Full Text
I.A. No.9602/2009 in C.S. [OS] No.1553 /2007
Through : Mr. Sandeep Sethi, Sr. Adv. with Mr. Rajat Navet and Mr. Mohit Bakshi, Advs.
Through : Defendant in person
JUDGMENT
1. Whether the Reporters of local papers may be allowed to see the judgment? No
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported Yes in the Digest? MANMOHAN SINGH, J.
1. The plaintiff has filed the present suit for declaration, injunction, recovery and damages of Rs.1,31,60,000/-. The plaintiff prayed for a decree of declaration against the defendant declaring that the defendant has violated the terms and conditions of the MOU dated 11th July, 2006 and the arbitral award dated 15th July, 2006. The plaintiff also prayed for a permanent injunction against the defendant restraining him, his agents, representatives, nominees, executors and assignees from making any complaints or pursuing any complaints 2009:DHC:4262
2. The plaintiff is a company duly incorporated under the Companies Act, 1956, having its registered office at C-125, Okhla Industrial Area, Phase-I, New Delhi-1100 20. Ms. Dipika Singh, is the Executive (Legal) of the plaintiff company having authority to institute, file, sign, and verify the suit for and on behalf of the plaintiff company by virtue of resolution passed by the plaintiff company dated 23rd July,
2004.
3. The case of the plaintiff is that the plaintiff company was established in 1981 and is a Global Training Corporation providing learning and knowledge solutions and imparting computer education and training to clients in over 30 countries. It is the leading service producer in information technology training in India and the only Indian IT Training Institute outside Europe and US having 20 global IT training institutes. The plaintiff delivers education courses through over 2000 Education Centres in India and abroad. It has an alumnus of over two million Indian students, which indicates the plaintiff‟s progressive growth and its popularity and acceptance in the IT market. The plaintiff is also providing computer education in thousands of Government schools in many states in India, under contracts with the respective State Governments. It has to its credit the honour of becoming the first institute to receive the ISO 9001 certification for its Quality Processes, Acknowledgements from the Guinness Book of World Records and the Limca Book of Records, recognition from Microsoft Corporation as their “best training partner in Asia” etc. the plaintiff company who was employed with the plaintiff company from 1995 till December, 2001 as Deputy General Manager who thereafter resigned from the plaintiff company. The defendant was subsequently associated with the plaintiff company on a retainer ship basis w.e.f. 3rd December, 2001 till March, 2002.
5. It is averred that the defendant raised certain exorbitant and totally uncalled for and irrelevant demands, which were not acceded to by the plaintiff company. The defendant also requested the plaintiff company to compensate him for loss of emoluments for the last approximately 5 years.
6. It is also alleged that the defendant had been trying to blackmail the plaintiff company and has been making illegal demands with threats. The defendant had written certain e-mails/letters to the officers and directors of the plaintiff company. The defendant had also filed false and frivolous complaints against the plaintiff, amongst others, before the Enforcement Directorate and the Department of Income Tax. The defendant had also indulged in making false complaints against the concerned authorities to their superior authorities and central vigilance commission thereby putting pressure on them to pass adverse orders against the plaintiff company.
7. The matter was thereafter referred to Arbitration vide an Agreement dated 26th June, 2006.
8. During the pendency of the arbitration proceedings, a Memorandum of Understanding was entered into between the plaintiff sum of Rs.69 lac would be paid by the plaintiff company to the defendant as full and final settlement of all and every claims, rights and entitlements of the defendant qua the plaintiff company. It was also stipulated in the Memorandum of Understanding that the defendant would not do any acts which would be prejudicial to the interest of the plaintiff company and/or any of its subsidiary companies or group companies and/or against any employees or Directors thereof and/or could cause any harm to their image.
9. It was also stipulated in the MOU that the defendant would keep undisclosed all the confidential information that he had received/procured during his employment with the plaintiff company. It was also stated that the defendant would not pursue the complaints that he had filled against the plaintiff company in various government departments and that the same would stand abandoned and withdrawn.
10. The relevant clauses of the MOU dated 11th July, 2006 are reproduced hereunder: “2. It has been mutually agreed upon between Mr. Mehta and the company as per this Memorandum of Understanding that on the passing of the arbitral award: a) Mr. Mehta will not do any acts, things and deeds which are prejudicial to the interest of the company, NIIT Technologies Limited and any of their subsidiary companies, any of their employees or and directors or which may cause harm to the image of the above companies, their employees and directors; b) Mr. Mehta shall keep confidential all the information he had received from the company whether during the term of his employment or otherwise and shall not divulge such information. Mr. Mehta represents that as on company or any of its directors‟ companies; c) Mr. Mehta will not pursue the complaints, if any, filed by him against the company, its subsidiaries, employees and directors and the companies of the directors with certain government departments and the same shall stand abandoned and withdrawn; d) In the event Mr. Mehta violates any or all these undertakings, the current compromise shall become null and void as if it never existed and there shall be an Award in favour of the company and against Mr. Mehta for an amount of Rs.69 lac and the company shall have the right to take appropriate steps to execute the Award and recover the Awarded amount representing all monies paid to Mr. Mehta under this compromise.”
11. From the above, it is clear that in the MOU it is provided that in case of any violation by the defendant of any of the undertakings mentioned, the compromise affected by way of the MOU would become null and void as if it never existed and there would be an award in favour of the plaintiff company and against the defendant for an amount of Rs.69 lac and the plaintiff company would have the right to take appropriate steps to execute the award and recover the awarded amount.
12. In furtherance of the MOU dated 11th July, 2006 the sole arbitrator passed an award on 15th July, 2006 in terms of the Memorandum of Understanding entered into between the parties. The terms and conditions of the MOU were specifically incorporated in the award and it was reiterated therein that the conditions stipulated in the MOU were part of the award and binding on both the parties.
13. The plaintiff asserted that pursuant to the passing of the settlement of the award to the defendant. Thus, award became final and was not challenged by the defendant.
14. The plaintiff company alleged that the defendant has continued to proceed with his nefarious designs and has been making false and frivolous complaints and pursing the same before various government authorities, just as he had been doing prior to the passing of the arbitral award, thus violating the terms and conditions of the MOU and the award.
15. It is submitted that in May 2007 the plaintiff company came to know that the defendant was filing applications before the Income Tax Authorities not only on his own behalf but also on behalf of his wife, seeking information and copies of Assessment Orders passed subsequent to the search and seizure operation of the plaintiff group of companies. In the applications/appeals filed by the wife, it is the defendant who has been appearing before the authorities as the authorized representative of his wife, Ms. Alka Mehta.
16. It is stated that the derogatory and defamatory statements made in the abovesaid complaints by the defendant were read and discussed by a number of employees. The plaintiff company has been defamed on account of the defamatory remarks/statements made and published by the defendant.
17. Per contra, the defendant submitted that plaintiff itself did not strictly abide by the Memorandum of Understanding (MOU) in so far as the aforesaid MOU dated 11th July, 2006 required the plaintiff to attached to the MOU, the plaintiff has not paid the complete amount of Rs.69 lac but only an amount of Rs.45,77,460/-. It is contended that the aforesaid MOU did not state that the payment to the defendant was towards arrears of salary and what was received by the defendant were in fact arrears of salary for the period December 2001 to July 2006 as per TDS certificate dated 7th March, 2007 issued to him for tax deducted at source from income chargeable under the head “Salaries” and cheque No.050716 dated 15th January, 2007 which was issued by the plaintiff from its Staff Schemes Account. Thus the payment received by the defendant towards arrears of salary was not covered by the aforesaid MOU. The Memorandum of Understanding dated 11th July, 2006 is therefore, not enforceable.
18. The defendant contended that the MOU is unlawful, void, has no legal force or binding effect and is opposed to public policy, therefore, it is void ab initio.
19. The defendant submitted that per understating reached with the plaintiff, the defendant has refrained from providing further information to the government authorities regarding evasion of Customs duty, sales tax and other violations committed by the plaintiff company. The defendant only sought information under the Right to Information Act, 2005, from the Director of Income Tax Investigation and from the Commissioner of Income Tax, Central-III, New Delhi about the taxes recovered pursuant to searches carried out on the NIIT Group of companies in 2004, so that the case of the defendant could Investigation. He denied that he has violated any of the terms of MOU dated 11th July, 2006.
20. It is contended that the said MOU is an unconscionable contract insofar as it takes away the right of the individual to provide information regarding the illegalities committed by a company with the government authorities. The defendant submitted that there cannot be any injunction against the law and the claim of the plaintiff is wholly illegal.
21. No individual can be restrained from providing information to the concerned authorities with regard to the evasion of taxes and other illegal activities. Any such restraint imposed upon an individual, if incorporated in an Award, does not make the said Award binding on the individual. No individual can be bound by illegal undertakings as comprised in the Memorandum even though the defendant has not violated any such term.
22. By way of the said relief, the plaintiff is praying before this court that the illegalities which have been committed by the plaintiff company be not brought before the concerned authorities for the necessary and suitable legal action.
23. Summons were issued in the present suit on 24th August, 2007, returnable n 22nd October, 2007. Issues were framed on 21st May,
2008. Ad interim order was passed against the defendant on 9th February, 2009.
24. After thoughtful consideration of the matter and having gone this court is of the view that the interim order granted on 9th February, 2009 is made absolute till the disposal of the suit due to the following reasons: (a) That the defendant has not disputed the factum of execution of the MOU dated 11th July, 2006 nor the award passed on 15th July, 2006 on the basis of matter referred to arbitration vide agreement dated 26th June, 2006. (b) That the defendant has received Rs.69 lac pursuant to the said award.
(c) That the award passed between the parties has become final.
(d) It is not denied by the defendant that in view of the MOU, particularly Clause 2(a) to (d) the defendant was not to pursue the complaints etc. filed against the plaintiff company.
25. In view of admitted facts between the parties, the defendant has no option but to comply with the clauses of MOU reached between the parties, therefore, an interim order is necessary to be passed against the defendant.
26. As regard the other defences raised by the defendant in the matter, those are to be decided at the time of trial as per their own merit. If any finding is given in this regard at this stage, it will prejudice the case of one of the parties. Therefore, this Court is of the view that the plaintiff has made a good prima facie case in its favour for grant of interim order. The balance of convenience also lies in favour of the plaintiff. In case the interim orders are not passed, the plaintiff will of the matter, the interim orders passed on 9th February, 2009 are confirmed.
27. This order shall have no bearing on the final outcome of the present suit and shall not prejudice the rights and interests of either party. The interim application being I.A. No.9602/2009 is disposed of in view of the above said directions. There will be no order as to costs. C.S. [OS] No.1553 /2007 List this matter on 21st January, 2010 before the Joint MANMOHAN SINGH, J OCTOBER 13, 2009 SD