NEW LAW COLLEGE, MUMBAI

______________________________________________________________________

BEFORE THE HON’BLE HIGH COURT OF MUMBAI (“HON’BLE COURT”)

AT

MUMBAI

______________________________________________________________________

MR. SUBHASH PAI

- PLAINTIFF/ APPLICANT

VS.

MS. GARIMA CHAUDHARI

- DEFENDANT / RESPONDENT

______________________________________________________________________

O.S. (C) No.: ______/2019

MEMORANDUM FOR

THE PLAINTIFF
Table of Contents_______________________________________________________________

Table of Contents

Index of Authorities.......................................................................................1

Index Of Cases.............................................................................................1

Statement of Jurisdiction..............................................................................1

Statement Of Facts......................................................................................2

Issues Raised...............................................................................................5

Summary of Arguments................................................................................6

Body Of Pleadings........................................................................................7

Prayer For Relief........................................................................................12

 INDEX OF AUTHORITIES

 STATUTES

O INDIAN CONTRACT ACT, 1872

O SPECIFIC RELIEF ACT, 1963

INDEX OF CASES

 SUPREME COURT OF INDIA - M/S GUJARAT BOTTLING CO. LTD. & ORS VS THE COCA

COLA CO. & ORS ON 4 AUGUST, 1995

EQUIVALENT CITATIONS: 1995 AIR 2372, 1995 SCC (5) 545

 SUPREME COURT IN PERCEPT D'MARKR (INDIA) PVT. LTD VS ZAHEER KHAN & ANR

ON 22 MARCH, 2006

STATEMENT OF JURISDICTION

Both the Plaintiff and the Respondent reside within the territorial Jurisdiction of the

Hon’ble Court. Further, the amount claimed by the Plaintiff by way of alternate relief falls

with the pecuniary jurisdiction of the Hon’ble Court.

1
 STATEMENT OF FACTS

 The Petitioner, Mr. Subhash Pai, is a movie producer, who has several Silver

Jubilee hits to his credit, is renowned to introduce several newcomers and make

them overnight stars;

 The Respondent, Ms. Garima Chaudhari, was offered a break in the film industry

by the Petitioner. Prior to that her roles were limited to T. V. Serials only;

 A contract dated DDMMYYY was entered into between the Petitioner and the

Respondent, which provided as follows:

o The Respondent was to work in a mega -budget movie for the Petitioner,

being made simultaneously in Hindi, English and three other Indian

languages, for which she was to be paid Rs. 80 lac by the Petitioner;

o Further, during the CONTRACT PERIOD OF FIVE YEARS, the

Respondent would WORK EXCLUSIVELY ONLY WITH THE

PETITIONER for which the Respondent was to get an annual Royalty of

Rs. 10 lac which was in addition to her professional fees for the next

venture with Petitioner assuring minimum amount of Rs. 30 lac per

annum.

o The said restraint by the Petitioner was justified on the ground that the

Petitioner would take pains taking efforts to shape and improve the skills

of the Respondent, to make her star celebrity and to give her life time

opportunity, which she would not get otherwise.

2
 Enclosed as Exhibit “A” is a copy of the duly executed contract entered into

between the Petitioner and the Respondent.

 The Petitioner, actually spent good amount of money and time to revamp the

personality, appearance, media projection and also acting and dance skills of the

Respondent from experienced professionals.

Enclosed as Exhibit “B” is a summary of the expense of Rs. XX/- lac incurred by

the Petitioner on the Respondent along with the supporting invoices and payment

receipts.

 The Petitioner has till date performed his part of the contract and made the

following payments to the Respondent:

o Rs. 30 lac paid on DDMMYYY as initial amount and the balance amount

of Rs. 50 lac paid on DDMMYYY, before the release of the movie;

o Rs. 10 lac per annum as the committed royalty amount for the first two

years of the contract.

 Despite the movie having failed badly at the box office and the Petitioner

suffering heavy losses on account the same, he continued to pay the

Respondent her assured annual dues;

 On account of the once in a life time break in the film industry offered by the

Petitioner along with the other expenses incurred by the Petitioner in improving

and sharpening the skills of the Respondent, she received world-wide accolades

for her work in the movie;

 The Respondent, during the tenor and in breach of the contact, accepted an offer

for a lead role from Mr. Karan Grover in his forthcoming film on DDMMYYY.

3
Timeline

X : Five years exclusive contract entered into between Mr. Subhash Pai, Plaintiff

and Ms. Garima Chaudhari, Respondent

Advance payment of Rs. 30 lac

X+12 M : Annual Royalty of Rs. 10 lac paid to the Defendant

X+18 M : Balance amount of Rs. 50 lac paid to the Defendant – before release of the

movie

X+24 M : Annual Royalty of Rs. 10 lac paid to the Defendant

X+28 M : The Defendant received and accepted an offer from Mr. Karan Grover in

breach of the contract

4
Issues Raised___________________________________________________________________

ISSUES RAISED

I. WHETHER, THERE HAS BEEN A VALID CONTRACT?

II. WHETHER THE RESTRICTIONS STIPULATED IN THE CONTRACT, DURING THE CONTRACT

PERIOD ATTRACTS THE PROVISIONS OF SECTION 27 OF THE INDIAN CONTRACT ACT,

1872?

III. WHETHER THERE ARE ADEQUATE GROUND FOR THE HON’BLE COURT TO GRANT AN

INJUNCTION IN FAVOUR OF THE PLAINTIFF, THEREBY PREVENTING THE DEFENDANT

FROM TAKING UP THE ROLE WITH MR. KARAN GROVER?

Summary of Arguments__________________________________________________________

SUMMARY OF ARGUMENTS

1. There has been a valid contract between the parties

2. The negative stipulation in the contract, during the contract period do not amount to

an agreement in restraint of trade

3. There are adequate grounds for the Hon’ble Court to grant an Interlocutory

Injunction in favour of the Plaintiff

4. There has been a breach of contract and the Plaintiff is entitled to relief under

Section 73 of the Indian Contract Act, 1872

Body Of Pleadings______________________________________________________________

BODY OF PLEADINGS

1) THERE HAS BEEN A VALID CONTRACT BETWEEN THE PARTIES

a. As per Section 10 of the Indian Contract Act, 1872 (“ICA”), all agreements

are contracts if they are made by the

i. free consent of

ii. parties competent to contract,

iii. for a lawful consideration and

iv. with a lawful object, and

v. are not hereby expressly declared to be void

b. The contract entered into between the Plaintiff and the Defendant

meets all the above ingredients of a valid contract, having been

entered into with free consent of parties competent to contract, for a

lawful consideration and object and are not expressly declared to be

VOID under the Indian Contract Act

2) THE NEGATIVE STIPULATION IN THE CONTRACT, DURING THE

CONTRACT PERIOD DO NOT AMOUNT TO AGREEMENT IN RESTRAING

OF TRADE

a. Section 27 of the ICA provides that every agreement by which any one

is restrained from exercising a lawful profession, trade or business of

any kind, is to that extent void;

b. The Respondent has on her own volition entered into the said contract

and is bound by exclusivity provided to the Plaintiff for a period of five

Body Of Pleadings______________________________________________________________

years from the date of the contract – which formed the basis on which

a break in the film industry was provided to her in addition to the

annual royalty and the assured annual amount of compensation;

c. The Plaintiff has till date fulfilled his part of the contract and is willing to

perform his part as committed during the term of the contract;

d. The above section has been the subject of interpretation by the

Hon’ble Supreme Court on various occasion;

e. The Hon’ble Supreme Court in Percept D'Markr (India) Pvt. Ltd vs

Zaheer Khan & Anr on 22 March, 2006 held that:

“Under Section 27 of the Contract Act (a) a restrictive covenant

extending beyond the term of the contract is void and not enforceable.

(b) The doctrine of restraint of trade does not apply during the

continuance of the contract for employment and it applied only when

the contract comes to an end.

(c) As held by this Court in Gujarat Bottling vs. Coca Cola (supra), this

doctrine is not confined only to contracts of employment, but is also

applicable to all other contracts.”

f. The Hon’ble Supreme Court in M/S Gujarat Bottling Co. Ltd. & Ors

vs The Coca Cola Co. & Ors on 4 August, 1995 Equivalent

citations: 1995 AIR 2372, 1995 SCC (5) 545 noted that:

“It has been so held by this Court in N.S. Golikari (supra) wherein it

has been said:

Body Of Pleadings______________________________________________________________

‘The result of the above discussion is that considerations against

restrictive covenants are different in cases where the restriction is to

apply during the period after the termination of the contract than those

in cases where it is to operate during the period of the contracts.

Negative covenants operative during the period of the contract of

employment when the employee is bound to serve his employer

exclusively are generally not regarded as restraint of trade and

therefore do not fall under Section 27 of the Contract Act.”

Further, in response to the argument from Shri Shanti Bhushan that

these observations must be confined only to contracts of employment

and that this principle does not apply to other contracts, the Hon’ble

Supreme Court held that:

“We are unable to agree. We find no rational basis for confining this

principle to a contract for employment and excluding its application to

other contracts.”

3) THERE ARE ADEQUATE GROUND FOR THE HON’BLE COURT TO

GRANT AN INTERLOCUTARY INJUNCTION IN FAVOUR OF THE

PLAINTIFF FOR ENFORCEMENT OF THE NEGATIVE COVENANT

a. Section 42 of the Specific Relief Act, 1963 provides that

“Notwithstanding anything contained in clause (e) of section 41, where

a contract comprises an affirmative agreement to do a certain act,

coupled with a negative agreement, EXPRESS OR IMPLIED, not to do

a certain act, the circumstances that the court is unable to compel

Body Of Pleadings______________________________________________________________

specific performance of the affirmative agreement shall not preclude it

from granting an injunction to perform the negative agreement:

Provided that the plaintiff has not failed to perform the contract so far

as it is binding on him.”

b. The non-obstante clause contained in section 42 of the Act of 1963 lifts

the bar under section 41(e) to the grant of an injunction to prevent

breach of a contract the performance of which would not be specifically

enforced.

c. The Plaintiff seek enforcement of the negative covenant in the contract

in terms of the exclusivity arrangement, thus prohibiting the Defendant

for signing any film with other producers including Mr. Karan Grover

during the validity of the Contract;

d. As held by the Supreme Court in the case of Gujarat Bottling Co. Ltd.

(supra) while considering the prayer for an order of injunction against a

party for performance of the negative covenant, the Court has to

exercise its discretion by applying sound judicial principles to fulfil the

three tests - (i) whether the plaintiff has a prima facie case; (ii) whether

the balance of convenience is in favour of the plaintiff; and (iii) whether

the plaintiff would suffer irreparable injury if his prayer for interlocutory

injunction is disallowed.

e. As demonstrated in the above para the Plaintiff has made out a prima

facie case for the enforcement of the negative covenant. The contact

being valid and subsisting, the Plaintiff having fulfilled his part of the
Body Of Pleadings______________________________________________________________

contract is entitled to the exclusivity arrangement as agreed in the

contract during the contract period;

f. The balance of convenience is in favour of the Plaintiff as he has and

avers to fulfill his part of the contract;

g. The Petitioner has made a considerable amount of investment on the

Defendant so as to make him a star from a non-entity. Having invested

substantial amount in the skill development of the Defendant along

with the payment of the annual Royalty amount and the annual

minimum assured sum, the Plaintiff would suffer irreparable injury if his

prayer for interlocutory injunction is disallowed.

4) THERE HAS BEEN A BREACH OF CONTRACT AND THE PLAINTIFF IS

ENTITLED TO RELIEF UNDER SECTION 73 OF THE INDIAN CONTRACT

ACT, 1872

a. In the event the discretionary remedy of interlocutory injunction/

permanent injunction is not provided, the Plaintiff craves for alternate

remedy to damages for breach of the Contract.

b. The Plaintiff having taken substantial risk and investing a substantial

amount relying upon the exclusivity arrangement in the contract is

entitle to damages for the breach of contract.

Prayer for Relief________________________________________________________________

PRAYER FOR RELIEF

Wherefore in the light of above facts stated, arguments advanced and authorities cited,

the Hon’ble Court may be pleased to grant the following relief to the Plaintiff:

Interim Relief

1) An interlocutory injunction prohibiting the Defendant from violating the exclusivity

arrangement with the Plaintiff during the pendency of a suit or the balance validity
period of the Contract, whichever is earlier;
Final Relief

1) An injunction against the Defendant restricting her from entering into any

agreement/arrangement or accepting an offer from any other firm producer

including Mr. Karan Grover during the subsistence of the Contract;

2) Damages of Rs. 1.20 crore u/s 73 of the Indian Contract Act, 1872 covering:

a. The excess amount paid for the first movie break – Rs. 50 lac

b. Royalty Amount for the two years - Rs. 20 lac

c. Damages for the amount of money and time spend by Mr. Pai to revamp the

personality, appearance, media projection and also acting and dancing skills

from experienced professionals – Rs. 50 lacs

3) Litigation cost;

The Court may also be pleased to pass any other order in the light of justice, equity and

good conscience.

All of which is respectfully submitted.

At: Mumbai Counsel on behalf of Plaintiff

Date: ‘X’ September 2019