Delhi District Court
Hewitt Associates India Private ... vs Naveen Goyal on 6 June, 2013
IN THE COURT OF CIVIL JUDGEI, NEW DELHI DISTRICT, NEW DELHI
Presided By : Sh. Apoorv Sarvaria, DJS
CS No. 13/13
Unique Case ID No. 02403C0019892013
Hewitt Associates India Private Limited .....Plaintiff
Versus
Naveen Goyal ......... Defendant
Order on Application filed under Order XXXIX Rules 1 and 2 of
CPC
1.By this order, the application filed by the plaintiff under Order XXXIX Rules 1 and 2 of CPC shall be disposed of. In the application, the plaintiff has sought an interim injunction to restrain the defendant from joining or serving any other employer or organisation or firm or company or from divulging any information detriment to the interests of the plaintiff till the defendant is employed with the plaintiff and his employment comes to an end legally in terms of his appointment letter and and the plaintiff company's policy, during the pendency of the present suit. A further relief sought is for another interim injunction to restrain the defendant from divulging any information, instrument, document, report etc which may have come to his knowledge regarding the affairs of business matters of the plaintiff company.
2.The brief facts are that the plaintiff company is engaged in the business of rendering service to its customers abroad which relates to consulting, IT enabled services, risk management services, insurance and reinsurance brokerage and human capital and management consultant. It is averred in the plaint that the defendant Naveen Goyal took CS No. 13/13 Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 1 of 9 employment with the plaintiff vide appointment letter dated 26th December 2011 and was appointed as FS Finance Processor. It is stated that as per the appointment letter, the defendant had to give notice of 30 days after resignation to terminate the employment contract. The policy dated 10th December 2008 applicable under Clause 1 of the appointment letter dated 26th December 2011 also made the serving of the notice period mandatory. It is further stated that though either party could terminate the services after giving a prior notice of 30 days but the plaintiff had reserved the right not to accept payment of salary in lieu of the notice period at its sole discretion to enforce the notice period. It is further stated that as per Clause 5 of the appointment letter dated 26 th December 2011, the defendant was not supposed to engage any other activity which competed with the activities of the plaintiff company or conflicted with the defendant's position with the plaintiff company. Also, as per Clause 8 of the appointment letter, the defendant was was obliged not to divulge any third party any confidential information regarding the affairs of the business matters of the plaintiff.
3.It is further stated that the defendant has, in breach of the terms and conditions of the appointment letter, sent a resignation letter dated 8th February 2013 and sought to depart from the plaintiff without serving the mandatory notice period. The said resignation was rejected by the plaintiff and the rejection was informed to the defendant vide letter dated 18th February 2013. It is further stated that the plaintiff came to know after the letter dated 18th February 2013 was sent to the defendant that even before his resignation was accepted, the defendant was attempting to join another employment and the defendant is a critical resource in the plaintiff's team and it takes a minimum of 30 days to backfill the role of the defendant. However, the plaintiff was left with no time to find a replacement for the defendant. It is also stated that there is every likelihood of the defendant divulging the confidential information about the process of the plaintiff to other persons. On the basis of these facts, the present suit has been filed to restrain the defendant from joining any other CS No. 13/13 Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 2 of 9 organisation/company till the defendant's employment comes to an end legally in terms of the appointment letter dated 26th December 2011 and the applicable company policy. A further relief sought is for restraining the defendant from divulging any information and knowledge relating to the plaintiff. Another direction sought is for the defendant to hand over the charge to his successor and return documents and confidential information in his possession regarding the working of the plaintiff.
4.In reply to the present application, the defendant has stated the plaintiff has suppressed material facts and the defendant has not breached any condition of the appointment letter/service agreement. Even otherwise if it is assumed that there is a breach of agraement, it is stated that the remedy available for the plaintiff is not of injunction. It is further stated in reply that no person can be forced to work as a bonded labour/worker and directed not to join some other company and such condition imposed by the plaintiff in the appointment letter is an unfair trade practice and against the Constitution of India. It is further stated in the written statement that the marriage of the defendant was scheduled to be solemnised on 23rd January 2013 and it was within the knowledge of the seniors of the defendant and the defendant had already informed his seniors that after marriage he would not be in a position to continue his services with the plaintiff company. Therefore, the defendant remained on leave from 16th January 2013 to 6th February 2013 and thereafter as advised, he resigned from the services on 8 th February 2013 after consulting with seniors and the defendant was assured by the plaintiff that his resignation will be accepted. However, now the plaintiff has filed the present suit of injunction only to harass the defendant.
5.This court has heard Shri Sohail Sehgal, learned Advocate for the plaintiff and Sh. Yatendra Nagar, learned Advocate for the defendant and perused the record.
6.For claiming the relief of interim injunction, the plaintiff has to satisfy the following three ingredients:
CS No. 13/13
Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 3 of 9 (1) that the plaintiff has a prima facie case in its favour and against the defendant.
(2) the balance of convenience is in favour of the plaintiff and against the defendant.
(3) there would be irreparable loss/injury to the plaintiff if the interim relief is not granted to it.
7.In the present case, for ascertaining whether the plaintiff has a prima facie case in its favour, it has to be seen whether the plaintiff has the right to enforce clauses 4,5 and 8 of the appointment letter dated 26th December 2011 relating to the mandatory requirement of service of notice of 30 days by the employee who is seeking to resign from the plaintiff company and relating to maintaining confidentiality of information. In the prima facie view of this court, in terms of section 14 (b) of the Specific Relief Act, 1963 these terms of the appointment letter are not specifically enforceable by the plaintiff. Contract of employment not specifically enforceable: injunction cannot be granted
8.In Nandganj Sihori Sugar Co. Ltd. v. Badri Nath Dixit, (1991) 3 SCC 54 the Supreme Court has observed as under: (paras 5,8 and 10, SCC) "5. ......Courts do not ordinarily enforce performance of contracts of a personal character, such as a contract of employment. In the words of Jessel, M.R.: [Rigby v. Connol, (1880) 14 Ch D 482, 487 : 28 WR 650; see Cheshire, Fifoot and Furmston's Law of Contract, 11th edn., p. 614] "The courts have never dreamt of enforcing agreements strictly personal in their nature, whether they are agreements of hiring and service, being the common relation of master and servant ...."
8. In Halsbury's Laws of England (4th edn., Volume 44, at para 407) it is stated:
"407. Contracts for personal work or services.-- A judgment for specific performance of a contract for personal work or services is not pronounced, either at the suit of the employer or the employee. The court does not seek to compel persons against their will to maintain continuous CS No. 13/13 Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 4 of 9 personal and confidential relations. However, this rule is not absolute and without exception. It has been held that an employer may be restrained from dismissing an employee in breach of contract if there is no loss of confidence between employer and employee or if (at least in a contract of employment to carry out a public duty) the employee has been dismissed in a manner which does not comply with statutory or contractual regulations governing dismissal. No court may, whether by way of an order for specific performance of a contract of employment or an injunction restraining a breach or threatened breach of such a contract, compel an employee to do any work or attend at any place for the doing of any work.
This principle applies not merely to contracts of employment, but to all contracts which involve the rendering of continuous services by one person to another, such as a contract to work a railway line ...."
10. A contract of employment cannot ordinarily be enforced by or against an employer. The remedy is to sue for damages. (See Section 14 read with Section 41 of the Specific Relief Act; see Indian Contract and Specific Relief Acts by Pollock and Mulla, 10th edn., page 983). The grant of specific performance is purely discretionary and must be refused when not warranted by the ends of justice. Such relief can be granted only on sound legal principles. ..."
(emphasis added)
9.Therefore, in terms of Section 41(1)(e) of the Specific Relief Act, 1963 injunction cannot be granted for preventing breach of a contract that is not specifically enforceable. Section 42 of Specific Relief Act is not applicable
10.Ld. Advocate for the plaintiff, while relying upon Power Finance Corporation Ltd v. Pramod Kumar Bhatia (1997) 4 SCC 280 contended that the jural relationship between the plaintiff and the defendant still exists and the plaintiff is seeking the relief of injunction in terms of Section 42 of the Specific Relief Act which provides for enforcement of negative convenants. In support of this contention, he relied upon the decision in BLB Institute of CS No. 13/13 Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 5 of 9 Financial Markets Ltd v. Ramakar Jha 154 (2008) DLT 121. In the considered view of this court, Section 42 of the Specific Relief Act cannot be interpreted to mean that an agreement which is nonenforceable becomes enforceable. The enforcement (in terms of injunction) provided for in Section 42 of the Specific Relief Act has to be distinct from the agreement which is found to be not enforceable. It cannot be interpreted as making agreement which is nonenforceable as enforceable. If Section 42 of the Specific Relief Act were to be read in such manner, it would amount to making of contracts specifically enforceable notwithstanding provisions of Specific Relief Act. To the same effect is the ratio of the decision of the High Court of Delhi in Yogesh Radhakrishnan v. Media Networks and Distribution (India) Ltd 2013 IV AD (Delhi) 92 (107). The High Court of Delhi has futher observed in Yogesh Radhakrishnan that Section 42 of Specific Relief Act provides for a situation where even though the agreement may be found to be specifically not enforceable but the defendant has separately agreed not to do a certain act and permits grant of an injunction restraining the defendant from doing that act. Therefore, the decision in BLB Institute of Financial Markets cannot be made applicable in view of the law laid down by Nandganj Sihori Sugar Co and Yogesh Radhakrishnan. Therefore, the contention of Ld. Advocate for the plaintiff to interpret Section 42 of the Specific Relief Act in such terms cannot be accepted.
11.Therefore, this court is of prima facie view that the plaintiff is not entitled to any relief of injunction as prayed for as the clauses 4,5 and 8 relating to 30 days' notice period before resignation are not specifically enforceable. As far as the clause relating to maintaining confidentiality of information, the plaintiff has not specifically averred the details of confidential information that are specifically within the knowledge of the defendant. A vague averment that the plaintiff has custody of confidential information would not prima facie entitle the plaintiff to any relief in its favour.
12.The caselaws relied upon on behalf of the plaintiff are distinguishable on material facts. CS No. 13/13 Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 6 of 9 In the present case, the plaintiff has not even averred a word about the nature of confidential information that the plaintiff apprehends that the defendant is holding and which can cause damage to the plaintiffs. Also, the employment of the defendant as FS Finance Processor prima facie does not appear to be critical to the working of the plaintiff company. In the cases relied upon by the plaintiff, the employee was either working in some other organisation after committing breach of the notice period or was holding substantial confidential data and the nature of confidential data was also disclosed by the employer in its averment in those cases. In the present case, the plaintiff has neither shown any document nor has made any averment showing that the defendant is working in some other organisation without serving the notice period. Also, as already stated, the details of the confidential information have not been given. On the other hand, the defendant has stated in his written statement that he does not intend to work at all before any company after his marriage.
13.There is one more fact that disentitles the plaintiff from the discretionary and equitable relief of injunction. The plaintiff itself has stated that the defendant resigned from its service on 8th February 2013. But the plaintiff took 10 days to take decision on waiving off the 30 days' notice period and wrote letter dated 18 th February 2013 directing the defendant to serve the 30 days' period and now it expects the defendant to join back and complete the notice period. The conduct of the plaintiff does prima facie disentitle it to relief of injunction under Section 41(i) of Specific Relief Act, 1963.
14.The only remedy, if at all, appears to be available to the plaintiff is seeking damages for not complying with the requirement of serving mandatory notice period and not for an injunction to compel the defendant to join the plaintiff for 30 days when he himself does not wish to do the same and has already resigned from the plaintiff company. Such a relief as prayed for by the plaintiff would also be prima facie hit by Section 27 of the Indian Contract Act, 1872. (See Ambiance India Pvt. Ltd. Vs. Sh. Naveen Jain 122 (2005) DLT 421, CS No. 13/13 Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 7 of 9 2005 (81) DRJ 538.)
15.Therefore, for all these reasons, this court finds that the plaintiff has failed to show any prima facie case in its favour.
16.Since the plaintiff has failed to make out a prima facie case, there is no need to go into the question of balance of convenience and irreparable loss and injury. In Kashi Math Samsthan v. Srimad Sudhindra Thirtha Swamy AIR 2010 SC 296, it was observed as under (AIR @ p. 299):
"13. It is well settled that in order to obtain an order of injunction, the party who seeks for grant of such injunction has to prove that he has made out a prima facie case to go for trial, the balance of convenience is also in his favour and he will suffer irreparable loss and injury if injunction is not granted. But it is equally well settled that when a party fails to prove prima facie case to go for trial, question of considering the balance of convenience or irreparable loss and injury to the party concerned would not be material at all, that is to say, if that party fails to prove prima facie case to go for trial, it is not open to the Court to grant injunction in his favour even if, he has made out a case of balance of convenience being in his favour and would suffer irreparable loss and injury if no injunction order is granted."
(emphasis added)
17.Even otherwise, the balance of convenience is not in favour of the plaintiff as the defendant has already left the employment of the plaintiff in the month of February 2013. Also, the plaintiff will not suffer irreparable loss if the interim injunction, as prayed for, is not granted.
18.Therefore, the plaintiff has failed to satisfy the ingredients necessary for grant of interim relief in its favour. The opinion expressed in this order shall not be construed as an CS No. 13/13 Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 8 of 9 expression of opinion on the merits of the matter by this Court. The application is dismissed. The Order be uploaded to www.delhidistrictcourts.nic.in.
Announced in the Open Court (Apoorv Sarvaria)
On 6 June 2013
th
Civil JudgeI, New Delhi District
New Delhi
CS No. 13/13
Hewitt Associates India Pvt Ltd v. Naveen Goyal Page number 9 of 9