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Patent
Trademark
Copyright
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Petitioner / Claimant (Plaintiff)
Advance Cable Technologies Private Limited
Respondent / Defendant
Sanu S Nath, Pompi Das, Montu Das, Adity Composite Private Limited
Dispute Summary
The plaintiff, Advance Cable Technologies Private Limited, sued the defendants for infringement of trade secrets and recovery of damages. The defendants, including a former employee, were accused of misusing confidential information to start a competing business. The court found in favor of the plaintiff, granting an injunction and damages. The case highlights the importance of protecting trade secrets and the consequences of their misuse. The plaintiff's business of manufacturing copper and metal-based wires/cables was affected by the defendants' actions, and the court's decision provides relief to the plaintiff.
Outcome / Ruling
plaintiff_favorable
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Full text judgment
[Cites 13 , Cited by 0 ] Bangalore District Court Advance Cable Technologies Private ... vs Sanu S Nath on 18 July, 2026 170020142022 IN THE COURT OF LXXXVI ADDL. CITY CIVIL & SESSIONS JUDGE, (COMMERCIAL COURT) BENGALURU (CCH-87) Dated this the 18th day of JULY, 2026 Present: SRI JITHENDRANATH C.S., B.A., LL.M., LXXXVI ADDL. CITY CIVIL & SESSIONS JUDGE BENGALURU. Com.O.S.No.1073/2022 BETWEEN: PLAINTIFF : ADVANCE CABLE TECHNOLOGIES PRIVATE LIMITED, A company registered under the Indian Companies Act, 1956 , having its registered office at: G-1, Sunrise Serenity, No.1, 40 Feet Road, M.R.Garden, Gedanahalli, Ashwathnagar, Bangalore, Karnataka - 560094. Represented by its Director, Shashank Kumar Jain. (By Sri.Ajay J. Nandalike advocate) - AND - DEFENDANTS : 1. Mr.SANU S. NATH, Son of Sukhdev Nath, Aged about 32 years, Employee of Adity Composite Private Limited, Residing at: Balijan Bongaon Part, Balijan, Tinsukia, Assam-786171. 2 Com.OS.No.1073/2022 Also having office/factory at: Plot No.391 & 392, Sub Layout of Sompura 1st Stage, Industrial Area, Niduvanda, Nelamangala Taluk, Bangalore Rural, Karnataka - 562111. 2. Mrs. POMPI DAS, Wife of Sanu S. Nath, Aged about 26 years, Director of Adity Composite Private Limited, Residing at Balijan Bongaon Part Balijan, Tinsukia Assam-786171. Also having office/factory at: Plot No.391 & 392, Sub Layout of Sompura 1st Stage, Industrial Area, Niduvanda, Nelamangala Taluk, Bangalore Rural, Karnataka - 562111. 3. Mr. MONTU DAS, Son of Gyan Das Aged Major Director of Adity Composite Private Limited, Residing at Balijan Bongaon Part, Balijan, Tinsukia, Assam - 786171. Also having office/factory at: Plot No 391 & 392, Sub Layout of Sompura 1st Stage Industrial Area, Niduvanda Nelamangala Taluk, Bangalore Rural, Karnataka 562111. 4. ADITY COMPOSITE PRIVATE LIMITED, A company registered under the 3 Com.OS.No.1073/2022 Companies Act, 2013 Having its Registered Office at, Plot No 391 & 392, Sub Layout of Sompura, 1st Stage Industrial Area, Niduvanda Nelamangala Taluk, Bangalore Rural, Karnataka-562111, Represented by its Director. (By Sri. Rishabha Raj Thakur, advocate) Date of Institution : 28.07.2022 Nature of the suit : Infringement of Trade Secrets and for recovery of damages. Date of the commencement : 17.01.2024 of recording of the evidence Date on which the Judgment : 18.07.2026 was pronounced Total Duration : Year/s Month/s Day/s 04 00 20 Digitally signed by JITHENDRANATH S JITHENDRANATH CHELUR S CHELUR Date: 2026.07.18 17:40:53 +0530 (JITHENDRANATH C.S.) LXXXVI Addl. City Civil & Sessions Judge, Bengaluru. JUDGMENT The plaintiff is said to be a company interalia engaged in the business of manufacture and process of copper and other metals based various types of wires/cables, optical cables, wire harnesses, compounding telecom cables, Automotive cables, cables and harnesses for Electrical 4 Com.OS.No.1073/2022 Vehicles, Charging Stations, inter connects etc. The defendant No.1 was an employee of the plaintiff company. The defendant No.1 had provided with six months training effective from 02.11.2015 in which he had undergone the process of manufacturing and handling of various machineries and tools. He was promoted from trainee supervisor to supervisor vide letter dated 01.11.2016 and he was entrusted with responsibilities to take care of the day today affairs of the factory and office of the plaintiff company. Vide letter dated 01.07.2017 his appointment was confirmed as supervisor. Having taken consideration of his long standing relationship the plaintiff company promoted him as engineer. The defendant No.1 had signed an employment contract dated 01.04.2018 through which he under took that he would not divulge in any confidential information, know- how, secret, methods, plans, data and such other trade secrets of the plaintiff company that he acquired during his course of service. The defendant No.1 was later promoted to the post of manager vide letter dater 01.10.2020 and entered in to a fresh employment agreement and code of conduct dated 01.10.2020 with the plaintiff company. The plantiff 5 Com.OS.No.1073/2022 company had three units and the defendant No.1 was in charge and responsible to manage unit No.2 and unit No.3. By the virtue of his position as a manager, the defendant No.1 had a complete knowledge of the entire workings of the plaintiff, its trade secrets including commercial information in relation to customers, proprietary trade secrets in relation to chemical and physical composition of the cables. The design specifications and the materials and material used for manufacturing of the cables are unique and not available in public domain. By the virtue of being a manager the defendant No.1 had learnt about the design, make and method of manufacture of the cables and also the details of the plaintiff 's customers. The plaintiff holds the copyright in respect of the design, shape, drawing, specifications, components, materials and method of manufacture of the cables. The plaintiff is one of the largest manufacturers and suppliers in the country and the plaintiff supplies to various customers, Government bodies and Public Sector undertakings like Railway, Defence, Metro and many other domestic and multi national companies. The plaintiff alleges that the defendant No.1 had taken out materials worth of 6 Com.OS.No.1073/2022 Rs.25,60,000/- from Unit No.2 of the plaintiff company in the guise of transporting the same to Unit No.3 and when the plaintiff verified the records, the defendant sent a resignation letter dated 12.03.2022. The plaintiff further alleges that the defendant No.1 in conspiracy with his wife Smt. Pompi Das i.e., defendant No.2, his father-in-law Sri Montu Das i.e., defendant No.3, has started the defendant No.4 company in the same line of business the plaintiff is carrying on. According to the plaintiff, the plaintiff is one of the largest manufacturers and supplier to various customers namely Crest Specialty Resins Pvt Ltd., OCV India/Balaji Trading Company, Jushi India Fiberglass Pvt. Ltd., Goa Glass Fibre Ltd., Chemclotex Corporation, ACS UV Technologies, Precision Panel Technology, V Cube Industries, Sai Extrumech Pvt. Ltd., and Sunil Engineering. The Defendants are approached the above suppliers and also supplying the materials to the competitors' companies viz., Jyothi Cables, Semita Technologies Pvt Ltd., KEC International Limited, West Coast/Telecom/Sudarshan Telecom, Poly Links and Akash Cables. The plaintiff alleges that the defendant against to his undertaking soliciting the customers of the 7 Com.OS.No.1073/2022 plaintiff. In this background, the plaintiff has filed this suit seeking the following reliefs: a) Grant permanent injunction restraining the Defendants, their officers, directors, employees, agents, representatives, successors in interest, assignees or anybody acting through them or on their behalf from, in any manner whatsoever, utilising and disclosing the Plaintiff's trade secret, confidential, strategic and proprietary information acquired by Defendant No.1 virtue of his association with the Plaintiff; b) Grant permanent injunction restraining the Defendants their officers, directors, employees, agents, representatives, successors in interest, assignees or anybody acting through them or on their behalf from infringing the copyright and trade secrets of the Plaintiff; c) Grant permanent injunction restraining the Defendants, their officers, directors, employees, agents, representatives, successors in interest, assignees or anybody acting through them or on their behalf from, in any manner whatsoever from soliciting the clients and/or customers of the Plaintiff Company or in any manner entering into any agreements with them; 8 Com.OS.No.1073/2022 d) Grant permanent injunction restraining the Defendants, their officers, directors, employees, agents, representatives, successors in interest, assignees or anybody acting through them or on their behalf from, in any manner whatsoever from soliciting the employees of the Plaintiff Company and appointing the ex-employees of the Plaintiff Company to the Defendant No.4 company; e) Grant permanent injunction restraining the Defendants, their officers, directors, employees, agents, representatives, successors in interest, assignees or anybody acting through them or on their behalf from, in any manner whatsoever from approaching the suppliers of the Plaintiff company and supplying materials to any of the competitors of the Plaintiff Company; f) Grant permanent injunction restraining the Defendants, their officers, directors, employees, agents, representatives, successors in interest, assignees or anybody acting through them or on their behalf from, in any manner whatsoever from disclosing the technology of the Plaintiff Company and selling the machineries similar to that of the Plaintiff Company to any of the competitors of the Plaintiff Company; 9 Com.OS.No.1073/2022 g) Direct the Defendants to pay sum of Rs. Rs.25,60,000/- (Rupees Twenty Five Lakh and Sixty Thousand Only) along with 18% interest towards the damages for the loss caused to the Plaintiff Company; h) Grant the cost of the instant Suit; and i) Grant any other relief or reliefs, that this Hon'ble court may deem fit. 2. The Defendants No.1 to 4 have filed a common written statement traversing the averments contained in the plaint. It is admitted that the Defendant No.1 was formerly in the employment of the Plaintiff-Company. However, it is contended that even prior to joining the services of the Plaintiff-Company, the Defendant No.1 possessed over five years of prior work experience. It is further pleaded that during the period of his training, the Defendant No.1 in fact apprised the Plaintiff-Company of the manufacturing process of its products and rendered assistance in augmenting its business operations. The Defendants have categorically denied that the Plaintiff-Company imparted any training to 10 Com.OS.No.1073/2022 the Defendant No.1, or that it disclosed to him the manufacturing process, customer particulars, and other trade secrets. It is averred that the Plaintiff-Company had reposed confidence in the Defendant No.1 and entrusted him with the management of product planning, quality control, and product development. The specific averment that the Defendant No.1 was in-charge of and responsible for the management of Unit No.1 and Unit No.3 is denied. It is further pleaded that prior to joining the Plaintiff-Company, the Defendant No.1 had been in employment with three other companies. 3. The Defendants have denied the allegation made against the Defendant No.1 that he had removed materials from Unit No.1 and Unit No.3. It is, however, admitted that the Defendant No.1 tendered his resignation to the Plaintiff- Company. Save and except the said admission, the Defendants have denied all other allegations levelled against the Defendant No.1. It is contended that there are over one thousand companies operating in the same line of business across the country. The Defendants assert that they have no 11 Com.OS.No.1073/2022 malafide intention either to compete with the Plaintiff- Company or to cause it any loss. It is further averred that the Defendant No.1 did not acquire any confidential information during the course of his employment with the Plaintiff-Company. It is also pleaded that the Defendant No.1 joined the Plaintiff-Company as a Training Supervisor in the year 2015 and continued in its service till 22.03.2026. It is stated that the Defendant No.2 incorporated a company under the name and style of 'Adity Composite Private Limited' on 28.06.2021. It is further contended that after the resignation of the Defendant No.1, the Plaintiff-Company lodged a false complaint against him before the Dodballapur Police Station in Crime No.68/2022, after an unexplained delay of four months, alleging misappropriation. According to the Defendants, the present suit has been instituted by the Plaintiff-Company with malafide intention. In light of the above submissions, the Defendants have prayed that this Court be pleased to dismiss the suit with costs. 4. On the basis of the above pleadings, the court has framed the following issues: 12 Com.OS.No.1073/2022 ISSUES 1. Whether the plaintiff prima facie proves that 1st defendant being its former employee in conspiracy with defendants 2 to 3 started 4th defendant company in the same line of business as that of plaintiff and manufacturing the similar product using machinery which are exclusively used by the plaintiff and thereby defendants are required to be restrained by order of permanent injunction? 2. Whether balance of convenience tilts in favour of plaintiff? 3. Whether plaintiff proves that he will be put to irreparable injury if an order of injunction against defendants is not granted? 4. Whether plaintiff proves that defendants are also liable to pay a sum of Rs.25,60,000/- by way of damages along with interest for the loss caused to the plaintiff company by them? 5 What order or decree? 5. In order to substantiate its case, the Plaintiff-Company examined its Senior General Manager, Sri M. Harish, as P.W.1, and got marked documents at Ex.P.1 to Ex.P.31. In rebuttal, the Defendant No.1, Sri Sanu S. Nath, examined himself as D.W.1, and got marked documents at Ex.D.1 to Ex.D.3. 13 Com.OS.No.1073/2022 6. The court has heard the arguments of both the parties. 7. Having heard the matter, the court answers the above issues as follows: Issue No.1 : In the negative, Issue No.2 : In the negative, Issue No.3 : In the negative, Issue No.4 : In the negative, Issue No.5 : As per final order for the following: REASONS Evidence before the court:- 8. In his evidence affidavit, P.W.1 Sri M. Harish has reiterated the averments made in the plaint. The Plaintiff- Company has produced and got marked the original Board Resolution dated 08.01.2024 as Ex.P.1. Ex.P.2 to Ex.P.22 are 21 documents filed along with the list of documents and admitted by the Defendants in their Statement of Admission and Denial, and accordingly marked as Ex.P.2 to Ex.P.22 respectively. Ex.P.2 is a copy of the Certificate of Fresh Incorporation and Ex.P.3 is a copy of the Certificate of Incorporation. Ex.P.4 is the Certificate of Registration of Alteration of Objects and Ex.P.5 is a copy of the Articles of 14 Com.OS.No.1073/2022 Association. Ex.P.6 is a copy of the Offer Letter. Ex.P.7 is a copy of the Trainee Supervisor Training Letter dated 02.11.2015 and Ex.P.8 is a copy of the Appointment Letter dated 05.11.2018. Ex.P.9 is a copy of the Confirmation Letter dated 01.05.2017 confirming the appointment of the Defendant No.1 as Supervisor. Ex.P.10 is a copy of the Promotion Letter dated 01.04.2018 promoting the Defendant No.1 as Engineer and Ex.P.11 is a copy of the Employment Agreement and Code of Conduct dated 01.04.2018 executed by the Defendant No.1. Ex.P.12 is a copy of the Promotion Letter dated 01.10.2020 promoting the Defendant No.1 to the post of Manager and Ex.P.13 is a copy of the Employment Agreement and Code of Conduct dated 01.10.2020. Ex.P.14 is a copy of the Resignation Letter dated 12.03.2022 tendered by the Defendant No.1. Ex.P.15 is the statement showing transfer of materials from Unit No.2 to Unit No.3. Ex.P.16 is a copy of Delivery Challan bearing No.095 relating to transfer/delivery of materials. Ex.P.16(a) is a copy of the logbook/register extract relating to outgoing material transactions from Unit No.2 and Ex.P.16(b) is a copy of the logbook/register extract relating to incoming material 15 Com.OS.No.1073/2022 transactions to Unit No.3. Ex.P.17 is a copy of the Certificate of Incorporation of 'Adity Composite Private Limited', Ex.P.18 is a copy of its Memorandum of Association and Ex.P.19 is a copy of its Articles of Association. Ex.P.20 is a copy of the Company Master Data of 'Adity Composite Private Limited'. Ex.P.21 is a copy of the employee details/nominee details of the Defendant No.1. Ex.P.22 is a copy of the Complaint Letter dated 26.03.2022 lodged before Doddaballapura Police Station seeking registration of FIR against the Defendant No.1. Ex.P.23 is a copy of the FIR dated 29.03.2022. Ex.P.24 and Ex.P.25 are Notices dated 09.12.2022 issued to Guru Krupa Consultancy Service and Mukarji Enterprises respectively. Ex.P.26 is the Reply Notice dated 13.12.2022 issued by Guru Krupa Consultancy along with email and postal cover. Ex.P.27 is the Employment Application and Bio- data submitted by the Defendant No.1. Ex.P.28 is the certified online copy of the Order dated 19.04.2022 passed in Crl.Misc.1066/2022. Ex.P.29 is the Certificate under Section 65B of the Indian Evidence Act, 1872. Ex.P.30 and Ex.P.31 are the Postal Receipts. 16 Com.OS.No.1073/2022 9. In his examination-in chief, DW.1, reiterated the averments made in the written statement. Ex.D.1 is the copy of the charge sheet filed in Doddaballapura Police Station, Ex.D.1(a) is the copy of the statement of accused Mr.Sanu S. Nath in Crime No.68/2022, Ex.D.1(b) is the copy of the statement of accused Mrs.Pompi Das in Crime No.68/2022, Ex.D.1(c) is the copy of the statement of accused Mr.Montu Das in Crime No.68/2022, Ex.D.2 is the compliance affidavit filed by defendant No.1, Ex.D.3 is the copy of the GSTR-3B statement for the month of July 2021-2022, Re.issues No.1 to 4: 10. It is not in dispute that the Defendant No.1 was in the employment of the Plaintiff-Company. During the course of his employment, the Defendant No.1 had executed an Employment Agreement and Code of Conduct, which have been marked and exhibited as Ex.P.11 and Ex.P.13 respectively. A perusal of the recitals contained in the said Agreement and Code of Conduct makes it evident that any breach of the provisions thereof would constitute misconduct, and that the employer would be at liberty to take disciplinary 17 Com.OS.No.1073/2022 action or to initiate appropriate legal proceedings against the employee, namely the Defendant No.1. 11. Clause A of the said Agreement imposes an obligation on the defendant No.1 to maintain confidentiality, which is as follows: a) Confidentiality: You are expected to maintain utmost Confidentially with regard to the affairs of the company and shall keep confidential any information, whether written or oral ,which relates to internal controls, computer or data processing applications, routines, subroutines, techniques or systems, or information concerning the business or financial affairs and methods of operation or proposed transactions, security procedures, trade secrets, know-how, or inventions of the company or its Affiliate, or any client, agent, contractor or vendor during the tenure and also post employment. 12. The Defendant No.1 has not disputed the said clause. Having voluntarily executed the Agreement, the Defendant No.1 was bound to adhere to the terms and conditions stipulated therein, unless such terms are found to be illegal 18 Com.OS.No.1073/2022 or contrary to public policy. Sri M. Harish, the Senior General Manager of the Plaintiff-Company, in his evidence affidavit as P.W.1 has reiterated the case of the Plaintiff- Company that the Defendant No.1 has committed breach of the confidentiality clauses contained in the Agreement. Information, by its very nature, is a "fact" capable of being perceived by the senses and assimilated by the mind. In that view of the matter, the onus lies upon the Plaintiff-Company to establish, by cogent evidence, that the Defendant No.1 acquired certain knowledge and information in the course of his employment with the Plaintiff-Company and that such knowledge or information was of a confidential nature. 13. This Court has meticulously perused the evidence on record. The Plaintiff has nowhere disclosed as to what precise knowledge or information the Defendant No.1 acquired during the course of his employment, nor as to how the said information can be said to be confidential in nature. In paragraph No.9 of the plaint, the Plaintiff has asserted that it holds copyright in respect of the design, shape, drawing, specifications, components, materials and method of 19 Com.OS.No.1073/2022 manufacture of cables. The Plaintiff-Company further claims that its products are unique and are not available with any other company. Having made such an assertion, it was incumbent upon the Plaintiff-Company to specifically narrate as to how its products are unique and as to how they differ from the products of other companies. However, the Plaintiff has not placed on record any material to demonstrate that it has obtained patent, design registration, copyright, etc., in respect of its products. Had the Plaintiff indeed possessed copyrights, it ought to have produced the same for the perusal of this Court. Since the Plaintiff has failed to produce any such proof, this Court is constrained to infer that the Plaintiff does not hold any such copyrights in its name. It may be true that during the course of his employment with the Plaintiff-Company, the Defendant No.1 might have acquired certain knowledge, skills, experience, etc., both on the administrative and technical side. However, all knowledge, expertise and skills acquired during employment do not ipso facto amount to confidential information. The term "confidentiality" in the present context connotes information, know-how, method, plan, data, etc., which is 20 Com.OS.No.1073/2022 known exclusively to the Plaintiff and its employees and to no one else. The Plaintiff-Company has not placed before this Court any such secret information, data or plan. In the absence of placing on record the alleged confidential information, the Plaintiff cannot contend that the Defendant No.1 acquired confidential information during the course of his employment. In his cross-examination, P.W.1 has deposed as follows: "We have not taken any patent to manufacture of fiber reinforced plastic. I do not know whether the products of to company have been registered under Copyright Act . I do not know who is the right person in our company to say about the matters relating to patent and copy rights. I do not know the information with regard to manufacturing of FRP and OFC available in the you-tube. It is true to suggest that plenty of companies are manufacturing FRP and OFC all over India and in Karnataka". 14. Learned counsel for the defendant cited a decision of the Hon'ble Supreme Court, in the case of American Express Bank Ltd. Vs. Ms. Priya Puri,1 wherein the 1 2006 (3) L.L.N.217 21 Com.OS.No.1073/2022 Hon'ble Supreme Court, held that general skill, technical knowledge and the experience that an employee carries in his memory and acquires in the course of employment or his own, and their use after he leaves the company is not a breach. In the case of Wipro Ltd. Vs. Beckman Coulter International S.A.,2 the Hon'ble Delhi High Court held that, the routine day-to-day affairs of the employer within the knowledge of many and are commonly known are not trade secrets; a trade secret is a formula, technical know-how or peculiar method unknown to the others. The above extracted portion of the cross-examination of P.W.1 makes it manifestly clear that the Plaintiff-Company has failed to prove that it holds any copyrights or patents. Merely because the Defendant No.1 was an employee of the Plaintiff-Company and that he acquired some general knowledge and skill in the manufacture of OFC and FRP products, it is not possible to jump to the conclusion that the Plaintiff-Company had shared with him any confidential information and that he has misused the same. 2 2006 SCC OnLine Del 743. 22 Com.OS.No.1073/2022 15. The Plaintiff-Company has pleaded and its witness P.W.1 has stated in paragraph No.29 of his evidence affidavit that the Defendants, by making use of the proprietary information of the Plaintiff-Company acquired during the course of employment of the Defendant No.1, have approached the suppliers of the Plaintiff-Company for purchase of materials and have commenced manufacture by utilizing the alleged confidential data and trade secrets of the Plaintiff-Company. It is further alleged that the Defendants are supplying such products to competitor companies of the Plaintiff with an intent to make unlawful gains and to cause loss to the Plaintiff-Company. The Plaintiff has also furnished the names of such manufacturing companies in the said paragraph. However, in his cross-examination, P.W.1 has admitted the suggestion that raw materials required for the production of cables, OFC and FRP are readily available in Mumbai, China, Delhi and in Gulf Countries. From the said admission, it is manifest that the raw materials are available in the open market and are not exclusive to the Plaintiff- Company. In that view of the matter, information with respect to the suppliers of the Plaintiff-Company cannot, by any 23 Com.OS.No.1073/2022 stretch, be termed as proprietary information or confidential information. Further, the Plaintiff-Company has failed to establish by any cogent evidence that it is the exclusive purchaser of raw materials from the companies mentioned in paragraph No.29 of the evidence affidavit of P.W.1. In the absence of such proof, the mere allegation that the Defendants approached the said suppliers does not, by itself, constitute misappropriation of confidential information or trade secrets. 16. It is the specific allegation of the Plaintiff-Company that the Defendant No.1, in the guise of transporting materials from Unit No.2 to Unit No.3, has stolen materials worth Rs.25,60,000/-. Pursuant to the said allegation, the Plaintiff- Company lodged a complaint against the Defendant No.1 alleging theft and misappropriation of materials. After investigation, the police have filed a 'B' Final Report in the matter. In his cross-examination, P.W.1 has stated that at the time of shifting materials from one unit to another, the Manager and the Store Keeper would ordinarily be responsible. The Company verifies inter-unit transactions 24 Com.OS.No.1073/2022 once in every two to three months. At the gate of every unit, a Security Guard maintains a ledger regarding the ingress and egress of transporting vehicles. Similarly, the Store Keeper also maintains a ledger containing the particulars of materials received and dispatched. It is, however, pertinent to note that the Plaintiff-Company has not produced any such registers before this Court. Absolutely there is no positive or cogent evidence on record to draw an inference that the Defendant No.1 has committed theft of goods worth Rs.25,60,000/-. The Plaintiff-Company has made an attempt to demonstrate that the Defendant-Company, despite there being no production, has sold the products of the Plaintiff- Company and thereby earned wrongful gain. The act of theft, however, is a positive act and requires to be established by positive evidence. Had the alleged theft really taken place, the Plaintiff-Company ought to have produced the relevant ledgers maintained by the Store Keeper and the Security Guard. The Plaintiff-Company, having failed to prove the positive act of theft by adducing cogent evidence, is now attempting to demonstrate that the Defendants, without there being any production, have sold finished products. In the 25 Com.OS.No.1073/2022 absence of any positive evidence from the Plaintiff's side, this Court cannot embark upon an audit of the business affairs of the Defendant-Company nor can it presume theft on the basis of mere surmises and conjectures. 17. The Defendant No.2 is the wife and the Defendant No.3 is the father-in-law of the Defendant No.1. The Defendant Nos.2 and 3 are the promoters of the Defendant No.4 Company. The Defendant No.1 is stated to be associated with the Defendant No.4 Company. However, he is neither a Director nor a Shareholder therein. The Defendant Nos.2 to 4 have not actively participated in the present suit. Evidence has been adduced by the Defendant No.1 on his behalf and also on behalf of the other Defendants. From the prevailing circumstances, an inference arises that the Defendant No.1 is the person behind the promotion and incorporation of the Defendant No.4 Company. The Learned Counsel for the Defendants submits that even if it is presumed that the Defendant No.1 has promoted the Defendant No.4 Company by projecting the Defendant Nos.2 and 3 as promoters, such an act on the part of the Defendant No.1 would not result in 26 Com.OS.No.1073/2022 any legal injury to the Plaintiff-Company. In support of his submission, the Learned Counsel has relied upon the following decisions: 1. Niranjan Shankar Golikari Vs. Century Spinning & Mfg. Co. Ltd.,3 2. Superintendence Company of India (P) Ltd. Vs. Krishan Murgai 4 3. Percept D' Mark (India) (P) Ltd. Vs. Zaheer Khan & Anr.5 18. In the first decision the Hon'ble Supreme Court, held that negative covenants operative during the period of the contract of an employment when the employee is bound to serve his employer exclusively or generally not regarded as restraint of trade and therefore, do not fall under Section 27 of the Contract Act. In the second decision, the Hon'ble Supreme Court, reiterated the decision of Hon'ble Culcutta High Court in Brahmaputra Tea company Limited Vs. Scarth6 and held that where the condition under which the covenantee was partially restrained from competing after the 3 1967 SCC Online SC 72 4 (1981) 2 SCC 246 5 (2006) 4 SCC 227 6 ILR (1985) 11 CIL 545 27 Com.OS.No.1073/2022 term of his engagement with his former employer was held to be be banned but the condition by which he bound himself during the term of his agreement, not directly or indirectly, to compete with his employer was held good. Thus, it is clear that after termination of the contract the employee can compete with his ex-employer. In the third decision, the Hon'ble Supreme Court, held that under Section 27 of the Contract Act a restrictive covenant extending beyond the term of the contract is void and not enforceable. In the present case, the Defendant No.1 has ceased to be an employee of the Plaintiff-Company. Even assuming for the sake of argument that he has promoted the Defendant No.4 Company through the Defendant Nos.2 and 3, the covenant of non-compete contained in the Employment Agreement would not come into operation. It is a well settled principle of law that a person who seeks compensation for breach of contract is required to establish not only the civil wrong i.e., the breach committed by the defendant, but also the actual loss or damage suffered by him in terms of money. In the case of Kailash Nath Associates Vs. Delhi Development Authority,7 the Hon'ble 7 (2015) 4 SCC 136 28 Com.OS.No.1073/2022 Supreme Court, while interpreting Section 74 of the Contract Act, has held that compensation is payable for breach of contract only where damage or loss is caused by such breach. In the present case, absolutely there is no proof of the alleged breach by the Defendant No.1 of the Employment Agreement. The Plaintiff-Company has also failed to establish that it has suffered loss by the alleged breach. 19. In view of the foregoing discussion and the material placed on record, this Court is of the considered opinion that the Plaintiff-Company has failed to establish any breach of confidentiality, misappropriation of trade secrets, or theft against the Defendant No.1. The raw materials being admittedly available in the open market, the information regarding suppliers cannot be treated as confidential or proprietary. Further, the alleged act of theft has not been substantiated by any cogent and positive evidence in the form of ledgers or other records which were mandatorily required to be maintained and produced. With respect to the covenant of non-compete, the Defendant No.1 having ceased to be an employee, and the Plaintiff-Company having failed to prove 29 Com.OS.No.1073/2022 either the breach or the resultant loss in terms of money, no liability can be fastened on the Defendants in terms of Section 74 of the Contract Act as enunciated in Kailash Nath Associates Vs. Delhi Development Authority (Supra ). Thus, the Plaintiff-Company has not made out a case for grant of any relief. Accordingly, the suit of the Plaintiff- Company is liable to be dismissed with costs. Issue No.5:- 20. In view of the findings on aforesaid issues, the court proceed to pass the following:- ORDER The suit of the plaintiff is hereby dismissed with costs. Draw decree accordingly. The office is hereby directed to send a soft copy of this judgment to the parties to the proceedings to their respective e-mail IDs as required under Order XX Rule 1 of CPC and as amended under section 16 of the Commercial Courts Act, 2015. [Dictated to the Adalat AI Dictaphone Software, edited by stenographer, corrected and signed by me then pronounced in the Open Court, on this the 18th day of July, 2026] Digitally signed by JITHENDRANATH S JITHENDRANATH CHELUR S CHELUR Date: 2026.07.18 17:41:18 +0530 (JITHENDRANATH C.S.) LXXXVI Addl. City Civil & Sessions Judge, Bengaluru. 30 Com.OS.No.1073/2022 ANNEXURE List of witnesses examined on behalf of the plaintiff: PW.1 M.Harish List of documents marked on behalf of the plaintiff: Ex.P.1 original Board Resolution dated 08.01.2024 as Ex.P.2 Copy of the Certificate of Fresh Incorporation Ex.P.3 Copy of the Certificate of Incorporation Ex.P.4 Certificate of Registration of Alteration of Objects Ex.P.5 Copy of the Articles of Association Ex.P.6 Copy of the Offer Letter Ex.P.7 Copy of the Trainee Supervisor Training Letter dated 02.11.2015 Ex.P.8 Copy of the Appointment Letter dated 05.11.2018 Ex.P.9 Copy of the Confirmation Letter dated 01.05.2017 confirming the appointment of the Defendant No.1 as Supervisor Ex.P.10 Copy of the Promotion Letter dated 01.04.2018 promoting the Defendant No.1 as Engineer Ex.P.11 Copy of the Employment Agreement and Code of Conduct dated 01.04.2018 executed by the Defendant No.1 Ex.P.12 Copy of the Promotion Letter dated 01.10.2020 promoting the Defendant No.1 to the post of Manager Ex.P.13 Copy of the Employment Agreement and Code of Conduct dated 01.10.2020 Ex.P.14 Copy of the Resignation Letter dated 12.03.2022 tendered by the Defendant No.1 Ex.P.15 Statement showing transfer of materials from Unit No.2 to Unit No.3 Ex.P.16 Copy of Delivery Challan bearing No.095 relating to transfer/delivery of materials Ex.P.17 Copy of the Certificate of Incorporation of 31 Com.OS.No.1073/2022 'Adity Composite Private Limited Ex.P.18 Copy of the Memorandum of Association of 'Adity Composite Private Limited' Ex.P.19 Copy of the Articles of Association of 'Adity Composite Private Limited' Ex.P.20 Copy of the Company Master Data of 'Adity Composite Private Limited' Ex.P.21 Copy of the employee details/nominee details of the Defendant No.1 Ex.P.22 Copy of the Complaint Letter dated 26.03.2022 lodged before Doddaballapura Police Station seeking registration of FIR against the Defendant No.1 Ex.P.23 Copy of the FIR dated 29.03.2022 Ex.P.24 Notice dated 09.12.2022 issued to Guru Krupa Consultancy Service Ex.P.25 Notice dated 09.12.2022 issued to Mukarji Enterprises Ex.P.26 Reply Notice dated 13.12.2022 issued by Guru Krupa Consultancy along with email and postal cover Ex.P.27 Employment Application and Bio-data submitted by the Defendant No.1 Ex.P.28 Certified online copy of the Order dated 19.04.2022 passed in Crl.Misc.1066/2022 Ex.P.29 Certificate under Section 65B of the Indian Evidence Act, 1872 Ex.P.30 & Postal Receipt Ex.P.31 List of witnesses examined on behalf of the defendants: DW.1 Mr.Sanu S. Nath List of documents marked on behalf of the defendants: Ex.D.1 Copy of the charge sheet filed in Doddaballapura Police Station Ex.D.1(a) Copy of the statement of accused Mr.Sanu S. Nath in Crime No.68/2022 Ex.D.1(b) Copy of the statement of accused Mrs.Pompi Das in Crime No.68/2022 32 Com.OS.No.1073/2022 Ex.D.1(c) Copy of the statement of accused Mr.Montu Das in Crime No.68/2022 Ex.D.2 Compliance affidavit filed by defendant No.1 Ex.D.3 Copy of the GSTR-3B statement for the month of July 2021-2022 Digitally signed by JITHENDRANATH S JITHENDRANATH CHELUR S CHELUR Date: 2026.07.18 17:41:29 +0530 (JITHENDRANATH C.S.) LXXXVI Addl. City Civil & Sessions Judge, Bengaluru.
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