Decide Issue Of Jurisdiction First: Karnataka HC Sets Aside Trial Court Order Restraining French Resident From Making Statement Against Ex-Employer

The Karnataka High Court has set aside an order passed by the trial court restraining a former employee of a company from making any statement, remarks and/or imputations against the company and its management in any social media, public forum and before any other entities.

A single judge bench of Justice H P Sandesh allowed the appeal filed by Arnaud Descamps, a resident of France, and set aside the order passed on the application made by Onmobile Global Limited. It remitted back the matter to the Trial Court to consider the issue of 'jurisdiction' in passing the restraint order. It observed,

“Trial Court has not discussed with regard to the issue of jurisdiction whether the Court has got jurisdiction to entertain the suit and what are all the materials placed before the Court to invoke the jurisdiction of the Trial Court, while granting the relief but, the Trial Court failed to take note of the said fact into consideration.”

The company (original plaintiff) claimed that during his employment, the employee (original defendant) failed to perform his duties promptly, which left the company with no option but to legally terminate his services. In the year 2015, the defendant filed a case before the Labour Court, Paris against the plaintiff claiming damages for restraining the defendant from exercising his options under Employee Stock Option Plan (‘ESOP’ for short).

The French Labour Court dismissed the claim of the defendant. The defendant then filed a revision petition before the Court of appeal challenging the findings and the same was also dismissed.

It was alleged that the defendant in pursuit to accomplish his false allegations against the plaintiff, also filed a complaint before the Ministry of Corporate Affairs which was finally closed considering that there were no merits in the allegations.

It was contended that the defendant has time and again with malafide intention filed several complaints before the SEBI and MCA inter alia, making baseless and frivolous allegations using defamatory and derogatory remarks against the plaintiff company and its management. Thus the company filed the suit before the trial court.

Challenging the order of the trial court, the defendant contended that there is no whisper with regard to invoking jurisdiction under Section 20(c) of C.P.C. and the defendant is also not within the jurisdiction of the Court. It was contended that even if the allegations against the defendant are assumed to be true, the place of publication could either considered to be France or places where the entity has their offices, i.e. Maharashtra.

Further it was contended that nothing is mentioned in the plaint with regard to the defamatory imputations made against the plaintiff.

Findings:

Firstly the court rejected the contention of the defendant that the plaint nowhere mentioned about the defamatory imputations. Referring to the plaint it said, “Having perused the averments made in the plaint, it is seen that specific allegations are made in the plaint with regard to making allegations using defamatory and derogatory remarks in the complaint before SEBI and MCA. Hence, the very contention of the learned counsel for the appellant-defendant that a blanket order is passed by the Trial Court and the same is not defamatory cannot be accepted.”

Addressing the other contention of jurisdiction the bench noted that except stating that Court has jurisdiction to entertain the suit, the plaint nowhere states that on what basis the jurisdiction of the Trial Court is invoked. It noted that the Trial Court has discussed with regard to the defamatory imputations but "failed to consider the issue which is raised before the Court with regard to the jurisdiction is concerned which is a fundamental issue raised before the Trial Court as whether the Court has got jurisdiction to entertain the suit.”

It added “When the issue of jurisdiction is raised, the Trial Court ought to have considered the same, but the same has not been considered by the Trial Court.”

Placing reliance on the Apex court judgment in the case of Axis Bank v. MPS Greenery Developers (2010), the bench held,

“I am of the opinion that the Trial Court has committed an error in not considering the issue of jurisdiction as to whether the plaint is maintainable for want of jurisdiction and on perusal of the order of the Trial Court in its entirety, it is seen that the same has not been considered by the Trial Court. Even though the Trial Court extracted the defence of the defendant in Para No.10 of the order, however it did not touch upon the issue of jurisdiction, while passing an order.”

Accordingly it allowed the appeal.

Case Title: Arnaud Descamps And Onmobile Global Limited

Case No: M.F.A. NO.4019/2022

Citation: 2023 LiveLaw (Kar) 272

Date of order: 14-07-2023

Appearance: Advocate A.S.Vishwajith for Appellant.

Senior Advocate Uday Holla a/w Advocate Nikhilesh Rao M.

Click Here To Read/Download Judgment