Telangana High Court
Mr.Venkateshwarlu Guduru vs Siddhardha Dev Bathula on 26 September, 2025
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE JUSTICE GADI PRAVEEN KUMAR
COMCA.NO.17 OF 2025
Sri P. Raghu Ram, learned Senior Counsel representing Sri R. Ranganathan, learned
counsel appearing for the appellants.
Sri A. Venkatesh, learned Senior Counsel representing Sri A. Naveen Kumar, learned
counsel appearing for the respondents.
JUDGMENT:
(Per Hon'ble Justice Moushumi Bhattacharya)
1. The Commercial Court Appeal arises out of an order dated
03.10.2024 allowing the respondents/plaintiffs' I.A. granting
temporary injunction for restraining the appellants/defendants
from commercially exploiting or disseminating the proprietary
confidential information or trade secrets of the
respondents/plaintiffs from divulging the said confidential
information which the defendants have gained access to owing
to their past relationship with the plaintiffs.
2. The defendants (the respondents in the I.A. before the
Commercial Court) are the appellants before us.
3. By the impugned order, the appellants/defendants were
restrained from causing the breach of confidential information
through commercial exploitation and dissemination of
any proprietary confidential information of the
respondents/plaintiffs.
4. The appellants/defendants are aggrieved by the absolute
and blanket nature of the restraint.
5. Learned Senior Counsel appearing on behalf of the
appellants submits that the impugned order is vague, lacks
material particulars and is contrary to the rights of the
appellants/defendants from carrying on trade and also their
fundamental right to carry on any trade or business as
guaranteed under the Constitution of India.
6. Senior Counsel further submits that the defendant No.1
worked with the plaintiff No.2 at the nascent stage of the
plaintiff's business. Senior Counsel submits that the plaintiff
No.2 is a much bigger enterprise compared to the defendant
No.3 but has unlawfully sought to stop the defendants' business
altogether. It is also submitted that the plaintiffs have failed to
particularize the confidential information and trade secrets
which form the essential cause of action in the Suit. Senior
Counsel further submits that there is no trade secret involved in
the manufacturing process of the oil seals and the entire
procedure for manufacturing is available in the public domain.
7. Learned Senior Counsel appearing for the
respondents/plaintiffs relies on the impugned order to urge that
the Advocate Commissioner appointed by the Delhi High Court
in an earlier Suit i.e., CS (Comm) No.318 of 2019 (renumbered
as COS No.19 of 2022) filed by the plaintiffs found several
incriminating materials in the premises of the defendants. The
material includes lists of customers, boxes, CDs and mails
which would show that the defendant No.1 has used the
confidential information and trade secrets of the plaintiffs in an
unauthorized manner. Senior Counsel further submits that the
defendants have obtained orders from the plaintiffs' customers
by using their association with the plaintiffs.
8. We have considered the submissions made on behalf of
the parties.
9. The prayers in the plaint in the Suit (COS No.19 of 2022)
filed by the respondents in the present Appeal is for permanent
injunction on the defendants (appellants) from breaching
confidential information and fiduciary duty, misappropriation of
unlawful solicitation of clients, breach of contract, unfair
competition damages and delivery up, trade secrets. The
prayers in the I.A. filed by the plaintiffs are relevant for outlining
our view as to whether the defendants/appellants require any
protection at this stage.
10. The prayers in the I.A.No.213 of 2022 are set out below:
"a) From commercial exploitation and further dissemination of
any proprietary confidential information or trade secrets of the
petitioners/plaintiffs through any medium or modes;
b) From developing, manufacturing, offering for sale, selling,
advertising, or any other acts in furtherance of the release of
any product which pertains to, and/or is substantially derived
from, the petitioners/plaintiffs' proprietary confidential
information or trade secrets;
c) From copying, duplicating, licensing, selling, distributing,
publishing, leasing, renting, or otherwise marketing the
petitioners/plaintiffs' proprietary confidential information and
all other studies containing, using, and/or substantially derived
from petitioners/plaintiffs' proprietary confidential information
or trade secrets;
d) And from divulging the said confidential information, which
the respondents/defendants have gained access to owing to
their past relationship with the petitioners/plaintiffs, or any
other material which has been generated by the
respondents/defendants based on the petitioners/plaintiffs'
said confidential proprietary information, or making known
directly or indirectly the confidential information to third parties
in any manner whatsoever, amounting to infringement of trade
secrets, breach of confidential information, and fiduciary duty;
e) An order restraining the respondents/defendants from
soliciting the petitioners/plaintiffs' clients."
11. In the impugned order, the Commercial Court discusses
the exhibits marked in the Suit including a mail sent by the
defendants to BHEL stating that the defendant No.2 gained
experience while in the employment of the plaintiff No.2 and
requested for an order of products.
12. The Trial Court proceeds to rely on several exhibits
consisting of an inventory list of goods seized by the local
Commissioner from the premises of the defendant Nos.1 and 2
which includes documents of the plaintiff No.2, purchase
orders, quality manual inventory list and products of the
plaintiff No.2. The Trial Court proceeds to hold that the
defendants have infringed the plaintiffs' trade secrets which
resulted in the appointment of the Advocate Commissioner for
seizing material pending notice to the defendants. The Trial
Court further finds that the defendants are competing with the
business of the plaintiffs, more particularly with the customers
of the petitioners/plaintiffs which prima facie shows that the
defendants are in possession of the 'trade secrecy' of the
plaintiffs' and have infringed the said 'trade secrecy' and
'business tactics' of the plaintiffs which amounts to a breach of
confidentiality also.
13. The Trial Court accordingly finds that the plaintiffs have
established a prima facie case and that the balance of
convenience also tilts for grant of a temporary injunction in
favour of the plaintiffs.
14. The resulting order of injunction is reproduced below:
"In the result, the petition is allowed by granting a temporary
injunction restraining the respondents/defendants, their
officers, directors, principals, agents, servants, employees,
attorneys, successors, and assignees, and other person acting
through them either directly or indirectly, singly and/or of
together, from breach of confidential information, trade secrets,
and fiduciary duty; from commercial exploitation and further
dissemination of any proprietary confidential information or
trade secrets of the petitioners/plaintiffs through any medium
or modes; from developing, manufacturing, offering for sale,
selling, advertising, or any other acts in furtherance of the
releases of any product which pertains to and/or is
substantially derived from the petitioners/plaintiffs' proprietary
confidential information or trade secrets; from copying,
duplicating, licensing, selling, distributing, publishing, leasing,
renting, or otherwise marketing the petitioners/plaintiffs'
proprietary confidential information or trade secrets; from
divulging the confidential information or trade secret of the
petitioners and also restraining the respondents from soliciting
the petitioners/plaintiffs' clients, till disposal of the suit."
15. The impugned order suffers from several fundamental
infirmities.
16. It is settled law that both 'confidential information' as well
as 'trade secrets' must be identified and particularized for any
form of injunction to be granted against the wrongdoer. Both
rights are broad-based rights that a plaintiff cannot be asserted
vaguely or in a vacuum but must specify in order to pinpoint
the exact unauthorized use or infringement.
17. It is also settled law that a breach of confidence can only
occur:
(i) where the information possesses the necessary quality
of confidence, i.e., the information is not in the public domain;
(ii) that the information was communicated to the
recipient (the alleged wrongdoer) in circumstances imposing an
obligation of confidence;
(iii) that the alleged wrongdoer used or disclosed the
information without the proper authorization;
(iv) causing harm to the rightful owner.
18. Similarly, infringement or misappropriation of a Trade
Secret entails improper acquisition, disclosure or use of the
trade secret without the consent of the owner. The
plaintiff/owner must first establish the existence of a valid trade
secret and that the plaintiff/owner took reasonable steps to
protect it. Second, the plaintiff must prove unauthorized
acquisition or use of the trade secret which, (third), caused
damage to the plaintiff. The proof of duty, fiduciary or
otherwise, occurs only where the plaintiff is in a position to
establish that the infringer knew of the existence or value of the
trade secret but nonetheless proceeded to misappropriate it
without the plaintiff's consent and was bound to the plaintiff by
a relationship of trust. The first condition, i.e., the existence of
a trade secret also pre-supposes that the information is not in
the public domain and is not readily accessible to others and
has an independent economic value which gives the owner the
right to protect it against others.
19. The above conditions are premised on the specificity of
the information or trade secrets, which must have been clearly
defined and are identifiable, as opposed to a vague, generalized
body of details or plans. Indisputably, the impugned order does
not contain any particulars of the confidential information or
the safe trade secrets which have been divulged or infringed by
the defendants. The Trial Court simply proceeds on the
material seized by the Local Commissioner from the premises of
the defendant No.2 to arrive at the conclusion that the plaintiffs
have made out a prima facie case for an injunction. There is no
discussion whatsoever in the impugned order as to the exact
nature of the information or trade secrets over which the
plaintiffs lay claim.
20. In our view, the absence of specificity goes to the root of
the matter and should have been the first issue which the Trial
Court considered.
21. Even more strange is the absolute and blanket order of
injunction which has been extracted above. We have extracted
the prayers in the plaintiffs' I.A. and the injunction for a reason.
The purpose is to show that the Trial Court simply reproduced
the prayers in the I.A. without bothering to exercise its
independent discussion as to whether the plaintiffs' merit such
a broad and open-ended injunction. The operative part of the
impugned order vaguely mentions 'confidential information,
trade secrets, and fiduciary duty' without any reference to the
plaintiffs' rights over any of the three limbs of restraint.
22. The impugned order is thus not only vague but draconian
and contrary to a party's constitutional and legal right to carry
on any trade or business.
23. We are hence of the considered view that the Trial Court
erred in passing the impugned order without considering the
fundamental requirements of the law relevant to the subject.
24. We thus allow and dispose of the COMCA by directing the
Trial Court to consider the issues raised by the plaintiffs in the
I.A. afresh with due regard to the law relevant to the subject.
The I.A. shall be decided as expeditiously as possible and
without granting any unnecessary adjournments to the parties.
All the issues are left open to be decided by the Trial Court.
25. COMCA.No.17 of 2025, along with all connected
applications, is disposed of in terms of the above. Interim
orders, if any, shall stand vacated.
__________________________________
MOUSHUMI BHATTACHARYA, J
_____________________________
GADI PRAVEEN KUMAR, J
Date: 26.09.2025
NDS
