IN THE HIGH COURT OF DELHI AT NEW DELHI
RAJIV SAHAI ENDLAW, J.
Navigators Logistics Ltd. - Petitioners
Versus
Kashif Qureshi & Ors. - Respondents
CS(COMM) 735 of 2016, CCP(O) Nos.45 of 2016 & 46 of 2016, IAs No.7964 of 2016 (for directions), 7421 of 2016 (u/O XXXIX R-1&2 CPC), 7422 of 1016 (u/O XXVI R-9&10 CPC) & 13684 of 2016 (u/O VII R-11 CPC
Decided On : 17-09-2018
Confidentiality Agreement - Employment Contract - Copyright Act, 1957 - Section 2(c) and (o) - The plaintiff's claim for permanent injunction and damages against the defendants was dismissed by the court. The court found that the plaintiff's claim for copyright in its original literary and artistic works was not supported by specific details and failed to establish a case for copyright infringement. The court also held that the plaintiff's claim for breach of confidentiality agreement and non-compete clause in the employment contract was void under Section 27 of the Contract Act. The court dismissed the suit and rejected the plaintiff's claim for injunction and damages.
Fact of the Case:
The plaintiff filed a suit against twelve defendants, alleging that they misused the plaintiff's confidential data and trade secrets after leaving the plaintiff's employment. The plaintiff sought permanent injunctions, damages, and recovery of Rs.1,50,00,000 from the defendants.
Finding of the Court:
The court found that the plaintiff's claim for copyright in its original literary and artistic works lacked specific details and failed to establish a case for copyright infringement. The court also held that the plaintiff's claim for breach of confidentiality agreement and non-compete clause in the employment contract was void under Section 27 of the Contract Act. The court dismissed the suit and rejected the plaintiff's claim for injunction and damages.
Ratio Decidendi: The court held that the plaintiff's claim for copyright infringement lacked specific details and failed to establish a case for copyright infringement. The court also held that the plaintiff's claim for breach of confidentiality agreement and non-compete clause in the employment contract was void under Section 27 of the Contract Act.
Final Decision: The court dismissed the suit and rejected the plaintiff's claim for injunction and damages.
1. The plaintiff instituted this suit against as many as twelve defendants, pleading (i) that the plaintiff is engaged in the field of logistics and freight forwarding services; (ii) that the plaintiff has developed and evolved very distinctive, detailed and comprehensive data, information and databases pertaining to running of its business; (iii) that this includes all the confidential data, customer database, accounts information, airway drawings, airway bills templates, plans, reports, taxes and other financial information; (iv) that the aforesaid confidential data and information constitute the trade secrets of the plaintiff and are in the digital format and are stored on computers, computer systems, computer networks, computer resources and communication devices of the plaintiff; v) that the said information, data and other related material are original artistic and literary works of the plaintiff within the meaning of Section 2(c) and (o) of the Copyright Act, 1957; (vi) that the plaintiff is the first owner of the copyright in the said information, data and other related materials; vii) that for the purpose of conducting its day-to-day business and activities, the plaintiff engages the services of various employees; (viii) that owing to the sensitive nature of the information to which the said employees would become privy, the plaintiff has got very stringent legal documentation which it gets signed from all its employees at the time of joining the employment; (ix) that the defendant no.1 was employed as Customer Service Executive, the defendant no.2 as Deputy Manager (Commercial), the defendant no.3 as Assistant Manager (Pricing), the defendant no.4 as Customer Service Executive, the defendant no.5 as Sales Executive, the defendant no.6 as Business Development Manager, the defendant no.7 as Assistant Manager (Pricing) and defendant no.8 as Accounts Executive (Overseas) with the plaintiff; x) that the Appointment Letters of the defendants contain inter alia the following Clauses:
“3. During the probation period your services maybe terminated with two week’s notice or salary in lieu (Basic salary + All allowances/benefits/reimbursements) from either side. However, after the confirmation of service, the notice period would automatically stand revised to 1 (one) month from either side. The Company reserves the right to terminate your services without assigning any reasons by giving 1 month notice in writing or 1 month’s salary in lieu thereof.
5. Incase an employees service is terminated with or without notice, or in the event the employee resigns from the service, then wherever applicable, the employee is first required to recover all the outstanding, (which the client/customer owes to the company), from any clients/customer, which client/customer has been generated by the employee. The Company will not issue a relieving letter or complete exit formalities without the employee first having collected such outstanding from the respective client/customer. The Company is at liberty to first adjust from any salaries and dues of such employee such outstanding amount, at the time of payment of final dues. It is also clarified that, where the Company receives or recovers such outstanding from the client/customer, the Company shall pay to the employee his/her dues so adjusted along with the relieving letter. However, where the Company incurs any cost (including for legal counsel’s fees) for the purpose of recovery of any such outstanding from such client/customers, the same shall be adjusted with the salaries or payments of the employees at the discretion of the Management.
6. The Company also reserves the right to terminate your services without any notice or salary in lieu thereof on the grounds of misconduct, integrity issue, or even in the case of reasonable suspicion of misconduct, disloyalty, commission of any act involving moral turpitude, or any act of indiscipline or inefficiency or loss of confidence.
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