IN THE HIGH COURT OF BOMBAY
S.S. Nijjar, J.
Jet Airways (I) Ltd...... Plaintiff.
Versus
Mr. Jan Peter Ravi Karnik..... Defendant.
Notice of Motion No. 632 of 2000 in Suit No. 711 of 2000 with Notice of Motion No. 633 of 2000 in Suit No. 712 of 2000 with Notice of Motion No. 634 of 2000 in Suit No. 713 of 2000 with Notice of Motion No. 676 of 2000 in Suit No. 766 of 2000, decided on 17-4-2000.
Advocates appeared :
Gulam Vahanvati with Ms. Armin Kalyanram Ms. Vishakha Vaswani i/b V.V. Juris, in Notice of Motion No. 632 of 2000 in Suit No. 711 of 2000, for the plaintiff.
Shekhar Naphade with Nutan Desai i/b Sanjiv Kanchan Co., in Notice of Motion No. 632 of 2000 in Suit No. 711 of 2000, for the defendant.
Janak Dwarkadas with Ms. Armin Kalyanram Ms. Vishakha Vaswani i/b V.V. Juris, in Notice of Motion No. 633 of 2000 in Suit No. 712 of 2000, for the plaintiff.
Virendra Tulzapurkar with Nutan Desai i/b Sanjiv Kanchan Co., in Notice of Motion No. 633 of 2000 in Suit No. 712 of 2000, for the defendant.
Janak Dwarkadas with Zal Andhyarujina Ms. Vishakha Vaswani i/b V.V. Juris, in Notice of Motion No. 634 of 2000 in Suit No. 713 of 2000, for the plaintiff.
D.H. Mehta with Nutan Desai i/b Sanjiv Kanchan Co., in Notice of Motion No. 634 of 2000 in Suit No. 713 of 2000, for the defendant.
Iqbal Chagla with D.J. Khambatta Ms. Vishakha Vaswani i/b V.V. Juris, in Notice of Motion No. 676 of 2000 in Suit No. 766 of 2000, for the plaintiff.
J.B. Chinoy with K.K. Khurana, Rahul Rao, Mahendra Rathod and Nutan Desai i/b Sanjiv Kanchan Co., in Notice of Motion No. 676 of 2000 in Suit No. 766 of 2000, for the defendant.
INJUNCTION - RESTRAINT OF TRADE - NEGATIVE COVENANT - VALIDITY - REASONABLENESS - PUBLIC INTEREST - BALANCE OF CONVENIENCE - SPECIFIC RELIEF ACT, 1963, SECTIONS 41(E), 42.
Fact of the Case:
The plaintiffs, Jet Airways, sought an order of permanent injunction restraining the defendants, who were pilots employed by the plaintiffs, from taking up or continuing any employment until 11th October, 2005 with any other Airline including Sahara Airlines for the purpose of operating aircraft on the basis of the endorsement of the licence obtained as a result of the training provided by the plaintiffs, that is to say, for operating B 737 Series 300/400/500. The plaintiffs also sought an order directing the defendants to return forthwith to the plaintiffs the documents and articles set out in Exhibit-1. The plaintiffs also sought a money decree against the defendants in the sum of Rs. 6,94,000/- together with interest at the rate of 24 per cent per annum from the date of the filing of the suit until payment or realisation.
Finding of the Court:
The court held that the negative covenant in the employment contracts was in restraint of trade and was unreasonable, unfair and unconscionable. The court also held that the plaintiffs had failed to show prima facie any legal or equitable right for the grant of injunction. The court further held that the balance of convenience lay in favour of the defendants and that the plaintiffs could be suitably compensated by award of damages in the event the suit was finally decreed against the defendants and in favour of the plaintiffs.
Issues: 1. Whether the negative covenant in the employment contracts was in restraint of trade and was unreasonable, unfair and unconscionable? 2. Whether the plaintiffs had shown prima facie any legal or equitable right for the grant of injunction? 3. Where the balance of convenience lay?
Ratio Decidendi: 1. A negative covenant in an employment contract is in restraint of trade if it prevents the employee from exercising a lawful profession or trade or business of any kind. 2. A negative covenant in an employment contract is unreasonable, unfair and unconscionable if it is not designed to protect any proprietary interest of the employer. 3. The balance of convenience lies in favour of the employee if an injunction would compel the employee to remain idle or would force the employee to serve the employer.
Final Decision: The court dismissed the plaintiffs' Notices of Motion for injunction with costs.
S.S. NIJJAR, J.:---This order will dispose of Notices of Motion 632 of 2000 in Suit No. 711 of 2000, 633 of 2000 in Suit No. 712 of 2000, 634 of 2000 in Suit No. 713 of 2000 and 676 of 2000 in Suit No. 766 of 2000. Since the facts are substantially the same in all the four suits, for facility of reference, the facts are being reported from Suit No. 711 of 2000.
2.The plaintiff seeks an order of permanent injunction restraining the defendant from taking up or continuing any employment until 11th October, 2005 with any other Airline including Sahara Airlines for the purpose of operating aircraft on the basis of the endorsement of the licence obtained as a result of the training provided by the plaintiff, that is to say, for operating B 737 Series 300/400/500. The plaintiff also seeks an order directing the defendant to return forthwith to the plaintiff the documents and articles set out in Exhibit-1. The plaintiff also seeks a money decree against the defendants in the sum of Rs. 6,94,000/- together with interest at the rate of 24 per cent per annum from the date of the filing of the suit until payment or realisation.
3.Notice of Motion No. 632 of 2000 has been taken out seeking an order of temporary injunction in the same terms as stated above.
4.The plaintiff carries on the business of Air transport carrier within India and operates a fleet of modern Aircraft. The plaintiff commenced operation in May, 1993. It decided to operate and expand its fleet based on the latest series of Boeing 737 aircraft in India only the Aircraft 737-200 was operated. The plaintiff, however, introduced the series B 737-300/400. The plaintiff was the first Airline to induct these two series of aircrafts in India. When the plaintiff commenced operations, there were no pilots in India who were rated for this type of aircraft i.e. who were valid licences endorsed by the Director General of Civil Aviation (DGCA) to fly this type of aircraft. The plaintiff, therefore, embarked on a manpower plan of recruiting Indian pilots and training in the First Officers and Commanders. In the initial year of the Airlines operation, the Aircraft were commanded by foreign instructors who were training the plaintiff Indian Pilots. The defendant was employed by the Plaintiff after an interview on 30th April, 1998. Prior to joining the plaintiff, the defendant was employed by the Indian Navy and thereafter by Span Air. When the defendant joined the plaintiff, he had been flying Super King Air 8 200",. In order to equip the pilots for operating B-737/300/400 series an intensive training has to be undertaken. The plaintiff organised the necessary training for the defendant and the other pilots. In the letter of appointment dated 30th April, 1998 the defendant was offered the post of Trainee First Officer on certain terms and conditions. In consideration of the plaintiff making the arrangement for the training of the defendant, the defendant agreed and undertook that during a period of 7 years from the date of completion of training in India and abroad and on resuming actual services with the plaintiff as First Officer, he would not accept employment, similar in nature, either in full time or part time with any other employer. In the event of the defendant resigning from the services, he would make good to the plaintiff entire cost in respect of training and/or damage, if any. The defendant joined the services of the plaintiff w.e.f. 4th May, 1998. The total cost of training is approximately Rs. 15 lakhs. Therefore, the defendant had agreed to provide a bank Guarantee/deposit for a sum of Rs. 7.5 lakhs for a period of 7 years. The balance Rs. 7.5 lakhs was to be recovered in instalments from the salary of the defendant after successful completion of training over a period of 3 years. In addition to this, the defendant was required to execute the indemnity bond with two sureties for an amount of Rs. 7.5 lakhs and agreeing to serve the company for a period of 7 years
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