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in Contracts Law
Asked December 04, 2017

Breach of contract by TV preseneter

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Mr. Sunil, was recruited by NDTV. He joined NDTV on 16th January, 2014 as a Presenter. He entered into an agreement with the petitioner on the same date. His professional fee was fixed at Rs. 95,833/- per month. The term of the agreement dated 16th January, 2014 was for two years effective from the date of telecast of the 1st show on the channel and renewable in writing with the mutual consent of the parties. He was required to perform his services from various offices of the petitioner throughout India including New Delhi and NCR. After executing the agreement, he was involved in various programmes of NDTV and got enormous popularity due to the fact that he was showcased in a prominent manner by NDTV. It is alleged that on 8th February, 2015 NDTV received an e- mail from the respondent by which he requested the petitioner to relieve him of his duties with immediate effect. He was informed by the petitioner by mail that in view of terms of agreement, he cannot leave the job, thus his resignation was not accepted. But he left the office with a request to accept the resignation along with a cheque for an amount of Rs. 5,74,998/- ( Six months’ salary) on the table of one of the officials of the petitioner company. It is also alleged that he is now falsely claiming that his resignation was accepted by the petitioner company as the cheque for an amount of Rs. 5,74,998/- was left on the table of the official of NDTV. The main terms stipulated in the agreement dated 16th January, 2014, are: • That the term of the agreement shall be 2 years • Sunil has to render services as a presenter on NDTV on exclusive basis • The Presenter does not have any right to terminate the agreement • That the entire copyright vests in NDTV • The Presenter shall not engage in any other service during the currency of the contract and that the services are exclusively for NDTV • The Presenter shall not during the validity of this agreement allow his name, image or voice to be associated with any other television channel. • The Presenter shall not take up any work of similar nature which is in competition with NDTV during the validity of the agreement. • For a period of one year after the termination of this contract or expiry of this contract, the Presenter will not engage in a similar programme having a similar concept on any other television channel. • The Presenter shall not take up any assignment contrary to the interest of NDTV. • The Presenter shall not take up any part time employment with any other television channel during the validity of the agreement. • The Presenter shall not solicit, negotiate or engage in any discussion relating to any future engagement at any time prior to the termination of the contract. This obligation of the Presenter would continue for the term of the contract and for any renewal thereof and 30 days thereafter. • That if the Presenter breaches any terms and conditions stipulated in this agreement, the petitioner company will be entitled to obtain an injunction restraining the Presenter from engaging in such conduct and further also claim and obtain damages for breach of this agreement. Broadly, a perusal of the contract reveals that Sunil is not entitled to, during the term of the contract i.e. till 16th January, 2016 engage or be engaged by any other competitive television channel. NDTV has filed a petition before Delhi High Court alleging breach of contract and seeking inter alia, the following relief: "a) That the respondent be restrained from in any manner engaging or providing services in violation of the terms of the Agreement to any other television channel during the term of the contract i.e. till 16th January, 2016 and for a period of one year thereafter i.e. 16th January, 2017 either as a presenter, host, anchor, reporter in any other manner in any on-screen role whatsoever or from permitting his name, image, voice or any other personal television channel either for shows or promos or advertising." The case of NDTV is that the petitioner is one of the leading media companies in India and broadcasts and operates a 24 hour Hindi news channel by the name NDTV which recruits a large number of producers, anchors, reporters, technical personnel, editors, journalists etc. and spends aggressive amounts of monies on promoting the image, persona and personality of the Presenter and the same is categorized as “BRAND BUILDING EXPENSE”. Arguments of the Parties On a notice issued by the Court, the respondent i.e., Sunil filed his short reply in which it was admitted by him that he is now working with Aaj Tak as a Senior Special Correspondent with effect from 16th February, 2015. He did not deny about the entering of agreement between him and the petitioner i.e, NDTV. It is admitted by him that after resignation he joined new channel and performing the same services. According to him the prayer made in the petition has become infructuous in view of averments made in the short reply. It is alleged by him that the petitioner being fully aware of the fact that the respondent is now employed with AajTak on the date of filing of petition who has intentionally not disclosed the true facts. AajTak is also not impleaded as a party despite of fact that the service of Court notice was effected at his new office. It is also submitted that any restraint order passed against him would directly affect the business of AajTak who is not a party before the Court. The restrictive covenants mentioned in the agreement are void, unenforceable. The same are extremely harsh and impose an absolute bar on the respondent to take up any assignment with any other television channel, thus the petitioner is not entitled to the relief claimed for. It is further submitted by him that before joining the petitioner- company, he worked with many prestigious organizations. It is on account of the same that the petitioner-company approached him to work with it. At the time of joining the petitioner, he was already a famous anchor and thus one of the reason, he was picked up for employment by the petitioner, it is the petitioner who has benefitted as he had a huge experience of having anchored programmes with Jain TV, E TV (Urdu), Sahara Samay, Star News, Rajya Sabha TV. The reliefs sought by the petitioner even otherwise violates the fundamental rights enshrined in Article 19(1)(g) of the Constitution of India which guarantees the respondent to carry on any lawful trade and profession. The arbitration clause, in the Agreement is also void as power to appoint the Arbitrator in a service contract has been given to the employer. The negative covenant as contained in the agreement dated 16th January, 2014 amounts to a restraint of trade under Section 27 of the Contract Act, 1872 apart from being against the public policy as he tendered his resignation on 8th February, 2015 strictly as per one of the clauses of termination of the agreement. Mr. Singh, learned Senior counsel appearing on behalf of the respondent has argued that: 1. Even if respondent failed to discharge the duties and responsibilities under the agreement for any reason whatsoever, he as per termination clause exercised his option to join other channel, he was to pay an amount equivalent to six months’ professional fee which was the condition of termination of contract and what exactly he has done in the present case, he has resigned from the job by termination of contract and left amount equivalent to six months’ professional fees. After that he was entitled to join any service with any channel. 2. Mr. Singh’s second submission is that it was a determinable contract between the parties within the meaning of Section 14 of the Specific Relief Act, 1963, thus petitioner is not entitled to the relief claimed, i.e. not to engage or provide services to any other television channel, under Section 41 of the Specific Relief Act. If the petitioner has any grievance against the respondent, it’s only remedy lies in claiming compensation under the Contract Act. Therefore, the petitioner is otherwise not entitled to any relief. Even otherwise, the petitioner is not entitled to the relief as the petitioner has not come before this Court with clean hands. 3. Learned Senior counsel has relied upon the decision of the Supreme Court in Superintendence Company of India (P) Ltd. vs. Sh. Krishnan Murgal reported in (1981) 2 SCC 246 held as follows:- ".....employee-covenants should be carefully scrutinized because there is inequality of bargaining power between the parties; indeed no bargaining power may occur because the employee is presented with a standard form of contract to accept or reject." It was further held that:- "...the Courts, therefore, view with disfavour a restrictive covenant by an employee not to engage in a business similar to or competitive with that of the employer after the termination of his contract of employment." He has also referred another decision where a similar view was taken by this Court in Ambience India Pvt. Ltd. vs. Naveen Jain¸ reported in 122 (2005) DLT 421 wherein it was held as follows:- "....In the present case, nothing has been indicated even as to what trade secrets or technical know-how was revealed to the defendant which should not be divulged to others. In a business house, the employees discharging their duties come across so many matters, but all these matters are not trade secrets or confidential matters of formulae, the divulging of which may be injurious to the employer. If the defendant on account of his employment with the plaintiff has learnt some business acumen or ways of dealing with the customers or clients, the same do not constitute trade secrets or confidential information, the divulgence or use of which should be prohibited." Before discussing the rival submissions of both parties, it is necessary to refer some of the relevant terms and conditions of agreement dated 16th January, 2014. "Terms and conditions i) From the date of signing of this agreement, for the duration of this agreement including any extensions thereof, at the sole discretion of the Company, the Presenter shall render all services in relation to the Programme and the Presenter shall exclusively work for the Company. ii) The Presenter shall be paid a sum of Rs.95,833/- per month as fee by 10th of the following month for presenting the programme which includes all taxes and duties levied by the Government or appropriate authority from time to time during the course of this agreement and subject to deduction of tax as may be required under the Income Tax Act, 1961 or any other applicable law which shall be in force at the time of payment. iii) The Presenter shall also fully cooperate in the production of the show as also promos of the said Programme. The Presenter shall be available for press conferences, events and any other promotional or other publicity requirements for promotion of the Channel or the Programme. The Company is fully entitled to use the Presente’s image, voice and other personal attributes for the promotion of the programmes on NDTV, any other channel of the Company and/or in the print/electronic media. iv) The term of this contract is two years effective from the date of telecast of the 1st show on the channel and renewable in writing with the mutual consent of the parties." Ms. Renu Gupta, Advocate appearing on behalf of the petitioner countered the arguments of the respondent. She has also referred various clauses of the agreement and e-mails exchanged between the parties before resignation of his service. She argued that: 1. In the present case the contract containing the negative covenants is completely enforceable in law. The contractual period has not expired. The negative covenants fully operate during the term of the contract and for one year thereafter. The respondent is not entitled to terminate the contract. The respondent has merely sent his e-mail dated 8th February, 2015 to leave the job with the petitioner in the middle of its term. 2. Her second submission is that in the present case, the conduct of the respondent is in complete violation of the stipulations contained in the contract between the parties as the negative covenants fully apply during the term of the contract and for a period of one year after the period of the contract as contained in the contract itself. As the contractual term is still subsisting and the respondent is not entitled to breach the same and it can be remedied in accordance with law. 3. Her next submission is that the contract itself provides that the petitioner would be entitled to seek an injunction in case of violation, under such circumstances, the respondent cannot be allowed to breach the agreement in this manner as he during the course of his employment was engaged in negotiations with the rival channel which is clearly violation of the duties and responsibilities which he owned to the company. The said conduct cannot be allowed to be given go by allowing the petitioner to breach the contract. Therefore, some interim orders are to be passed against him otherwise, the purpose of executing the agreement would be defeated in every case. 4. Lastly, she argued that the respondent is not entitled to take the benefit of any ground of Section 27 of the Contract Act, 1872 as the doctrine of restraint of trade does not apply during the continuance of the contract for employment and it applies only when the contract comes to an end except in rare cases wherein special exception is carried out by the Court that the contract is totally one-sided and the restrictive covenant extending on the face of it would be beyond the term of contract is void and not enforceable. But, the present case is not covered in the said category due to the reason that the contract between the parties has not come to an end and further the termination clause has to read with other clauses stipulated in the agreement which are binding in nature, coupled with the fact that while examining the same, the Court has to see the conduct of the respondent and the nature of service joined by the party concerned.

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