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2019 (6) TMI 573 - AT - Companies LawOppression and Mismanagement - termination of the Franchise Agreement - non-competing agreements - Appellant stated that the 2nd and 3rd respondent have attempted to ride on the goodwill and reputation of the Appellants by representing themselves as “Ex-Director –TIME and 2nd and 3rd respondent issued various advertisement for promotion of 4th respondent. HELD THAT:- Once it has been accepted by the appellant and the respondent that when this franchise agreement is terminated it will be unreasonable restriction on the part that one party will be restrained not to do anything which is similar to the appellant company, especially when no consideration has flown from appellant company and the respondent nor even there has been any agreement to either purchase or sell shares in the 1st respondent by both group of shareholders. We have also noted non-competing Clause at Para 43 Page 98, that the appellant has reserves its rights to directly or indirectly engage, invest or participate in or provide assistance to any person or entity which competes with the company in India or abroad. After the termination of the franchisees agreement, 1st respondent company being reduced to virtually defunct company, restrictions on 2nd and 3rd respondent would not be justifiable. At the time of these advertisements it has been noted already termination of the franchise agreement has taken place and it has also been accepted w.e.f. 25.4.2012 by the appellant company. After this position has been accepted, the right of the persons to use the word “Ex-Director” cannot be denied as it would represent their experience as well. Therefore, we do not see that there is enough ground to object to use of the word “Ex-Director”. We see no irregularity in this matter. In any case, it can not be matter for consideration for consideration of question of oppression. In the absence of any supporting documents for a huge amount of ₹ 10 crores, the demand of the appellant is illogical. It could only be a wild guess for a loss. Having noted that few of the courses were withdrawn by the appellant and also having a right directly or indirectly engage, invest or participate in or provide assistance to any person or entity which competes with the company in India or abroad which does not restrict that the appellant to organise his own business especially as it has been contended that the TIME is a great name in the market. There would hardly be any hindrance in its organising its operation even when this franchisees agreement has been terminated. A well established name had come through being successful in the competition. It would not be desirable that others are denied the same opportunity. After the agreement has been terminated there is no basis for this demand. Appeal dismissed.
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