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2006 Supreme(Del) 952
High Court Of Delhi
AMERICAN EXPRESS BANK LTD - Appellant
Versus
PRIYA PURI - Respondent
Decided On : 05/24/2006
Headnote:
CONTRACT - Employment - Restraint of Trade - Confidentiality - Injunction - Whether the defendant obtained any file containing trade secrets or confidential information from Ms. Shikha Bhardwaj or from anyone else or the allegations have been made only with a view to coerce her into remaining in her job and/or on account of fear of the plaintiff bank of losing its those clients which were brought by defendant, due to her departure.
Fact of the Case:
The plaintiff, a banking company, filed a suit against the defendant, its former employee, for permanent and mandatory injunction, alleging that the defendant had disclosed confidential information and trade secrets relating to the plaintiff's business and operations, and had solicited or induced away any of the plaintiff's customers. The defendant denied the allegations and contended that all the allegations regarding misuse of the alleged confidential information or retaining the same have been made only after she resigned from the plaintiff bank with a view to coerce her into remaining in her job and the intention of the plaintiff to adopt coercive means in an effort to retain its customer base and prevent competition is bearing fruits as on account of interim order the defendant is unable to obtain employment anywhere else till date, which is causing grave hardship and injury to the defendant and interfering with her fundamental right to earn her livelihood.
Finding of the Court:
The court found that the plaintiff had failed to make out a strong prima facie case in its favor and that the balance of convenience was in favor of the defendant. The court held that the injunction as prayed by the plaintiff would have a direct impact on curtailing the freedom of the defendant in her future prospects and service and that such an injunction would rather lead to multiplicity of proceedings.
Issues: 1. Whether the defendant obtained any file containing trade secrets or confidential information from Ms. Shikha Bhardwaj or from anyone else or the allegations have been made only with a view to coerce her into remaining in her job and/or on account of fear of the plaintiff bank of losing its those clients which were brought by defendant, due to her departure. 2. Whether the plaintiff had made out a strong prima facie case in its favor.
Ratio Decidendi: 1. The court held that the plaintiff had failed to produce any evidence to show that the defendant had obtained any file containing trade secrets or confidential information from Ms. Shikha Bhardwaj or from anyone else. The court also found that the plaintiff had not produced any evidence to show that the defendant had disclosed any confidential information or trade secrets relating to the plaintiff's business and operations, or had solicited or induced away any of the plaintiff's customers. 2. The court held that the plaintiff had failed to make out a strong prima facie case in its favor and that the balance of convenience was in favor of the defendant.
Final Decision: The court dismissed the plaintiff's application for an injunction and vacated the interim order dated 15th October, 2005.
( 1 ) THIS order shall dispose of Plaintiff s application under Order 39 rules 1 and 2 of the Code of Civil Procedure and the defendant s application under Order 39 Rule 4 of Code of Civil Procedure to vacate the interim order dated 15th October, 2005 whereby by t,,,he defendant was restrained from using the information and data regarding the wealth of the customers of the plaintiff bank and customers? wealth management operations and iwealth View program/operations of the plaintiff?s bank.
( 2 ) BRIEF facts to comprehend the controversies between the parties are that the plaintf filed the suit for permanent and mandatory injunction against the defendant seeking inter-alia a restrain against the defendant from using or disclosing any information and trade secrets relating to the business and operations of the plaintiff and to solicit or induce any of the customers of the plaintiff especially those who are part of the wealth management operation and/or iwealth View programme and from breaching the confidentiality term as per letter of appointment/code of conduct including customers privacy principles/policies. The plaintiff also sought mandatory injunction against the defendant to deliver up all the confidential information, data and trade secrets in particular the customer list of wealth management operations and/or the iwealth View programme/operations of the plaintiff available with the defendant or under her control.
( 3 ) THE plaintiff contended that it is a banking company under the laws of state of Connecticut, USA doing banking business in India and having its branch office at Hamilton House, Connaught Place, New Delhi. The plaintiff was an employee of defendant as head of wealth management, Northern Region. The defendant was employed in the management cadre on the terms and conditions stipulated in the letter dated 12. 3. 2001. The relevant terms for the purpose of present applications are as under:-"after confirmation, if you wish to resign from the Company s service, you will be required to give one month s notice in writing to the Company or one month s salary in lieu thereof. Similarly, the company may terminate your employment by giving you one month s notice or one month s salary in lieu thereof. ""you will maintain the confidentiality of all the information that you will be exposed to and will not divulge any information pertaining to the operations of the Company or any of its affiliates to any one without the express written permission of your superior. ""you will not, at any time, while in employment with Company, use other than in reference to the business of the Company and in the course of your duties any such confidential information OR after cessation of employment with the Company, use to disclose to anyone else such confidential information and you will also undertake to indemnify the Company and its affiliates from any loss or damage arising from any breach of this undertaking. ""you will be bound by all rules, regulations, policies and other orders issued/amended by the Company from time to time in relation to working hours, conduct, discipline, leave, medical, retirement and any other matter as though these rules, regulations, policies and orders were a part of this contract of this employment. "
( 4 ) THE plaintiff contended that it has various interests in finance and banking service industry in India including credit cards and wealth management etc and various business activities of wealth management are named and styled iwealth View. The products under the iwealth View are demand products, term deposits and mutual funds.
( 5 ) ON employment, the defendant initially joined in the credit cards division at a position with American Express Travel Related services where she continued till 2003 and thereafter she was moved to Wealth Management division.
( 6 ) THE plaintiff asserted that it has a code of conduct along with certain company policies which are applicable to all the employees
