documents of the plaintiff:
a) Appointment letter as Ex P1;
b) Employee list dated 01.04.2015 as Ex P2; and
c) Resignation letter as Ex P3.
ISSUES 14 On 01.02.2020, seven issues were framed by Ld Predecessor Court:
"i. Whether the defendant committed breach of undertaking/HR policies of the plaintiff' company as stated in the appointment letters dated 23.04.2008, 31.07.2008 and the code of conduct (Annexure to CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 5/20 appointment letter), and human resource policy as enshrined in Human Resources Manual (revised) 2008 & Human Resources Policy of ITSL-2015 and a consent letter dated 01.04.2015?...OPP ii. Whether the defendant breached his employment contract with plaintiff by joining M/s Catalist trusteeship Ltd.?..OPP iii. Whether the suit of the plaintiff is barred by law?...OPD iv. Whether the plaintiff is entitled for a decree of declaration that the defendant violated the employment terms and conditions and HR policy of the plaintiff?...OPP v. Whether the plaintiff is entitled to a decree of damages in the sum of ₹25,00,000/- (Rupees Twenty five lakhs only)?...OPP vi. Whether the plaintiff is entitled for interest on the damages of ₹25,00,000/- (Rupees Twenty five lakhs only) @ 18% per annum from the date of the filing of the suit until its actual realization? ...OPP vii. Relief, if any"
EVIDENCE 15 In order to prove its case, the plaintiff company examined two witnesses:
15.1 PW1/AR of the plaintiff company tendered affidavit Ex PW-1/A in evidence, which reiterates the facts mentioned in the plaint. He relied on the following documents:
a) Copy of authority letter of PW1 as Ex PW1/1;
b) Copy of appointment letter dated 31.07.2008 as Ex PW1/3;
c) Copy of relevant clause of HR Manual 2008 and Code of Conduct as Mark 4;
d) Copy of HR Manual 2015 as Mark 5A;
e) Copy of letter dated 02.02.2017 as Mark 7;
CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 6/20
f) Copy of letter dated 22.02.2017 as Mark 8; and
g) Admitted documents Ex P1 to P3.
15.2 PW2/Vishakha Rahul Kotkar tendered her affidavit Ex PW2/A and relied on the following documents:
a) Copy of minutes of meeting of Board of Directors as Ex PW2/1;
b) Copy of HR Manual 2015 as Ex PW2/2;
c) Email dated 16.02.2017 and its certificate under Section 65B of Evidence Act as Ex PW2/3 and Ex PW2/3A (The documents exhibited as Ex. PW-2/3 and Ex.
PW-2/3A were objected to by learned counsel for the defendant on the ground that the certificate accompanying the electronic evidence was not in conformity with the requirements of Section 65B of the Indian Evidence Act, 1872, or Section 63(4) of the Bharatiya Sakshya Adhiniyam. The objection is sustained, as the certificate does not contain the mandatory particulars prescribed under Section 65B(4) of the Indian Evidence Act or Section 63(4) of the Bharatiya Sakshya Adhiniyam. Further, although the said documents were permitted to be taken on record by the Ld Predecessor Court, they travel beyond the pleadings, inasmuch as there is no reference to these documents either in the plaint or in the replication. The fact that the defendant admitted sending the email Ex. PW-2/3, during his cross-examination does not cure the defect relating to the admissibility of the document.);
d) Copy of letter dated 02.02.2017 as Mark A (also Ex DW1/P1); and
e) Copy of letter dated 22.02.2017 as Mark B and its tracking report as Mark C. 16 The defendant tendered his affidavit Ex DW-1/1 in evidence, which reiterates the facts mentioned in the written statement.
FINDINGS CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 7/20 17 I have heard Sh. Gulshan Chawla, Ld Counsel for the plaintiff and Sh. Vartul Vishnoi, Ld Counsel for the defendant. I have also gone through the written submissions filed by the parties.
18 Issue-wise findings are as under:
19 "i. Whether the defendant committed breach of undertaking/HR policies of the plaintiff' company as stated in the appointment letters dated 23.04.2008, 31.07.2008 and the code of conduct (Annexure to appointment letter), and human resource policy as enshrined in Human Resources Manual (revised) 2008 & Human Resources Policy of ITSL-2015 and a consent letter dated 01.04.2015?...OPP ii. Whether the defendant breached his employment contract with plaintiff by joining M/s Catalist trusteeship Ltd.?..OPP iii. Whether the suit of the plaintiff is barred by law?...OPD iv. Whether the plaintiff is entitled for a decree of declaration that the defendant violated the employment terms and conditions and HR policy of the plaintiff?...OPP"
19.1 All the aforesaid issues being interlinked are taken up together for adjudication.
19.2 It is an admitted position that the defendant was employed with the plaintiff pursuant to the employment contract, Ex. P-1. The said appointment letter specifically provides that the defendant shall be governed by the Human Resources Manual, 2008, as amended from time to time. During his cross- examination, the defendant stated that the HR Manual, 2008 was never shown to him and, therefore, he is not bound by the same. He further stated that at the time of joining, he was merely informed that it was a basic standard manual and that he was required only to adhere to his basic duties. This assertion cannot be accepted, as no such objection was raised by the defendant in his written statement. Moreover, having availed the benefits of CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 8/20 the employment contract, the defendant cannot now be permitted to approbate and reprobate by disputing the binding nature of the HR Manual.
19.3 It is also not in dispute that the defendant was apprised of the revised HR Manual, 2015, as evidenced by Ex. PW-2/2. Although the defendant stated during cross-examination that the said document was circulated merely for signatures and that the employees were not permitted to read the HR Manual, 2015, the said assertion is wholly self-serving and unsupported by any evidence. Ex. PW-2/2 clearly records, "Please find enclosed HR Policy of ITSL 2015... All are requested to read the same ." The document bears the signatures of several employees, including the defendant. If the defendant's case were that the signatures were obtained under compulsion, the burden to establish the same lay upon him in terms of Section 102 of the Evidence Act. No evidence has been led in this regard. The bare ipse dixit of the defendant is insufficient to displace the evidentiary value of a signed document.
19.4 Once the defendant had agreed to be bound by the HR Manual, 2008 as amended from time to time, and had been duly informed of the revision in the form of the HR Manual, 2015, he cannot be permitted to contend that he is not bound by the revised manual merely on the ground that it was not separately acknowledged or accepted by him.
19.5 This, however, leads to the core issue regarding the validity and enforceability of Clause 15 of the HR Manual, 2015. 19.6 Learned counsel for the defendant has contended that negative covenants operating post-employment are in restraint of trade and, therefore, void under Section 27 of the Indian Contract CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 9/20 Act. Reliance has been placed on Niranjan Shankar Golikari v. Century Spg. and Mfg. Co. Ltd., 1967 SCC OnLine SC 72; Superintendence Company of India (P) Ltd. v. Krishan Murgai, (1981) 2 SCC 246; Gujarat Bottling Co. Ltd. v. Coca Cola Co., (1995) 5 SCC 545; Percept D'Mark (India) (P) Ltd. v. Zaheer Khan, (2006) 4 SCC 227; Varun Tyagi v. Daffodil Software Pvt.
Ltd., 2025 DHC 5015; Polaris Software Lab Ltd. v. Surain Khiwadhkar, (2004) I LLJ 323 (Mad); and Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar, 2009 SCC OnLine Del 3936.
19.7 Per contra, learned counsel for the plaintiff has submitted that the plaintiff has not sought a blanket prohibition on the defendant's employment, but only a limited cooling-off period of six months. It is argued that the restriction is narrowly tailored to prevent an immediate conflict of interest, to protect confidential and fiduciary information acquired by the defendant during his employment, and to preserve institutional integrity, regulatory compliance, and client confidence in the trusteeship framework. It is submitted that the defendant was free to join any non-competing entity during the said period and that the restriction does not attract the bar under Section 27 of the Contract Act. It is further contended that the judgments relied upon by the defendant themselves recognise the enforceability of reasonable negative covenants, and that the decision in Varun Tyagi underscores that enforceability depends upon reasonableness, proportionality, and the existence of a legitimate protectable interest. It is submitted that the defendant occupied a position of trust, with access to sensitive regulatory, client, and transactional information, and having derived benefits under the CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 10/20 employment policies, cannot resile from their binding effect post- resignation. It is further alleged that the defendant immediately joined a competing entity and exploited sensitive client and regulatory information, thereby prejudicing the plaintiff's legitimate business interests and violating established principles governing fiduciary duties and post-employment restraints. 19.8 I have given my thoughtful consideration to the rival submissions.
19.9 The legal position on this issue is well settled. Unlike English law, which recognises a distinction between partial and absolute restraints of trade, Section 27 of the Indian Contract Act does not carve out any such distinction. Any agreement that falls within the ambit of Section 27 is void, unless it is saved by Exception 1 thereto.
19.10 Reference may be made to Affle Holdings Pte. Limited v. Saurabh Singh & Ors., 2015 SCC OnLine Del 6765 , wherein the Hon'ble Delhi High Court reiterated the settled position of law and observed as under:
"9.8 In my opinion, the principles with regard to grant of injunction where a negative covenant obtains are far too well settled for me to reinvent the wheel. In the present case, what has to be considered is, can an injunction operate qua respondent no. 1 post termination of his employment contract. Undoubtedly, the answer has to be that, a negative covenant in the employment contract which prohibits carrying on a competing business beyond the tenure of the contract is void and not enforceable. This prohibition operates on account of the provisions of Section 27 of the Contract Act. However, the prohibition does not operate during the subsistence of the employment contract. Since, the employment contract, has been terminated on 16.10.2014, clause 6 of the employment contract prima facie ceased to operate qua respondent no. 1."
19.11 The reliance placed by learned counsel for the defendant on the aforesaid judicial precedents is well founded. In Niranjan Shankar Golikari v. Century Spg. and Mfg. Co. Ltd., CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 11/20 1967 SCC OnLine SC 72, the Hon'ble Supreme Court has categorically held that negative covenants which restrain an employee from taking up employment with any other employer after the termination of his employment with the former employer are void, observing as under:
"3. ....
Clause 17 provided as follows:
"In the event of the employee leaving, abandoning or resigning the service of the company in breach of the terms of the agreement before the expiry of the said period of five years he shall not directly or indirectly engage in or carry on of his own accord or in partnership with others the business at present being carried on by the company and he shall not serve in any capacity, whatsoever or be associated with any person, firm or company carrying on such business for the remainder of the said period and in addition pay to the company as liquidated damages an amount equal to the salaries the employee would have received during the period of six months thereafter and shall further reimburse to the company any amount that the company may have spent on the employee's training."
...
14. A similar distinction has also been drawn by courts in India and a restraint by which a person binds himself during the term of his agreement directly or indirectly not to take service with any other employer or be engaged by a third party has been held not to be void and not against Section 27 of the Contract Act. In Brahmaputra Tea Co. Ltd. v. Scarth [ILR (XI) Cal 545] the condition under which the covenantee was partially restrained from competing after the term of his engagement was over with his former employer was held to be bad but the condition by which he bound himself during the term of his agreement, not, directly or indirectly, to compete with his employer was held good...
17. The result of the above discussion is that considerations against restrictive covenants are different in cases where the restriction is to apply during the period after the termination of the contract than those in cases where it is to operate during the period of the contract. Negative covenants operative during the period of the contract of employment when the employee is bound to serve his employer exclusively are generally not regarded as restraint of trade and therefore do not fall under Section 27 of the Contract Act. A negative covenant that the employee would not engage himself in a trade or business or would not get himself employed by any other master for whom he would perform similar or substantially similar duties is not therefore a restraint of trade unless the contract CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 12/20 as aforesaid is unconscionable or excessively harsh or unreasonable or one-sided as in the case of W.H. Milsted & Son Ltd. Both the trial court and the High Court have found, and in our view, rightly, that the negative covenant in the present case restricted as it is to the period of employment and to work similar or substantially similar to the one carried on by the appellant when he was in the employ of the respondent Company was reasonable and necessary for the protection of the company's interests and not such as the court would refuse to enforce. There is therefore no validity in the contention that the negative covenant contained in clause 17 amounted to a restraint of trade and therefore against public policy."
(emphasis supplied) 19.12 The aforesaid principle of law was reiterated by the Hon'ble Supreme Court in Percept D'Mark (India) (P) Ltd. v. Zaheer Khan, (2006) 4 SCC 227, wherein it was held that the reasonableness of a restraint is not a relevant consideration while examining the validity of a restrictive covenant under Section 27 of the Indian Contract Act, observing as under:
"54. On the pleadings contained in the arbitration petition, there can be no escape from the conclusion that what the appellant sought to enforce was a negative covenant which, according to the appellant, survived the expiry of the agreement. This, the High Court has rightly held is impermissible as such a clause which is sought to be enforced after the term of the contract is prima facie void under Section 27 of the Contract Act.
...
56. The legal position with regard to post-contractual covenants or restrictions has been consistent, unchanging and completely settled in our country. The legal position clearly crystallised in our country is that while construing the provisions of Section 27 of the Contract Act, neither the test of reasonableness nor the principle of restraint being partial is applicable, unless it falls within express exception engrafted in Section 27.
...
63. Under Section 27 of the Contract Act: (a) a restrictive covenant extending beyond the term of the contract is void and not enforceable, (b) the doctrine of restraint of trade does not apply during the continuance of the contract for employment and it applies only when the contract comes to an end, (c) as held by this Court in Gujarat Bottling v. Coca-Cola [(1995) 5 SCC 545] this doctrine is not confined only to contracts of employment, but is also applicable to all other contracts."
(emphasis supplied) CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 13/20 19.13 Further, in Superintendence Company of India (P) Ltd. v. Krishan Murgai, (1981) 2 SCC 246, the Hon'ble Supreme Court unequivocally held that neither the test of reasonableness nor the distinction between partial and absolute restraint is applicable to agreements governed by Section 27 of the Indian Contract Act, unless the agreement falls within the ambit of Exception I thereto.
19.14 In view of the settled legal position, the contention of the plaintiff that it did not seek a blanket prohibition but merely a limited cooling-off period, or that the restriction was intended to prevent an immediate conflict of interest or to safeguard confidential and fiduciary information, cannot be accepted for the purposes of Section 27 of the Contract Act.
19.15 In Wipro Ltd. v. Beckman Coulter International S.A., 2006 SCC OnLine Del 743, the Hon'ble Delhi High Court, after an exhaustive consideration of the judgments of the Hon'ble Supreme Court and various High Courts, concluded as under:
"58. After a review of all the decisions of the Supreme Court and the High Courts, including this Court, the following points become clear:
(1) Negative covenants tied up with positive covenants during the subsistence of a contact be it of employment, partnership, commerce, agency or the like, would not normally be regarded as being in restraint of trade, business of profession unless the same are unconscionable or wholly one-sided;
(2) Negative covenants between employer and employee contracts pertaining to the period post termination and restricting an employee's right to seek employment and/or to do business in the same field as the employer would be in restraint of trade and, therefore, a stipulation to this effect in the contract would be void.
In other words, no employee can be confronted with the situation where he has to either work for the present employer or be forced to idleness;
(3) While construing a restrictive or negative covenant and for determining whether such covenant is in restraint of trade, business or profession or not, the Courts take a stricter view in employer- employee contracts than in other contracts, such as partnership CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 14/20 contracts, collaboration contracts, franchise contracts, agency/distributorship contracts, commercial contracts. The reason being that in the latter kind of contracts, the parties are expected to have dealt with each other on more or less an equal footing, whereas in employer-employee contracts, the norm is that the employer has an advantage over the employee and it is quite often the case that employees have to sign standard form contracts or not be employed at all;
(4) The question of reasonableness as also the question of whether the restraint is partial or complete is not required to be considered at all whenever an issue arises as to whether a particular term of a contract is or is not in restraint of trade, business or profession."
19.16 Accordingly, there remains no manner of doubt that Clause 15 of the Human Resources Manual, 2015, even assuming it to have been agreed to by the defendant, is unenforceable in law, being hit by Section 27 of the Indian Contract Act. 19.17 The reliance placed by the defendant on the decision in Varun Tyagi (supra) is also well founded. I am unable to accept the submission of learned counsel for the plaintiff that the said decision affirms enforceability on the basis of reasonableness, proportionality, or the existence of a legitimate protectable interest. As already noted hereinabove, once a covenant is found to be hit by Section 27 of the Contract Act, no enquiry into its reasonableness is permissible unless the case falls within Exception I to the said provision, which is admittedly not attracted in the present case. This is, in fact, the ratio laid down in Varun Tyagi, as shall be evident from the extract reproduced hereinafter:
"64. Under Indian Law, all contracts falling within the terms of Section 27 of the ICA are void unless they fall within the specific exception under Section 27 of the ICA. Accordingly, the Appellant has submitted that clause 2.16 read with a definition of 'Business Associates' in the Employment Agreement between the Appellant and the Respondent is very broad and imposes a blanket ban on the Appellant to not work for any present or potential customer of the Respondent. Hence, the restriction sought to be enforced by the Respondent is clearly in restraint of trade and is void under Section 27 of the ICA.
CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 15/20 ...
66. An employee cannot be confronted with the situation where he has to either work for the previous employer or remain idle. An employer-employee contracts, the restrictive or negative covenant are viewed strictly as the employer has an advantage over the employee and it is quite often the case that the employee has to sign standard form contract or not be employed at all.
67. Further, the reasonableness and whether the restraint is partial or complete is not required to be considered at all when an issue arises as to whether a particular term of contract is or is not in restraint of trade, business or profession. ...
70. It is settled law that the negative covenant post termination of the employment can be granted only to protect the confidential and proprietary information of the employer or to restrain the employee from soliciting the clients of the employer. However, none of the cases relied upon by the Respondent has held that the employee can be restrained from undertaking any employment in order to enforce the negative covenant."
(emphasis supplied) 19.18 In Varun Tyagi, the Court was concerned with the question of whether an injunction could be granted restraining the employee from working with or for the clients and business affiliates of the respondent company, and from disclosing confidential data belonging to the respondent, which the appellant had acquired during the course of his employment. It was in the context of these facts that the observations contained in paragraph 70 of the judgment (as extracted hereinabove) were made. The Hon'ble Court held that the respondent's apprehension regarding the possible disclosure of confidential information or intellectual property to DIC (the appellant's new employer) was misconceived, as the said confidential information and intellectual property already belonged to DIC itself. Consequently, there arose no question of any sharing of confidential information, source code, or intellectual property with DIC.
19.19 In essence, while the Hon'ble Court recognised that, in CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 16/20 an appropriate case, an employee could be restrained even post- resignation from disclosing confidential information or soliciting clients, no such factual foundation had been laid in that matter. However, insofar as the restriction on employment was concerned, the Hon'ble Court unequivocally held the same to be void.
19.20 In view of the aforesaid discussion, the defendant has successfully established that Clause 15 of the Human Resources Manual, 2015 is null and void, being hit by Section 27 of the Indian Contract Act, and is therefore unenforceable. Consequently, it cannot be held that the defendant committed any breach of his undertaking, employment contract, or the Human Resources policies of the plaintiff company. The issues are accordingly decided in favour of the defendant and against the plaintiff.
20 "v. Whether the plaintiff is entitled to a decree of damages in the sum of ₹25,00,000/- (Rupees Twenty five lakhs only)?...OPP vi. Whether the plaintiff is entitled for interest on the damages of ₹25,00,000/- (Rupees Twenty five lakhs only) @ 18% per annum from the date of the filing of the suit until its actual realization? ...OPP"
20.1 In view of the findings returned on Issues Nos. i. to iv., the plaintiff is not entitled to recovery of any damages on account of the alleged breach of contract.
20.2 The plaintiff has further alleged that the defendant has been passing on or compromising the plaintiff's confidential information, knowledge, technology, know-how, trade secrets, documents, and business-related information. However, the pleadings in this regard are general and vague, bereft of any CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 17/20 material particulars. Significantly, both witnesses examined on behalf of the plaintiff admitted that no document had been placed on record to demonstrate that the defendant leaked or disclosed any confidential information of the plaintiff company after cessation of his employment. It was further admitted that no document or list of customers allegedly approached by the defendant post-resignation has been filed. The witnesses also conceded that no documentary evidence, statement of account, or record has been produced to substantiate the claim that the plaintiff suffered damages amounting to ₹25 lakhs on account of any act or omission of the defendant.
20.3 The written submissions and arguments filed by the plaintiff at the stage of final hearing make reference to certain clients who are stated to have shifted to M/s Catalyst Trusteeship Services Ltd.; however, such submissions, unsupported by evidence, cannot substitute proof adduced during trial. 20.4 In Vishal Engineers & Builders v. Indian Oil Corporation Limited, 2011 SCC OnLine Del 5124, the Hon'ble Delhi High Court held that in the absence of proof of any loss whatsoever, an aggrieved party cannot claim entitlement to liquidated damages without at least establishing a semblance of loss.
20.5 Similarly, in Batliboi Environmental Engineers Ltd. v. Hindustan Petroleum Corporation Ltd., (2024) 2 SCC 375 , the Hon'ble Supreme Court held that compensation is not payable in the absence of proof of actual damage, observing as under:
"16. This is without doubt, a sound legal and correct proposition. However, the computation of damages should not be whimsical and absurd resulting in a windfall and bounty for one party at the expense of the other. The computation of damages should not be disingenuous. The damages should commensurate with the loss CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 18/20 sustained. In a claim for loss on account of delay in work attributable to the employer, the contractor is entitled to the loss sustained by the breach of contract to the extent and so far as money can compensate. The party should to be placed in the same situation, with the damages, as if the contract had been performed. The principle is that the sum of money awarded to the party who has suffered the injury, should be the same quantum as s/he would have earned or made, if s/he had not sustained the wrong for which s/he is getting compensated. .."
(emphasis supplied) 20.6 In the present case, there is not even a scintilla of evidence to demonstrate that any actual loss was suffered by the plaintiff.
20.7 Learned counsel for the plaintiff has argued that the defendant was a fresher at the time of his appointment and that the plaintiff company incurred substantial expenditure in imparting training to him and in providing full exposure in the legal, operational, and compliance aspects of the trusteeship business, and that the defendant eventually rose to the position of Assistant Vice President during his tenure with the plaintiff company.
20.8 I am unable to accept the aforesaid contention. The plaintiff is not entitled to claim damages on account of such training, particularly when the defendant's resignation was duly accepted and he was formally relieved from service. This is not a case where the defendant left the employment during a lock-in period or without acceptance of his resignation. 20.9 Accordingly, the plaintiff is not entitled to any damages from the defendant. Issues Nos. v. and vi. are decided in favour of the defendant and against the plaintiff.
21 "vii. Relief, if any."
21.1 The plaintiff had also sought the relief of permanent CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 19/20 injunction. However, during the course of arguments, learned counsel for the plaintiff fairly conceded that the said relief has become infructuous, as the injunction was sought only for a period of six months with effect from 02.02.2017. 21.2 In view of the foregoing discussion, the suit of the plaintiff is dismissed. Costs of the suit are awarded against the plaintiff.
22 Decree sheet be prepared accordingly.
23 File be consigned to record room after due compliance.
Digitally signed by RICHARICHA GUSAIN SOLANKI GUSAIN Date:
SOLANKI 2026.02.07 17:27:38 +0530 Announced in open Court today (Richa Gusain Solanki) th on 7 February, 2026 District Judge-02, South West Dwarka Courts Complex New Delhi CS DJ ADJ No. 447/2017 M/s IDBI Trusteeship Services Ltd. vs Sameer Trikha Page no. 20/20