Rajiv Sahai Endlaw, J
Review Petition No.124/2019 (of the plaintiffs for review of the order dated 11th March, 2019)
1. The two plaintiffs viz. Transformative Learning Solutions Pvt. Ltd., India and Transformative Learning Pte. Ltd., Singapore have instituted this suit
for permanent injunction to restrain the three defendants namely Pawajot Kaur Baweja, Aastha Jain & Adya Ayurveda from, (i) disclosing or using in
any manner whatsoever any confidential information, trade secrets or any other information pertaining to the business and operations of the plaintiffs;
(ii) carrying out any business of or relating to Ayurveda, for a period of two years, in accordance with the employment contract; (iii) from using any
proprietary content including copyright of the plaintiff; (iv) from approaching, soliciting, inducing or encouraging any customer or employee of the
plaintiffs. In addition, relief of recovery of damages is also claimed.
2. It is inter alia the case of the plaintiffs that the defendants no.1&2 are the former employees of the plaintiff and have set-up business in the name of
the defendant no.3.
3. The suit came up first before this Court on 25th April, 2018, when the counsel for the plaintiffs stated that plaint is required to be amended and
sought adjournment. Post amendment of the plaint, the suit came up on 11th May, 2018 when the counsel for the plaintiffs stated that the confidential
information of the plaintiffs was filed before this Court in a Pen Drive. The suit was entertained and summons thereof ordered to be issued and vide
ex parte ad interim order, till further orders, the defendants were restrained from in any manner using any confidential information of the plaintiffs
which the defendants no.1&2 had been privy to or had access to during their employment with the plaintiffs.
4. The defendants appeared and filed their written statement.
5. On 30th October, 2018 when the suit came up before this Court, it was the contention of the counsel for the defendant no.2 that the controversy in
the present suit was covered by Navigators Logistics Ltd. Vs. Kashif Qureshi 2018 SCC OnLine Del 11321. Thereafter on 11th March, 2019, the
counsel for the plaintiffs contended that the facts of the present case were different from that of Navigators Logistics Ltd. However what was argued
by the counsel for the plaintiffs on that date was not found to be the pleaded case of the plaintiffs. Further, not finding anything on record spelling out
what was the confidential information from use whereof the defendants were sought to be restrained, it was enquired so from the counsel for the
plaintiffs.
The counsel for the plaintiffs contended that the said information was confidential and could not be disclosed. Attention of the counsel for the plaintiffs
was then invited to Rule 17 Chapter VII of the Delhi High Court (Original Side) Rules, 2018 providing for constitution of a Confidentiality Club and a
Confidentiality Club with the defendants no.1&2 and their counsels as members thereof was constituted and the plaintiffs directed to supply the
documents detailing the confidential information, from use whereof defendants were sought to be restrained, in a sealed cover to the counsels for
defendants no.1&2 and the members of the Confidentiality Club were directed to file affidavits qua confidentiality.
6. The plaintiffs however, instead of supplying the documents detailing the confidential information in a sealed cover to the counsels for the defendants
no.1&2, filed this Review Petition seeking review of the order dated 11th March, 2019 to the extent constituting the Confidentiality Club. The said
application came up before this Court on 27th March, 2019, when inter alia following order was passed;
“4. The senior counsel for the plaintiffs/review applicants has contended that as per Rule 17 of Chapter VII and Annexure-F of the Delhi High
Court (Original Sides) Rules, 2018, no copies of the confidential documents are required to be taken and only the advocates can be members thereof
and the opposite party or any of its employees/officers cannot be members of the confidentiality club. Attention in this regard is particularly drawn to
Clause (b) of Annexure-F aforesaid.
5. However Rule 17 of Chapter VII does not so restrict the membership of the confidentiality club and in my opinion Clause (b) of Annexure-F also
cannot be read as excluding the opposite party or its officers/employees. Moreover, I have enquired from the senior counsel for the plaintiffs/review
applicants, how inspection of the documents with respect to which confidentiality is claimed by the advocate only of the opposite party can serve the
purpose inasmuch as the advocate would necessarily be required to take instructions and cannot act in his own right. If the advocate, after inspection
of the documents is to take instructions from the client, even if it is held to be possible, obtaining such instructions would necessarily require the
advocate to disclose the contents or nature of the documents to the client and which could also be in breach of the affidavit of confidentiality filed by
such advocate.
6. The senior counsel for the plaintiffs/review applicants refers to the Telefonaktiebolaget LM Ericsson (Publ) Vs. Xiaomi Technology 2017 SCC
OnLine Del 11069 particularly to para 4 thereof.
7. In my prima facie, view the reasoning which follows from the aforesaid judgment is that there can be exclusion of opposite parties and/or its
officers and employees depending upon the facts of the case.
8. It is thus deemed appropriate that the defendants whose counsels appear on advance notice, file reply to this application.
and the matter adjourned to today.
7. The senior counsel for the plaintiffs, the counsel for defendants no.1 and 3 and the counsel for the defendant no.2 have been further heard.
8. The senior counsel for the plaintiffs has argued that, if the defendants are also made privy to the list of customers of the plaintiffs, it will cause
further damage to the plaintiffs, inasmuch as the defendants would then become aware of even those customers of the plaintiffs of whom they do not
know till now.
9. On enquiry, whether not the same is an admission of the defendants, till now being not aware of the list of customers of the plaintiffs and / or at
least not the entire list, striking at the very root of the suit, the senior counsel for the plaintiffs has contended that an independent person can examine
the list of customers of the plaintiffs as well as the list of customers of the defendants to determine the commonality, if any.
10. There is no list of customers of the defendants as yet and no application even for discovery thereof has been filed yet. This argument at this stage
is of no avail.
11. The senior counsel for the plaintiffs has also referred to the pages 26 and 100 of Volume-V of Part-IIIA file but which documents are not found to
be relevant for the present purpose.
12. On enquiry as to how the list of customers of the plaintiffs is prepared, for the plaintiffs to claim a copyright therein, though the senior counsel for
the plaintiffs has drawn attention to paragraphs 6,10,14 and 43 of the plaint but the same are not found to be describing the methodology of preparation
of list of customers. The senior counsel for the plaintiffs has sought to give a note in this respect but the need to go into the same also, for the purpose
of this review, is not felt. Moreover, a ‘note’ handed across the bar, cannot be a substitute for pleadings.
13. The senior counsel for the plaintiffs has else today also referred to Annexure-F to the Delhi High Court (Original Side) Rules, 2018 prescribing the
‘Protocol of Confidentiality Club’ and on the basis of Clause (b) thereof contended that the defendants cannot be members of the
Confidentiality Club. It is argued that only the advocates and external experts can be members of the Confidentiality Club.
14. I have enquired from the senior counsel for the plaintiffs, whether not without even knowing what the confidential information is, from use
whereof the defendants are sought to be restrained, the injunction cannot be enforced, inasmuch as a person can be restrained from doing a thing
what he knows he has been so restrained from doing and not from doing what he does not know he is restrained from doing.
15. The senior counsel for the plaintiffs today also relies on Telefonaktiebolaget LM Ericsson (PUBL) Vs. Xiaomi Technology 2017 SCC OnLine Del
11069 to contend that therein the Confidentiality Club was constituted only of advocates and experts.
16. However what was done in Telefonaktiebolaget LM Ericsson (PUBL) supra would not apply to the present factual scenario inasmuch as in the
present suit the defendants are sought to be restrained from using information claimed by the plaintiffs to be proprietary and confidential, without
specifying the information and for the defendants to be so restrained, it is essential for them to know specifically.
17. The counsel for the defendant no.2 has contended that what was done in Telefonaktiebolaget LM Ericsson (PUBL) supra, was is in view of
Section 103 of the Patents Act, 1970, as also reasoned therein and which is not applicable here. It is argued that that was a suit for permanent
injunction restraining infringement of patent and for ancillary reliefs and one of the issues therein was, whether the plaintiff had offered the defendant
a licence on fair, reasonable and non discriminatory (FRAND) terms and in proof whereof the plaintiff had produced patent licensing agreements
entered into with others, with respect whereto confidentiality was claimed. It is further argued, that only the rate at which licence was granted was to
be seen and for which purpose the need for defendant to see the licence agreement was not seen. The counsel for defendant no.2 has also drawn
attention to Rule 17 of Chapter-VII of the Delhi High Court (Original Side) Rules aforesaid, to contend that the same provides for constitution of the
Confidentiality Club, ‘as may be deemed appropriate in the facts of the case’ and Annexure-F is only ‘illustrative’, as also stated in Rule
17. He thus contends that considering the nature of the dispute in the present suit, the contention, that the defendants cannot be members of the
Confidentiality Club, ought not be accepted.
18. The counsel for the defendant no.1 and 3 has also drawn attention to the orders dated 25th April, 2018 and 11th May, 2018 in this suit and has
contended that the ex parte ad-interim injunction, on 11th May, 2018 was with reference to the confidential information stated to be contained in the
Pen Drive but which confidential information has not been disclosed to the defendants and the order is liable to be vacated. It is also argued that the
reluctance of the plaintiffs to disclose their customer list, is an admission, of the defendants having no knowledge thereof. It is argued that the plaintiffs
are indulging in a fishing and roving enquiry.
19. The senior counsel for plaintiffs on enquiry, under instructions states that the Pen Drive referred to in order dated 11th May, 2018, contains only
the list of customers of plaintiffs and no other confidential information.
20. I have considered the respective contentions.
21. A civil lis, governed by the CPC, requires each party thereto to have notice of the case of other, which is required to be met and the CPC does not
permit any surprises. The trial and adjudication of a civil lis is regulated by pleadings and evidence, documentaries or otherwise, beyond pleadings is
not permitted. The documents of each other are required to be admitted and/or denied and issues on which adjudication is required to be done, struck.
No evidence, even if led, beyond pleadings is permitted to be led. Thus, the proceedings require complete disclosure.
22. Of late however, in respect of a certain class of suits, it was felt that documents filed should not be permitted to go in public domain, as happens on
filing in the Court. Provision has thus been made for keeping such documents in a sealed cover, for eyes only of a limited number of persons who also
agree / undertake not to divulge contents thereof to others. In some cases, as in cases of patent infringement or infringement of copyright in source
code of a computer software, the need for a party to a lis to see the document may not arise as the opinion with respect thereto is to be given by the
expert only.
23. However in the present suit to restrain defendants from using confidential information of plaintiffs and for ancillary reliefs, the defendants are
permitted to defend the suit inter alia on the grounds, that the plaintiffs have no copyright in the customers list and even if the plaintiffs have a
copyright, the defendants have not infringed the same. I may mention that the suit has been filed as a commercial suit and not as an ordinary suit. This
suit, under Section 2(c) of the Commercial Courts Act, 2015, can qualify as a commercial suit only if arising out of intellectual property rights relating
to trade marks, copyright, patent, design etc. and not if arising out of property rights or a tort. In such a suit, to ask the defendants to contest the suit
without knowing the customers list in which copyright is claimed and without knowing what they are sought to be restrained from doing, would not
only be unfair to the defendants but also would be contrary to procedure prescribed by law. The Advocates of defendants and experts, even if any
possible in such scenario, cannot be expected to make pleadings, to meet the case of plaintiffs. The non disclosure to the defendant sought by the
plaintiffs, in my opinion deprives the defendant of opportunity of being heard and the right to defend the suit.
24. As far as Telefonaktiebolaget LM Ericsson (PUBL) supra is concerned, the counsel for defendant no.2 is correct in his contention that Annexure-
F supra is only illustrative and else there is no absolute bar to a party / litigant being a member of a Confidentiality Club. This is also clear from bare
language of Rule 17 of Chapter VII supra. Moreover, here, it is the pleaded case of plaintiffs that defendants are privy to the customers list of the
plaintiffs. In such circumstances, the reluctance of the plaintiffs is inexplicable and intended only to have a walkover and obtain an absolute but vague
order / decree of injunction against defendants, to stop the defendants from competing with the plaintiffs. This is impermissible in law.
25. I have thus enquired from the senior counsel for the plaintiffs, whether the plaintiffs are willing to share the customers list with respect whereto
only confidentiality is claimed, with the defendants, binding the defendants to confidentiality terms, as they have already been.
26. The senior counsel for the plaintiffs, on instructions states that the plaintiffs do not want to share their customers list with the defendants.
27. Consequently, the review petition is disposed of by, though recalling the order dated 11th March, 2019 insofar as constituting the Confidentiality
Club, but recording that the legal consequences of the refusal of the plaintiffs shall follow at whatever stage applicable.
28. Review petition is disposed of.
CS(COMM) No.817/2018
List for further consideration on 27th November, 2019.
