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2015 Supreme(Mad) 1276

HIGH COURT OF JUDICATURE AT MADRAS
R. SUBBIAH, J.
M/s. Indigo Business Services (India) Pvt Ltd. & Another - Appellants
Versus
M/s. Focal Merchandising (India) Pvt Ltd., represented by its Director, Noel Mohan Ravin & Others - Respondents
Original Application No. 981 of 2014 & Application No. 275 of 2015 in Civil Suit No. 793 of 2014
Decided On : 10-03-2015

Advocates Appeared:
For the Applicants:V. Prakash, Senior Counsel for K. Sudalai Kannan, Advocate.
For the Respondents:AR.L. Sundaresan, Senior Counsel for M/s. Vijayaganesh, M/s. Sairaj Associates, Advocates.

Headnote:

Injunction - Business Dispute - Order XIV Rule 8 of Original Side Rules, Order 39 Rules 1 & 2 and Section 151 of CPC - [Intellectual Property Rights, Business Competition, Goodwill] - [Order XIV Rule 8, Order 39 Rules 1 & 2, Section 151 of CPC] - The court vacated the interim injunction restraining the defendants from doing business with the clients of the plaintiff company, as the defendants had started a new business in their own name after leaving the plaintiff company, and the plaintiffs had quantified the damages, making them not entitled to injunction.

Fact of the Case:

The plaintiffs sought an interim injunction to restrain the defendants from doing any Point of Purchase display or advertising business with the clients of the plaintiff company, alleging that the defendants had diverted orders and business goodwill, resulting in loss to the plaintiff company.

Finding of the Court:

The court vacated the interim injunction, stating that the defendants had started a new business in their own name after leaving the plaintiff company, and the plaintiffs had quantified the damages, making them not entitled to injunction.

Issues: The main issue was whether the plaintiffs were entitled to an interim injunction restraining the defendants from doing business with the clients of the plaintiff company.

Ratio Decidendi: The court found that the defendants had started a new business in their own name after leaving the plaintiff company, and the plaintiffs had quantified the damages, making them not entitled to injunction.

Final Decision: The court vacated the interim injunction and dismissed the original application filed by the plaintiffs.

Judgment :-

1. Original Application No.981 of 2014 has been filed by the applicants/plaintiff under Order XIV Rule 8 of Original Side Rules read with Order 39 Rules 1 & 2 and Section 151 of CPC, praying to grant ad-interim injunction restraining the respondents/defendants from doing any Point of Purchase display or any such advertising business with any of the clients of the 1st applicant/plaintiff company, listed in the Schedule A of this application, pending disposal of this suit.

2. The applicants herein are the plaintiffs and the respondents herein are the defendants in the suit. For the sake of convenience, the parties are referred to as per their rankings in the suit.

3. The brief facts of the case of the plaintiffs are as follows:

3(1) The 1st plaintiff viz., M/s.Indigo Business Services (India) Pvt. Ltd., was incorporated in the year 1994 by the 2nd plaintiff, who is one of the Directors of the 1st plaintiff-company. As on date, the other Directors of the 1st plaintiff-company are one Smt.Amirtha Besant Raj (mother of the 2nd plaintiff) and Ms.NaliniRemeilaRaj (wife of the 2nd plaintiff). The 1st plaintiff-company is a Boutique Advertising Company that makes 'In Store' displays for leading Companies in the country like Hindustan Unilever, Pepsi, ITC, Glaxo-SmithKline, Reckitt Benckiser, Marico Industries, Johnson & Johnson Co., Vodafone, Murugappa Group, MRF, Colgate Palmolive, Britannia Industries, Pedigree etc. The 1st plaintiff-company through the efforts of the 2nd plaintiff, who is also the Promoter, had with great deal of investment and strain built up its goodwill in the business over the years and that such efforts together with dedicated performance led to the 1st plaintiff-company earning its goodwill and a high profile client base.

3(2) The shareholders of the 1st plaintiff-company are the 2nd plaintiff and his mother and wife viz., the said Smt. Amirtha Besant Raj and Ms. NaliniRemeilaRaj respectively and all the shareholders are the Directors of the 1st plaintiff-company. The 3rd defendant viz., Mr.Noel Mohan Ravin is none other than the brother-in-law of the 2nd plaintiff ie., younger brother of the 2nd plaintiff's wife Ms.NaliniRemeilaRaj.

3(3) In the year 1995, the 3rd defendant joined the 1st plaintiff-company as a Marketing Executive and remained in that capacity till late 1999, when he had to be with his father at Nagercoil, as his father had undergone surgery and was recuperating. Thereafter, about a year later, he (2nd defendant) re-joined the 1st plaintiff-company again as a Client Service Manager in the year 2000 and thereafter, he was elevated to the position of Director of the 1st plaintiff-company during March-2002. The 3rd defendant remained as a Director until his resignation in the year 2014. The 3rd defendant was put in-charge of the business, when the 2nd plaintiff (Promoter of the business) and his wife Mrs. NaliniRemeilaRaj decided to move to Tornto, Canada with family to expand the business and look for new opportunities. Therefore, from the year 2008, the 3rd defendant, being a relative and having been put in a position of trust, was made the Indian Head and Marketing Head of the 1st plaintiff-company and given the complete responsibility to manage and improve the business in India. At the time, when the 3rd defendant assumed this role in the 1st plaintiff-company, the turnover of the 1st plaintiff-company was Rs.7 crores per annum.

3(4) The 3rd defendant was the overall in-charge of the affairs of the 1st plaintiff-company since the year 2008 including its day-to-day operations. The 4th defendant viz., Mr.SakthiVadivelan was the General Manager (Finance & Operations) of the 1st plaintiff-company. The 5th defendant viz., Mr.V.Shankar was the Manager-Client Service and he was maintaining customer relations.

3(5) During the month of February-2014, the 3rd defendant expressed his desire to resign from service of the 1st plaintiff-company. After the 3rd defendant expressed his desire to resign f





























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