1 mpt IN THE HIGH COURT OF JUDICATURE OF BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 402 of 2008 IN SUIT NO.289 of 2008 M/s.Frankfinn Aviation Services Pvt. Ltd and Another .. Plaintiffs versus Mr.Vikas Bhalla .. Defendant ... Dr.Virendra Tulzapurkar, Sr.Counsel, Chetan Kapadia, Ajit Nair, Ms.Henal Vakharia, Ms.Deepti G. Adhav and Ms.Sonali Pimpale i/b Henal Akharia & Associates for the plaintiffs. Mr.T.K. Cooper with S.V. Doijode with Ms.M.Iyer i/b Doijode & Associates for the defendants. CORAM : D.G.KARNIK, J ORDER RESERVED ON : 7th April 2008 ORDER DELIVERED ON : 22nd April 2008 P.C.: 1. By this motion, plaintiff seeks interim injunction restraining the defendant from committing breach of clause 4 of the agreement dated 5th April 2007 till 1st June 2010 and further restraining him 2 from entering into any contract with any person as an artiste for singing, recording of music, participating in live performances, concerts, stage shows, inauguration ceremonies, commercial brand endorsements, modelling and advertisement including ramp shows, game shows, acting in films, television and theatre, playback singing till 1st June 2010. 2. The defendant is a professional actor, singer, television programme anchor and does various activities in the field of glamour and entertainment. Plaintiff no.1 is a company engaged in the business of music and entertainment. Plaintiff no.1 identified the defendant as an artiste with whom it could associate by engaging him to produce Hindi music albums. Accordingly, negotiations were held between the plaintiff no.1 and the defendant and an agreement was executed between the plaintiff no.1 and the defendant whereby the defendant agreed that he would exclusively sing, record and perform for the plaintiff for a period of two years. The plaintiff agreed to record minimum two music albums, each comprising of 8 - 10 songs sung by the defendant. The plaintiff also agreed to undertake production of atleast one music video featuring the defendant with budget of Rs.10 to 12 lakhs towards publicity. The plaintiff no.1 and the defendant agreed to share the earnings from sale of the music album and performances in the ratio of 60 : 40 till the plaintiff no.1 recovered all its expenses. 3 Thereafter the defendant was entitled to an increased share @ 70% or 80% of the net revenues. On 8th April 2007, the plaintiff no.1 informed the defendants that it planned to assign all rights under the agreement to its sister concern i.e. the plaintiff no.2. Disputes arose between the parties as to whether the plaintiff no.1 was entitled to assign the rights to the plaintiff no.2 and therefore the plaintiff no.1 and 2 have jointly filed this suit alleging that atleast either one of them is the owner of the rights under the agreement between the plaintiff no.1 and the defendant. 3. By a letter dated 30th November 2007 addressed to the plaintiff no.1, the defendant alleged that the plaintiff no.1 was in breach of the agreement and sought to terminate the agreement. By its advocate’s reply dated 22nd December 2001, the plaintiff no.1 responded and denied all allegations and contended that the defendant was bound by the agreement. The plaintiff also published a public notice dated 6th December 2007 in the trade journal about the subsistence of the agreement between the defendant and itself. The defendant respondent with a public notice dated 20th December 2007. The plaintiff has thereafter filed the present suit contending that it has invested sum of over Rs.40 lakhs towards the making of the first music album of the defendant titled as "Mehek Teri" and for an injunction restraining the defendant from acting or 4 performing for others or on his own account contrary to the agreement. According to the plaintiffs, the defendant agreed to work as an exclusive artiste for the plaintiff no.2 or plaintiff no.1 from June 2007 to June 2010 for a period of three years and since the defendant declined to perform for the plaintiff and was likely to perform for others, plaintiff of the agreement dated 5th April 2007. The plaintiffs have also claimed from the defendant a sum of Rs.40,62,850/- allegedly spent by it in promoting the defendant’s music album "Mehek Teri". Plaintiffs have also claimed a permanent injunction restraining the defendant from working as an artiste for singing or recording of music albums for anybody else till 1st June 2010. Interim relief pending the decision of the suit is claimed by this motion. 4. I have perused the agreement dated 5th April 2007. The agreement is for a period of three years from the date of release of music album "Mehek Teri" i.e. from June 2007 to June 2010. By clause no.4 of the agreement the defendant agreed that he shall exclusively record and perform for the plaintiffs atleast two music albums, including "Mehek Teri", comprising of 8 to 10 songs. By the agreement the defendant also agreed to be present for performance and recording of the albums as and when required by plaintiff no.1. The defendant also agreed that except for acting in film play back and/or modelling assignment he shall not himself deal with any third 5 party directly and shall not perform for anybody else. Clause no.4-C of the agreement states that the agreement was a contract for personal service of unique, unusual and extra ordinary character. Apart from the specific clause no.4-C I am satisfied that the contract is a contract for personal service. Needless to say that contract of personal service is not specifically enforceable. Learned counsel for the plaintiff however submitted that though the contract for personal service is not the specific enforceable negative covenant contained in the contract that the defendant shall not act as an artiste for anybody else during the period of the contract could be specifically enforced. In support the Counsel referred to and relied upon the two decisions of Supreme Court in Superintendence Company of India Pvt.Ltd. Vs. Krishan Murgai, AIR 1980 SC 1717 and Gujarat Bottling Vs. Coca Cola, 1995 AIR 1995 SC 2372. Per Contra, counsel for the defendant referred to and relied upon the decision of the Supreme Court in Percept D’Markr Vs. Zaheer Khan, AIR 2006 SC 3426. 5. In Superintendence Company of India Pvt.Ltd. Vs. Krishan Murgai (Supra) the Supreme Court following its earlier decision in Niranjan Shankar Golikari Vs. Spinning and Manufacturing Co.Ltd, AIR 1967 SC 1098 held that a contract of service which has its object a restraint of trade, whether general or partial, qualified or unqualified extending beyond 6 the termination of service is void. Unless a contract can be distinctly brought within exceptiom I to Section 27 of the Contract Act, there is no escape from the prohibition. The Court however held that a negative covenant in a contract of service to not to serve elsewhere or to enter into a competitive business could be valid and can be enforced during the period of the contract of service but not after the period of the contract. Relying on these observations Mr.Tulzapurkar submitted that the negative covenant in the present contract restraining the defendant working for anybody else or for himself by setting a competing business can be enforced and therefore the plaintiffs were entitled to an injunction till June 2010. 6. The decisions of the Supreme Court in the case of Niranjan Golikari, Superintendence Company of India and Gujarat Bottling Co. and other decisions have been considered elaborately by the Supreme Court in its recent decision in Percept D’Markr Vs. Zaheer Khan. In paragraph no.64 of the said decision, the Supreme Court has observed : 64. Assuming without admitting that the negative covenant in clause 31(b) is not void and is enforceable, it was nevertheless inappropriate, if not impermissible, for the Single Judge to grant an injunction to enforce it at the interim stage, for the following reasons:- (i) Firstly, grant of this injunction resulted in compelling specific 7 performance of a contract of personal, confidential and fiduciary service, which is barred by clauses (b) and (d) of Section 14(1) of the Specific Relief Act, 1963. (ii) Secondly, it is not only barred by clause (a) of Section 14(1) of the Specific Relief Act, but this Court has consistently held that there shall be no specific performance of contracts for personal services. (iii) Thirdly, this amounted to granting the whole or entire relief which may be claimed at the conclusion of trial, which is impermissible. (Bank of Maharashtra V. Race Shipping & Transport Co.(P)Ltd (SCC paras 10-12) iv) Fourthly, the Single Judge’s order completely overlooked the principles of balance of convenience as irreparable injury. Whereas Percept (the appellant) could be fully compensated in monetary terms if they finally succeeded at the trial, Respondent 1 could never be compensated for being forced to enter into a contract with a party he did not desire to deal with, if the trial results in rejection of Percept’s claim (Hindustan Petroleum Corporation Ltd. Vs. Sriman Narayan) v) The principles which govern injunctive reliefs in such cases of contracts of a personal or fiduciary nature, such as management and agency contracts for sportsmen or performing artistes, are excellently summarised in a judgement of the Chancery Division in Page One Records Ltd. V. Britton. In this case it was held that, although the appellant had established a prima facie case of breach of contract entitling them to damages, it did not follow that entire of them were entitled to the injunction sought; that the totality of the obligations between the parties gave rise to the fiduciary relationship and the injunction would not be granted, first, because the performance of the duties imposed on the appellant could not be enforced at the instance of the defendants and, second, because enforcements of the negative covenants would be tantamount to 8 ordering specific performance of this contract of personal services by the appellant on pain of the group remaining idle and it would be wrong to put pressure on the defendants to continue to employ in the fiduciary capacity of a manager and agent someone in whom he had lost confidence. 7. In view of the principles laid down by the Supreme Court in paragraph no.64 of its decision in Percept Vs. Zaheer Khan (Supra) the plaintiff is not entitled to an injunction. The grant of the injunction as prayed would virtually amount to grant of specific performance for contract of personal service. The defendant at the pain of remaining unemployed and penury, as he is not known to have any other skills, would be required to go back to the plaintiff. It may be noted that the contract not only prohibits the defendant from working for a competitor in business but also working for himself. If so prohibited the defendant could have alternative but to go to the plaintiff and this would amount to specific performance of the contract of personal service. Secondly, grant of an injunction would amount to grant of the whole or the entire relief which may be claimed at the conclusion of trial which is impermissible as laid down in sub clause (iii) of paragraph no.64 of the decision. Thirdly, balance of convenience is in favour of the defendant. Whereas the plaintiffs can be fully compensated in monetary 9 terms if they finally succeed at the trial. The defendant, however, could never be compensated for being forced to specifically perform the contract which he does not desire to perform. Lastly, but not the least the case is squarely covered by sub-clause(v) of paragraph no.64 of the decision. There the Supreme Court has held that even enforcing of the negative covenant would tentamount to ordering of specific performance of contract of personal service on the pain of remaining idle and it would be wrong to order a pressure on the defendant to do so. 8. In view of the law laid down by Supreme Court in Percept D’Markr Vs. Zaheer Khan (Supra) it would not be appropriate to grant any interim relief. Hence, the motion is dismissed with no order as to costs. (D.G. KARNIK, J)