TMI Blog2020 (5) TMI 712X X X X Extracts X X X X X X X X Extracts X X X X ..... there are only one or two others carrying on same business but on a much smaller scale than the plaintiff and the defendant. The effect of granting injunction as sought against the defendant, would be that the defendant even if has entered into agreements with the developer/owner of the Amritsar and Juhu, Mumbai properties, would be unable to proceed under the said agreements, leaving the developer/owner aforesaid in a lurch with respect to their properties meant for running and operating multiplex cinemas and who will have no option but to accept whatever commercial terms the plaintiff offers. The claim of the plaintiff herein also is, to monopolize land and buildings thereon, across India, and just like agricultural produce was held to be natural resource, so is land a natural resource. Moreover yet another directive principle is, that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment and the monopoly sought to be created by the plaintiff by seeking the injunction in this suit, to exclude the defendant from its forays to procure real estate for its business across India, would be against the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thus presenting viable business opportunities for the plaintiff; (iii) that the plaintiff, on learning of development underway of a property by the name of Suraj Chanda Tara Cinemas in Amritsar, undertook a feasibility study of running a multiplex in the said locality and found it to be a financially profitable business opportunity; (iv) accordingly in or about July, 2017, the plaintiff entered into negotiations with the developer of the said property at Amritsar, for a long term agreement with respect to the property and held various meetings with the said developer; (v) the defendant was also negotiating with the said developer for entering into an agreement/arrangement with respect to the property under development; (vi) however subsequently it was the plaintiff which entered into a binding term sheet with the developer whereunder the developer agreed to lease the said property to the plaintiff for a period of 15 years; (vii) though the said term sheet provided for a main Transaction Document to be subsequently executed, but the same was a mere formality and the term sheet was otherwise binding on the plaintiff and the developer and the plaintiff also paid security deposit to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veloper at Amritsar to terminate the term sheet executed with the plaintiff; (xv) but for the defendant, the developer at Amritsar could not have terminated the term sheet with the plaintiff; (xvi) the defendant has thus interfered in the contractual relationship of the plaintiff with others, inspite of being aware of such contractual relationship; (xvii) the defendant is attempting to piggyback on the success of the plaintiff in identifying and procuring the agreements with respect to properties of others across India; (xviii) the conduct of the defendant has resulted in grave injury to the plaintiff, as a multiplex space is not substitutable and the plaintiff in each of the cases had already initiated steps for procuring manpower and equipment required for the proposed multiplex; (xix) the plaintiff has apprehension that the defendant would interfere with the legal rights of the plaintiff with respect to the non-functional property of the plaintiff at Juhu, Mumbai also; and, (xx) the plaintiff has also reliably learnt that the defendant is also attempting to procure breach of other existing agreements between the plaintiff and owners of various other properties of the plaintiff. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspect. 8. List on 9th May, 2019. The senior counsel for the plaintiff and the senior counsel for the defendant were thereafter heard on 9th May, 2019 and 13th May, 2019 and orders as to the maintainability of the suit reserved. 6. This order/judgment being on the maintainability of the suit and which has to be judged as per averments contained in the plaint only and at which stage the defence of the defendant is not to be looked at, the need to record the same is not felt. 7. The senior counsel for the plaintiff, in his arguments took me through the contents of the term sheet entered into by the plaintiff with the developer at Amritsar, to contend that the same constituted a binding enforceable agreement. It was also suggested that the prior agreement entered into by the said developer, with the defendant and of which the plaintiff learnt later, was not a binding agreement. Reliance was placed on Kollipara Sriramulu Vs. T. Aswatha Narayana AIR 1968 SC 1028 holding that if all the essential terms of a contract are contained in the document which also provides for signing of a further formal agreement, it is not always that without the formal agreement being si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' or by some other act prevents 'B' from performing its contract; and, (ii) though a member of the family carrying on business is entitled in law to, after leaving the family business, establish a rival business, but is not entitled to interfere in the family business or to procure a breach of agreements of the family business with others; B. Tortious Interference with Contract: A Reassertion of Society's Interest in Commercial Stability and Contractual Integrity authored by John Danforth, Colombia Law Review, Volume 81, No. 7 (1981) pp. 1491-1524 opining that tort liability for interference with contract is well established; that the motive of the interferer is irrelevant; that it is in the interest of society that there is integrity of contracts; contractual remedies only promise broad commercial stability to the extent that they reflect and protect the measurable interest of particular contracting party; tort protection against interference with the contract promotes society's interest in commercial stability in two areas not adequately protected by the existence of traditional remedy against breach; tortious interference liability provides a threshold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act or relationship so disrupted, whether it is written or oral, enforceable or not enforceable. 11. Per contra the senior counsel for the defendant contended, (i) that though the plaint contains averments qua the property at Juhu, Mumbai but no mention is made thereof in the cause of action paragraph of the plaint; thus the same is not to be considered; (ii) that the documents filed by the plaintiff itself show that the developer of the property at Amritsar, vide letter dated 31st January, 2018 to the plaintiff informed the plaintiff that the term sheet had automatically lapsed and refunded the security deposit received from the plaintiff; the plaintiff accepted the said refund without any demur and did not impugn such termination and once has done so, there ceased to be any binding contract between the plaintiff and the developer of the property at Amritsar and the plaintiff is not entitled to seek relief with respect thereto in this Court; (iii) that across India, the defendant has 767 screens in 164 properties as against 583 screens in 145 properties of the plaintiff-it thus cannot be stated that the defendant is in any dominating position or is capable of indulging in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach the Court and his case is to be summarily thrown out; F. Speech and Software Technologies (India) Private Limited Vs. Neos Interactive Ltd. (2009) 1 SCC 475, Dresser Rand S.A. Vs. Bindal Agro Chem Ltd. (2006) 1 SCC 751 and Hansa V. Gandhi Vs. Deep Shankar Roy (2013) 12 SCC 776, to contend that an agreement to enter into an agreement is neither enforceable nor confers any right upon the parties, including the right to seek specific performance; G. Jagir Singh Vs. Ranbir Singh (1979) 1 SCC 560 to contend that what may not be done directly cannot be allowed to be done indirectly; H. Lindsay International Pvt. Ltd. Vs. Laxmi Niwas Mittal to contend that a breach of an existing contract is a sine qua non for the tort of inducement; I. Bimal Chandra Sen (Dr.) Vs. Kamla Mathur to contend that in the absence of principal offender having been found guilty of the offence, the question of an aider and abettor being guilty of the said offence does not arise; J. J.S. Yadav Vs. State of Uttar Pradesh (2011) 6 SCC 570 and Mumbai International Airport Private Limited Vs. Regency Convention Centre Hotels Private Limited (2010) 7 SCC 417 to contend that impleadment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fendant to contend that the same disclose the defendant to have also paid the same amount of security deposit to the developer of the property at Amritsar, as paid by the plaintiff. With respect to the contention of the senior counsel for the defendant, of freedom of contract, it is contended that after entering into a contract, there is no freedom left. It was informed that in Balailal Mookerjee Co. (P) Ltd. Supra, injunction was granted inspite of termination having been effected and the plaintiff was not compelled to sue for specific performance. With respect to Pepsi Foods Ltd. supra, it was contended that what has been held therein applies only with respect to employees and not with respect to competitors. It was controverted that the relief with respect to Mumbai is speculative and it was contended that it is by way of quia timet action and it was informed that the owner of the property at Mumbai is in liquidation/insolvency. It was also argued that all the said questions as to maintainability, as has been raised, are a matter of trial. With respect to the argument of remedy if any of the plaintiff being under the competition law, it was contended that there is a competitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be restrained from doing so and also from doing so with respect to other properties with respect whereto the plaintiff has existing contracts or may have contracts in future. In my opinion the plaintiff even if believed to be having existing binding contracts and even if the defendant is indeed interfering therein or causing breach thereof, is not entitled to so restrain the defendant. No trial is required in this regard inasmuch as the same is purely a question of law. 16. The law with respect to contracts, immovable property and specific performance, as far as India is concerned is codified in the Indian Contract Act, 1872, Transfer of Property Act, 1882 and the Specific Relief Act. Interpreting the said law, it has been held, (i) that any right in immovable property, whether by way of sale or lease, can be transferred or created only by a registered document and in the absence of registration, the deed of sale even if executed, at best constitutes an agreement to sell and the deed of lease even if executed with delivery of possession, at best is a lease from month to month, terminable by a 15 days' notice; a deed of lease even if executed and registered, but without d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any demur accepted refund of the security deposit paid with respect to the Amritsar property, signifying its acceptance of the termination of the arrangement, whatsoever it was with the developer of the said property; (vi) in the absence of the developer/owner of the properties at Amritsar and Juhu, Mumbai, it cannot also be determined whether it was the plaintiff who was in breach/violation of its obligations under the agreement entered into with respect to the said properties or it was the said developer/owner; (vii) the said parties were necessary parties to the suit considering the nature thereof and the plaintiff cannot hide behind the plea of the Court being always entitled to implead any party; the Court once finds the necessary party and in whose absence there can be no adjudication, to have been not impleaded, is not required to do the work of the plaintiff and has no option but to dismiss the suit; (viii) the reliefs claimed with respect to other properties across India are indeed vague and there can be no general injunction as sought; though the Courts have recognized a quia timet action but against a specific party and with respect to specific facts and not in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unenforceable, every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind. Thus, even if the defendants or any of them, under their agreement with the plaintiff, had undertaken not to carry on or be involved in any capacity in any business competing with the business of the plaintiff, even after leaving employment with/association of the plaintiff, the said agreement, owing to Section 27 supra, would be void and unenforceable and the plaintiff on the basis thereof could not have restrained any of the defendants from carrying on any business or vocation, even if the one which the defendant had agreed not to carry on. I find it incongruous that the law, on the one hand would disable a plaintiff from enforcing a contract where the defendant had voluntarily agreed not to do something, by going to the extent of declaring such contract void, but on the other hand, enable the same plaintiff to the same relief under the law of tort. To hold so, would make the law look like an ass. 30. Section 27, in Taprogge Gesellschaft MBH Vs. IAEC India Ltd. AIR 1988 Bom 157, Sharp Business System Vs. The Commissioner of Income Tax and Pepsi Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of general public, reasonable restrictions on the exercise of right conferred by the said clause. Thus, restrictions, in the interest of general public and if reasonable, to the Fundamental Right to practice any profession or to carry on any occupation, trade or business, can be imposed only by law. The law of tort of unreasonable interference in carrying on business, in view of Section 27 of the Contract Act in force since 1872, was not the existing law within the meaning of Article 19(6) of the Constitution. 33. I have in Independent News Service Pvt. Ltd. Vs. Sucherita Kukreti : (2019) 257 DLT 426, in the context of Section 27 of the Contract Act held the right saved thereby to be a facet of Article 21 of the Constitution of India. The judgment of the Division Bench of Allahabad High Court of the year 1930 [Bholanath Shankar Das Vs. Lachmi Narain AIR 1931 All 83 (DB)], after the right sought to be curtailed has been conferred the status of a Fundament Right and a facet of Article 21 of the Constitution of India, does not persuade me to hold that such Fundament Right of the defendants can be subject to the law of tort of enticement to commit breach of contract or of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract with the existing players. In my view, it is practically impossible to draw a line between such persons, on their own approaching the new entrant, and the new entrant approaching them. The process is quite complex and no precise rules can be made with respect thereto. The Courts would not lay down the law in the name of being a matter of evidence, in respect of matters which are incapable of determination by Courts. 38. Attention of the senior counsel for the plaintiff has also been drawn to the widespread business of headhunters and employment brokers, who sometimes are approached by employees/customers and sometimes by the new entrant and also sometimes on their own make the two meet. I have enquired from the senior counsel for the plaintiff, whether it will make any difference, that the new entrant in the market approaches a headhunter for hiring employees with the specialty and instead of the new entrant, it is the headhunter who approaches employees having contracts with existing players. It is virtually impossible, even if evidence were permitted to be led to draw a line, as to what caused the employee to breach an existing contract of employment and enter into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the argument, of defendants unfairly competing with the plaintiffs, holding (i) that in doing so, the Courts would be granting protection to certain intangibles not covered by the specific statutory regimes; (ii) the basic economic rule is that competition is not only lawful but a mainspring of the economy; (iii) the legislature has recognized that there should be exceptions-it has laid down the rules for these; the laws of patents, trademarks, copyrights and designs have all been fashioned for the purpose; each of them have rules for their existence... each has their own justification; (iv) it is not for the judges to step in and legislate into existence new categories of intellectual property; (v) it is not open for the Courts to create such judicial remedies to remedy what the Courts consider unfair; it is not open to the Court to legislate in this way; (vi) recognition of a general action for unfair competition involves not more than recognition of the fact that the existence of such an action is inconsistent with the established limits of the traditional and statutory causes of action which are available to a trader in respect of damage caused or threatened by a competito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Genetics India Pvt. Ltd. Vs. Shailendra Shivam. Therein, in the context of a suit brought by the plaintiff against its ex-employees/ex-directors for permanent injunction to restrain them from selling similar seeds as the plaintiff was involved in breeding during the term of employment of the defendants, and after finding the invention claimed by the plaintiff to be not falling in the ambit of the Copyright Act, 1957 or Patents Act, 1970 or the Protection of Plant Varieties and Farmers' Rights Act, 2001, while denying interim injunction it was held (i) the danger of enclosing as a monopoly, under the umbrella of trade secret or confidential information, what is clearly commonly shared information and resources, in the absence of a statutory regime is, that the Courts of law would at one fell stroke, not only make policy choices which would impact livelihoods of millions, but would be ordaining, unwittingly, legislation, which cannot be tested for its reasonableness; (ii) an inventor or innovator undoubtedly should be provided a fair regime which protects his creative efforts and rewards him but in the absence of thought out policies, which weigh the advantages as well as the d ..... 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