Agreement To Sing For Only For One Music Company Was 'Unfair': Punjab & Haryana High Court Grants Relief To Shehnaaz Gill

The Punjab & Haryana High Court has refused to interfere with the appellate court's order which held that singer Shahnaz Gill cannot be compelled to sing only for one music company with which she had signed in 2019, observing that the terms are "unfair" and lacked equal bargaining power.

Gill entered into a contract "in a hurry" with Simran Music company in 2019 before entering the TV show Big Boss and according to the terms she was not allowed to sing for any other company.

Justice Gurbir Singh, "defendants Company, due to its goodwill and reputation in the music industry, is placed on higher pedestal, whereas the plaintiff, who was an aspiring singer, was dreaming to create her place in the music industry and accordingly, in order to fulfill her dreams, acceded to the unfair terms mentioned in the Agreement."

In the present case, prima facie, the terms of the Agreement in question are unfair and the same is the result of one party having superior bargaining power and the other party at a very inferior position with low bargaining power, the Court added.

The Court was hearing a revision petition to the order, passed by Additional District Judge, SAS Nagar (Mohali) (Appellate Court) in 2023, thereby allowing an appeal filed by the plaintiff-Shahnaz Gill against the order passed by Civil Judge (Junior Division), SAS Nagar (Mohali) (Triall Court), dismissing the application filed by the respondent under Order 39 Rules 1 and 2 CPC.

Background

Plaintiff Shehnaz Kaur @ Shehnaaz Gill filed suit for a declaration that the Agreement, executed between her and Simran Music Industries is void and unenforceable and for permanent injunction restraining the defendants or their agents from raising any ownership claims over the works, performances or other related projects and further permanent injunction restraining the defendants or their agents from defaming her and contacting third parties or threatening them with legal action if they proceed to work with her.

Gill contended that just two days prior to entering the Big Boss House, defendants approached her requesting and pleading her to sign a quick “Memorandum of Understanding” regarding a show of intent with respect to their future working relationship. 

On repeated requests by the defendants, Gill signed the contract in a hurry and left for Big Boss House. After the show was over, she started getting many offers. However, she came to know that the defendants were sending E-mails to third parties claiming that the plaintiff was their exclusive artist as per the Agreement dated 25.09.2019 and was not allowed to appear in any other music video without the permission of defendants, the plea added.

Gill filed an application for a temporary injunction, however, it was rejected by the Trial Court on the ground that no finding can be given with respect to the Agreement dated 25.09.2019 that the same is the result of misrepresentation, without consideration or against public policy

The  Appellate Court allowed the appeal and held that the Trial Court had failed to take into consideration that by writing E-mails to third parties, with whom the plaintiff was doing certain projects, the reputation of plaintiff was lowered. The third-party would avoid entering into a contract with Gill, which would cause irreparable loss to her, it added.

The counsel for Simran Music Industries challenging the appellate court's order, argued that it sent different E-mails to third parties in order to bring to their notice with respect to breach of trust on the part of the plaintiff. In order to avoid the medium of litigation, they preferred the medium of mediation. Gill, in her struggling stage of her career, was backed by the defendants. After earning fame, the behaviour of the plaintiff changed and she resiled from the Agreement, he submitted.

After hearing the submissions, the Court said, "It is established principle of law that negative covenants, operative during the period of employment when the employee is bound to serve the employer exclusively, are not to be regarded as restraint of trade, and therefore, do not fall under Section 27 of the Indian Contract Act, 1872."

It is also well established that freedom of contract must be founded upon equality and bargaining power between the contracting parties. The party having less bargaining power is left with little or no choice but to accept the unfair and unreasonable terms imposed upon it by the party with superior bargaining power, it added further.

The Court also noted that the defendants failed to respond to the notice sent by Gill in December 2020 to rescind the contract. 

"As per terms of the agreement, the defendants were to make four official Audios and Videos of plaintiff in each year. Defendants neither took any step nor gave any notice to the plaintiff for performing her part of the contract. The defendants seemed to have acquiesced in December 2020 to the notice of the plaintiff, whereby plaintiff informed the defendants that she had rescinded the agreement. Defendants did not directly and indirectly interfere in the working of the plaintiff for the said period and allowed the plaintiff to work independently. The silence of defendants prima facie establishes that they took the Agreement to have been rescinded, as conveyed by the plaintiff," it noted further.

Justice Singh highlighted that the Courts are required to see three ingredients i.e. prima facie case, balance of convenience and irreparable loss or injury.

Adding that in the present case, prima facie, the terms of the Agreement in question are unfair and the same is the result of one party having superior bargaining power and the other party at a very inferior position with low bargaining power, the Court said, "So, the Agreement cannot be prima facie considered to be valid and therefore, cannot be said to be binding the plaintiff."

The defendants did not interfere the working of the plaintiff for a long period of two years after receiving legal notice from her, rescinding the Agreement in question. Balance of convenience is also in favour of the plaintiff, the judge added.

In the light of the above, the Court opined that there is no merit in the present revision petition and the same was accordingly dismissed. 

Dr. Anmol Rattan Sidhu, Senior Advocate with Mr. Harlove Singh Rajput, Advocate and Mr. Jashandeep Singh Bains, Advocate for the petitioners.

Ms. Fury Jain, Advocate and Mr. Taranjeet Singh Dosanjh, Advocate for the respondent.

Title: Sajjan Kumar Duhan and another v. Shehnaz Kaur @ Shehnaaz Gill

Citation: 2024 LiveLaw (PH) 254

Click here to read/download the order