LEGAL ASPECTS OF BUSINESS

Case Analysis
(Petitioner: NDTV
Vs.
Respondent: Mr. Sunil)

Submitted to: Submitted by:

Prof. G.K. Kapoor Juhi Chhabria 16PGDM022

Date of Submission: 20/02/2017

 Petitioner:
NDTV

Vs.

Respondent:
Mr. Sunil

Case Facts:

Mr. Sunil (respondent) entered into an agreement with NDTV on 16 th January, 2014 as a
presenter.

The term of the agreement dated 16th January, 2014 was for two years effective from the date
of telecast of the 1st show. The agreement was subject to certain terms as mentioned in the
case. (Refer to Appendix 1)

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 along with a cheque for an amount
of Rs. 574998/- (Six months salary).

Relief wanting to seek by the petitioner:

"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:

Mr. Sunil (Respondent):

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 1. Any restraint order passed against him would directly affect the business of
AajTak who is not a party before the Court.
2. 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.
3. 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.
NDTV (Petitioner):
1. The negative covenants fully operate during the term of the contract and for one
year thereafter.
2. As the contractual term is still subsisting, the respondent is not entitled to
breach the same and it can be remedied in accordance with law.
3. The contract itself provides that the petitioner would be entitled to seek an
injunction in case of violation.
4. 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.

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Judgement:

Section 27 in The Indian Contract Act, 1872 states:

Agreement in restraint of trade, void every agreement by which any one is restrained from
exercising a lawful profession, trade or business of any kind, is to that extent void. Exception
saving of agreement not to carry on business of which goodwill is sold.

Even though there is restraint of trade, the contract cannot be termed void because of the
exception. Human capital is considered as an important source of goodwill. Here, Mr. Sunil is a
valuable employee because of his enriched experience and hence brings goodwill to NDTV. His
resignation from NDTV and joining AajTak can result in sale of NDTVs goodwill to AajTak. Hence,
this contract cannot be declared void under section 27 and is very much enforceable.

This has resulted in actual breach of the contract with a special emphasize on few of the terms
as follows:
The Presenter does not have any right to terminate the agreement
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.
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.

As a result, NDTV can file a suit for injunction as per the terms of the contract.

Further, NDTV has filed the case on the ground of Brand Building Expense which makes it case
strong.

Also, the relief wanting to seek by NDTV is only till the term of the contract and not beyond that.
Hence, it is very much a valid claim.

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Appendix 1:

The main terms stipulated in the agreement dated 16 th January, 2014, are:
1. That the term of the agreement shall be 2 years
2. Sunil has to render services as a presenter on NDTV on exclusive basis
3. The Presenter does not have any right to terminate the agreement
4. That the entire copyright vests in NDTV
5. The Presenter shall not engage in any other service during the currency of the contract and that
the services are exclusively for NDTV
6. The Presenter shall not during the validity of this agreement allow his name, image or voice to
be associated with any other television channel.
7. The Presenter shall not take up any work of similar nature which is in competition with NDTV
during the validity of the agreement.
8. 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.
9. The Presenter shall not take up any assignment contrary to the interest of NDTV.
10. The Presenter shall not take up any part time employment with any other television channel
during the validity of the agreement.
11. 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.
12. 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.

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