Octavious
Hr Manager
Sushilkluthra@gmail.com
Consultant In Legal Matters
+1 Other

Thread Started by #sjoshi9175@gmail.com

Hello Seniors,
I worked for a company for more than 17 years and left before 10 months. Now, they are behind me and sent me two letters through a lawyer saying that it is "legal notice". Into last letter they asked a huge amount from me and to leave the existing job. In fact I have joined their competitors. While I joined them before 17 years as trainee engineer, they mentioned in appointment letter that I cannot join a competitor and based on that they are threatening me for legal proceedings!!! I know it is kind of personal matter and one particular person, who was my supervisor is insisting for this activity, otherwise company and the Managing Director are good.
So, now I need your expert advice please.
Thank you,
Sachin Joshi
4th February 2015 From India, Palanpur
do not confuse with hardship of supervisor and kindness of managing director who ever managing business. your query is related to recovery of dues, i suppose. you can prefer a complaint with labour officer of your area and put forth your views. rest your problem solved.
6th February 2015 From India, New Delhi
In fact I have got all the dues, but my concern is that they are sending me legal notices. They asking me asking me to give Rs. 1 Crore and also to leave my current job.
7th February 2015 From India, Palanpur
#Anonymous
I had already posted earlier that there is a Supreme Court judgement wherein the SC has stated that trying to force an employee not to join a competitor is a violation of the constitutional right of employment. Moreover, this kind of restraint can only be enforced when one is working in a strategic role and not an operational role. Even in a strategic role, the restraint can be enforced if an adequate compensation is paid for the cooling of period.

When Mark Hurd left HP as CEO and joined Oracle as CEO, HP went to court. The court was very clear that Mark Hurd had joined a division which is not a direct competitor of HP, while Oracle may have products which HP has. Hence there is no damage to HP. So, if at a CEO level, no damage is found to be caused, at your level, I don't think this case will sustain. I have quoted numerous cases even in India on this. Please go through the thread and look up.

From your posting, I assume that you were not holding a strategic role and neither were you privy to any strategy. Hence, the matter of any damage to the ex company does not arise at all. You need to take this stand and respond to them directly or through a lawyer. Meanwhile, since you say that MD is a good person, write to him directly stating the harassment you are undergoing and also that since you were not in a strategic role but only in an operational role, your moving to the competition is not going to cause any damage to the company. There could be some respite.

Regards
9th February 2015 From Indonesia, Jakarta
Such an agreement restraining you to carry out profession in a competitor business after leaving earlier job, has been held to be void under Section 27 of Contract Act as held by Delhi High Court in American Express Bank vs Ms. Pratima Puri in 2006 after referring to Apex Court decisions. Give a reply through counsel and since it is void agreement contrary to public policy, also mention that extortion proceedings may be initiated against him.
Thanks
Sushil
9th February 2015 From India, New Delhi
Had your employer taken Bond from you, it all depends the terms& conditions mentioned in the service Bond. If you have not given any service bond than the employer can not do any thing if you have resigned the job and they accepted the same. otherwise they can only play around the terms of agreement for breach of contract. it is always stipulated in the conditions of agreement if you entered at the time of joining N K SHARMA
9th February 2015 From India, Chandigarh
Hello, I did not sign any bond but, as I mentioned in first post, they mentioned the terms in the appointment letter at the time of my joining before 18 years and that I had signed.
10th February 2015 From India, Palanpur
#Anonymous
Sachin,
Both the Anonymous person and Sushil have provided good advice. To put it in simple English - Forcing employees / ex-employees to not join competitor or trying to extract compensation for joining a competitor is no longer permissible in the eyes of the law. Your old agreement / terms of appointment which stated that you cannot join competitor companies is therefore void (does not exist / becomes null). As Anonymous suggests please speak or write to your senior in your earlier company or HR Head, or reply through a lawyer. Please rest assured they cannot force you to pay such a huge amount.
10th February 2015 From India, Mangalore
Hello Seniors,
Thank you all for your advice. Please know that it is an American MNC and my ex-supervisor, who is a director also in the company, insisting to take these actions. The managing director and HR manager are not able to stop him since he has strong back up from group CEO and president from USA. Not only me but most of the people in the company say that the MD is just like a rubber stamp or "Dhrutrashtra". He does not have in depth technical knowledge and hence the other person is taking advantage. I know that there is no case and it does not stand in court, but they do not want to miss any chance to harass me.
Thank you once again for your attention!!
Best Regards,
11th February 2015 From India, Palanpur
These sort of johneys are snubbed only after showing them how criminal proceedings can be launched against them. Remember the scenario of Bhopal gas massacre. CEO of that MNC could not be tracked only because of protection of politicians. Otherwise hands of law were very long.
Thanks
Sushil
11th February 2015 From India, New Delhi
Dear Sushil Ji,

I fully agree with you. In fact I have all the guts and anger, but being a common man from a middle class family, can not do anything against a giant.

To describe more, actually I put my resignation two times. When I put my 1st resignation in August 2013, my ex-boss hacked or snooped my personal gmail account and seen my all the correspondences (I was using the company laptop - my mistake) with new employer. This way he came to know that I am going to join a competitor company and also the salary and other things mentioned in my e-mail. On the third day after my resignation, he told me that he has seen my all e-mails and he know everything. He also acknowledged that it is good that I have not shared any confidential information to the competitor company. He also told me that I have been very hard working, honest and dedicated perosn throught out my career of more than 17 years. Then he started threatening and torturing me saying that if I join them, then the company will take legal actions against me and bla...bla...After 3 days of mental harassment, me and my family decided not to leave the company and I continued as regular job again for further 9 months. But, the working atmosphere became the worst and I was really feeling uncomfortable due to their doubts and other politics within the company. Then finally I decided to quite and left in April 2014. That time also he continued threatening, but I was mentally prepared this time. Now, I think that I have wasted many precious years of my life by doing too much hard working even sacrificing my family and personal life.

Best Regards,
11th February 2015 From India, Palanpur
Then it would have been better not to have annoyed your employer by joining his competitor. I think for an experienced person like you, there was no dearth of opportunities.
Better straighten out the misconceptions.
Thanks
Sushil
11th February 2015 From India, New Delhi
Dear Sjoshi
There is nothing to worry. By accepting your resignation your company have accepted that all and any contract that existed between you and your company has ceased to exist and thereby absolving you of any and all liability and obligation ,applicable on an employee ,that originated from that contract
With cessation and termination of contract all the clause of the contract ceased to be binding upon you,till the extent of personal performance.
You are 100% safe and may continue with your work without any worry.
Seek a good lawyer and send reply to their notice without fail.
Regards
Octavious
11th February 2015 From India, Mumbai
Dear SJoshiji,

The extract of the following decision is self evident to judge the contours of jurisprudence and law on the subject. I hope you are not being alleged for imparting any confidential information of former employer after your resignation which liability subsits even after that because of its post resignation/termination of contract effect:

Sanmar Speciality Chemicals ... vs Dr. Biswajit Roy on 27 April, 2007

Application was filed for an order of interim injunction restraining the respondent former Manager from in any manner disclosing or using the confidential information of the applicant by carrying on directly or indirectly any business which is of competing nature, contacting the applicant's customers or employees and thereby interfering with the applicant's business, pending arbitration of the disputes between the parties.

The applicant Company was engaged in a very specialised field of business involving unique know-how and technical data and these are peculiar to them. The respondent joined the company as a Scientific Officer in January 2001. Over the years he became an integral part of the senior management team and he was given access to information which were vital for the operations of the applicant's Bangalore Genie Division namely, product and process know how, R & D processes, procedures, raw materials sources, quality control etc. On 20.6.2005, the former employee(respondent) entered into a Confidentiality and Non-Compete Agreement with the applicant. At the time of entering into an agreement the respondent was working as Assistant General Manager-Research & Development. Under the Confidentiality and Non-Compete Agreement, the respondent shall not disclose the confidential information to any person after cessation of employment with the applicant. Similarly the respondent shall not take up any employment or involve himself with any other person or body co-operate in the similar field of activity which is competitive in nature with the business of the applicant for a period of 3 years after cessation of employment with the applicant.

The former employee, respondent submitted his resignation on 17.7.2006.

The case of the applicant is that the respondent is violating Clause 3 and Clause 6 of the agreement and therefore an order of interim injunction is to be granted against the respondent. Even though it is prayed by the applicant that the respondent shall be restrained from disclosing the confidential information by carrying on any business which is of competing nature, contacting the applicant's customers or employees and thereby interfering with the applicant's business, this Court on 15.3.2097 made it very clear that the respondent is not injuncted in making use of any other such information which was simultaneously obtained by him from some other means.

Insofar as the non-compete clause contained in the agreement is concerned, the court was of the opinion that the negative covenant contained thereon is unenforceable in law and the same is contrary to the provisions of Section 27 of the Indian Contract Act.

Thanks

Sushil
11th February 2015 From India, New Delhi
Dear Sushil Ji and Octavious Ji,

Thank you for valued time to reply.

Sushil Ji, coming to your previous reply above, I can not change field after 17-18 years of experience a particular field and I have to go to the same field and thus to join the competitor. Also, I was not at all comfortable with the working atmosphere and politics in the company in the past 4 years and that's why I was in search of a better opportunity. Moreover, at the time of my first time resignation in August 2013, they tried to retain me by other negative ways like threatening, torturing, hacking of personal e-mails etc. They did not ask me the reason for leaving or tried to solve the problems. I was also not happy with the pay scale, which was however, not the prime reason for leaving the job. They wanted me to work for them without any expectation by becoming the "slave".

Now, coming to your latest reply above, first of all I could not understand whether court had given judgement against respondent? And my case is different as I did not know confidential information and I was not an integral part of the senior management. I initially worked in service department and then they transferred me to the sames department and at the time of leaving, I was Dy. Manager. Also I did not sign any Confidentiality or Non-Compete Agreement. The only thing is that they mentioned in the appointment letter given before 18 years at the time of my joining. Those terms are all one sided and no time limit is mentioned i.e. they have not mentioned for how much period I can not join the competitor. Apart from this, there is one more fact that I have responsibility of my family and I need to work somewhere and I can not get work other than competitor at my desired salary. I agree that their business may get affected by some extent as I am in sales and taken few orders against them, but its my work.

Best Regards,
11th February 2015 From India, Palanpur
Dear Sjoshi
Even if you had signed a Non Compete agreement, still it wont be applicable to you, because the agreement for personal performance cease to exist upon termination of contract.
A specific performance cannot be invoked against you because for them to invoke and win a specific relief against you they must prove that interest is not an ordinary article of commerce, or is of special value and that it is not easily available in the market.
Regards
Octavious
12th February 2015 From India, Mumbai
Hello,
I have consulted a senior advocate and as per him, I need not to reply anything. He said that I already had replied to their 1st notice and our stand does not change. They have repeated the same thing into their 2nd notice and asked to give Rs. 1 Crore within 15 days and also to leave my current job. Already 50 days are passed to that notice.
Please advise what should I do? Is it okay if I do not reply to their latest notice?
Regards,
19th February 2015 From India, Palanpur
It is not known what you replied in first notice. If your counsel had projected the legal position of voidness of contract under section 27 Indian Contract Act, then probably, the first notice would have been withdrawn by the past employer. But since he is coercing you repeatedly to quit present job and pay heavy damages to him. It is nothing but extortion and criminal intimidation in terms of Allhabad High Court decision extracted below. Although a contrary view in Delhi High Court decision cited earlier, is there but discuss with your counsel and give notice to deter threats and withdraw notices otherwise file criminal proceedings:

Allahabad High Court

Oriental Bank Of Commerce vs S.M. Chopra on 12 October, 1999

Equivalent citations: 2000 (1) AWC 594

12. The material allegations in this regard are contained in paragraphs 21 to 26 of the plaint the substance of which is that plaintiff Joined the Head Office at New Delhi he was summoned soon thereafter i.e., at 4.45 p.m. in the cabin of the General Manager Sri Surendra Mohan who has appeared as D.W. 2. The General Manager asked the plaintiff to submit his resignation and threatened him for dire consequences on failure to submit the resignation by handing over him to the C.B.I. on false ground of committing fraud in the bank services. Further allegations are that about 4 other persons unknown to the plaintiff were also present in the cabin of the General Manager. They created 'gherao' of the plaintiff from all sides and compelled him by manhandling to write the resignation letter from the services of the bank then and there. It is also stated that the plaintiff at that time had told that he did not want to resign from the service as he had no other source of income but he was compelled to write resignation letter. There is no dispute that the Courts below on the evidence adduced by the parties have concurrently held that the resignation letter which was dictated by the General Manager, was tendered by the plaintiff-respondent in the aforesaid circumstances. Such a finding of fact was arrived at by the trial court on the basis that these facts were categorically stated by the plaintiff in his deposition and he was not cross-examined in this regard and his testimony on this point was unchallenged. Sri Surendra Mohan the General Manager had appeared as D.W. 2 and in his deposition he did not refute the facts stated in the plaint and stated by the plaintiff on oath. At the relevant time he was General Manager of defendant-bank in New Delhi Branch. The question, therefore, arises whether the aforesaid act or the allegations against the General Manager of the defendants-appellants amount to coercion or not. As argued by Sri G.N. Verma it will have to be seen whether the acts alleged were forbidden by the Indian Penal Code so as to bring them within the definition of 'coercion'. Sri Shashi Nandan, learned counsel appearing for the respondent has suggested that the acts alleged amount to criminal intimation as defined in Section 503 of the Indian Penal Code and such an act is forbidden under Section 506 of the Indian Penal Code.

13. Criminal intimidation has been defined under Section 503 of the Indian Penal Code which reads as follows :

"503. Criminal Intimidation.--Whoever threatens another with any injury to his person, reputation or property, or to the person or reputation of any one in whom that person is interested, with intent to cause alarm to that person, or to cause that person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, as the means of avoiding the execution of such threat, commits criminal intimidation.

Explanation.--A threat to injure the reputation of any deceased person in whom the person threatened is interested, is within this section."

14. Reading of the definition of Criminal intimidation as reproduced above would indicate that there must be an act of threatening to another person, such a threatening should be of causing an injury to the person, reputation, or property of the person threatened or of the person in whom the threatened person is interested, the threatening must be with intent to cause alarm to the person threatened or it must be to do any act which he is not legally bound to do or omit to do an act which he is legally entitled to do. In the instant case there is specific allegation that the plaintiff was 'gheraoed' and manhandled and he was forced to tender the resignation letter as dictated by the General Manager of the defendants-appellants bank. It has been clearly stated that the plaintiff did not intend to submit or tender his resignation. The plaintiff was further threatened that in case he did not tender the resignation he will be handed over to the C.B.I. on false allegations of committing fraud relating to the affairs of the Bank. The allegations clearly show that the plaintiff was compelled to sign and tender the resignation by manhandling him. This allegation certainly amounted to a threat of injury to the person of the plaintiff in case he did not tender the resignation. There is no case of the defendants-appellants that the plaintiff was legally bound to tender resignation. Even though they have pleaded that the resignation was tendered by the plaintiff of his own free will and without any threats to his person but the plaintiffs evidence goes unchallenged. It has been found as a fact by the Courts below that the resignation was obtained by the plaintiff under threat of injury to his person and injury to his reputation by handing him over to C.B.I. on a false charge of committing fraud which he would not have otherwise tendered. Therefore, the plaintiff was forced to do an act, viz., to tender the resignation which he was not legally bound to do. The offence of criminal intimidation is punishable under Section 506 of the Indian Penal Code which provides that "whoever commits the offence of criminal intimidation shall be punished with imprisonment of either description for a term which may extend to two years, or with fine or with both ; and in case threat, be to cause death or grievous hurt, or to cause the destruction of any property by fire or to cause an offence punishable with death or imprisonment for life or with imprisonment for a term which may extend to seven years as provided in second part of the section the sentence may extend to seven years or with fine or with both." Therefore, act of criminal intimidation is an act prohibited by the Indian Penal Code.

15. Besides this Section 383 of the Indian Penal Code defines extortion which provides that "whoever intentionally puts any person in fear of any injury to that person, or to any other, and thereby dishonestly induces the person so put in fear to deliver to any person and property or valuable security, or anything signed or sealed which may be converted into a valuable security, commits "extortion". Section 384 of the Indian Penal Code provides for punishment of extortion. Thus, an act of extortion is prohibited by Section 384 of the I.P.C. The ingredients of offence of extortion are that--(a) intentionally putting any person in fear of any injury to that person or to any other ; (b) thereby dishonestly inducing the person by putting in fear to deliver to any person, any property or valuable security or anything signed or sealed which may be converted into a valuable security. Here as already pointed out above the allegations are that by putting the plaintiff in fear of injury to his person and by manhandling him he was forced to sign the resignation letter.

The resignation letter amounted to a valuable security as defined under Section 30 of the Indian Penal Code. It was a document which extinguishes the legal right of the plaintiff to hold office as servant of the appellants-bank and to draw salary and other benefits of service. Section 30 of the Indian Penal Code provides that the words "valuable security" denote a document which is, or purports to be, a document whereby any legal right is created, extended, transferred, restricted, extinguished or released, or whereby any person acknowledges that he lies under legal liability, or has not a certain legal right." Thus, a resignation letter which extinguishes the legal right of the person to hold an office and draw salary and benefits of service which he was legally entitled to hold amounts to valuable security as defined under Section 30 of the Indian Penal Code. To be forbidden by the Indian Penal Code an act of delivery of any valuable security must be with dishonest intention. Under Section 24 of the Indian Penal Code the expression 'dishonestly' [as used in Section 383 of the I.P.C.) means anything done with an intention of causing wrongful gain to one person or wrongful loss to another person. The expression "wrongful loss" is defined under Section 23 of the Indian Penal Code which means the loss by unlawful means of property to which the person losing it is legally entitled. The term "property" has not been defined in the Indian Penal Code. It however, includes a right to draw salary and other service benefits by holding office to which a person is entitled.

16. Therefore, when a person is put in fear of any injury to his person and thereby he is dishonestly induced or forced to deliver or tender the resignation letter which is a 'valuable security' shall be deemed to have committed an offence of extortion. Such an act is punishable under Section 384 of the Indian Penal Code and, therefore. It is prohibited by the Indian Penal Code. In my considered opinion, therefore, acts alleged by the plaintiff in the plaint and as found to have been established by the evidence on record, amount to an act of coercion and it is concluded that the resignation of the plaintiff-respondent was obtained by the General Manager of the appellants-bank by using of coercion.

Thanks

Sushil
19th February 2015 From India, New Delhi
Dear Mr. Sushil,
In my reply to their first notice, I mentioned sec. 27 of the contract act 1872. Answer was sent by me personally through regd. AD. However, it was prepared by a senior and retired advocate, with whom we have family relations. We also mentioned that the contents and allegations made in their notice were vague and thus those were denied. We had prepared very descriptive reply. If you want, I can send both the notices and my reply on your e-mail ID.
Regards,
20th February 2015 From India, Palanpur
It would have been better that reply should have been sent through Advocate. Now send reply through advocate keeping in view above position. Thanks Sushil
20th February 2015 From India, New Delhi
Hello, I have received summon from civil court. It is mentioned that I should be present there on 19th March. Please advise. Regards,
26th February 2015 From India, Palanpur
I have heard that these kind of cases run up to 20 - 50 years! Is that true? Please help. Also advise me how to deal with these kind of persons. Regards,
1st March 2015 From India, Palanpur
Since the past employer has filed suit against you seeking damages of heavy amount though misconceived, will you not twist his arm so that he leaves your neck. Thanks Sushil
1st March 2015 From India, New Delhi
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