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Bombay HC: “Competition must be fair and not in violation of contractual obligations that survive termination.”
The claim within the Arbitration Petition relates to the tip that the Petitioners, Living Audio Systems LLP say the Respondent, Petitioner an erstwhile employee bound by an employment agreement that had confidentiality, non-disclosure, and non-compete provisions, found out a competing business within the name of the 2nd Respondent. She is imagined to have provided the Petitioner’s confidential and proprietary information to her own company, TAC, and ITS, another company. Respondent wont to be used with one Paragon Business Solutions Ltd. This was an entity that was one among the Petitioner’s vendors.
Petitioner and Respondent 3 knew one another. Respondents 3 and 4 through their Advocate, Mr. Sanghai, state that aside from one email, they need to receive no information from the Petitioner. There could also be other proceedings in parallel and there are in fact counter-allegations being made by Respondents 3 and 4 against the Petitioners.
According to the Petitioner, he learned only in late February 2021 23rd June 2021 31-ARBPL11089-2021.DOC that Petitioner and one Ramesh, another employee of the Petitioner, had set up a competing business in Delhi. The Petitioner's chief business is in home automation systems. This requires the Petitioner to liaise with several different professionals from various disciplines including architects, engineers, interior designers, and so on. There is a narrative that sets out how Petitioner Aditya Gupta learned of what petitioner was doing in Delhi in coordination with Ramesh.
Petitioner was confronted with this information at a client's site. Gupta asked Petitioner to return her company (Petitioner)-provided laptop. She did on checking the machine, Gupta was surprised to see that Petitioner had sent quotations on the letterhead of TAC. There were several files that appear on the letterhead of the 4th Respondent.
Mr. Sharan Jagtiani, Senior Advocate submitted that the law therein regard is settled and not contentious. But that competition must be fair and not in violation of contractual obligations that endure termination, as necessities of confidentiality undoubtedly do. An expressive circumstance is that the material that Gupta obtained from Petitioner’s laptop. The averments about this indicate that it's indeed the Petitioner’s material and tip that's or was the idea of approaches made byPetitioner to the eight clients named in prayer clause (g)(i). the proper to hold on a competing business doesn't and can't reach the illicit use of another party’s tip and data.
The single-judge bench of Justice G.S.Patel said that what Mr. Jagtiani seeks isn't a blanket injunction against competing but a restricted prayer supported certain evidentiary material that has been adequately disclosed. The court while listing the matter on 14th July 2021directed that affidavits back by Petitioner and TAC are to be filed and served on or before 2nd July 2021. Respondents 3 and 4 have filed an Affidavit back a replica is going to be served on or before 25th June 2021. Affidavits in Response to be filed and served no later than by 9th July 2021. No additional Affidavits without leave of the Court.
