I T H S C D A R: N HE Onourable Upreme Ourt OF Ivistan T Adsri
I T H S C D A R: N HE Onourable Upreme Ourt OF Ivistan T Adsri
I T H S C D A R: N HE Onourable Upreme Ourt OF Ivistan T Adsri
AT RADSRI
IN THE MATTER OF
APPELLANT
v.
RESPONDENT
[Under Article 133 of the Constitution of Divistan read with Order XIX, Rule 1 & 3 of the
TABLE OF CONTENTS..........................................................................................................iii
INDEX OF AUTHORITIES....................................................................................................iii
STATEMENT OF FACTS......................................................................................................vii
STATEMENT OF JURISDICTION......................................................................................viii
SUMMARY OF ARGUMENTS...............................................................................................x
ARGUMENTS ADVANCED.................................................................................................11
UNREASONABLE..............................................................................................................11
CONTRACT ACT.................................................................................................................5
PRAYER....................................................................................................................................7
ii
INDEX OF AUTHORITIES
Cases
; Central Inland Water Transport Corpn. Ltd. v. Brojo Nath Ganguly, (1986) AIR 1571.........6
Central Inland Water Transport Corporation v. Brojonath Ganguly, (1986) SCR (2) 278.......5
Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar, (2014) 1 Mah LJ 758.............2
Lalbhai Dalpatbhai & Co. v Chittarangan Chandulal Pandiya, (1966) AIR Guj 189...............xi
Niranjan Shankar Golikari v. The Century Spinning and Mfg. Co. Ltd., (1967) 2 SCR 367...xi
Pollock and Mulla, Indian Contract & Specific Relief Acts, thirteenth edn.,pp. 823-826........2
Sandhya Organic Chemicals Pvt Ltd v United Phosphorous Ltd (1997) AIR Guj 177.............3
Sanjay Jain v. National Aviation Company of India Ltd, CIVIL APPEAL NO.10881/2018
Taprogge Gesellschaft mbH v IAEC India Ltd, (1988) AIR Bom 157.....................................3
VFS Global Services Pvt. Ltd. v. Suprit Roy, 2008 (2) Bomcr 446..........................................2
Statutes
iii
Other Authorities
Andrei Costin, Security of CCTV and Video Surveillance Systems: Threats, Vulnerabilities,
https://dl.acm.org/citation.cfm?id=2995290..........................................................................5
Sir Jack Beatson & Andrew Burrows, Anson’s Law of Contracts, 30th Edn. P.431..................7
Valerie Steeves & Owen Jones, Surveillance, Children and Childhood, Oxford Human Rights
%20Children%20and%20Childhood%202010.pdf...............................................................6
iv
STATEMENT OF FACTS
Ms. Divika Anjani, a law graduate, received an offer to join the law firm Kulpani Law
& Co. Ltd. [“The Firm”], which specialized in the field of Intellectual Property
rights. The preliminary offer letter was followed by a detailed employment agreement
which stipulated various terms and conditions, including the ones restricting the
employee from competing or soliciting after two years of leaving the job.
Although the agreement said that it would be appreciated if employee stays for
minimum of two years, Ms. Divika decides to resign within a year and a half and
After the court decreed in favour of the Firm, Ms. Divika approaches the Supreme
Court.
v
STATEMENT OF JURISDICTION
The Appellant has approached the Honourable Supreme Court of Divistan, invoking its writ
jurisdiction to admit and adjudicate the present matter under Article 133 of the Constitution
of Divistan, 1950 read with Order XIX, Rule 1 and 3 of the Supreme Court Rules, 2013 and
decide accordingly.
vi
ISSUES FOR CONSIDERATION
I. WHETHER THE EMPLOYMENT AGREEMENT AND THE ACTIONS OF THE FIRM ARE
VALID OR NOT?
vii
SUMMARY OF ARGUMENTS
Firstly, the agreement ambiguously states the condition for the period for which the
unreasonable and unfair and bound the employee even after the termination of
employment.
This amounts to a restraint of trade, thus invoking Section 27 of the Contract Act.
viii
ARGUMENTS ADVANCED
UNREASONABLE
A very weak restraint which protects an important interest is unjustifiable if a yet weaker
restraint could do the job.1 Through various case laws, the test of reasonable restraint under
Section 27 of The Contract Act states that the validity of a restraint depends on [A] the
proprietary interests, [B] reasonableness; and [C] public interest.2 A covenant cannot be
covenantee while at the same time being reasonable for both the parties. 3 In light of this
a) It was held by the Court that when an act is challenged under the ground of restraint
of trade under Section 27 of the Contract Act, the onus is on the party supporting the
contract to show that the restraint is reasonably necessary to protect of his interests
along with being reasonable and non- harsh on its employees. If the terms are
unconscionable and one sided, it would amount to a restraint of trade. 4 Also, the
restraint is absolute except for the case of sale of goodwill where the parties may
1
Stephen (1995) 15 OJLS 565
2
Esso Petroleum Co. Ltd. v. Harper’s Garage Ltd. (1967) 1 AllER 699 (HL); Niranjan
Shankar Golikari v. The Century Spinning and Mfg. Co. Ltd., (1967) 2 SCR 367
3
Sir Jack Beatson & Andrew Burrows, Anson’s Law of Contracts, 30th Edn. P.431
4
Niranjan Shankar Golikari v. The Century Spinning and Mfg. Co. Ltd., (1967) 2 SCR 367;
Lalbhai Dalpatbhai & Co. v Chittarangan Chandulal Pandiya, (1966) AIR Guj 189
1
b) Further, it has been held by the court that the livelihood of the employees is supreme
and must prevail,5 and that covenant is void if it restrains the employee from work in
future.6
c) For a professional law graduate, it would not only be unreasonable, but also to an
extent non-feasible, to not work in a law firm or practice law for 2 years following the
clause of that severity to protect the interests of the other party. In other words, it
b) Considering the fact that the non-solicitation covenant of the employment agreement
provides that the employee shall not solicit, take away, or even attempt to call on any
customer of the firm, which he became acquainted to during the term of employment,
secret9 or which prevents ‘some personal influence over the customers being
abused’.10 Further, for a restraint to be justifiable, the servant must be one who has
acquired not merely knowledge of the customers, but in addition influence over
5
Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar, (2014) 1 Mah LJ 758
6
Satyavrata Ghosh v. Kurmee Ram Bangor, [1954] SCR 310
7
Pollock and Mulla, Indian Contract & Specific Relief Acts, thirteenth edn.,pp. 823-826
8
VFS Global Services Pvt. Ltd. v. Suprit Roy, 2008 (2) Bomcr 446
9
Faccenda Chicken Ltd. v. Fowler, (1986) 1 All ER 617
10
Pollock and Mulla, Indian Contract & Specific Relief Acts, thirteenth edn., p 838.
2
them.11 Another condition is that the confidentiality restraint would not be valid if it is
nothing more than a method adopted by the business or something available in the
public domain.12
b) As the time of restriction is increased and the space of its operation grows, the onus
The confidentiality and non-disclosure clause of the employment agreement [A] provides for
wide and sweeping constrains on the other party without even specifying the time until which
it would be applicable, and [B] uses the phrase “any confidential information or intellectual
information, or the intellectual property is unique to the firm. Hence, the clause is uncertain
Through various cases, it has been well established that in Indian Law, a service covenant
running beyond the terms of the service is void.14 In a fact scenario which resonates with
the present case, there was a clause in the employment contract which said that the
employee could not join any other competitor’s firm for a period of 2 years after he left
the company.15 This covenant was held to be void by the Hon’ble Supreme Court. Similar
Since the clauses bind the employee even after the termination of contract for two years,
11
Herbert Morris Ltd. v. Saxelby, (1916) All ER 617
12
Supra footnote 32
13
Supra footnote 32; Atwood v Lamont (1920) All ER Rep 55
14
Superintendence Co of India Pvt Ltd v Krishan Murgai, (1980) AIR SC 1717; Supra
footnote 32
15
Id.
16
Sandhya Organic Chemicals Pvt Ltd v United Phosphorous Ltd (1997) AIR Guj 177;
Taprogge Gesellschaft mbH v IAEC India Ltd, (1988) AIR Bom 157
3
2. THE EMPLOYEMENT CONTRACT IS VOID DUE TO VARIOUS REASONS
It is submitted that the employment agreement, is invalid on two counts, namely, [A]
unfair terms in a standard form of contract and [B] violation of Section 27 of the Contract
Act
one party, to be signed by the party in a weaker position, usually a consumer, who has
little choice about the terms. Also termed Contract of adhesion; adhesory contract;
adhesionary contract; take it or leave it contract; leonire contract. Some sets of trade
and professional forms are extremely one-sided, grossly favouring one interest group
against others, and are commonly referred to as contracts of adhesion. From weakness
It is evident that in this form of contracts, [A] the parties are not at an equal footing
with respect to bargaining power and there is no scope of negotiating over the terms.
[B] One of the parties may be completely unfamiliar with the complex language,
These are pre-printed contracts with unilateral terms offered on a take it or leave it
basis, where the big corporations could abuse their power under the garb of free will. 18
17
Black’s Law Dictionary, 7th Ed. p. 38
18
Law Commission of India, 199th Report, 2006
19
Id.
4
In these cases, if the party has signed the contract, it becomes important determine
whether the clauses could be given contractual effect. In various cases, contracts have
been struck down as void for imposing restrictive and unreasonable conditions. 20
Since fairness and reasonableness are highly relevant for the enforceability of these
contracts, and the same are clearly absent in the present case, the contract is void.
Section 27 of the Contract Act states that every agreement by which any one is
that extent void.21 It is clear that the covenants restraining the appellant from [A]
practising her profession, either individually or as a part of a firm, and [B] prohibiting
her from competing with the firm is a clear violation of Section 27 of the Contract
Act.
CONTRACT ACT
(i) The clause 10.4 of the employment agreement is ambiguous as it fails to signify
obligation, this is because of the fact that it has been constructed in a non-restrictive
“Used in connection with the construction of written documents to the effect that an
ambiguous provision is construed most strongly against the person who selected the
language.”
20
Central Inland Water Transport Corporation v. Brojonath Ganguly, (1986) SCR (2) 278;
Levison v. Patent Steam Carpet Cleaning Co., (1997) 3 AllER 498,CA
21
Section 27, Contract Act, 1872
5
c) It is a principle which is generally used for the interpretation of ambiguous clauses
when they have more than one meaning and the implication is not the same for both
the parties.22 This assumes that the party putting forward the wording must have
looked after its interests while doing so. The party has no right to induce the other to
make a contract on the supposition that the words mean one thing, and then to argue
d) The judges have adopted a similar line of reasoning in case of contracts and the
principle has been applied in various cases. 24 Applying it in present case would meant
that even though there is an obligation, there is no restriction and hence the employee
In the case of Sanjay Jain v. Aviation Company of India Ltd, it was held by the
Hon’ble Supreme Court that an employee cannot be forced to serve in case he is not
Thus, it can be concluded that in the present case, with the absence of any restriction,
the appellant is free to leave and the decision of the firm to not accept the resignation
and release the original documents is clearly a violation of Section 27 of the Contract
Act.
22
See Sir Jack Beatson & Andrew Burrows, Anson’s Law of Contracts, 30th Edn. P. 195
23
Id.
24
Bank of India vs. K. Mohan Das, (2009) 5 SCC 313; Central Inland Water Transport
Corpn. Ltd. v. Brojo Nath Ganguly, (1986) AIR 1571; Horne Coupar v. Velletta &
Company,2010 BCSC 483
25
Sanjay Jain v. National Aviation Company of India Ltd, CIVIL APPEAL NO.10881/2018
(ARISING OUT OF S.L.P.(C) NO.27941/2017)
6
PRAYER
Therefore, in the light of facts stated, issues raised, arguments advanced and authorities cited,
it is most humbly prayed before this Honourable Supreme Court of Divistan that it may be
pleased to:
1. Declare the impugned clauses of the employment agreement of Kulpani Law Co. as
void and direct the firm to pay damages to the employee for acting in restraint of
trade.
And pass any other order in favour of the Appellant which this Court may deem fit in the
Appellant
S/d__________