1990 (3) TMI 383 - HC - Indian Laws

Summary

Issues Involved:
1. Grant of interlocutory injunction.
2. Alleged wrongful termination of agency agreement.
3. Alleged breach of fiduciary duty and conspiracy to defame and injure the plaintiffs.
4. Procurement of breach of agreements with foreign principals.
5. Use or disclosure of confidential information and trade secrets.

Detailed Analysis:

1. Grant of Interlocutory Injunction:
The law regarding the grant of interlocutory injunction is well-settled. The judgment references Lord Diplock's speech in American Cyanamid's case and the Supreme Court's decision in United Commercial Bank v. Bank of India, establishing that only a prima facie case is needed at this stage without considering the chance of success at the final disposal of the suit. A reasonable or even plausible case is sufficient at this interlocutory stage. The court also noted that the same principle applies to the grant of quia timet injunction to prevent apprehended damage.

2. Alleged Wrongful Termination of Agency Agreement:
The plaintiffs contended that the termination of their agency agreement by the foreign principal was wrongful, illegal, and void as it was not in accordance with the agreement between the parties. The plaintiffs did not accept the termination and argued that the defendants wrongfully conspired to induce this breach.

3. Alleged Breach of Fiduciary Duty and Conspiracy:
The plaintiffs alleged that the defendants, who were former partners and employees, established rival businesses to make secret profits and illegal gains. They contended that the defendants breached their fiduciary duty and conspired to defame and injure the plaintiffs' business. The court noted that while the establishment of a rival business by itself is not actionable, the breach of fiduciary duty combined with deliberate and direct interference with the execution of a contract could warrant legal intervention.

4. Procurement of Breach of Agreements with Foreign Principals:
The plaintiffs argued that the defendants procured and induced breaches of agreements with various foreign principals. The court examined telex messages that indicated an intent to interfere with existing contractual relationships. The court held that deliberate and direct interference with the execution of a contract is actionable, and the intent to procure a breach is sufficient for an interlocutory injunction.

5. Use or Disclosure of Confidential Information and Trade Secrets:
The plaintiffs sought an injunction to restrain the defendants from using or disclosing confidential information and trade secrets acquired from the plaintiffs. The court agreed that there was sufficient evidence to show a fair question to be tried at the final adjudication, warranting an order of injunction.

Conclusion:
The court granted an order of injunction restraining the defendants from procuring or wrongfully inducing any breach of agreements made between the plaintiffs and their foreign principals. The defendants were also restrained from using or disclosing confidential information or trade secrets acquired from the plaintiffs. The plaintiffs were awarded the costs of the application.