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2016 Supreme(Del) 3171

IN THE HIGH COURT OF DELHI AT NEW DELHI
VIBHU BAKHRU, J.
M/S STELLAR INFORMATION TECHNOLOGY PRIVATE LTD – Appellant
Versus
MR RAKESH KUMAR & ORS – Respondents
CS (COMM) No. 482 of 2016
Decided On : 29-08-2016

Advocates Appeared:
For the Appellant :Mr. Gagan Mathur, Advocate.
For the Respondent:Mr. Roshan Santhalia, Advocate and Mr. Kirtiman Singh, CGSC.

Headnote:

Contract Act, 1872 - Section 27 - Agreement - Negative covenant - Ad interim injunction - Vacated - Defendant Nos. 1 to 3 are the employees of the Plaintiff - Defendant Nos. 5 to 7 are the spouses of Defendant Nos. 1 to 3 - Defendant no. 4 is a company promoted by Defendant nos. 5 to 7 - Access to Plaintiff's confidential data - Breach of the "Confidentiality and Invention Assignment Agreement" and "Employee Confidentiality Agreement" - Restriction to carry on competing business for a limited time - Plaintiff attempted to enforce a covenant in restraint of trade - Whether an agreement is void - This provision is not applicable when the restraint is for a limited period only - Partial restriction have effect only when the fact fall within the exception to the section - A contract has for its object a restraint of trade is void - Section 27 of the Contract Act is general in terms - Unless a particular contract can be distinctly brought within Exception 1 there is no escape from the prohibition - Application is dismissed - Interim order is vacated.

JUDGMENT :

VIBHU BAKHRU, J.

IA No. 5576/2016

1. The Plaintiff has filed the present application, inter-alia, praying as under:-

"(a) Pass an ex-parte ad interim injunction order thereby restraining the defendant, his agent, servants, or any other person on behalf of defendants from using and utilizing the Confidential Information of the plaintiff company and from carrying out any activity including competitive activity in breach of the Confidentiality and Invention Assignment Agreement and Employee Confidentiality Agreement and from approaching the clients, customers and employees of the plaintiff company and further restrain them from bad-mouthing and indulging in vilification campaign against the plaintiff company and thereby cause harm to the reputation and goodwill of the plaintiff company;

(b) Pass an ex-parte ad interim injunction order thereby directing the defendant no. 4 to render accounts before this Hon'ble Court;"

2. The Plaintiff is a private company and is, inter-alia, engaged in the business of Data Recovery. The Plaintiff states that it has been providing a wide range of Data Recovery, Data Migration and Data Erasure Solutions to its clients in India and abroad.

3. Defendant Nos. 1 to 3 are the erstwhile employees of the Plaintiff. Defendant Nos. 5 to 7 are the respective spouses of Defendant Nos. 1 to 3. Defendant no. 4 (hereafter 'Tech chef’) is a company promoted by Defendant nos. 5 to 7 and they are also the directors of the said company.

4. The Plaintiff alleges that although Defendant nos. 5 to 7 are shown as the promoters/directors of Tech chef, in fact, its business is carried on by Defendant nos. 1 to 3, who are in de facto control and management of Tech chef. It is further alleged that Tech chef is also carrying on the same activities/business as is being carried on by the Plaintiff - that is, the business of providing services relating to data recovery, data migration and data erasure - and is directly competing with the Plaintiff.

5. It is the Plaintiff’s case that Defendant nos. 1 to 3 - by virtue of their employment with the Plaintiff - had access to Plaintiff’s confidential data, information, trade secrets and know how and they are now using the same for securing the business from the Plaintiff's clients. According to the Plaintiff, the same is breach of the “Confidentiality and Invention Assignment Agreement” and “Employee Confidentiality Agreement” entered into by Defendant nos. 1 to 3 with the Plaintiff.

6. The Plaintiff claims that it became aware of an email forwarded by Defendant no.1 to Defendant no. 3 regarding a work order sent by M/s Rollatainers Limited, which the Plaintiff claims is an ancillary of M/s Amtek Group, which in turn is stated to be a customer of the Plaintiff. It is further claimed that the Defendants are continuing to approach the Plaintiff's customers and soliciting work from them. It is contended that the aforesaid action of the Defendants approaching the Plaintiff's customers is in violation of the aforesaid Agreements entered into by the Defendants with the Plaintiff.

7. Mr. Mathur, the learned counsel for the Plaintiff submitted that the Defendants have stolen the Plaintiff's client list, which includes the phone numbers and contact details of the concerned persons, and are using the same for their business. He further stated that the Defendants had also not returned the laptop provided to them during their employment. It was earnestly contended that the client list prepared by the Plaintiff is its proprietary information and, therefore, the Defendants must be restrained from using the said list and/or approaching the Plaintiff's customers.

8. Mr. Mathur further submitted that the Defendants were only restrained from carrying on the competing business and that too for a limited period and therefore, the subject clause was reasonable and in terms of the Agreements, the Plaintiff was entitled to injunctive relief. He relied upon the decisions of this Court in Diljeet Titus, Advoc












































































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