TMI Blog2013 (4) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent is restrained for the period of seven days between 12th April, 2013 to 18th April, 2013 from any manner engaging or providing services either as a presenter, host, anchor, reporter or in any other manner on-screen solo of television in any channel including in the channel where he has been recruited - No further orders are required to be passed - The petition is accordingly disposed - OMP No.151/2013 - - - Dated:- 2-4-2013 - Manmohan Singh, J. For the Petitioner. Ms. Pratibha M. Singh and Mr. Sumeet Bhatia, Advs. For the Respondent. Mr. V. P. Singh, Sr. Adv. with Mr. R. R. David, Mr. Mukul Bawa and Mr. Anurag Mathur, Advs. JUDGMENT 1. The petitioner has filed the present petition under Section 9 of Arbitration and Conciliation Act, 1996 seeking inter alia, the following relief : a) That the respondent be restrained from in any manner engaging or providing services in violation of the terms of the Agreement to any other television channel during the term of the contract i.e. till 16th January, 2014 and for a period of one year thereafter i.e. 16th January, 2015 either as a presenter, host, anchor, reporter in any other manner in any on-screen r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, 2012, are :- That the term of the agreement shall be 2 years. The respondent has to render services as a presenter on INDIA TV on exclusive basis. The Presenter does not have any right to terminate the agreement. That the entire copyright vests in the petitioner company. The respondent shall not engage in any other during the currency of the contract and that the services are exclusively for INDIA TV. The Presenter shall not during the validity of this agreement allow his name, image or voice to be associated with any other television channel. The Presenter shall not take up any work of similar nature which is in competition with INDIA TV during the validity of the agreement. For a period of one year which after the termination of this contract or expiry of this contract the Presenter will not engage in a similar programme having a similar concept on any other television channel. The Presenter shall not take up any assignment contrary to the interest of India TV. The Presenter shall not take up any part time employment with any other television channel during the validity of the agreement. The Presenter shall not solicit, negotiate or engage in any discussi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the petitioner, it is the petitioner who has benefitted as he had a huge experience of having anchored programmes with Jain TV, E TV (Urdu), Sahara Samay, Star News, Rajya Sabha TV. The reliefs sought by the petitioner even otherwise are violative of the fundamental rights enshrined in Article 19(1)(g) of the Constitution of India which guarantees the respondent to carry on any lawful trade and profession. The arbitration clause is itself void as power to appoint the Arbitrator in a service contract has been given to the employer. The negative covenant as contained in the agreement dated 16th January, 2012 amounts to a restraint of trade under Section 27 of the Contract Act, 1872 apart from being against the public policy as he tendered his resignation on 8th February, 2013 strictly as per one of the clauses of termination of the agreement. 9. Mr. V.P. Singh, learned Senior counsel appearing on behalf of the respondent has argued that even if respondent failed to discharge the duties and responsibilities under the agreement for any reason whatsoever, he as per termination clause exercised his option to join other channel, he was to pay an amount equivalent to six months̶ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or clients, the same do not constitute trade secrets or confidential informations, the divulgence or use of which should be prohibited. 12. Before discussing the rival submissions of both parties, it is necessary to refer following some of the relevant terms and conditions of agreement dated 16th January, 2012. The other relevant clauses would be reproduced at the appropriate place at the time of discussion and their relevancy required. Terms and conditions i) From the date of signing of this agreement, for the duration of this agreement including any extensions thereof, at the sole discretion of the Company, the Presenter shall render all services in relation to the Programme and the Presenter shall exclusively work for the Company. ii) ....... iii) The Presenter shall be paid a sum of Rs.95,833/- per month as fee by 10th of the following month for presenting the programme which includes all taxes and duties levied by the Government or appropriate authority from time to time during the course of this agreement and subject to deduction of tax as may be required under the Income Tax Act, 1961 or any other applicable law which shall be in force at the time of payment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract. Therefore, some interim orders are to be passed against him otherwise, the purpose of executing the agreement would be defeated in every case. 16. Lastly, she argued that the respondent is not entitled to take the benefit of any ground of Section 27 of the Contract Act, 1872 as the doctrine of restraint of trade does not apply during the continuance of the contract for employment and it applies only when the contract comes to an end except in rare cases wherein special exception is carried out by the Court that the contract is totally one-sided and the restrictive covenant extending on the face of it would be beyond the term of contract is void and not enforceable. But, the present case is not covered in the said category due to the reason that the contract between the parties has not come to an end and further the termination clause has to read with other clauses stipulated in the agreement which are binding in nature, coupled with the fact that while examining the same, the Court has to see the conduct of the respondent and the nature of service joined by the party concerned. 17. Both the parties have referred various decisions in support of their argument. It is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or profession. In paras 48 and 49 of his decision, Hon‟ble Judge came to the following conclusions. The same are reproduced below: 48. In the light of these principles which have been culled out from the decisions with regard to the scope and ambit of the provisions of Section 27 of the Indian Contract Act, it remains to be considered as to whether the non-solicitation clause in question amounts to a restraint of trade, business or profession. Two things are material. First of all, the contract in which the non-solicitation clause appears is a contract between the petitioner and the respondent whereby the petitioner was appointed as the sole and exclusive Canvassing Representative/Distributor of the respondent for its products in India. Secondly, it is not a contract between an employer and an employee. If one considers the non-solicitation clause, it becomes apparent that the parties are restrained for a period of two years from the date of termination of the agreement, from soliciting, inducing or encouraging any employees of the other party to terminate his employment with or to accept employment with any competitor, supplier or customer of the other party. It is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preventing the respondent from employing them. Therefore, an injunction cannot be granted restraining the respondent from employing even those employees of the petitioner company who were allured by the solicitation held out by the respondent in the said advertisement. But, the respondent can be injuncted and restrained from making any such or other solicitation in future during the period of two years w.e.f. 31.12.2005 to any other employees of the petitioner. As regards the solicitation already made by the respondent in the advertisement, the petitioner, if it is able to substantiate this in the arbitration proceedings, would be entitled to be compensated by the grant of damages. So, it is not as if a breach of the non-solicitation clause would leave the petitioner without a remedy. The remedy lies in the claim for damages and an injunction against solicitation in future. It does not lie in the grant of an injunction preventing its employees from resigning and taking up employment with the respondent. Accordingly, this application under Section 9 of the Arbitration and Conciliation Act, 1996 is disposed of with the following directions:- 1) the respondent is restrained during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of one year after the termination of this contract or expiry of this contract. iv) The Presenter shall not take up any assignment which would be contrary to the interests of the Company/India TV channel or the Programmes which the Presenter may present during the term of the contract. v) .... vi) .... vii) The Presenter agrees that at any point of time prior to the termination of this contract he/she will not solicit, negotiate or otherwise engaging discussion related to offer of future engagement of his/her service with any TV channel. This obligation shall continue during the entire term of the contract and any renewed term of this contract and 30 days thereafter. viii) The Presenter acknowledges and agrees that in the event of breach of any of the covenants terms and conditions contained in this agreement the Company will be entitled to obtain an injunction restraining the Presenter from engaging in such conduct and further also claim and obtain damages for breach of this agreement. ix) .... 19. In the present case, it is the admitted position that despite of termination clause, another clause of confidentiality is stipulated in the agreement with the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covenant in a contract of employment is often a matter of great difficulty. In the employment cases so far discussed, the issue has been as to the validity of the covenant operating after the end of the period of service. Restrictions on competition during that period are normally valid, and indeed may be implied by law by virtue of the servant's duty of fidelity. In such cases the restriction is generally reasonable, having regard to the interest of the employer, and does not cause any undue hardship to the employee, who will receive a wage or salary for the period in question. But if the covenant is to operate after the termination of services, or is too widely worded, the Court may refuse to enforce it. 22. There is no prima-facie evidence available on record to show that the contract executed between the parties is not enforceable and it is against the practice followed in this trade. Rather, in the present case incase, both the clauses of termination and confidentiality are read together, the combined effect is to put restriction on the respondent to work with the petitioner at least for two years and he would not join the competitor in violation of the terms of the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be issued as the respondent has cleverly escaped the valid contract despite agreeing to all the stipulations contained therein. It has been argued that the respondent may not be allowed to go completely scot-free from the valid contract and some impediment may be imposed so that he may refrain himself from violating the contract of this nature in future after knowing fully about the consequences. This will also give effect to stipulations in the contract. It has been argued that incase, the respondent is allowed to get away from his such deeds without any pinch, wrong message would also go to the similar situated employees who may do the same without any fear and fairness. In normal case, such argument would not have been considered but in the present case it is evident from the entire gamut of the matter, the respondent had been negotiating with the competitor of the petitioner during the terms of the agreement. Further, the modus operandi adopted by him at the time of termination of contract was not straight and frank. Rather in his e-mail dated 13th February, 2013 he asked the petitioner not to resort to manipulating tactics and reserved his right to take action agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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