2024 Supreme(Online)(DEL) 546
HIGH COURT OF DELHI
Mini Pushkarna, J
NAYAN INDIA SCIENCE AND TECHNOLOGIES PVT. LTD – Appellant
Versus
TUSHAR MAURYA & ORS. – Respondent
CS(COMM)-526/2024
Mandatory injunctions for personal service are unenforceable under Section 14 of the Specific Relief Act, emphasizing that employees cannot be compelled to perform duties against their will.
Headnote:(A) Code of Civil Procedure, 1908 - Order XXXIX Rules 1 and 2 - Specific Relief Act, 1963 - Section 14 - Application for interim relief to restrain defendant from using plaintiff's confidential information and to compel knowledge transfer - Court held that mandatory injunction for personal service is not enforceable under Section 14 of the Specific Relief Act. (Paras 8, 16, 19)
(B) Employment Agreements - Obligations post-termination - Court emphasized that an employee cannot be compelled to perform personal services against their will, reaffirming the principle that mutual trust is essential in employment relationships. (Paras 17, 20)
Facts of the case:
The plaintiff sought to prevent a former employee from disclosing confidential information after joining a competitor and requested knowledge transfer as per the Employment Agreement. The defendant claimed to have fulfilled his obligations.
Findings of Court:
The court found no prima facie case for granting the injunction, stating that the plaintiff could be compensated in monetary terms.
Issues: The main issue was whether the court could compel the defendant to transfer knowledge post-employment.
Ratio Decidendi: The court ruled that specific performance of personal service contracts is barred under Section 14 of the Specific Relief Act, emphasizing that no employee can be compelled to work against their will.
Result: Application dismissed.
MINI PUSHKARNA, J:
- I.A. No. 31760/2024
1. The present application has been filed by the plaintiff under Order XXXIX Rules 1 and 2, read with Section 151 of Code of Civil Procedure, 1908 (“CPC”) for granting interim reliefs in favour of the plaintiff.
2. The present application has been filed with the following prayers: “xxx xxx xxx a. Restrain the Defendant No.1 to use/access/share any confidential, sensitive and proprietary information including and not limited to its intellectual property which Defendant No. 1 gained access during the course of his employment for his own benefit or to the benefit of any third parties including and not limited to Defendant No.2 and 3; b. Direct Defendant No. 1 to complete the exit formalities and handover all work product and knowledge to Plaintiff, return Plaintiffs confidential, sensitive and proprietary information including and not limited to its intellectual property and provide immediate access to Plaintiffs confidential information which Defendant No. 1 gained access during the course of his employment;
- c. Restrain the Defendant No. 1 from further violating any terms of the Agreement;
- d. Ex-parte interim orders m respect of (a), (b ), and ( c) above;
- e. An order for handing over of all digital storage mediums including cloud repositories accessible and in possession of Defendant No.1, to validate retention of confidential information beyond the employment period;
- f. An order of disclosure of all confidential information shared about Plaintiff including work product, intellectual property and documents worked on or having accessed by Defendant No.1 while employed at Plaintiff to any third parties including and not limited to Defendant No.2 and 3;
- g. An order of disclosure of all information shared including work product, intellectual property and documents from the date of joining with Defendant No.2; h. For costs; and i. For such other and further reliefs as the nature and circumstances of the case may require.
- xxx xxx xxx”
3. At the outset, Mr. Tanmay Mehta, learned counsel appearing for the plaintiff submits that for the present, he is pressing only prayer b, to the extent of giving direction to the defendant no.1 to transfer the work product knowledge to plaintiff, by visiting the office of the plaintiff in that regard.
4. The facts, as canvassed before this Court, are as follows:
4.1 The present suit has been filed seeking a perpetual and mandatory injunction to prevent defendant no.1 from using or disclosing the plaintiff‟s confidential and proprietary information for personal gain or for the benefit of third parties, including defendant nos. 2 and 3. The plaintiff also claims damages for violation of the Employment Agreement by defendant no.1 and seeks specific performance of the said agreement by defendant no.1. 4.2 The defendant no.1, a former employee of the plaintiff, was initially hired as a software engineer-AI in 2021 and signed an Employment Agreement dated 22nd February, 2021. Subsequently, defendant no.1 was promoted to the position of Lead-AI from January, 2022 and was further promoted to the level of Co-founder of the plaintiff vide letter dated 30th September, 2022, effective from 24th October, 2022.
4.3 The defendant no.1 had been intimately involved in understanding, development and promotion of plaintiff‟s products and services, including the Driver Behaviour Monitoring feature of plaintiff‟s application, which can be integrated through Dashcams as well. Defendant no. 1 has been part of and aware of all the developments in the plaintiff-company in this technology particularly, and was involved in all key strategic decisions.
4.4 Defendant no.1 also participated and represented plaintiff in the capacity of Lead-AI as well as Co-founder on multiple occasions, before current and prospective clients, investors, government events and vendors, discussing and presenting plaintiff‟s products and services, including the Driver Behaviour Monitoring feature. Additionally, defenda