MANAS AGRAWAL S/O. ASHOK K. AGRAWAL Vs. MU SIGMA BUSINESS SOLUTIONS PRIVATE LIMITED A COMPANY REGISTERED UNDER THE PROVISION OF THE COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT KALYANI PLATINA, 4TH AND 5TH FLOORS, SURVEY NOS. 6 AND 24 KUN

JUDGEMENT

(1.) REVISION petitioners are the defendants in the suit being aggrieved by the order dated 24 -11 -2011 made on I.A. No. 6 in O.S. No. 26755/2011 passed by IV AddL. City Civil Judge, Bangalore, wherein the Trial Court rejected the application filed under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act'), have tiled this revision petition. The facts of the case are as follows. The respondent herein filed a suit contending that it was a company registered under the Companies Act, 1956 having its registered office at Kalyani Platina, 4th and 5th floors, K.R. Puram, Bangalore. It was involved in the business of Management Consultant, engaged in highly specialized field of data mining and data analysis specifically in the areas of Retail, Marketing, Supply Chain and Risk Analytics. The Company's innovations and development team has developed analytical methods, assets, and tools which are used to provide cutting edge services to its customers, which no other company is able to provide. The plaintiff -company is spending large amount of time, money and its resources in training its employees and providing them with the skill sets necessary to perform these services with high quality and very quick response time. Its employees are also a valuable asset of the company. While appointing the employees, the plaintiff -company used to enter into an agreement with its employees with regard to the non -disclosure of technical know -how.

(2.) THE case of the plaintiff is that the 'revision petitioners 1 to 3 who are defendants 1 to 3 in the suit were appointed by the plaintiff -company on 3 -12 -2008, 17 -7 -2006 and 4 -2 -2008 respectively in the capacity of Manager and defendants 2 and 3 are the Business Analysts. As per the terms of the agreement, if there is any dispute arising out of or in connection with the agreement, the dispute has to be referred to the Arbitrator nominated jointly by the company and the employee. Even after the termination of service, the agreement continues to be in force. Further, the employees are not supposed to disclose the technical know -how during the time of employment and thereafter and the employee shall hold in strict confidence and should not use for Lecture or for publications. The defendants 1 to 3 have signed the said agreement also and undergone the training in the specialized field. Thereafter, the defendants 1 to 3 resigned from service on 2 -2 -2011, 14 -12 -2010 and 29 -3 -2011 and started the 4th defendant -company for doing the similar business and solicit the customers of the plaintiff company making use of the confidential information of the customers of the plaintiff -company. In view of that, the plaintiff has filed a suit seeking for following reliefs: (a) of permanent injunction restraining the defendants their agents, servants, contractors or anybody claiming under them from carrying on business with, dealing, or in any manner transacting with any of the clients, customers, or potential clients or customers of the plaintiff; (b) of permanent injunction restraining the defendants, their agents, servants, contractors or anybody claiming under them from soliciting any employees or the customers of the plaintiff; (c) of permanent injunction restraining the defendants, their agents, servants, contractors or anybody claiming under them from utilizing or disclosing any of the confidential information of the plaintiff -including its unique analytical methods, analytical tools, client and customer lists of contract information, pricing and other client data, trade secrets, inventions processes, formulas, source and object codes, know -how, designs and techniques and other data generated by the plaintiff and any other details pertaining to the plaintiff's clients, whether by way of transacting or dealing with or contacting any clients or potential clients of the plaintiff, or otherwise: (d) of permanent injunction restraining he defendants, their agents, servants, contractors or anybody claiming under them from competing with the plaintiff's business; (e) directing the defendants to compensate the plaintiff for the losses caused to the plaintiff by their illegal solicitation of the plaintiff's customers, which the plaintiff assesses to be Rs. 1.00 crore along with interest at 12% p.a. from the date of filing of the suit until payment; and (f) awarding the plaintiff costs of this suit and other reliefs.

(3.) SRI . K.G. Raghavan, learned Senior Counsel appearing for the revision petitioners contended that the order passed by the Trial Court rejecting I.A. No. 6 filed under Section 8 of the Arbitration Act is contrary to law. The judgment relied upon by the Trial Court is not applicable to the facts of the present case. He further contended that admittedly, the defendants 1 to 3 were the employees of the plaintiff -company. The first defendant was working as a Manager and defendants 2 and 3 were working as Business Analysts. The Employee Proprietary Information and Inventions Agreements clearly disclose that if there is any dispute with regard to the agreement, the matter has to be settled by the Arbitrator as per the Indian Arbitration and Conciliation Act 1996. The similar agreement had been entered into between the respondent and all the three revision petitioners. Even 'after resignation of their services, the agreement entered into by the parties is binding on them as per Clause 1.3 of the agreement. The revision petitioners after resigning from the plaintiff -company established 4th revision petitioner -company. Initially, petitioners 1 and 2 are the Directors of the 4th respondent -Company Subsequently, the 3rd petitioner also became the Director of the said company. Except the petitioners 1 to 3 there are no other Directors. The business is carried on by the petitioners as per their Memorandum of Association and Articles of Association having its registered office at Karnataka. If the corporate whale is lifted, except the three petitioners, no other person is available. The suit has been filed by the plaintiff against the defendants 1 to 3 who are the revision petitioners herein. Admittedly, as per the employment agreement entered into between the plaintiff and defendants 1 to 3, the defendants are not supposed to disclose the confidential information of the plaintiff -company and they cannot solicit the customers of the plaintiff -company. Virtually the relief has been sought against the defendants 1 to 3. Hence, the application filed by the defendants is maintainable. He also relied upon the judgment reported in 2008(3) ARB. L. R 445 (Delhi) (Virendra Yadav v. Aerosvit Airlines Company and Others): (1997) Vol. 89 CC 362 (Delhi Development Authority v/s. Skipper Constructions): 1997 (89) CC 849 (New Horizons Limited v. Union of India): AIR 1998 SC 1737 (State of U.P. v. Renusagar Power Co. and Others); Hind Overseas Private Limited Vs. Raghunath Prasad Jhunjhunwalla and Another, AIR 1976 SC 565 and sought for setting aside the order dated 24.11.11 and to refer the parties to arbitration.