Bombay High Court
Tapas Kanti Mandal vs Cosmo Films Ltd on 16 August, 2018
Bench: S.P. Deshmukh
{1} wp2875-18drp IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO.2875 OF 2018Tapas Kanti Mandal PETITIONERAge – 49 years, Occ – ServiceR/o Plot No. 48, Sadguru Housing Society,Opp – Airport, Near Vimannagar,Chikalthana, Aurangabad VERSUSCosmo Films Ltd. RESPONDENTA Company registered under theCompanies Act, 1956 and having itsRegistered Office at 13, Community Centre,New Delhi and having its administrationAnd Manufacturing unit at B-14/8-9MIDC, Waluj, Aurangabad …….Mr. R.N.Dhorde, Sr. Advocate i/b Mr. P.S.Dighe, Adv for petitionerMr. A. D. Kasliwal, Advocate for the respondent ……. [CORAM : SUNIL P. DESHMUKH, J.] DATE : 16th AUGUST, 2018JUDGMENT :
1. Rule. Rule made returnable forthwith and heard finally withconsent of learned advocates for the parties.

2. Petitioner is before this court aggrieved by order dated 17 thFebruary, 2018 passed by Joint Civil Judge, Junior Division,Gangapur whereunder application at Exhibit-5 in Regular CivilSuit No. 16 of 2018 seeking temporary injunction under OrderXXXIX, Rules 1 and 2 of Civil Procedure Code, 1908 has been {2} wp2875-18granted.

3. Parties hereto would be referred to by their status inRegular Civil Suit No. 16 of 2018, Cosmo Films Limited V/s TapasKanti Mandal, petitioner as ‘defendant’ and respondent as’plaintiff’.

4. Plaintiff has instituted Regular Civil Suit No. 16 of 2018seeking perpetual injunction against the defendant restraininghim from rendering service in Asia, directly or indirectly throughcollaborator, employee, consultant or any other manner in linewith business which competes with the whole or part of thebusiness of the plaintiff, for a period of three years from the dateof resignation, which is 27th December, 2017.

5. Succinctly stated, it is the case of the plaintiff that;
It is a multinational company having global manufacturingfacilities and is supplier of BOPP, thermal laminating films,lacquer quoted films, CPP films and synthetic paper. Defendanthad applied for a post of manager with the plaintiff and theplaintiff on the request had decided to employ him as a managerin its Research and Development Department. The defendanthad been appointed in May, 2003 on the terms and conditions asreferred to in appointment order and in the agreement. The {3} wp2875-18defendant had agreed to the same and had joined services withthe plaintiff with effect from 5th May, 2003. Agreement containsnon-compete clause, according to which, the defendant isobligated not to directly or indirectly engage himself in businessor profession as consultant or advisor to any competitor orcompany manufacturing BOPP films etc. or subsidiaries,associated companies, holding companies for a period of threeyears from the date of cessation of his employment. There is aclause in the agreement that default in observance of the termswould entitle plaintiff company to initiate action in law, of civil orcriminal nature.

The defendant had gone through all the terms andconditions and had solemnly signed the same after taking intoaccount pros and cons and consequences flowing therefrom. Thedefendant, by virtue of his employment had acquired in-depthknowledge of current products of the company. He had also comein possession of confidential process and knowledge ofmanufacture of its product. He had also been in knowledge ofvarious projects of the company, formulae, patterns, complexion,programmes, devices, methods, techniques and processes of theplaintiff company. Future plans of the plaintiff company havebeen known to him. He had also been aware of unique ideas,discoveries and inventions of the plaintiff company and also {4} wp2875-18about its future plans and product. Such knowledge as well astrade secrets, unique ideas, discoveries, inventions, processes,projects are intellectual property of the plaintiff and by virtue ofhis position in employment, the defendant had come across thesame and had been in possession of the same and he is underobligation not to divulge the same to any other person,partnership, company, corporation as per the contractualobligations incurred by him.

After serving for about fifteen years, abruptly, on 27 thDecember, 2017 the defendant purported to communicate thathe intends to resign from services with the plaintiff andrequested to accept his resignation and to relieve him before 26 thJanuary, 2018. The plaintiff company had not relieved thedefendant from the post of Deputy Manager of Research andDevelopment, a promoted post which he had been holding sinceApril, 2012, as his unilateral resignation was in contravention ofterms and conditions of agreement and had put the interest ofthe plaintiff in peril of suffering injury, which would be irreparableand irreversible. Apart from above, the abrupt truncation ofemployment had been prejudicial to the interest of the plaintiff.
Sudden flurry of activities at the end of the defendantentailed an action in law to safeguard and secure plaintiff’s {5} wp2875-18interest. The plaintiff has expressed grave concern andapprehension that the defendant in all likelihood would engagehimself in similar business as that of the plaintiff and in allprobability would disclose knowledge and intellectual knowhowgained by him during his service with the plaintiff.
6. The plaintiff, along with plaint, had also filed applicationExhibit-5 seeking temporary injunction referred to above. Itappears that an ex parte ad interim relief had been granted bythe trial court against the defendant on 16th January, 2018,restraining the defendant from taking up employment elsewhere.While the matter had been before the trial court on 29 th January,2018, the plaintiff had filed an application Exhibit-11 seekingcontinuation of ad interim order and according to the defendantdespite his appearance, without calling upon his response,Exhibit-11 had been allowed and ad interim order had beencontinued till 5th February, 2018. Said order of continuation ofinterim relief had been subjected to challenge by the defendantunder writ petition bearing No. 1217 of 2018, which came to bedisposed of by the high court on 31st January, 2018 directing thetrial court to hear the parties on 5th February, 2018 and to decidethe temporary injunction application Exhibit-5 by 17 th February,2018 by a reasoned order, considering all the contentions of theparties.
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7. The defendant had filed his say at Exhibit-10 and hisdefence was to the effect that;

The trial court does not have jurisdiction to try andentertain the suit in view of the term under the service bond andsecrecy agreement, whereunder according to the defendant,jurisdiction had been restricted exclusively to the court inAurangabad city and no other. According to the defendant thewords “exclusively” and “none else” are used. Without referenceto the same, the suit has been instituted at Gangapur and, assuch, the same is suppressed. The plaint has been devoid ofrequirements for seeking restraint on the defendant and hadbeen deficient of material for grant of injunction under section 38of the Specific Relief Act. The defendant had objected to themaintainability, tenability and sustainability of the suit.
The suit is not maintainable as it is covered by section 41of the Specific Relief Act. It is referred to that pursuant to section42 of the Act, in order to have relief of injunction, the plaintiff isunder obligation to perform its part. While agreement providesfor liquidated damages, in no case, injunction would issue. It isstated that pursuant to the terms of agreement, employee cansever ties forthwith and with the resignation dated 27 thDecember, 2017, the defendant ceases to be employee of the {7} wp2875-18plaintiff and had accordingly requested the plaintiff to relieve himunder communications dated 29th December, 2017 and 17thJanuary, 2018 with effect from 26th January, 2018 by adjustingprivilege leave of 77 days towards period of notice. It iscontended that in view of section 27 of the Contract Act, everyrestraint on carrying on lawful profession or trade or business ofany kind is void. Conditions in the agreement with respect tospace and time have been void right from the beginning andunreasonable, unfair, onerous, against public policy and offendthe fundamental rights of the defendant. Employer cannotprevent a person from taking up employment elsewhere oncessation of his employment with the employer. It is submittedthat all the information which has come across during his servicewould not be confidential or a trade secret. The plaintiff cannotclaim itself to be an exclusive manufacturer or a trader. A personcannot be permanently tied down with employer. Enforcement ofcontract of personal service after cessation of relationship isabhorred by law. Resignation is unilateral act and does notrequire any further action of acceptance. It has been denied thatdefendant had failed to return all the information, material,documents, computer programme provided by plaintiff to him.The allegations have been termed by him to be vague andbaseless. All the information of the plaintiff is in its office. The {8} wp2875-18defendant is not holding any property of the plaintiff and / ormisusing the same for benefit of competitor. It is contended bythe defendant that injunction, if granted, would defeat hisfundamental right to earn livelihood. The service bond cannot bespecifically enforced being replete with onerous conditions. Thedefendant, as such, requested rejection of application fortemporary injunction with costs of Rs. 5,00,000/-
8. Trial court had framed usual points for determination aboutprima facie case, balance of convenience and irreparable loss tothe plaintiff. Trial court, to quite some extent, has dwelt upon thequestion of jurisdiction, albeit points for determination did notcontain any issue in respect of the same and has considered thatthere was no force and substance in the contention of thedefendant in respect of ouster of jurisdiction of the court atGangapur. Trial court went on to consider that the plaintiffcompany is situated within the jurisdiction of the court and thejudgments cited on behalf of the defendant have been decisionsin different contexts. Trial court, in paragraph No. 25 of the orderimpugned, has referred to citations relied on, on behalf of thedefendant and has referred to that facts in the citations and thecase before it had been different and as such, considered thatthe ratio thereunder may not hold the present case.
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9. Trial court has further referred to citation relied upon onbehalf of the plaintiff in the case of “Niranjan Shankar Golikari V/sCentury Spinning and Manufacturing Co. Ltd.,” reported in AIR 1967, SC1098, and reproducing an excerpt from the same, has consideredthat facts in the present case and the facts in the cited case toquite large extent were identical and considered that employeecan be restrained from doing similar business or seeking similaremployment. It had, thus, considered that restraint on thedefendant from getting engaged in any trade or business incompetitor company would be a reasonable restriction imposed.
10. Trial court has also referred to citation relied upon onbehalf of the plaintiff in the case of “M/s Kuoni Travel ((I) Pvt. Ltd. V/sMr. Ashish Kishore” reported in 2007 (6) ALL MR 808 and taken andquoted excerpt therefrom and considered that a trade secretagreement can be enforced even after service period. Trial courthas considered clause 7 of the appointment letter referring tothat it was the term wherein defendant had undertaken not toengage himself in competing employment or business for aperiod of three years from cessation of his employment with theplaintiff.

11. Trial court has refused to buy line of the defendant aboutperiod had been agreed upon only for five years from the date of {10} wp2875-18joining service i.e. 5th May, 2003 to 4th May, 2008 and hasconsidered that service bond and secrecy agreement cannot beread in isolation, while a part imposes a condition of five yearsminimum service, it does not refer to as to what should be thewhole period of service. Besides, there is a retirement clause inthe same and age of retirement is mentioned to be 58 years. Ifthe service period had been for five years, then it ought not tohave referred to retirement age. As such, it was considered,intention of the parties appears to be different. In addition toaforesaid, there were certain terms in respect of probation andconfirmation, superannuation, provident fund and gratuity. Assuch, it was considered that it cannot be said that the agreementhad been only for five years.

12. The court had appreciated that an exception has beencreated and commercial or business agreement may fall undersuch exception, considering explanation under section 27 of theIndian Contract Act, which refers to that in sale of goodwill ofbusiness one may agree with buyer to refrain from carrying onspecific business within specified local limits if it appears to thecourt reasonable, regard being had to the nature of business.Trial court has considered that the defendant had been holding akey post in the plaintiff company, had come across variousconfidential secrets and knowhow of the company, the company {11} wp2875-18had spent huge amounts on the defendant. It has consideredthat the plaintiff had been seeking only three year’s restraint andrestriction of three years has been found to be reasonable andnecessary for protection of interest of the plaintiff. The plaintiffhas been a multinational company, if such a condition is notimposed on its employee, it will suffer irreparable loss.
13. The trial court, thus, allowed the application and passed anorder confirming ad interim injunction for a period of three yearswith effect from 26th January, 2018 to 25th January, 2021 or tilldisposal of the suit, whichever is earlier. It is against this decisionof the trial court, defendant is before this court.
14. At the outset, Mr. R. N. Dhorde, learned senior advocate forthe petitioner – defendant vehemently submits that impugnedorder is wholly misconceived on facts as well as in law.
15. Mr. Dhorde further submits that decisions cited on behalf ofthe defendant have been made short work of, by cursorilydiscarding them as being different on facts and context. Hesubmits that order does not depict as to how said authoritiescould be said to be distinguishable, so far as ratio thereunder isconcerned. Ratio under said authorities had not only beenrelevant, but would be applicable to the present set of facts andcircumstances. He submits that impugned order falls short of {12} wp2875-18showing application of mind to the vital aspects involved in thematter.

16. He submits that appointment letter and agreement, asannexed to the petition, would show that beyond the period ofinitial five years, no specific period of contract had been agreedupon. Learned judge of the trial court has adverted to theappointment letter and to a few terms appearing therein aboutprovident fund, superannuation, gratuity as per law, but hasmissed out on a term appearing therein about notice period atitem No. 5, which speaks of service being terminable by notice.According to him, clause 7, captioned ‘secrecy agreement’,though refers to a hiatus to be had from engaging in anyprofession or employment in any capacity for a period of threeyears after cessation or termination of service, there is nocorresponding provision for any remuneration / compensation tobe payable to employee during such period. He submits that inpresent case, it cannot be gainsaid that no period after expiry ofinitial period agreed upon had been specifically agreed upon. Thenegative covenant does not provide for and does not take care ofthe remuneration / compensation to the employee. Post servicerestrictive convent in the circumstances is all the more not onlyvoid but also is illegal. He submits that reliance on judgment inthe case of “Niranjan Shankar Golikari V/s The Century Spinning and Mfg.
{13} wp2875-18Co. Ltd.,” reported in AIR 1967 SC 1098, which clarifies position thata negative covenant of the agreement can be enforced duringthe period of contract, is wholly misplaced and the same wouldnot hold at all after termination / cessation of employment.
17. He goes on to refer to series of decisions, “Bhavesh J. Bhatt V.sCyrus N. Baxter” reported in 1991 Mh.L.J. 231; “American Express Bank Ltd.V/s Ms.Priya Puri” reported in (2006) 3 LLN 217; “F.L.Smidth Pvt. Ltd., V/sSecan Invescast (India) Pvt. Ltd.” reported in 2013 (1) CTC 886 = 2012 (2)MWN (Civil) 815 in support of his submission that a postemployment period restraint term under the garb of protectingproprietary interest, by which employer compels the employee toserve the employer or leads the employee to remain idle orstarve would not be in public interest and cannot be binding. Hesubmits that aforesaid legal position in India has been settledand post service period restriction in negation is void undersection 27 of the Indian Contract Act and the same is a unlawfulrestriction. He submits that catena of decisions and even arecent decision of this court delivered on 16 th February, 2016 inthe case of “Satyam Patel V/s Human Factors International Pvt. Ltd.” inCompany Petition No. 733 of 2015 not only reiterate, but alsoreassert aforesaid position. He submits that the position isholding field from long time. Delhi High Court has even quiterecently in its decision dated 17th May, 2017 has followed said {14} wp2875-18dictum. He submits that for many other reasons and rationale,such a covenant would not be specifically enforceable.
18. Mr. Dhorde submits that learned judge of the trial court hasfailed to appreciate and draw distinction in enforceability ofrestrictive negative covenant during course of employment andafter cessation of employment. He submits that the court hasbeen in oblivion of that restriction after cessation of employmentin this particular case is inequitable and does not take care of thecompensation to the employee for a period under restriction. He,therefore, urges to grant the writ petition.

19. Mr. A. D. Kasliwal, learned advocate for respondent -plaintiff vehemently submits that as a matter of fact order oftemporary injunction is an appealable order pursuant to OrderXLIII, Rule 1 (r) of the Civil Procedure Code. He submits that itcannot be gainsaid that an appeal is provided and while anappeal is available, writ petition would seldom be entertained. Heemphatically submits that series of decisions by the SupremeCourt would show that high court should not meddle with anorder, which is amenable to challenge in appeal.
20. Learned advocate for the plaintiff purports to put up stiffresistance to maintainability of the writ petition in the face ofappellate remedy as is available pursuant to Order XXXXIII, Rule {15} wp2875-181 (r) of the Civil Procedure Code. He submits, order impugnedhas been passed in exercise of powers under Order XXXIX, Rules1 and 2 of the Code of Civil Procedure. According to him, while astronger remedy has been under an appeal, a direct resort toextra ordinary powers of this court, would not be possible andsuch an attempt will have to be stamped down.

21. He submits, it may have other facet that in case of decisiongoing adverse to the interest of any party, a forum locally andconveniently available would stand taken away or for that matterwiped out. He submits that it is not such an extraordinarysituation wherein alternate remedy could not have been resortedto by the defendant and underlying intention appears to pre-empt remedy available locally to the original plaintiff.
22. Mr. Kasliwal goes on to submit that one has to take intoaccount that temporary injunction application has been preferredby the plaintiff under Order XXXIX, Rules 1 and 2 of the CivilProcedure Code, while resisting the same the defendant hadpurportedly raised question of jurisdiction and forced the court todecide the same. He submits that even in such a case, theapplication filed by the plaintiff continues, without depleting itsbasic character to be an application under Order XXXIX, Rules 1and 2 of the Code of Civil Procedure. As such, upon decision {16} wp2875-18therein, a resort necessarily, pursuant to the legal proceduralrequirements, will have to be in an appeal and not otherwise. Hesubmits that if statute has prescribed a remedy against an order,the same will have to be invoked first.

23. In order to buttress his aforesaid submissions, he refers toa decision of the Supreme Court in the case of “Miss ManeckCustodji Surajaji V/s Sarafazali Nawabali Mirza” reported in 1976 ALL MROn Line 174 (SC).

In aforesaid case the Supreme Court had rendered thedecision in the circumstances, wherein appellant before it hadbeen a tenant of a flat in city of Mumbai. The respondent hadadvertised for accommodation as a paying guest and in responsethereto, the appellant who had been tenant of the premises, hadentered into an agreement and respondent had been allowed tooccupy part of the premises as paying guest. The respondent,trying to take advantage of amendment to Bombay Rents, Hoteland Lodging House Rates Control Act, 1947, instituted a suit inthe Court of Small Causes praying that standard rent be fixedand an ex parte order against appellant restraining her fromtaking possession without due process of law had been passed.
As such, litigation ensued before City Civil Court at the {17} wp2875-18instance of appellant and notice of motion for injunction hadbeen taken out and ex parte injunction was granted for removinglock in respect of flat, save portion allowed to be occupied aspaying guest to the respondent and accordingly possession wastaken by the appellant of portion of premises excluding partgiven to respondent as paying guest.

An attempt by respondent before city civil court to havestay to the suit under section 10 had been made, contendingearlier suit being pending raising same issue, however, that didnot succeed before city civil court and the high court.
City civil court decreed the suit deciding that respondenthad not been entitled to continue to occupy, however, hadstayed operation of said decree for three months in order toenable the respondent to file appeal. Respondent, in thecircumstances, instead of preferring appeal, had filed special civilapplication before High Court for quashing and setting aside finaldecree of the city civil court. The special civil application, againstfinal decree of the court was entertained by high court directingthat execution of decree be stayed until other suit had beendecided.

It is in that context the Supreme Court considered that it isvery difficult to appreciate reasoning behind order of the high {18} wp2875-18court. The respondent had legal remedy by way of an appealagainst the decree and the same is more comprehensive than anapplication under Article 227 of the Constitution of India.
24. He further refers to a recent decision of the Supreme Courtin the case of “Hameed Kunju V/s Nazim” reported in 2017 ALL SCR2178, wherein as well the Supreme Court had been consideringcase of eviction. It is in the facts and circumstances of that case,the court considered that all the four orders were amenable forchallenge before appellate authority and writ petition, in thecircumstances, would not have been a proper remedy. The courthad considered that the high court ought to have declined toentertain writ petition on the ground of availability of alternateremedy.

25. He also refers to a decision of the Supreme Court in thecase of “A. Venkatsubiah Naidu V/s S. Chellappan and Others” reported in2001 (1) ALL MR 247, referring to paragraphs No. 11 and 20 thereofreading, thus-
” 11. It cannot be contended that the power to pass interim ex parte orders of injunction does not emanate from the said Rule. In fact, the said rule is the repository of the power to grant orders of temporary injunction with or without notice, interim or temporary, or till further orders or till the disposal of the suit. Hence, any orders passed in exercise of the aforesaid powers in Rule 1 would be appealable as indicated in Order 43 Rule 1 of the Code. The choice is for the party {19} wp2875-18 affected by the order either to move the appellate Court or to approach the same Court which passed the ex parte order for any relief.
20. Now what remains is the question whether the High Court should have entertained the petition under Article 227 of the Constitution when the party had two other alternative remedies. Though no hurdle can be put against the exercise of the constitutional powers of the High Court it is a well recognized principle which gained judicial recognition that the High Court should direct the party to avail himself of such remedies one or the other before he resorts to a constitutional remedy. Learned single judge need not have entertained the revision petition at all and the party affected by the interim ex parte order should have been directed to resort to one of the other remedies. Be that as it may, now it is idle to embark on that aspect as the High Court had chosen to entertain the revision petition. ”
26. He submits that in the face of such situation, writ petitionought not to be considered and the defendant be directed toavail of alternate remedy.

27. Learned advocate for the plaintiff Mr. A. D. Kasliwal,countering arguments of learned senior advocate on behalf ofthe defendant, refers to clause 7 of the agreement reading asunder :
” 7. Secrecy Agreement: a) During the employee’s service with the company, he / she shall come across various business / trade Secrets, confidential data or details. Information relating to the technology and processes, Methods and Systems used by the company and it’s market details, which are exclusive {20} wp2875-18 and vital and which should not be divulged out. For the employee’s functional development with the company, the company would have trained him / her in it’s exclusive business areas, systems, methods and technology by incurring considerable expenses and spending management’s time. Accordingly, the company’s image, expertise, business areas, systems trade secrets and the related goodwill shall be in the trust with the employee to that extent during the period of his / her employment / service with the company. Hence in the event of cessation of employment with the company for any reason whatsoever, he / she shall not directly and / or indirectly engage himself / herself in any business, profession and / or employment including engaging himself / herself as Consultant / Advisor to any competitor and / or any company manufacturing BOPP Films, It’s subsidiaries, associated companies, holding companies for a period of THREE years from the cessation of his / her employment. In case the employee fails to abide by this convenant while in employment or otherwise, the company shall be entitled to take action against the employee under civil and criminal laws inclusive of damages as deem fit and proper. b) Any process, discovery, invention or patent promoted or made by you in the course of your employment with us shall belong to the company and / or it’s management. If required, company may execute a secrecy agreement with you. ”
28. Learned advocate for plaintiff, submits that in the presentcase, the employee had entered into a solemn agreement {21} wp2875-18putting his signature under the same, binding himself withconfidentiality term and not only had joined but has continuedwith employment. The term 7, captioned as “SecrecyAgreement”, reproduced hereinabove, refers to that propertiesreferred to therein are in trust with the employee and oncessation of employment for a specific period of three years, heis obligated not to render service to others. It had been agreedupon by the defendant that post cessation of employment, hewould be bound under the term for a period of three years not toget engaged or employed in any capacity. He submits that such aterm is necessary to be incorporated for protection of proprietaryinterest in the knowledge, technology, know-how, trade secret,business relations, etc., lest years of efforts, labour, money andhard work and time would be under peril and threat of gettingruined and the benefit may be made readily available to others /person himself without any expense. He, therefore, submits thatthe restriction cannot be termed as unreasonable or irrational orin the present case to be void under section 27 of the ContractAct.

29. Mr. Kasliwal submits that though the learned senioradvocate had referred to various decisions contending thatprevailing legal position is as submitted by him, yet, in presentpeculiar facts and circumstances, as also, so far as this high {22} wp2875-18court is concerned, position appears to be distinguishable. Forsaid purpose he refers to and relies on a decision of this court inthe case of “M/s Kouni Travel (I) Pvt. Ltd V/s Mr. Ashish Kishore” reportedin 2007 (6) ALL MR 808. It was a case dealing with a non competeand garden leave clause giving right to employer requiringemployee to remain away from employment directly or indirectlyin any capacity and in any way with any competitive business fora period of three months after termination / resignation ofservice and non compete clause provided for that the employeeshall be bound not to take similar employment.

30. Mr. Kasliwal, learned advocate supports the decision relyingon the case of “Niranjan Golikari” (supra). He further refers to thataforesaid judgment and the case of “Kouni Travel” (supra) havebeen referred to and relied on in impugned order.
31. He submits that the defendant is an educated person andhad been working on a key post with the employer and hasentered into a service contract, bond and secrecy agreement. Hesubmits that although it is argued that there is no specific periodagreed upon, the trial court has adverted to that the agreedperiod would have to be gathered from the terms appearing inappointment letter and / or agreement. The appointment letterand the agreement have to be harmoniously read, which put {23} wp2875-18restraint on the defendant on cessation of employment. The trialcourt has rightly considered that clause 7 of the appointmentletter obligates the defendant to refrain from directly or indirectlyengaging himself in similar business of the plaintiff for a period ofthree years after cessation of employment with the plaintiff. Trialcourt has rightly appreciated that intention underlying theagreement shall receive its due.

32. He submits that not all the agreements placing restraint onemployment post service period are void under section 27 of theContract Act. He submits that the agreement read withexplanation under section 27 of the Contract Act has beenappropriately considered and appreciated by the trial court andaccordingly, having regard to facts and circumstances decisionhas been rendered. Trial court has specifically taken into accountemployer is a multinational concern and is likely to sufferirreparable loss on cessation of employment of a key person. Thesame would not be open for finding fault with. He, therefore,considers that the impugned order is not amenable forinterception under the writ jurisdiction of this court.
33. Mr. R. N. Dhorde, learned senior advocate for thedefendant, submits that while jurisdiction of the court had beenquestioned with reference to specific clause under the {24} wp2875-18agreement, which restricts the same to Aurangabad city court,the same has been decided disregarding underlying intentionand substance of the term agreed upon by the parties solemnlyand also disregarding the legal position that parties can restrictthe same to anyone, in case jurisdiction is with multiple courts.He submits that the court had drifted away from this imperativelegal position and entertained erroneous concept on erroneousassumptions. While agreement had been entered into, it hadbeen agreed upon that Aurangabad city court would be resortedto and no other. The terms “exclusive” and “none else” mustassume significance and ought to have been consideredaccordingly. Even otherwise, according to learned senioradvocate, Aurangabad court would always have jurisdiction,since the defendant resides at Aurangabad and his address intitle clause would evince the same. Going by provisions of law,jurisdiction would be with the court, where the defendant wouldreside and this aspect has not been even considered whiledeciding this issue.

34. Mr. Ajit D. Kasliwal, learned advocate appearing for therespondent – plaintiff, however, on the other hand, submits thatquestion of jurisdiction has been raised by the defendant and thecourt had to deal with the same and had accordingly beenanswered.
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35. He submits that so far as jurisdiction of Gangapur court isconcerned, it is beyond question. Cause of action had arisenwithin territorial limits of jurisdiction of Gangapur court. Plaintiff’smanufacturing factory, office and employment of the defendanthad been within the jurisdiction of Gangapur Court. Resignationhad been tendered and communicated by the defendant to theplaintiff within the jurisdiction of Gangapur court. Major part ofoccupation of the defendant had been within the jurisdiction ofGangapur court. In the circumstances, Gangapur court wouldalways have jurisdiction to try and entertain the suit. While theagreement had been entered into, this particular area had beenpart of Aurangabad and with subsequent developments has beenfalling in Gangapur area. In the circumstances, situation in whichterms and conditions had been entered into, will have to belooked into and appreciated in that context under which theclause had been incorporated. With aforesaid developments, theclause will have to be construed in tune with the same.
36. Over and above this, learned advocate for the plaintiffrefers to an ordinance dated 27th June, 2018 issued by Law andJudiciary Department of Government of Maharashtra bearing No.XVIII of 2018. Clause 3 (2) of the ordinance declares that anyproceedings questioning decision in respect of jurisdiction in {26} wp2875-18favour of court where proceedings are filed, being pendingbefore a revisional court, shall stand abated, leaving it open tobe considered in appellate proceedings.

37. In the circumstances, learned senior advocate for thedefendant although has submitted that in the present matter, awrit petition had to be preferred as impugned order givesdecision on the question of jurisdiction, yet, having regard to theordinance, such a question would not be amenable now to beconsidered.

38. Learned senior advocate Mr. Dhorde, however, has adifferent perspective of the matter submitting that indeed,question of jurisdiction had been raised by the defendant havingregard to the terms in appointment letter and the agreement andthe court had despite the same decided that it has jurisdiction. Insuch a case, while the order is a composite order with regard tojurisdiction and injunction, a resort would be have to such aforum which would be able to take into account grievance of thedefendant on both the counts. It cannot be gainsaid thatappellate forum, pursuant to Order XXXXIII of the Civil ProcedureCode, in the present matter, would not have been a forumagainst order on issue of jurisdiction as it is not an order fromwhich an appeal is provided. He, therefore, submits that {27} wp2875-18maintainability of writ petition is beyond question. It indeedwould be maintainable in present circumstances and would evenotherwise be always maintainable, while the court decides toexercise its extraordinary powers having regard to facts andcircumstances and present matter is precisely one such matter.He submits that despite series of decisions on the point, the trialcourt has wholly misconceived the same. While the law favoursthe defendant, trial court has decided the application against thedefendant. He submits that right to carry on avocation andprofession and service is a personal fundamental right and thatin the process has got intercepted under erroneous appreciationby the trial court. He, therefore, submits that there is nosubstance in the argument that a resort necessarily had to be inan appeal alone, in the given facts and circumstances isabsolutely untenable and deserves non consideration.
39. Learned senior advocate Mr. Dhorde with respect toalternate remedy, refers to quite a few decisions of the SupremeCourt, particularly the case of “Whirlpool Corporation V/s Registrar ofTrade Marks, Mumbai and Others” reported in AIR 1999 SC 22, whereinthe Supreme Court has considered that an alternate remedy isnot an absolute embargo on invoking powers of high court.According to him, it has been considered that existence ofalternate statutory remedy is not a constitutional bar to high {28} wp2875-18court’s jurisdiction. Particularly, alternate remedy would notoperate as a bar in at least three contingencies – (i) where writseeks enforcement of fundamental rights; (ii) Where there isviolation of principles of natural justice and (iii) Where the orderor the proceedings are wholly without jurisdiction or vires of theact is challenged.

40. He submits that right to carry on profession and vocation isindeed a fundamental right and a covenant imposing postservice period restriction is void under law and is illegal. Inpresent facts and circumstances, defendant would not beunnecessarily relegated and forced to file miscellaneous civilappeal against the impugned order, which is a common orderpassed on question of jurisdiction of the court and injunction. Hesubmits that since the court has determined that it hasjurisdiction, without letting opportunity to lead evidence to theparties, in the circumstances, defendant had been left with nooption but to invoke jurisdiction of this court under writ petition,since determination of question of jurisdiction is not amenable toappeal under the scheme of Civil Procedure Code, includingBombay Amendment of incorporation of section 9A. He,therefore, submits that while decision on such a question couldnot be amenable to appeal before appellate forum, resultantly,defendant had no alternative but to challenge the same before {29} wp2875-18this court. Even otherwise, alternate remedy is not an absoluteembargo on the powers of this court, to invoke its extraordinaryjurisdiction,. He submits that though further developments, mayhave been submitted to have seemingly diffused challenge onthe question of jurisdiction involved in present case, in thecircumstances invoking powers of this court is not unjustified atall. He submits that with the developments and having regard topassage of time while an individual is pitted against financialcorporate giant, a weaker party may not be driven to appellateremedy having regard to circumstances in which writ petitionhad been preferred.

41. It would be worthwhile to refer to that section 27 of theIndian Contract Act, which declares an agreement in restraint oftrade is void carving out an exception referred to therein. Section27 of the Act, reads, thus-
” 27. Agreement in restraint of trade, void – Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Explanation 1 – Saving of agreement not to carry on business of which goodwill is sold – One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business. ”
{30} wp2875-18
42. While it comes to restrictions on personal service andemployment, decision in the case of “Niranjan Shankar Golikar V/s TheCentury Spinning and Mfg. Co. Ltd.,” reported in AIR 1967 SC 1098;observes that a restraint by which a person binds himself duringthe period of contract for not taking services with any otheremployer is not a restraint on trade and is not hit by section 27of the Indian Contract Act.

43. Following decisions consistently show that a negativerestrictive covenant to be operative post service period wouldnot be enforceable at all and this particular position has not beendeviated from during all this period:

“Superintendence Company of India (P) Ltd. V/s Krishan Murgai,reported in (1981) 2 SCC 246; “M/s High Polymer Labs Pvt. Ltd., V/s R. K.Mutreja and Another” reported in 1982 SCC Online Del 237; “TaproggeGesellschaft MBH V/s IAEC India Ltd” reported in AIR 1988 Bombay 157;”Bhavesh J. Bhatt V/s Cyrus N. Baxter” reported in 1991 Mh.L.J. 231; “JetAirways India Limited V/s Mr. Jan Peter Ravi Karnik” reported in 2000 SCCOnline Bom 241; “Star India Private Limited V/s Laxmiraj Seetharam Nayakand Another” reported in 2003 SCC Online Bombay 27; “Weiler InternationalElectronics Private Limited V/s Punita Velu Somasundaram” reported in 2003SCC Online Bom 1006; “Zaheer Khan V/s Percept D’ Mark (India) PrivateLimited and Another” reported on AIR 2004 Bombay 362; “R. Babu and {31} wp2875-18Another V/s TTK LIG Ltd” reported in 2004 SCC Online Mad 1789;”Ambiance India Private Limited V/s Naveen Jain” reported in 2005 SCCOnline Del 367; “American Express Bank Ltd V/s Priya Puri” reported in2006 (3) LLN 217; “VFS Global Service Pvt. Ltd., V/s Suprit Roy” reported in2007 SCC Online Bom 1083; “F. L. Smidth Pvt. Ltd., V/s Secan Invescast (India)Pvt. Ltd.,” reported in 2012 (2) MWN (Civil) 815; “Satyan Patel V/s HumanFactors International Pvt. Ltd.” in Company Petition No. 733 of 2015(Bombay High Court); and “M/s ELI Research India Private Limited V/sMr. Deepak Gupta and Another” reported in 2017 SCC Online Del 8403.Most of the decisions have been given with reference to section27 of the Indian Contract Act and enforceability of restrictivecovenant post service period has been held in the negative.
44. While the legal position is as aforesaid, a post servicerestrictive convent is not enforceable, in the present case,additionally it will have to be adverted to that in the case of “M/sKouni Travel (I) Pvt. Ltd V/s Mr. Ashish Kishore” reported in 2007 (6) ALLMR 808 28, the court after taking stock of the situation, had foundthat in that particular case, the condition had not come free forthe plaintiff. The plaintiff was required to pay full remuneration tothe defendant for the relevant period when garden leave clausewould be in operation and substantial amount was being paid tothe employee. The term under said agreement took care ofpayment of compensation / remuneration to the employee during {32} wp2875-18the period in which restrictive covenant is stated to be operative.It is in that context decision had been rendered. The period ofrestraint in that case had been smaller and only for threemonths. As such, said case although being cited by learnedadvocate for the plaintiff, in support of his contentions, the sameis distinguishable on facts and the terms of agreement. It is notthe case of employer – plaintiff in the present matter that anysuch term has been incorporated in the agreement. There is nocorresponding provision in the appointment letter or underclause 7 in the agreement, taking care of remuneration /compensation to the employee, which to a quite large extentgives indication of that the defendant in the circumstances eitherwill be forced to continue with the plaintiff – employer or wouldbe required to remain idle.

45. A negative covenant, which oppresses a person either toperform personal service or to remain idle or starve is consideredinequitable, onerous and oppressive term and tends to obliteratethe object underlying section 27 of the Indian Contract Actforbidding a compelled servitude. An employee seeking betteremployment would not be injuncted on the ground that he hasconfidential information and under the garb of confidentialiltyemployer cannot be allowed to perpetuate forced employment.Freedom to change employment is a vital and important right of {33} wp2875-18an employee, which cannot be curtailed on the ground ofconfidentiality and such a restriction will be hit by section 27 ofthe Contract Act. As such, injunction would not issue.
46. Taking into account that Bombay High court, subsequent todecision in “M/s Kouni Travel” (supra) in similar set of facts in thecase of “VFS Global Services” (supra) read with other decisionsin the field has considered that even a garden leave clause wouldnot be enforceable and would amount to restraint on trade andwould be hit by section 27 of the Contract Act.

47. In the present matter, perusal of the plaint would disclosethat negative restraint has been sought against the defendantfor a period of three years and so is the case of temporaryinjunction under the application therefor. Further perusal of theimpugned order, particularly its operative part shows that thedefendant – petitioner has been restrained for a period of threeyears, as prayed for in the suit and interim relief application. Inthe circumstances, it may have to be adverted to that there ishardly any distinction between the final relief and the interimrelief. Under interim order court has restrained the defendant forthe whole of the term as claimed in the suit.

48. The Supreme Court in the case of “Dayanand Vedic VidyalayaSanchalak Samiti V/s Education Inspector, Greater Bombay and Another”
{34} wp2875-18reported in (2007) 15 SCC 192 has considered that an interim reliefin the nature of final one which is not in consonance withstatutory rules, would be refrained from being given. The courthad observed, an interim order which amounts to grant of finalrelief should not be granted and such a practice should bediscouraged.

49. One may have to give regard to that an alternate remedy isnot an absolute embargo to exercise powers of this court. Writpetition has been filed asserting breach of fundamental rightshaving regard to the decisions as also the question of jurisdictionof the court been raised and decided. In the present case, thereare strong circumstances, which warrant invoking of suchjurisdiction while trial court does not appear to have properlyappreciated those. The reported decisions consistently hold andreaffirm that post service period negative restrictive convent isnot enforceable. One may have to consider that circumstantialand legal position unmistakably is in favour of the defendant -employee and his right to carry on profession and avocation is atstake, since January, 2018.

50. The question of jurisdiction may pale into insignificanceunder the recent ordinance issued during pendency of the writpetition and it is being argued that resort shall be had to an {35} wp2875-18appeal, as provided under Order XXXXIII of the Civil ProcedureCode. Predominant legal position is that negative restrictiveconvent post employment period is not enforceable.Circumstances like duration consumed hitherto and that thedefendant – employee is pitted against a corporate, financiallyable ex-employer and the circumstances in which writ petitionhas been preferred would not be ignored. The trial court hascommitted error in granting interim injunction restraining thedefendant from seeking employment after termination ofemployment with the plaintiff. Facts, circumstances andexposition of law in the decisions referred to clearly point out theposition that injunction as clamped would not be sustainable.Since appeal is provided against the impugned order, to relegatethe defendant to such a remedy, in the present facts andcircumstances, would tantamount to a formality to achievecompliance of procedural requirement and in the process aperson like petitioner – employee would be dragged and hurtledalong, though the circumstances and law are in his favour. Itwould not be a case to adopt stickler’s approach to the matterand to pedantically send the petitioner – defendant to appellateremedy. Such an approach would have to be eschewed in thegiven facts and circumstances.

51. Writ petition, therefore, succeeds and is allowed. Rule is {36} wp2875-18made absolute in terms of clauses “II” and “III”. Request underprayer clause “IV” is not considered and is kept open. RegularCivil Suit No. 16 of 2018 in the circumstances may be proceededwith as expeditiously as possible.

[SUNIL P. DESHMUKH, J.]. At this stage, learned advocate for the respondent makes arequest to stay operation of this order for a period of six weeks.As such, operation of this order be put on hold for a period of sixweeks.
[SUNIL P. DESHMUKH, J.]drp/wp2875-18 Digitally signed Dinesh by Dinesh Ramrao Pawar Ramrao Date: 2018.08.16 Pawar 15:28:55 +0530

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