Final Order 1

Order Details: Notice of Motion
Pdf Text: 1 NM 495-2019 in Suit.134-2019
MHCC010012432019
IN THE BOMBAY CITY CIVIL COURT FOR GREATER
BOMBAY
NOTICE OF MOTION NO. 495 OF 2019
IN
S. C. SUIT NO. 134 OF 2019
M/s. Sky Industries Limited ]
A Company registered under the ]
Companies Act, 1956, having its ]
office at 1101, Universal Majestic, ]
Behind RBK International School, ]
Ghatkopar Mankhurd Link Road, ]
Chembur (W), Mumbai-400 043. ]
Through its Authorized representative]
Arushi Subhash Singhal. ].. Plaintiff
Versus
1. Siddharth Korat, ]
Adult, Indian Inhabitant, ]
R/a. 692/4550, G.H. Bord, ]
Bapunagar, Ahmedabad City, ]
Gujarat-380 024. ]
2. M/s. Velar Corporation, ]
Also known as WELAR Corporation ]
Having office at: A/804, Chinmay ]
Tower, Near Shubhash Chowk, ]
Gurukul Road, Memnagar, ]
Ahmedabad-380 052. ]
3. Mr. Jay Fuletra Managing Director ]
of M/s. Velar Corporation, ]
Also known as WELAR Corporation]
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Having office at: A/804, Chinmay ]
Tower, Near Shubhash Chowk, ]
Gurukul Road, Memnagar, ]
Ahmedabad-380 052. ] .. Defendants.
Appearances :-
Ld. Adv. E. A. Sasi for Plaintiff.
None for defendants.
CORAM : HER HONOUR JUDGE
SMT. ANITA B. SHARMA
COURT ROOM NO.03
DATE : 19/04/2024
ORDER
The plaintiff has taken out present notice of motion for
claiming the relief inter alia;
(a) To restrain the defendants from using the confidential
information, computer resource, trade secrets, technical knowhow,
specifications or drawings of the plaintiff’s Company for any purpose;
(b) To restrain the defendants from carrying on any activity which is
competitive to that of the plaintiff’s Company and also from soliciting,
interfering with, disturbing or attempting to disturb the relationship
between the plaintiff Company and third parties including any
customers or supplier with the plaintiff’s Company.
2. It is contention of the plaintiff that they have been carrying
on the business of manufacturing and supply of the Hook and Loop,
Tapes, Fastner products all over the Country and also exports its product
abroad. It is further contended that the defendant No.1 was appointed
by the plaintiff’s Company as a “Business Development Manager”,
subject to fulfillment of the terms and conditions as mentioned in the
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appointment letter. It is also contended that at the time of the
appointment, the defendant No.1 agreed to abide by the Company’s
Corporate code of conduct and ethics and policy manual which were in
force, in the organization as amended from time to time and for that
purpose, the defendant No.1 had executed a Bond titled as “Non
Disclosure Undertaking” by which he had further agreed, inter alia not
to disclose, discuss, reproduce, copy, forward email, mail, disseminate
ort remove any confidential information or trade secret during the
period of his employment with the plaintiff Company or in future. It
was also agreed by the defendant No.1 that upon his
termination/resignation or discontinuation of service from the Company
for any reason, he will not misuse and/or disclose any confidential
information made available to the defendant No.1 or known to him in
the source of his employment with the other Company, to any person,
organization, firm for any purpose whatsoever either directly or
indirectly, personally and/or through any of his family members and/or
through any Company/Firm with which defendant No.1 and/or his
family members are directly/indirectly associated. According to the
plaintiff, the defendant No.1 further agreed and undertook not to join
or take up any assignment with any other Company/Firm/
Organization/Entity which deals in any product/Service offered by the
plaintiff Company M/s. Sky Industries Limited, and its group of
companies in any capacity whatsoever. It was further agreed by the
defendant No.1 that not to deal with or sell similar products/services to
any customers of the Sky Industries Ltd., and its group of Companies
wither directly or indirectly the defendant No.1 or through his family
members. It was also agreed by the defendant No.1 that whatsoever the
information / knowledge, which he gathered during his tenure, he shall
not part with to anyone and he had specifically agreed and undertaken
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to be bound by this con-compete clause for a period of 3 years after
separation from the plaintiff’s Company and further agreed that in the
event of any breach, the defendant No.1 shall be responsible for the
same and he shall be liable for the appropriate legal action.
3. It is further contention of the plaintiff that the defendant
No.1 has resigned from the plaintiff’s Company on 28/02/2018 and
despite of the written undertaking to abide by the said terms and
conditions, code of conduct in force in the plaintiff’s Company and the
said “Non Disclosure Undertaking”, the plaintiff came to know that
during the month of October 2018, the defendant No.1 not only
deliberately and willfully committed breach of all the said terms and
conditions, undertakings and commitments given by the defendants to
the plaintiff’s company but also he removed and taken away the
important confidential business and information and transferred and/or
downloaded from the computer system available with the plaintiff’s
company. It is further contended that the defendant No.1 has taken out
various information, entered secrets into his own email ID and also
passed on the same to the defendant No.2 and 3. It is further contended
that the defendant No.1 deliberately committed such breaches with
intention of setting of his own firm/company/organization known in
the name and style of M/s. Velar Corporation, which is indirectly
controlled by the defendant No.1 wherein the defendant No. 3 is shown
as partner of the defendant No.2 firm.
4. Is also contended that after setting up the said business
organization, the defendants are now approaching the plaintiff’s regular
customers and suppliers at various places, soliciting, selling and/or
promoting the similar product better manufactured by the plaintiff and
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thereby carrying on similar business with plaintiff’s customer on
account of such solicitation in contravention of the bond executed and
undertaking given by the defendant number one to the plaintiff’s
company. It is also contention of the plaintiff that the plaintiff has issued
legal notice on 23/10/2018 and thereby called upon to disclose to the
plaintiff the complete information of the business being carried on by
the defendant No. 2 and also to refrain themselves from carrying on
and/or proceeding with any such business activity similar to that being
carried on by the plaintiff within the next three years as per the written
commitments and undertakings given by the defendant number one to
the plaintiff’s company. But despite of the receipt of the same, the
defendants failed and neglected to respond the same. According to the
plaintiff, during the pendency of the suit the defendants have changed
name of their firm by changing the spelling of “VELAR Corporation” to
“WELAR Corporation” while the defendant No.2 operates its business
activities from the same address even after the change of the spelling. It
is further contended that the only with intention to escape from the
consequences of legal proceedings instituted against the defendants,
they have changed the name of the company as aforesaid. It is also
contended that the aforesaid acts of the defendants caused great
hardship and inconvenience, adversely affected on the business
prospects of the plaintiff’s company in addition to the monetary loss.
According to the plaintiff, they have prima facie case and if the
defendants are not restrained from using the confidential information
entered secrets of the plaintiff’s company, they would suffer irreparable
loss which could not be compensated in terms of money. Hence this
motion.
5. The defendants have opposed the notice of motion by filing
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reply mainly on the ground that the suit as well as this notice of motion
filed by the plaintiff are not maintainable as the plaintiff is seeking final
relief at the interim stage. All the adverse allegations are specifically
denied. It is submitted that this court has no reduction to try and
entertain and adjudicate the suit. It is further submitted that the
plaintiff has mischievously alleging that the non-disclosure undertaking
is alleged to have been signed by the defendant No.1. It is further
submitted that none of the defendants are having the address within the
territorial jurisdiction of this court therefore the plaintiff is not entitled
for any relief. It is also submitted that the signature of the defendant
No.1 is forged on the alleged nondisclosure undertaking as the
defendants have not even seen the alleged nondisclosure undertaking at
any point of time. It is the submission of the defendants that for
claiming the relief of declaration and injunction, the plaintiff is required
to prove the alleged intellectual property owned by it and the plaintiff
has the exclusive right there to. It is further submitted that the plaintiff
has not even registered his trademark over the said product therefore, it
is not entitled to claim exclusive use of those products. It is further
submitted that the alleged signature on the alleged nondisclosure
undertaking is a distinct and different from the signature of the
defendant No.1 appearing on his appointment letter. The plaintiff has
prepared false and fabricated document. The plaintiff cannot claim on
locally on the said products and alleged confidentiality information or
trade secrets as falsely alleged therein. It is further submitted that the
suit is bad mis-joinder of the parties as the defendant No.2 and 3 have
never employed with the plaintiff’s company nor they have executed
any agreement or contract with the plaintiff and the suit is bad in law as
no privity of contract between the plaintiff and defendant No.2 and 3.
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6. According to the defendants, there is no cause of action to
file the present suit and on this ground alone, the notice of motion as
well as suit are required to be dismissed. It is submitted that the terms
of the appointment letter were only applicable during the term of
tenure of defendant No.1 with the plaintiff’s company therefore the
question of divulging or disclosing of any alleged information does not
arise. It is also specifically submitted that the plaintiff has no exclusive
use and manufacture or supply of the Hook and Loop Tap Faster
Products and there are manufacturers and suppliers of these products
and all of such manufacturers and suppliers are possessing the
necessary confidential information entered secrets for so long therefore
the question of defendant No.1 disclosing or divulging or revealing the
alleged information or trade secrets or sharing of the data as alleged
does not arise. According to the defendants, the products which
allegedly claimed to be products of the plaintiff herein fall under the
general category of Narrow-Woven Tape Fastener Category (hook and
loop etc.) at the same are manufactured, produced and sold/marketed
by various entities in India and abroad.
7. It is the submission of the defendants that defendant No.1
was only employed in the plaintiff’s company in the lower grade
category and no such alleged confidential or trade secrets were
shared/disclosed with him by the plaintiff as he was on the probation
and never made his job permanent by the plaintiff. It is also submitted
that the defendant No.1 has resigned from the plaintiff’s company after
following the procedure and formalities of the company and thus the
plaintiff’s company has released a defendant No.1. According to the
defendants, the plaintiff had provided a computer to the defendant No.
2 which was totally controlled by IT team of the plaintiff’s company and
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he was provided access to the email under the surveillance. During the
tenure of defendant No.1, the plaintiff’s company has never alleged and
observed any misuse of data by the defendant No.1. It is also submitted
that the alleged nondisclosure undertaking is not binding upon them as
they are not the signatory thereto. Therefore, the plaintiff has failed to
make prima-facie case. On all these grounds, the defendants pray to
dismiss the motion.
8. Perused the notice of motion, reply, rejoinder and record.
Heard both sides.
9. Admittedly, the defendant No.1 was the employee of the
plaintiff and he worked with the plaintiff till 28/02/2018. It is pertinent
to note that at the time of the joining of the service with the plaintiff,
the defendant No.1 has signed one ‘Non-Disclosure Undertaking’
wherein clause No.5 clearly indicates that “I agree and undertake to be
bound by this non-compete clause for a period of 3 years after
separation from M/s Sky Industries Limited, and in the event of any
breach, I shall be responsible for the same and shall be liable for
appropriate legal action”. The defendant No.1 though denied his
signature on the said ‘Non-Disclosure Undertaking’ by saying that he has
not even seen the alleged undertaking at any point of time.
10. It is not disputed that the defendant No.1 after leaving the
job of the plaintiff joined the defendant No.2 Company. The documents
filed on record indicates that the heads given to the home page of
defendant No.2 are “Home, Product, Industries” are similar/ identical as
per the home page of the plaintiff. It is also seen that under the head of
product “Hooks and Loop” are common and the defendant No.2 has
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mentioned Value added “Division” whereas the plaintiff has mentioned
Value added product. It is pertinent to note that under the head of
“Industry” options “Footware, sports, packings, Aviation, Medical,
Automative, Defence, Apparels” are common. Thus, the documents
placed on record prima facie indicates material similarity in the heads
mentioned on the pages of the website of the defendant No.2 as per the
homepage of the plaintiff. Though the defendants have denied all the
material adverse contention of the plaintiff, but the aforesaid
documents clearly prima facie indicates that the information and the
knowledge gained from the plaintiff’s company by the defendant No.1 is
utilized, copied from the web page of the plaintiff’s company while
designing the web page of the defendant No.2, which is prima facie
clear breach of the terms and condition of the ‘Non-Disclosure
Undertaking’ executed by the defendant No.1.
11. It is the case of the defendants that the plaintiff has not
even registered his trademark over the said product therefore, it is not
entitled to claim exclusive use of those products. It is pertinent to note
that the plaintiff has annexed Certificate of registration under the Trade
Marks Act,1999 issued on 05/04/2005. Therefore, it cannot be said that
there was no registration of products and the plaintiff has no right to
institute proceeding in regard to infringement. The learned advocate for
the plaintiff has argued that the registration under the Copyright Act is
optional and not compulsory and as per Section 17 of the Copy Right
Act, the author of the work is the first owner of copyright.
12. Prima facie, it is seen that the registration of the plaintiff’s
company was done in the year 2005 and company of the defendant
No.2 was registered in the year 2015. Under such circumstance, the
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plaintiff is having copy right about its labels, heads and products shown
on the webpage of the plaintiff. I have already reached to the conclusion
that the data available on the webpage of the company of the defendant
No.2 is similar with the webpage of the plaintiff. Under such
circumstances, if the defendants are allowed to use the confidential
information, computer resource, trade secrets, technical knowledge,
specifications or drawings of the plaintiff’s company and also allowed
the defendants to carry out activities which are competitive to the
plaintiff company, then irreparable loss will be caused to the plaintiff
which could not be compensated in terms of money. Thus, considering
the facts and circumstance, I reached to the conclusion that the plaintiff
has made out his prima facie case for grant of injunction. The balance of
convenience also lies in favour of the plaintiff.
13. In view of the aforesaid discussion, I proceed to pass
following order:-
ORDER
1. The Notice of Motion No. 495 of 2019 is allowed in terms of
prayer clause (a) and (b).
2. Costs in cause.
3. Notice of Motion No. 495 of 2019 is accordingly disposed of.
(Smt. Anita B. Sharma,)
Judge,
City Civil Court, Greater Bombay
Dated : 19/04/2024 C.R. No.03
Dictated on : 19/04/2024
Typed on : 22/04/2024
Signed on : 23/04/2024
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“Certified to be true and correct copy of the original signed order”.
23/04/2024
at about 4.15 p.m.
(Dastagir Babalal Mulla)
Stenographer Grade-I (Gazetted)
Court Room No.03, Gr. Bombay
Name of the Hon'ble Judge : Smt. Anita B. Sharma,
Judge, Bombay City Civil Court &
Addl. Sessions Judge,
Court Room No.03, Gr. Bombay
Date of pronouncement of
Order
: 19/04/2024
Order signed by Hon'ble Judge
on
: 23/04/2024
Order uploaded on : 23/04/2024
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