This has been reiterated recently by the Supreme Court in Srihari Hanumandas Totala v. Hemant Vithal Kamat (2021 SCC OnLine SC 565) It was reiterated as below:
Order 7 Rule 11(d) of CPC provides that the plaint shall be rejected “where the suit appears from the statement in the plaint to be barred by any law”. Hence, in order to decide whether the suit is barred by any law, it is the statement in the plaint which will have to be construed. The Court while deciding such an application must have due regard only to the statements in the plaint. Whether the suit is barred by any law must be determined from the statements in the plaint and it is not open to decide the issue on the basis of any other material including the written statement in the case.
(emphasis added)
19. With regard to this suit being barred, in the above case, it was further observed by the Supreme Court that the broad principle while dealing with applications under Order VII Rule 11 CPC, particularly, Rule 11(d) CPC as being barred by law, was that the court would not consider any evidence or enter into a disputed question of fact or law. Only the averments in the plaint are germane, the pleas taken by the defendants would be wholly irrelevant while deciding an application under Order VII Rule 11 CPC.
20. The Supreme Court in the case of Srihari Hanumandas Totala (Supra) has summarized the guiding principles for deciding an application under Order VII Rule 11(d) CPC in the following manner:
(i) To reject a plaint on the ground that the suit is barred by any law, only the averments in the plaint will have to be referred to;
(ii) The defense made by the defendant in the suit must not be considered while deciding the merits of the application;
(iii) To determine whether a suit is barred by res judicata, it is necessary that (i) the ‘previous suit’ is decided, (ii) the issues in the subsequent suit were directly and substantially in issue in the former suit; (iii) the former suit was between the same parties or parties through whom they claim, litigating under the same title; and (iv) that these issues were adjudicated and finally decided by a court competent to try the subsequent suit; and
(iv) Since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the ‘previous suit’, such plea will be beyond the scope of order VII rule 11(d), where only the statements in the plaint will have to be persued.
21. Though, these guiding principles are with reference to the plea of res judicata, it is also relevant in the present case, since, the plea has also been raised to the effect that the previous suit filed in the Bengaluru court barred the filing of the present suit before this Court. Once again these are matters that call for inquiry, namely, an assessment of whether the pleadings and prayers are the same in both the suits, which as held in the case of Srihari Hanumandas Totala (supra) are not relevant at the time of disposal of an application under Order VII Rule 11 CPC.
In the High Court of Delhi at New Delhi
(Before Asha Menon, J.)
Convergytics Solutions Pvt. Ltd. and Others Vs Randhir Hebbar and Others
CS(OS) 266/2021
Decided on October 25, 2021
Citation: 2021 SCC OnLine Del 4811 : (2022) 286 DLT 51
The Judgment of the Court was delivered by
Asha Menon, J.:— This order shall dispose of two applications, namely, I.A. 7119/2021 under XXXIX Rules 1 & 2 CPC filed by the plaintiffs seeking interim relief and the application I.A. 8364/2021 under Order VII Rule 11 CPC filed by the defendants No. 1 & 2 seeking rejection of the plaint.
2. Since the opposition by the defendants No. 1 & 2, to the grant of interim injunction in favour of the plaintiffs, is premised on the stand taken in the application under Order VII Rule 11 CPC, namely, that this Court has no jurisdiction, and the suit is barred by law, it is considered appropriate to dispose of both the applications by this common order, the contentions being common.
3. Before proceeding further, certain facts may be noted. The suit has been filed for damages and permanent and mandatory injunction, inter alia seeking to restrain Defendants Nos. 1 and 2 from making defamatory statements and spreading malicious falsehoods, committing unlawful and tortious interference with the business of the plaintiffs and indulging in breach of privacy of the plaintiffs and its employees. The plaintiff No. 1, Convergytics Solution Pvt. Ltd. is a duly incorporated company acting through it's CEO and Managing Director. The plaintiff No. 2, Sanjeev Mishra is the co-founder and Managing Director of the Company and leads the Analytical Solution Department at the company as well as Clients Engagement and Delivery. Plaintiff No. 3, Santosh Vithal Rao Atre is an Executive Vice President Client Engagement (US accounts) and hence, leads the account management and heads the new business development for the company. It is further claimed that plaintiffs No. 2 & 3 together comprise the majority share-holders of the company.
4. Randhir Hebbar, Defendant No. 1 has been described as an ex-employee of the company who had been engaged in the position of a Vice President vide letter of employment dated 2nd July, 2013 and whose appointment was terminated by the company for cause on 25th November, 2020. Bhagyasri Hebbar, Defendant No. 2 is stated to be a share-holder and former Director of the company. The two defendants are husband and wife.
5. The grievance of the plaintiffs is that the defendant No. 1 was indulging in activities that were against the interests of the plaintiff No. 1 and therefore, his services were terminated and soon thereafter, the defendant No. 1 alongwith his wife defendant No. 2 had started a vicious campaign against the plaintiffs by reaching out to employees and clients of the plaintiff No. 1 in such a manner that was adversely impacting the business activities and reputation of the plaintiff No. 1. It is contended by the plaintiffs that the actions of the defendants No. 1 & 2 had resulted in employees leaving the firm and important clients such as Dell, Tata Motors, Titan, Tanishq etc. becoming so disturbed that they had started seeking clarifications from them in order to continue business with them. In this background, the present suit has been filed praying that a decree of injunction be issued in favour of the plaintiffs restraining the defendants from indulging in such activities, particularly, through social media and damages of Rs. 5 crores have also been claimed among other reliefs. By means of the application under Order XXXIX Rules 1 & 2 CPC, interim directions were sought to restrain the defendants No. 1&2 from such activities during the pendency of the suit. Interim directions were also sought to the defendants No. 3 & 4 being LinkedIn Technology and LinkedIn Corporation, to take down the offending communications on their platform.
6. It may be mentioned at this juncture that LinkedIn had informed that it had complied with the directions by taking down the offending communications from its platform and on request, has been deleted from the array of parties vide order dated 2nd August, 2021.
7. By means of the application under Order VII rule 11 CPC, the defendants contend that this Court had no territorial jurisdiction to try this case. Reliance has been placed on the decision in Escorts Limited v. Tejpal Singh Sisodia (2016 SCC OnLine Del 4641) to submit that under Section 19 of the CPC, the suit could have been filed only where the defendants resided i.e. Bengaluru, and hence, the court has no jurisdiction at all inasmuch as the plaintiffs and defendants are located in Bengaluru and no cause of action has arisen in Delhi. In the application moved under Order VII Rule 11 CPC, the defendants further submit that true facts have been concealed by the plaintiffs as the defendant No. 1 was an equal share holder in the plaintiff No. 1 company and had the same rights as the plaintiffs No. 2 & 3. Therefore, there was no cause of action to file the present suit only because the defendant No. 1 was exercising his legal rights.
8. It is further submitted that there are multiple litigations pending before various judicial forums in Bengaluru, namely, a company petition No. 216/BB of 2020 filed by the defendants No. 1 & 2 against the plaintiffs pending before the NCLT, Bengaluru, Writ Petition No. 14899/2020 filed by the defendants No. 1 & 2 against the plaintiffs, O.S. No. 6131/2020 filed by the plaintiff No. 1 against defendant No. 1 pending before the City Civil & Sessions Judge, Bengaluru, with the same relief as in the present case, namely, injunction against the defendants from communicating with employees, advisors and clients of the plaintiffs' company and also use and have administrative access to the company's Email-ID and domain and social media accounts like Facebook, LinkedIn and Twitter and blik.Al platform owned by the plaintiff company. Therefore, the present suit was filed in Delhi only when the Bengaluru suit did not yield the desired results and such forum shopping had to be dealt with sternly. It was submitted that the present suit is also barred under Order II Rule 2 CPC and was liable to be rejected under Order VII Rule 11 CPC.
9. In the reply to the application seeking interim relief, the stand taken by the defendants No. 1 & 2 is that the court had no jurisdiction to try this matter. Moreover, as an equal share holder in the plaintiff No. 1 company, when the emails sent by plaintiff No. 2 to the employees of the company, had created confusion, it was his right to clear the confusion about his role in plaintiff No. 1 company. Thus, the defendant no. 1 contends that he had done nothing to tarnish the image of the plaintiffs, rather the plaintiffs' actions had tarnished his image. Though, he had been the promoter of the plaintiff No. 1 company, it was only on account of his previous employment, that the arrangement of an employment with the plaintiff No. 1 was worked out till such time he could leave his employment. Thereafter, the share-holding in the name of the defendant No. 2 was transferred to him alongwith some shares by both the plaintiffs No. 2 & 3 thus, equalizing his share-holdings with that of plaintiffs No. 2 & 3. It was also submitted that the suit was barred under the Arbitration and Conciliation Act, 1996.
10. Mr. Ujwal Jha, learned counsel for the defendants No. 1 & 2 submitted that the present suit could not have been entertained by this court, as the defendants No. 1 & 2 were residents of Bengaluru. The defendant No. 3 alone had an office in Delhi but with the deletion of the said defendant from the array of parties, and as LinkedIn Corporation, Defendant no. 3 had ceased to be a party to the suit, under Section 19 CPC, this suit was not maintainable here. Further, it was argued that the suit for injunction filed and pending before the Civil Judge, Bengaluru was between the same parties inasmuch as plaintiff No. 2 is a party there, as also the defendant No. 1 here. By merely elaborating on the prayers, an attempt had been made to present this suit as a new suit. The previous suit was pending and since no relief had been granted in that suit, therefore, the present one had been filed. Thus, this Court should not permit ‘Forum Shopping’ and the plaint ought to be returned.
11. Mr. Jayant Mehta, learned senior counsel for the plaintiffs, on the other hand, submitted that the employees, who were residing in Delhi had seen the communication uploaded on LinkdIn at Delhi. Moreover, the copies of all communications, defamatory of the plaintiffs had also been sent to all the employees including the two, Shubhika Goel & Naveen Sharma, whose declarations are on record. It was submitted that the Escorts judgment (Supra) did not apply since in that case, all the acts were done in Faridabad and all relevant averments were not made, whereas in the present case, specific facts have been pleaded to show that this Court had the jurisdiction to try the present matter.
12. With regard to the application under Order XXXIX Rules 1 & 2 CPC, learned senior counsel for the plaintiffs submitted that the defendant No. 1 was only an employee, as reflected by the letter of employment dated 2nd July, 2013. Though, he was terminated by letter of termination dated 25th November, 2020, yet he sent emails to a group of employees describing them as his team members stating specifically not to comply with the directions issued by the plaintiff No. 2. Similarly, communication had been sent to Jack Y. Chen of Dell who in turn sent back the communication seeking clarifications and indicating that if things were not resolved, the company may reconsider having transactions with plaintiff No. 1.
13. The Learned senior counsel has pointed out the acts of the defendant No. 1, which were against the interests of the company, such as making accusations of greed and conspiracy against the Plaintiffs no. 2 and 3 to all the employees of the company vide email dated 8th December, 2020 (at page no. 129), making false allegations that Plaintiff no. 2 and 3 were wrongly terminating the employment of employees of the company and urging the Plaintiffs' employees to engage in active insubordination against them by making libelous statements about the plaintiffs stating that the Plaintiff no. 1/company “doesn't have a real board and also doesn't have investors” and attempted to instigate “the top 10-15 senior most employees” to “clean up the mess created” by the Plaintiffs no. 2 and 3 vide emails dated 9th December, 2020 (at page no. 132) and 25.02.2021 (at page no. 168), further, alleging financial discrepancies without naming names as is evident by email dated 4thMay, 2021 (at page no. 189) of the e-file. Subsequently, Defendant no. 2 published a post dated 6th May, 2021 (at page no. 191) of the e-file on www.linkedIn.com disparaging plaintiffs no. 1 and 2 and stating that they had “stabbed us in the back for their ulterior motives”. The said post was also shared by Defendant no. 1 who asked all followers to share the same (at page no. 193 of the E-file). On the same day, an Email was also sent to all employees of the company making allegations that Plaintiffs no. 2 and 4 are ‘destroying’ the company and siphoning out funds from the company. Defendant no. 1 further also included links to his previous LinkedIn posts dated 4th May, 2021 and 6th May, 2021, ensuring that those are read by all the employees and leaving no doubt as to who was being referred to in the post dated 4th May, 2021. In fact, the Defendant no. 1 tried to contact employees individually as well, like the email dated 12th May, 2021 (at page no. 196) which was subsequently sent to Mr. Puhup Srivastava, who is the Financial Advisor of the company, without informing the company's Board and without any authorization and making false implications that “startling” facts had come to his knowledge about the mismanagement of funds in the company and attempted to engage Mr. Puhup to conduct an audit into the affairs of Plaintiffs no. 2 and 3.
14. Furthermore, even though the services of the defendant No. 1 had been terminated and he had been excluded from the official mailing list, yet the defendant No. 1 hacked into the same and ensured that by default he would get a copy of all communications through the official mailing list. Learned senior counsel submitted that there was no issue of the defendant No. 1 exercising his rights as a Director or as share-holder but he had no business to blacken the fair name of the plaintiff No. 1, on social media, as under Section 166 of the Companies Act, 2013, a Director is required to always act in good faith, being in a fiduciary capacity and acting in trust. On the other hand, all these documents and emails clearly reflected that the actions of the defendant No. 1 was in bad faith calculated to injure the plaintiff No. 1's reputation.
15. Reliance has been placed on the judgments of DBOI Global Services Private Limited v. Mary Varghese Abraham (2017 SCC OnLine Bom 7208), Housing Development Finance Corporation Ltd. v. Sureshchandra V Parekh (2014 SCC OnLine Guj 1975), and Swami Ramdev v. Juggernaut Books Pvt. Ltd. (2018 SCC OnLine Del 10133)
16. With regard to the jurisdiction, the learned senior counsel submitted that the blog post was accessible to everybody even at Delhi. The two employees, who had filed their declarations, were also located in Delhi on account of Covid-19 and were working from home and as such, the cause of action has arisen in Delhi and this Court had complete jurisdiction to try the case. Hence, it was submitted that the application under Order VII Rule 11 CPC be dismissed and the interim injunctions be granted as prayed for. Furthermore, all the dates given in the present suit clearly reflect the fact that the cause of action for filing the present suit had arisen subsequent to the filing of the suit before the Bengaluru court and this was not a case of forum shopping.
17. It was further submitted that the Joint Venture Agreement did not vest any special rights in the defendant No. 1, particularly, to carry out a calumnious campaign against the plaintiff No. 1.
DISCUSSION
18. Taking the application being I.A. 8364/2021 under Order VII Rule 11 CPC, it is trite that while dealing with an application under Order VII Rule 11 CPC, the contents of the plaint alone are to be considered. The contentions of learned counsel for the defendants No. 1 & 2 are twofold, (i) that no cause of action has arisen before this Court and this was a case of ‘forum shopping’ and (ii) the second suit was barred in view of the pendency of the prior suit at Bengaluru. As regards the absence of any cause of action having arisen within the jurisdiction of this Court, it is contended that the declarations by the two employees of the plaintiff No. 1 are sham documents. Clearly, such a plea is determinable only on the basis of evidence. It cannot be taken at this stage when the defence raised by the defendants is not to be considered. This has been reiterated recently by the Supreme Court in Srihari Hanumandas Totala v. Hemant Vithal Kamat (2021 SCC OnLine SC 565) It was reiterated as below:
Order 7 Rule 11(d) of CPC provides that the plaint shall be rejected “where the suit appears from the statement in the plaint to be barred by any law”. Hence, in order to decide whether the suit is barred by any law, it is the statement in the plaint which will have to be construed. The Court while deciding such an application must have due regard only to the statements in the plaint. Whether the suit is barred by any law must be determined from the statements in the plaint and it is not open to decide the issue on the basis of any other material including the written statement in the case.
(emphasis added)
19. With regard to this suit being barred, in the above case, it was further observed by the Supreme Court that the broad principle while dealing with applications under Order VII Rule 11 CPC, particularly, Rule 11(d) CPC as being barred by law, was that the court would not consider any evidence or enter into a disputed question of fact or law. Only the averments in the plaint are germane, the pleas taken by the defendants would be wholly irrelevant while deciding an application under Order VII Rule 11 CPC.
20. The Supreme Court in the case of Srihari Hanumandas Totala (Supra) has summarized the guiding principles for deciding an application under Order VII Rule 11(d) CPC in the following manner:
(i) To reject a plaint on the ground that the suit is barred by any law, only the averments in the plaint will have to be referred to;
(ii) The defense made by the defendant in the suit must not be considered while deciding the merits of the application;
(iii) To determine whether a suit is barred by res judicata, it is necessary that (i) the ‘previous suit’ is decided, (ii) the issues in the subsequent suit were directly and substantially in issue in the former suit; (iii) the former suit was between the same parties or parties through whom they claim, litigating under the same title; and (iv) that these issues were adjudicated and finally decided by a court competent to try the subsequent suit; and
(iv) Since an adjudication of the plea of res judicata requires consideration of the pleadings, issues and decision in the ‘previous suit’, such plea will be beyond the scope of order VII rule 11(d), where only the statements in the plaint will have to be persued.
21. Though, these guiding principles are with reference to the plea of res judicata, it is also relevant in the present case, since, the plea has also been raised to the effect that the previous suit filed in the Bengaluru court barred the filing of the present suit before this Court. Once again these are matters that call for inquiry, namely, an assessment of whether the pleadings and prayers are the same in both the suits, which as held in the case of Srihari Hanumandas Totala (supra) are not relevant at the time of disposal of an application under Order VII Rule 11 CPC.
22. Though learned counsel for the defendants No. 1 & 2 submitted that the judgments relied upon by the plaintiffs in Indian Potash Ltd. v. Media Contents and communication service (India) Pvt. Ltd., [CS(OS) 1717/2007], Frank Finn Management v. Subhash Motwani, (2008 SCC OnLine Del 1049) etc. were distinguishable because the defendants in those cases had offices in Delhi, the question considered by this Court in India Potash Ltd. (Supra) and Frank Finn Management (Supra) was jurisdiction of a court in a case relating to telecast over TV/publication over internet. It was held that in both the situations, Delhi Courts had jurisdiction because the telecast and publication was for a Pan Indian audience and viewers/readers from many parts of India view/read the same. In the present case, publication of a blog on LinkedIn was publication on the internet and as such, accessible from any part of the country. Therefore, following the above decisions, it has to be held that this court too has the jurisdiction to try the present case. Whether Shubhika Goel and Naveen Sharma were residing in Delhi or not and whether the emails of the defendants were sent only to those at Bengaluru would be questions of fact, to be determined on the basis of evidence led during trial. Hence, it cannot be a relevant factor for rejection of the plaint under Order VII Rule 11 CPC.
23. With regard to the question whether the present suit was barred under Order II Rule 2 CPC, it has been held by the Supreme Court in Gurbax Singh v. Bhooralal, ((1964) 7 SCR 831) that such a plea would succeed only where the defendant raises the plea and makes out that the second suit was in respect of the same cause of action as that on which the previous suit was based on and where the cause of action entitled the plaintiffs to more than one reliefs, all of which were not sought and without seeking leave from the court, the second suit had been filed. Thus, this question is to be established by the defendants whereas in an application under Order VII Rule 11 CPC, the focus is on the averments made in the plaint and the documents of the plaintiff. Thus, following the decision of the Supreme Court in Srihari Hanumandas Totala (supra), when the question is to be determined during trial, Order VII Rule 11 CPC would have no application.
24. Thus, this Court concludes that there is no ground to reject the plaint under Order VII Rule 11 CPC and the application is dismissed.
25. Having thus concluded that this Court has the jurisdiction to try this case, it is to be seen whether the plaintiffs are entitled to any interim relief.
26. Learned counsel for the plaintiffs had relied on a number of judgments, namely, DBOI Global Services Private Limited (Supra), Housing Development Finance Corporation Ltd. (Supra) and Swami Ramdev (Supra) to submit that the plaintiffs were entitled to interim injunction to protect their fair names.
27. An injunction would be issued, if the plaintiffs establish a prima-facie case in their favour and establish that irreparable loss and damages would be caused to them, in case, no injunction is issued and the balance of convenience lies in their favour.
28. The explanation offered by the defendant No. 1 is that being in the capacity of a Director, he had every right to remove confusions from the minds of the employees, who had been informed by the plaintiff No. 2 that the services of the defendant No. 1 had been terminated. However, a bare perusal of the various emails would show that the tenor of these emails seem to be of the nature creating greater confusion than clarity. For instance, several emails referred to above contain somewhat vitriolic responses to Sanjeev Mishra i.e. plaintiff No. 2, which has been copied to all. The Document No. 14 is again a mail sent to several people in reference to company instructions, accusing the plaintiffs No. 2 & 3 of collusion and asking people to whom the mail was sent to urge the plaintiffs “to stop this madness”. Similarly, Defendant no. 1 gave direct instructions to his team knowing well that his employment has been terminated and the people addressed by him are not his team members anymore. These instructions are clearly not to cooperate with the plaintiffs. Thus, the emails are intended to disrupt the working of the plaintiff No. 1. Similar disruptive intent pervades in the document No. 16. Document No. 18 is information to the plaintiff No. 2 from Microsoft support that they could not continue with the request of renewal, since the “listed admin”, who is the defendant No. 1, had “declined the request for elevation”. This again shows the disruption to company activities, caused by the act of the defendant No. 1 after his termination on 25th November, 2020. Several other documents have been placed on record showing the access of the defendant No. 1 to the internal mail system of the plaintiffs despite being blocked. The clarification sought from the plaintiffs by Dell (Document no. 32) reflects the confusion that was caused to a valuable and important customer of the plaintiff No. 1. The claim that the defendant No. 1 was only clarifying his position is again refuted by another email sent by Mr. Srivastava (Document no. 31) in which Mr. Srivastava clearly informs the defendant No. 1 that he was not interested in his complaints.
29. It is thus more than clear that the defendant No. 1 has used emails and social media to cause a dent in the reputation of the plaintiffs. He is entitled to assert his rights in law, as available to him, in the capacity of a Director or share-holder, as he claims he is, but so long as that is his stand, he is bound by the obligation of the fiduciary relationship between himself and plaintiff No. 1. Disputes that appear personalized by the defendant No. 1 do not justify his attacking the reputation of the plaintiffs and causing employees and customers to withdraw from the plaintiffs on account of lack of trust in the ability of the plaintiffs to provide the services for which they have built a reputation.
30. The continued activities of the defendants No. 1 & 2 would cause irreparable loss and damage to the plaintiff No. 1. The balance of convenience is also in favour of the plaintiffs since a restraint on the defendants during the pendency of the suit would result in no harm at all, to them as they have the liberty to enforce their legal rights without adversely affecting the legal rights of the plaintiffs.
31. Accordingly, the application under Order XXXIX Rules 1 & 2 CPC is allowed and the defendants No. 1 & 2 are restrained from publishing on social media and through emails to other employees and clients of plaintiff No. 1, matters that lower the reputation of the plaintiffs and their employees and/or interfere with the business of the plaintiffs, till the disposal of the suit.
32. The application is disposed of accordingly.
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