IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
B. Siva Sankara Rao, J.
Pranshu Mishra - Appellant
Versus
Guru Gowri Krupa Technologies Private Ltd. - Respondent
Civil Miscellaneous Appeal No. 1247 of 2017
Decided On : 27-12-2017
Eastern Chemical Company - Service Agreement - Temporary injunction application - Plaintiff was a registered company, the deponent of which is its director, vide authorization of board resolution, engaged in the business of providing wide range of Information Technology Solutions, support of services in different fields since 2004 to more than 100 companies across the world, having its registered office that the defendant was an employee of the plaintiff company with employment I.D. that at the time of taking up the employment the defendant agreed to the terms of employment and duly signed vide employment agreement, and that the employment agreement contains clauses relating to place of work, notice period, duties, hours of work, non-solicitation, non-compete and survival - It is further averred that in order to adequately protect the interest of the plaintiff company from divulging such confidential information, the defendant agreed by non-solicitation clause 7 and non-compete clause 10 of the agreement - Held, From the above legal positions, coming back to the facts, the negative covenant is not enforceable on the post-resignation or removal, as the case may be - Once such is the case, there is no prima facie case to grant injunction in favour of the plaintiff and against the defendant, leave about the irreparable injury rather than the plaintiff, the defendant would suffer if prevented from employment and leave about the balance of convenience in favour of the defendant rather than the plaintiff, and the plaintiff is entitled if at all any claim of damages and thereby the lower Court granting injunction restraining the defendant from pursuing the employment even it is the obligation of the terms of the contract of employment to such clause by defendant having entered with plaintiff, leave about the very clause and entries pursuant thereto, that is required to be decided after full-fledged trial and ultimately if the plaintiff succeeds can claim damages - Civil miscellaneous appeal is allowed.
B. Siva Sankara Rao, J.
The defendant in O.S. No. 881 of 2017 on the file of the III Additional District Judge, Ranga Reddy District at L.B. Nagar, in the suit filed against him by the plaintiff entity for the relief of permanent prohibitory injunction restraining the defendant from working with the plaintiff's client organization i.e., Eastman Chemical India Private Limited on whose projects the defendant had worked in the 12 months, immediately preceding the defendant separated from the plaintiff entity, for a period of 12 months with effect from 13.05.2017 and for a direction to pay Rs. 7,00,000/- towards compensation/special/punitive/liquidated damages, financial loss said to have been caused by the defendant to the plaintiff entity on account of breach of the conditions of the employment agreement, dated 17.04.2015, from the temporary injunction application in I.A. No. 636 of 2017 filed by the plaintiff to grant temporary injunction restraining defendant from working with plaintiff's client organization supra or any other clients of plaintiff's company in whose projects the defendant had worked preceding the defendant separation from the plaintiff company that was on contest, by order, dated 27.10.2017, was allowed by the learned III Additional District Judge supra is impugned in the revision.
2. The averments in the temporary injunction application vis-à-vis plaint in a nut shell are that the plaintiff a registered company, the deponent of which is its director, vide authorization of board resolution, dated 26.06.2017, engaged in the business of providing wide range of Information Technology Solutions, support of services in different fields since 2004 to more than 100 companies across the world, having its registered office at Jubilee Hills, Hyderabad, that the defendant was an employee of the plaintiff company from 17.04.2015 to 12.05.2017 with employment I.D. No. 912, that at the time of taking up the employment the defendant agreed to the terms of employment and duly signed vide employment agreement, dated 17.04.2015 and that the employment agreement contains clauses relating to place of work, notice period, duties, hours of work, non-solicitation, non-compete and survival. It is further averred that in order to adequately protect the interest of the plaintiff company from divulging such confidential information, the defendant agreed by non-solicitation clause 7 and non-compete clause 10 of the agreement, which reads thus:
7. Non-Solicitation & Non Compete
Subsequent to your separation from the Company, for a period of twelve months you will not take up any job or assignment, either full time or otherwise, either directly or indirectly for/on behalf of any other organization working with the client of the Company, whose assignment you have worked on in the twelve months immediately preceding your separation from the Company.
You also hereby further agree that during the term of this agreement and for a period of 12 months immediately following the cessation/termination of your employment with the Company, you shall not directly or indirectly
a. Solicit or attempt to solicit any of the Company's Employees to work for you or any other person, firm, company, partnership or corporation competitive with the Company;
b. Request or advise any person, firm, entity, or organization to not negotiate with, contract with or engage in business with the Company, or to withdraw, curtail or cancel its business with the Company.
c. Provide labour or services to any of he client with whom you had contact or became aware of while working for the Company that are similar in nature to any labour or services provided to such client by you during your employment with the Company; or
d. Own any interest (except as a shareholder in a publicly traded corporation) in any corporation, firm, partnership, business or enterprise that competes with the Company.
10. Survival:
Notwithstanding anything contained in this Agreement, upon termination of t
Hindustan Petroleum Corpn. Ltd. v. Sriman Narayan (2002) 5 SCC 760
Bank of Maharashtra v. Race Shipping and Transport Co. (P) Ltd. (1995) 3 SCC 257
N.V. Chowdhary v. Hindustan Steel Works Construction Limited AIR 1984 AP 110
Niranjan Shankar Golikari, Krishna Murgai and Gujarat Bottling Co. Ltd. v. Coca-Cola Co.
Percept D`Mark (India) (P) Ltd. v. Zaheer Khan and another (2006) 4 SCC 227
Satyabrata Ghosh v. Mugnee Ram Bangor AIR 1954 SC 44
Superintendence Company of India (P) Ltd v. Krishna Murgai AIR 1980 SC 1717
Sandhya Organic Chemicals P. Ltd. and others v. United Phosphorous Ltd. and another
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