M/S VOGUESERV INTERNATIONAL PVT LTD v. RAJESH GOSAIN & ORS

1. The Plaintiff, a company incorporated under the Companies Act filed the suit against the Defendants, its ex-employees inter alia seeking a decree of permanent injunction against the Defendants restraining them from contacting or dealing with Companies namely “STRAUSS innovations” (Germany), “BOLTZE” (Germany), “IMPRESSIONEN” (Germany), “SCHNEIDER” (Germany), and DS PRODUKTE” (Germany) in any manner whatsoever or from using any other information, material, electronic 2013:DHC:3959 and other data belonging to Plaintiff Company and seeking return of the said information, electronic data, documents etc.

2. By way of an ex-parte ad-interim injunction dated 18th May, 2012 this Court in IA No. 9538/2012 restrained the Defendants from using the data of the Plaintiff in respect of the abovementioned clients as also contacting them. Defendant Nos. 1 and 3 filed I.A. No. 13187/2012 under Order XXXIX Rule 4 CPC seeking vacation of the ex parte ad interim injunction. Thus the two applications are taken up for hearing.

3. Learned counsel for the Plaintiff contends that the Defendants in their written statement do not deny that they are using the data, material and information prepared while the Defendants were in employment of the Plaintiff. The case of the Defendants is that the client details of the plaintiff are in public domain and in the absence of any contract with the client which clearly authorizes the Plaintiff alone to deal with the clients in India in the business transactions, no exclusivity can be claimed. This contention of the Defendants is wholly erroneous in view of the decision of this Court in Diljeet Titus, Advocate and others vs. Alfred A. Adebare and others, 2006 (32) PTC 609 (Delhi). Relying upon Homag India Private Ltd. vs. Ulfath Ali Khan, MFA No. 1682 of 2010 decided by the Karnataka High Court on 10th October, 2012 it is stated that in an identical case the Court was pleased to grant temporary injunction. It is further contended that though the Defendant Nos. 1 and 3 have filed an application under Section XXXIX Rule 4 CPC however, the Defendant Nos. 2 and 4 have not filed any application and thus they are conscious that their acts were illegal and contrary to the law. Hence the ex-parte order granting injunction is liable to be confirmed.

4. Learned counsel for the Defendant Nos. 1 and 3 contends that as per Section 27 of the Indian Contract Act, any agreement in restraint of trade of business or lawful profession is void to that extent. Hence even assuming there is any contract though there is none, the Plaintiff cannot enforce the restraint. Relying upon American Express Bank Ltd. vs. Ms. Priya Puri, 2006 (110) FLR 1061 it is contended that facts like names of customers, telephone numbers and addresses are well known and can easily be ascertained being in public domain and thus cannot be treated as trade secret or confidential information. Referring to Ms. Sanmar Specialty Chemicals Ltd. vs. Dr. Biswajit Roy, AIR 2007 Madras 237 it is contended that confidentiality and Non-Compete Agreement where-under the Respondents shall not disclose confidential information to any person after cessation of employment with the applicant and not to take up any employment or involve himself with any other person or body corporate in the similar field of activity which are competitive in nature and thus contrary to Section 27 of the Indian Contract Act. Hence the interim order is liable to be vacated.

5. I have heard learned counsel for the parties.

6. The case of the Plaintiff is that the Plaintiff Company got engaged inter alia in the business of trading of home textiles, home decorative, furnishing and clothing etc. and provide comprehensive buying service to international buying companies. It has developed and maintained various confidential data and information regarding internal processes, specific client profile, client details, business strategy and methods, finances, client budget, pricing structure, upcoming projects, vendors business profiles etc. According to the Plaintiff this confidential data was developed over a period of several years by putting in extensive efforts however, the Defendants who are its former employees had access to some of its secret and confidential data during the course of their employment and all the four Defendants after resigning from the service of the Plaintiff company in the second week of July, 2011 took wrongful possession of various important and confidential files, documents, records etc. and are now illegally using them for their own advantage, contrary to the terms and conditions of their appointment letter. Consequently the Plaintiff registered a FIR against the Defendants on which certain data and records were seized however the Defendants are still using the data which was misappropriated and stolen from the Plaintiff Company and are contacting the old clients of the Plaintiff. The Defendants in November, 2011 formed a new company in the name and style of „Excel Buying Resources‟ in which they continue to use the data of the Plaintiff Company and continued to be in touch with the clients of the Plaintiff. One of the clients of the Plaintiff Company under deception continued sending emails to Defendant Nos. 1 and 3 on their old email accounts created by the Plaintiff Company on which the Defendants were dealing with the Plaintiff‟s customers.

7. The relevant terms of agreement between the Plaintiff and the Defendants as per the employment letter are as under: “1…….

2. ……

8. You shall maintain complete secrecy of information and know-how regarding our business that may come to your knowledge during the course of your tenure with the Company. You shall not utilize, disclose or divulge the same to any other person/Origination.

9. ….

17. You recognize and acknowledge that the company shall own all work products created by you during your term of service contract and ownership of all rights, titles and interests of the intellectual proprietary rights, therein shall rest exclusively with the company “Vogueserve International Pvt. Limited”. You also acknowledge that the restriction is reasonable and necessary to protect the legitimate interest of the company. That any breach by you will result in irreparable injury to the company for which a remedy at law would be inadequate. Accordingly, you acknowledge that the company shall be entitled to temporary, preliminary and permanent injunctive relief against you in the event of any breach or threatened breach by you, in addition to any other remedy that may be available at law or equity.”

8. There is no doubt that a contract for restraint of trade or profession is a void contract. Vide Clause-17 of the terms of appointment of the Defendants it was agreed that the Defendants recognize and acknowledge that the Plaintiff owned the products created by them during their term of services, the ownerships of all rights, titles and interest of the intellectual propriety rights were to vest in the Plaintiff and in breach thereof the Plaintiff was to take recourse of legal remedies. Thus the only thing which has to be seen is whether the products/materials/data sought to be used by the Defendants is of a kind which entails intellectual propriety rights in which case the bar under Section 27 of the Contract Act would not be attracted. In Diljeet Titus, Advocate (supra) this Court while dealing with a similar situation held that the copyright exists not only in what is drafted and created but also in the list of clients and addresses specially designed by an advocate or a law firm. It was held: