M/S Digital Radio (Delhi) ... vs Naved Khan
2011 Latest Caselaw 1163 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  OMP NO. 163/2011

                                     Date of Decision : 26.02.2011

M/s Digital Radio (Delhi) Broadcasting          ......Petitioner
                           Through: Mr. P. Mishra, Sr. Adv. with
                                     Mr. Arjun Pant, Adv.

                                Versus

Naved Khan                                      ......Respondent
                              Through:   Mr. Rajiv Nayyar, Sr. Adv.
                                         with Ms. Archana and Mr.
                                         Kapil Wadhwa, Adv.

CORAM :
HON'BLE MR. JUSTICE V.K. SHALI

1.    Whether Reporters of local papers may be
      allowed to see the judgment?                  NO
2.    To be referred to the Reporter or not?        NO
3.    Whether the judgment should be reported
      in the Digest ?                               NO

V.K. SHALI, J. (Oral)

1. The petitioner has filed the present petition under Section 9 of

the Arbitration and Conciliation Act, 1996 seeking a restraint

order against the respondent from performing 'on air' for

Entertainment Network India Ltd. (hereinafter referred as

'ENIL') or any other competitor of the RED FM which is

being run by the petitioner. It is also prayed that the

respondent shall be restrained from passing any confidential

information or trade secret directly or indirectly to any other

competitor of the petitioner including the ENIL.

2. Mr. P. Mishra, the learned senior counsel on behalf of the

petitioner has very vehemently contended that during the

pendency of the petition, a restraint order be passed against

the respondent in as much as he knows the trade secrets and

the confidential information of the petitioner which he has

acquired during his tenure as an employee of the petitioner

company and is passing off the same to the competitor (ENIL).

It has been contended that this information is very essential

and relevant in the light of the fact that World Cup Matches

are likely to start shortly and thereby it will jeopardize the

financial interest, of the petitioner.

3. Mr. Rajiv Nayyar, the learned senior counsel for the

respondent contested the grant of any ad interim order at this

stage without an opportunity being given to the respondent to

even file his reply. It has been contended by him that the

respondent has not worked even for a day with the petitioner,

despite the agreement having been signed by the respondent

with the petitioner as early as on 23.11.2010, which was to

commence from 24.01.2011. On 03.02.2011, the respondent

sent a notice to the petitioner stating that he is not interested

in continuing with the proposed employment of the petitioner

as they have failed to pay him even the consultancy fee in terms

of the agreement. Therefore, it was contended that apart from

the fact that the petitioner does not have a prima facie good

case, the balance of convenience is not in its favour and the

case does not warrant grant of any ad interim order against

the respondent at this stage.

4. Briefly stated the facts of the case are that the petitioner is a

company engaged in the business of radio broadcasting and

operates a radio frequency 93.5 FM which is commonly

known as RED FM. It is stated by the petitioner that the

aforesaid frequency is a very popular channel listened by

number of persons of different age groups. The respondent

is a radio jockey and was working with a company by the

name of ENIL which is also operating a radio frequency, by

the number 98.3 F.M. which is commonly known as Radio

Mirchi. This fact is not disputed by the learned counsel for

the petitioner. It is stated that the respondent had given his

resignation to ENIL on 25.09.2010 (which was wrongly dated

as 09.09.2010) and thereby terminating his relationship as

that of an employee with the ENIL. This resignation of the

respondent was accepted by the ENIL on 06.01.2011. A copy

of the same is placed on record. It is the case of the

petitioner that after having disclosed the information of

terminating his relationship with the ENIL, the respondent

had signed an agreement on 23.11.2010 with the present

petitioner to become a radio jockey for the petitioner

company. This agreement dated 23.11.2010 was made

effective from 24.01.2011 and was to remain operational

till 23.01.2014 i.e. for a period of 3 years.

The reason why the agreement was made operational and

effective from 24.01.2011 (although the same was purportedly

signed on 23.11.2010) was that the petitioner did not want to

violate the confidentiality clause which the respondent had

with the previous employer ENIL, according to which the

respondent could not have appeared as a radio jockey for any

other company other than ENIL for a period of three months

after having submitted his resignation.

5. It is the case of the petitioner that after the respondent had

joined the petitioner on 24.01.2011 and had started working

with them, he abruptly sent an e-mail dated 03.02.2011 to

the petitioner indicating that he is not interested in

continuing with the employment of the present petitioner.

The agreement dated 23.11.2010 signed between the

petitioner and the respondent, contained an important clause

which prohibited the petitioner to take up employment with

any other competitor as well as put an embargo on him of

giving a notice of three months before resigning. The

relevant clause reproduced herein before:

"2.3 The agreement may be terminated by either party by giving three (3) months notice or, or by paying an amount equal to the fee payable by the Company to the Consultant for such notice period in lieu of that. Notwithstanding the provisions of this clause, the consultant shall not terminate the Agreement during an ongoing sponsorship of any show.

8.2 Accordingly, the Consultant irrevocably and unconditionally agrees that upon the cessation of Consultant's duties under the Agreement, or upon Consultant's termination of the Agreement by whatsoever reason, whichever is earlier, Consultant shall not, for a period of six (6) months following such termination or cessation of

agreement, work as RJ and / or in any other capacity for any other radio station and / or radio company/ affiliate of the radio company in the geographical area covered by the company and / or its affiliates broadcast signal. If the time or area limitations, or both, contained in this paragraph are for any reason held to be unenforceable by any court of competent jurisdiction, this agreement shall nevertheless be enforceable for such lesser time or lesser area, or both, as the court shall determine. Further, Consultant agrees that any claim or cause of action of Consultant against Company shall not constitute a defense to Company's enforcement of this provision of the Agreement.

EXCLUSIVITY-

During the terms of this agreement, all the consultant's Services are exclusive to Company and/or its subsidiary/associate/affiliate. However, the Consultant shall be entitled to provide any kind of service on behalf of any other Company other than for any radio company and/ or radio station and / or its affiliates / associate / subsidiaries etc. provided prior written intimation of the same is given by the consultant to the company are not at all affected by such services. Further, in case the company/ and or its affiliates intimates to the consultant for his availability on a particular day and at a particular time, consultant will make himself available at that time provided prior to such intimation by the company to the consultant, the consultant has not intimated in writing to the company for his non-availability at that particular day and particular time."

6. It is also the case of the petitioner that there is an arbitration

clause between the petitioner and the respondent under

which a modality for adjudication of the disputes between the

parties is envisaged. The learned counsel for the petitioner

has contended that the respondent is bound by various terms

and conditions under which he was prohibited from revealing

any confidential information and from working as a radio

jokey for any competitor of the petitioner, whereas by giving a

notice dated 03.02.2011 he is trying to violate the same.

7. It has also been contended by the petitioner that they gave a

notice to the respondent requiring him not to appear as a

radio jockey for any other company other than the petitioner.

8. In the light of the aforesaid facts the petitioner had prayed for

grant of an ad interim order seeking a restraint against the

respondent from appearing as a radio jockey till the matter is

finally heard.

9. I have carefully considered the submissions made by the

learned counsel for the parties.

10. It is settled legal position that before a person is granted an

ad interim injunction three things must be satisfied. The

petitioner must have a prima facie good case, the balance of

convenience should be in its favour and the petitioner should

suffer an irreparable loss, if an ad interim injunction is not

granted in his favour. Although these are broad essentials

parameters which are to be considered while granting stay

under Order XXXIX Rules 1 and 2 CPC but the broad

parameters would equally be applicable while granting an ad

interim relief in respect of an application under Section 9 of

the Arbitration and Conciliation Act, 1996.

11. Coming back to the facts of the present case, although the

petitioner may have been able to make out a prima facie good

case in its favour on account of having signed an agreement

dated 23.11.2010 with the respondent that he shall not

appear as a radio jockey for any other company or that before

leaving the service he will give a requisite notice of three

months but the question which arises is whether the

petitioner is able to show that the balance of convenience is

also in its favour. In this regard, I feel that the petitioner has

been unable to show the same. This absence of the balance

of convenience is reflected from the fact that admittedly that

the agreement was signed on 23.11.2010 and it was to come

into operation on 24.01.2011. Further this agreement was to

remain in operation for a period of three years i.e. upto

24.01.2014 but on 03.02.2011 itself the respondent sent an

e-mail to the petitioner intimating that he does not intend to

continue working with the petitioner. This means that the

total number of days for which the respondent has worked

with the petitioner is two days of February, 2011 and six or

seven days of January, 2011 and even this period of nine to

ten days for which the respondent is alleged to have remained

in the employment of the present petitioner, there is no

documentary evidence placed on record by the petitioner that

the respondent had actually joined the petitioner company as

a radio jockey. On the contrary, the respondent has

categorically stated that he did not join the petitioner

company at all on any date much less on 24.01.2011 nor has

he been paid any consultancy charges. Even for the month of

January, 2011, the factum of payment of consultancy charges

not having been paid is corroborated by the fact that the

petitioner has enclosed a cheque for a sum of Rs.66,000/- or

so along with its notice. This clearly shows that although the

petitioner is stating that the respondent had resumed the

duty with the petitioner but the documentary evidence shows

to the contrary as neither any joining report has been placed

on record nor any payment is purported to have been made.

Under these circumstances, I feel that the petitioner has not

been able to show that the balance of convenience is in its

favour which may warrant the passing of a restraint order

against the respondent from working as a radio jockey with

any other company.

12. In addition to this, it is a basic principle of law that a contract

of personal service cannot be specifically enforced as it

depends on special skill of the party concerned. The instant

agreement, is a contract of personal service which cannot be

specifically enforced. Though such an agreement can be a

ground for passing of a negative restraint order against a

party but even for the passing of a negative restraint order

basic condition that he had joined the employment of the

petitioner must be satisfied, which I feel that the petitioner

has not been able to satisfy because of non filing of the documents

showing that the respondent had joined the petitioner after

a particular date and continued to be with them. Further,

even the injunction is refused, the consequential harm which

the petitioner may suffer may not be such which cannot be

compensated in terms of money.

13. For the reasons mentioned above, I feel that at this stage it

cannot be considered to be a fit case for passing any restraint

order against the respondent. In view of the aforesaid facts

and circumstances I dismiss the grant of any stay at this

stage. Let the respondent file its reply within four weeks.

14. Post the matter before the learned Joint Registrar on

06.04.2011.

15. Expression of any opinion herein before shall not be treated

as an expression on the merits of the case

16. List the case for disposal of the application after the reply of

the respondent is filed.

V.K. SHALI, J.

FEBRUARY 26, 2011 KP