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IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. ANAND VENKATESH, J.
E-merge Tech Global Services p Ltd., Represented by its Authorised Signatory, R. Venkatesh - Appellant
Versus
M.R. Vindhyasagar & Another - Respondent
Civil Suit No. 258 of 2020
Decided On : 15-12-2021
Civil Procedure Code, 1908 - Order VII, Rule 1 - O.S.Rules - Order IV, Rule 1 - Copy rights Act, 1957 - Section 61 and 62 - Commercial Courts, Commercial Appellate Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015 - Section 7 – Indian Contracts Act, 1872 - Section 27, 73 - Relief of damages to tune of Rupees Two Crores and for the consequential relief of permanent injunction restraining Defendants from divulging or exploiting copyrighted material belonging to Plaintiff, restraining Defendants from divulging confidential material and from directly or indirectly soliciting customers/clients of Plaintiff - Whether first Defendant is bound by non-solicit, non-compete and confidentiality/ non-disclosure agreement - Whether Plaintiff is entitled for permanent injunction as sought for against Defendants - Whether Plaintiff is entitled to damages and an account of profits - Whether Plaintiff is entitled to claim for infringement of their copyrighted work against Defendants – Held, first Defendant knew every shred of information pertaining to Plaintiff company and profile of its every client, particularly PI Healthcare - Defendant had an obligation under non-solicit and confidentiality/non-disclosure clauses and if same is violated, he is bound to face consequences - This is more so since Defendant is bound by non-solicit clause for a period of 3 years even after leaving employment - As confidentiality clause is concerned, he was bound by same during term of employment and even thereafter - Court has held in favour of Plaintiff Company with regard to non-solicit clause and confidentiality/non-disclosure clause and Plaintiff will be entitled for relief of permanent injunction as claimed in relief (c) and (d) in plaint - Plaintiff will also be entitled for the relief (e) claimed in plaint - It is clear that contention of learned counsel for plaintiff that Plaintiff Company is entitled to both compensatory damages as well as an account of profits cannot be accepted - This Court is of considered view that an order directing an account of profits developed in response to cases where loss suffered could not be measured adequately or if measured could/would not adequately place plaintiff in same position as if breach had not occurred - Court was empowered to justly compensate plaintiff by assessing damages with reference to gains made by defendant instead of conventionally assessing it with reference to loss caused to plaintiff - No material available to substantiate this claim - Name of second Defendant company is completely different - Judged by standard of an ordinary prudent man it is impossible to mistake second Defendant company to be a rebranded version of Plaintiff Company – Directions issued.
JUDGMENT :
(Prayer: Civil Suit has been filed under Order IV, Rule 1 O.S.Rules and Order VII, Rule 1 of the C.P.C. Read with Section 61 and 62 of the Copy rights Act, 1957 r/w Section 7 of the Commercial Courts, Commercial Appellate Courts, Commercial Division and Commercial Appellate Division of the High Courts Act, 2015, praying to pass a judgment and decree for:-
(b) Permanent injunction restraining the defendants, their men, directors, employees, agents, servants, representatives or any persons acting on their behalf from divulging or disseminating or otherwise exploiting the copy righted material belonging to the plaintiff as defined in Schedule A of the plaint in any manner including but not limited to reproducing, issuing copies of, communicating to the public, selling or public selling or offering for sale, adoption or infringing by any other means whatsoever, the plaintiff’s copy righted work;
(c) Permanent injunction restraining the defendants, their men, directors, employees, agents, servants, representatives or any persons acting on their behalf in any manner which could divulge and / or enable others to divulge the plaintiff’s confidential information which as described in Schedule B of the plaint, and in each of the products and information individually, specifically by reproducing, issuing copies of, communicating to the public, selling or public selling or offering for sale, adoption or infringing by any other means whatsoever, the plaintiff’s copy righted work.
(d) Permanent injunction restraining the defendants, their men, directors, employees, agents, servants, representatives or any persons acting on their behalf from directly or indirectly soliciting PI Healthcare holdings limited and any of the customers/clients of the plaintiff.
(e) directing the defendants to disclose in an affidavit the confidential information /data and trade secrets, and any other such details pertaining to the operation of the plaintiff companies that are in the possession of the defendants which belong to the plaintiffs and to return all such confidential information / data that are in possession of the defendants to the plaintiffs and to consequently return all the confidential information / data, trade secrets, and other such details in whatever from that are stored by the defendants, back to the plaintiffs.
(f) Directing the 2nd defendant to disclose its books of accounts including ledger accounts, balance sheets, bank statements and tax returns from the financial year 2019-2020 onwards for each financial year till the production of such book of accounts.
(g) Directing that the cost of the suit be paid by the defendants to the plaintiffs.)
1. The suit in C.S.No.258 of 2020 is laid for the relief of damages to the tune of Rupees Two Crores and for the consequential relief of permanent injunction restraining the Defendants from divulging or exploiting the copyrighted material belonging to the Plaintiff, restraining the Defendants from divulging the confidential material and from directly or indirectly soliciting the customers/clients of the Plaintiff. The Plaintiff has also sought for the relief of rendition of accounts and for a direction to the Defendants to disclose the availability of the confidential information and return of the same to the Plaintiff.
2. The case of the plaintiff is that for the past 13 years they are into the business of service/knowledge processing and provide knowledge intensive solutions which also includes patent and technology research, business research, life science information research, etc. The first Defendant was appointed as Manager-Business Development in the Plaintiff Company through a letter of appointment dated 31.12.2007. The appointment letter, amongs
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