The main legal point established in the judgment is that the reliefs claimed in the suit would result in a violation of the doctrine of restraint of trade contained in Section 27 of the Indian Contract Act, and hence, the suit was dismissed.

VALMIKI J. MEHTA, J

IA No. 14900/2017 (exemption)

Exemption allowed subject to just exceptions.

I.A. stands disposed of.

CS(OS) No. 671/2017 and IA No. 14899/2017 (Order XXXIX Rules 1 & 2)

1. This suit seeking reliefs of injunction, damages and rendition of accounts is filed by the plaintiff company against two defendants. Defendant no.1 in the suit is the Ex-Director of the plaintiff company. Defendant no.2 is the company of which defendant no.1 is the Principal Promoter. As per the suit plaint the following reliefs are prayed:-

“In view of the above facts and circumstances, the Plaintiff most humbly prays that this Hon’ble Court may be pleased to grant a decree in favour of the Plaintiff and against the defendant to the following effect:

(a) Restrain the Defendants, their officers, directors, employees, agents, representatives, successors in interest, assignees or anybody acting through them or on their behalf from, in any manner whatsoever, utilising the Plaintiff’s confidential, strategic and proprietary information acquired by Defendant No. 1 by virtue of his association with the Plaintiff;

(b) Direct the Defendants to jointly and severally pay damages to the tune of INR 2,00,00,000 (Rupees Two Crores) with interest at the rate of 18% per annum;

(c) For rendition of accounts of Defendant No. 2 and any further damages found to be payable to the Plaintiff by the Defendants jointly and severally, upon accounts so rendered, for which the Plaintiff undertakes to pay any additional court fees if found to be required:

(d) Award costs of the proceedings in favour of the Plaintiff; and pass any such other or further orders/directions as this Hon’ble Court may deem fit and proper in the facts and circumstances of this case."

2. The relief clauses in the plaint are predicated on the cause of action during the tenure of the defendant no.1 as director with the plaintiff company, the defendant no.1 has derived knowledge and information as regards business of manufacture and sale of electric buses, and that this knowledge and information therefore the defendant no.1 as also the defendant no. 2 company which is promoted by defendant no. 1, cannot use for carrying on business.

3. During the course of arguments learned counsel for the plaintiff has drawn the attention of this Court to the following paras of the plaint which as per the plaintiff creates a cause of action for the plaintiff company to file the suit and claim the reliefs as prayed:-

“54. During the meeting of the Board of Directors held on February 9, 2017 in Dharuhera (which was attended by Defendant No. 1), a discussion was held on the Plaintiff’s updated strategy and the Board of Directors was made aware of substantial confidential information including the details of selected battery chemistry, details relating to Microvast (the Chinese battery technology partner identified by the Plaintiff after months of efforts), the build of its pilot electric vehicle and details of other partners/vendors.

xxxxx xxxxx xxxxx

58. The chassis is the foundation on which the body of the electric bus has to be built and has to match the exact specifications and size of the components of the electric bus, in particular, the battery and the climate control system. Without finding the chassis that matched the precise specifications that the Plaintiff had indentified, there was no possibility for the Plaintiff to build its electric buses so as to match its strategy. When the Plaintiff and its founders carried out research to identify the appropriate chassis maker, which included visits and discussions with the major chassis makers and automobile and bus manufacturers in India, the Plaintiff learnt that chassis makers build, manufacture chassis so as to meet their local mass production requirements. Through this process of trial, error and elimination, some time around January, 2017, the Plaintiff determined that the chassis could not be procured in India and had to be imported in all likelihood from