Full Text
HIGH COURT OF DELHI
Decision delivered on: 21.08.2024
M/S MGI (INDIA) PVT LTD .....Appellant
Through: Mr S. Ravi Shankar, Ms Ruhini Dey and Mr Yamunah Nachiar, Advs.
Through: Ms Anne Mathew, Adv.
HON'BLE MR. JUSTICE AMIT BANSAL [Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J. (ORAL):
JUDGMENT
1. These appeals are directed against a common judgment dated 13.08.2019 passed by the learned Single Judge.
2. Via the impugned judgment, the learned Single Judge has set aside the common awards of even date, i.e., 22.02.2019.
3. The impugned judgment was rendered qua petitions filed by the respondent/International Design and Engineering Solutions Pvt. Ltd. under Section 34 of the Arbitration and Conciliation Act, 1996 [in short, “1996 Act”].
4. The core dispute which arose between the parties veered around the non-solicitation/non-hire clause(s) obtaining in the Architectural and Engineering Consulting Agreement(s) entered into between the disputants. The said clause(s) of the agreement(s), substantially, read as follows: “MGI hereby warrants that it will not recruit, hire, engage, cause and/or encourage other persons or entities to recruit hire and/or engage any Staff, directly or indirectly, nor contact, nor conduct any business with any (current or former) staff during implementation of this Agreement and for a period of two years after termination/cessation/revocation of this Agreement. In the event of a breach of this clause IDES shall be entitled to a legal monetary compensation equal to Rs.9,000/- per day per staff for each calendar day if MGI uses staff consultants without knowledge or concurrence of IDES directly or indirectly plus any and all expenses, including attorney fees, incurred to enforce this provision. MGI specifically admits such compensation payable immediately on occurrence of breach. No exception to this provision shall be recognized unless it shall be reduced to writing and signed by both parties for each and every staff for which an exception is sought. The provisions of this paragraph govern current, future and former staff.”
5. The respondent’s grievance centered around the alleged breach of the aforementioned provision of the agreement(s) obtaining between the parties. Based on this allegation, the respondent sought compensation in terms of the aforementioned clause(s).
6. The defence set up by the appellant/MGI India (Pvt) Ltd., was that it was not in breach of the above-mentioned clause(s). It was contended that the breach, if any, had been committed by the four (4) persons who had, in fact, formed a separate company, named, MGI Infra Pvt. Ltd.
7. The record discloses that the Arbitrator returned a finding that MGI Infra Pvt. Ltd. was an associate company and not a subsidiary of the appellant.
8. The Arbitrator, however, rejected the claim made by the respondent on the ground that the said clause of the agreement(s) was void and unenforceable against the appellant. The Arbitrator also concluded that if such a clause is enforced, it would curtail the rights of the employees to secure better employment.
9. It is this aspect that was challenged by the respondent in the Section 34 petition.
10. We may note that the learned Arbitrator had also rejected the counterclaim preferred by the appellant amounting to Rs 65,71,269/- on the ground that it was time-barred.
11. The record discloses that the learned Single Judge disagreed with the view taken by the learned Arbitrator concerning the rejection of the respondent’s compensatory claim pivoted on the non-hire/non-solicitation clause embedded in the agreement(s).
12. On this count, the learned Single Judge relied on a judgment of this Court rendered in Wipro Ltd. vs. Beckman Coulter International S.A., 2006 SCC OnLine Del 743.
13. The sum and substance of the learned Single Judge’s conclusion was that the Arbitrator had not considered, in the present case, whether the appellant can or cannot be made liable to pay damages under the nonhire/non-solicitation clause(s) of the agreement(s), against the backdrop of the stand taken that the employees had formed a new company after tendering their resignation to the respondent.
14. The learned Single Judge concluded that this submission would have to be considered by the Arbitrator after evidence is led by the parties.
15. It is in this context that the learned Single Judge proceeded to set aside the impugned award.
16. We may note that the learned Single judge left it open to the respondent to agitate its claims, albeit in accordance with the law. 16.[1] Four (4) years have passed since then.
17. Ms Anne Mathew, learned counsel, who appears on behalf of the respondent, informs us that after the decision was rendered by the learned Single Judge, the respondent has not taken any steps to initiate fresh arbitration proceedings. 17.[1] Likewise, Mr S. Ravi Shankar, who appears on behalf of the appellant, states that no steps have been taken by the appellant as well to initiate fresh claims, although he states that he was awaiting the outcome in the appeal.
18. We are in agreement with the view taken by the learned Single Judge. According to us, it requires no interference.
19. We have put to Mr Shankar that since the respondent has not taken any steps towards initiation of arbitration proceedings even though there was no interim order staying the operation of the learned Single Judge’s judgment, both sides, figuratively, could consider burying the hatchet.
20. Learned counsel for the parties say that they would have no objection, given the lapse of time, if the Court were to observe that disputes between the parties shall stand closed. 20.[1] It is ordered accordingly.
21. The appeals are disposed of in the aforesaid terms.
RAJIV SHAKDHER, J AMIT BANSAL, J AUGUST 21, 2024 Click here to check corrigendum, if any