1. ' KHILJI ARIF HUSSAIN, J.--- Brief facts for the purpose of deciding appeal are that appellant- company engaged in business of manufacture and supply of lead acid and industrial batteries in Pakistan for various application under the name and style of Exide Pakistan Ltd. Respondent initially employed as sales representative on 9-3-1971 and over a period of time was promoted to various posts/designations viz. Sales Officer, Branch Manager based at Karachi to look after Sindh and Balochistan Provinces, Marketing Manager South and lastly promoted as General Manager (Marketing) South on 1-4-1996. Respondent resigned after 36 years of service on 4-12-2007. The appellant's case was that last annual appraisal of the respondent was made on 12-6-2007 which was effective from 1-4-2007 on terms and conditions mentioned therein, which was accepted expressly in writing covenanted in the said letter dated 12-6-2001 that the respondent upon leaving the employment on any reason would not join any other organization directly or indirectly competitor with the appellant in any of its products for a period of two years. After resigning respondent joined Messrs Pakistan Accumulators (Pvt.), a Company, which is one of the competitors of the appellant, engaged in business of manufacturing of led-batteries. It was the case of the appellant that the appellant has developed its own quality control procedure that to ensure manufacturing according to the highest quality standard and customer satisfaction.
2. Respondent holding position of General Manager Marketing acquired knowledge of confidential manufacturing process and quality control documents and manuals that the work products of the appellant. Although the respondent's basic responsibilities were limited to sales and marketing of South. Region, his office was situated at the appellant's corporate marketing office at the factory premises. It was alleged that the respondent, therefore, had in his possession/charge the appellant's confidential records including but not limited to national sales budget, national sales plans, marketing policies and strategies, advertisement budget and plans, trade receivable report on national as well as regional basis, names and addresses of retai outlets of automotive batteries in Pakistan and statutory records. T appellant alleged that respondent was obligated not to accept employme for a period of two years with any other similar organization but breach respondent has accepted employment associated in a substantial similar position in company engaged in competitor business where t appellant was looking after sale of south region. The appellant's c that, he came to know in/or about 3rd week of May, 2008 respondent has joined appellant competitors filed suit for perma injunction to restrain the respondent from working and associating I business of any organization engaged in manufacture and sale of led electric storage batteries heavily automotive batteries. The appellant filed application under Order XXXIX, rules 1 and 2, C.P.C.
3. Where respondent filed application under Order XXXIX, rule 4 to recall the interim order passed.
4. ' After hearing the learned counsel for the parties application under Order XXXIX, rules 1 and 2, C.P.C.
5. Filed by the appellant was dismissed as appellant had failed to make out a prima facie case vide order dated 19-8-2008.
6. ' Aggrieved by the said order, the appellant has preferred this appeal.
7. ' Learned counsel for the appellant vehemently argued that the respondent was appointed as General Manager Sales for Sindh and Balochistan. By annual appraisal letter dated 12-6-2007 restriction was imposed upon the respondent that in case he has to leave his job due to any reason, he will not join for at least a period of two years any such company/organization in private or public sector which directly or indirectly competes Exide Pakistan Ltd. And any of its products. It was further contended that the respondent not only confirmed, but also accepted the terms and conditions mentioned in the said letter in writing. The respondent on 4-2-2007, resigned from the service of the appellant and such resignation was accepted by the appellant. The respondent being an officer of the appellant was discharging his duties as General Manager Marketing, made privy to a number of original ideas pertaining to the appellant's business, plans, quality control, formulated, developed and advanced by the appellant. The office of the respondent was situated at the appellant's factory premises and the respondent had in his possession appellant's confidential record including national sale budget, national sale plans, marketing policies and strategies, advertisement budget and plans, trade receivable reports on national as well as regional basis, names and addresses of retail outlets of automotive batteries in Pakistan, which he will use against the appellant y joining service in a firm admittedly having competitive rivalry of the ppellant. The respondent, once accepted restrictive covenant clause nder law cannot engage in any business competitive to the appellant's siness or join service of any corporate body which competes with the pellant's business, i,e, Exide Pakistan Ltd. Having information smetime in the third week of May, 2008 that the respondent has joined vice of a competitor, the appellant served a legal notice dated 5-2008, filed suit for permanent injunction to restrain the respondent working or associating in the business of any organization engaged e manufacturing and sale of lead acid electric storage batteries in stan for a period of 24 months from 4-12-2007, being the date of ation of respondent's employment with the appellant. Ad interim stay was granted on 28-5-2008. It was contended by the learned counsel for the appellant that a restrictive covenant not to join any service or business competitive to the business of the appellant is the lawful restriction and since the respondent had accepted such covenant, therefore, he cannot join service in any organization engaged in a business in which the appellant is engaged. Learned counsel for the appellant in support of her contention drew our attention to commentary of Chitty on Contract, 29th Edition, Volume I, where a covenant putting restriction on an employee in respect of trade secrets and connection with the customers were discussed. Learned counsel for the appellant also drew our attention to commentary of Halsbury on Law of England, 4th Edition, Volume.47, where the learned author has discussed that while dealing with the restrictive covenants reasonableness of it has to be looked into and relied upon the case of Hafeezullah Khan and 2 others v. Al-Haj Chaudhri Barkat Ali and 2 others, PLD 1998 Kar:274. During the course of arguments, learned counsel for the appellant stated that the appellant is ready to pay three months' salary to the respondent provided respondent adheres to restrictive covenant, however, the appellant has no objection if the respondent works in northern region of Pakistan.
8. ' Mr. Abdul Qayyum Abbasi, learned counsel for the respondent, argued that the appellant has manoeuvred letter dated 12-6-2007, in which alleged restrictive covenant is mentioned by inserting words "I confirm that I fully accept the terms and conditions as set out above" and in this regard he heavily relied upon copy of the letter available on the file where such words did not appear. While arguing that the respondent is not bound by the alleged restrictive covenant in the letter dated 12- 6-2007, learned counsel for the respondent argued that the respondent was forced to leave the service of the appellant before three years to become entitled for pension. The appellant created a hostile atmosphere in the office and under these circumstances the respondent was left with no other option but to disassociate himself from the service of the appellant. As regards the date of knowledge, alleged by the appellant that of 3-5-2008, learned counsel drew our attention to document, available on record and argued that right from the day one of hi resignation it was in the knowledge of the appellant that the responde has joined service of a company engaged in manufacturing lead aci batteries and present suit has been filed mala fidely against him. In repl to the arguments of learned counsel for the appellant about trade secre learned counsel for the respondent argued that the respondent remai in the sale department throughout his service and by nature of its job has no access so far as the manufacturing of the batteries is conceri As regards the list of customers, while denying that any such list of appellant's customers is in possession of the respondent, learned could argued that the manufacturers of lead acid batteries deliver their batteries to the dealers of said batteries, who then sell it to individual customers. The list of retail outlets of lead acid batteries is available in the market easily and can be secured by anyone. The retail outlets dealers have their own association and any person can approach to the association and can get information about name, address of retailer of batteries. Learned counsel for the respondent further argued that the restriction covenant in the agreement is void under Article 18 of the Constitution and also relied upon Ordinance LII of 2007, Competitive Ordinance, 2007 and argued that in terms of the said Ordinance such restriction imposed upon the respondent is void and in this regard he heavily relied upon section 4 of the Ordinance, 2007, which provided that no undertaking or association of undertaking shall enter into any agreement in respect of production, supply, distribution, etc. Are the provisions of service which have object or effect of preventing or restricting or reducing competition within the relevant market unless exempted under section 5 of the Ordinance. In support of his contention learned counsel for the respondent relied upon the cases of Shri Gopal Paper Mills Ltd. v. Sunder K. Ghansham AIR 1962 Calcutta 61, Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd. AIR 1967 SC 1098 and Superintendence Company of India (P.) Ltd. v. Krishan Murgui, AIR 1980 SC 1717.
9. ' We have taken into consideration respective arguments advanced by the learned counsel for the parties and perused the record.
10. ' The respondent joined service of the appellant on 9-3-1971 as Sales Representative in Marketing Department of the appellant. In the offer letter, it was stated that respondent will initially put through a training course at factory premises until the end of March, 1971 whereafter respondent will be posted as sales representative Karachi. Respondent was given increment in the salary by various letters "annual salary was reviewed from time to time". From perusal of the salary, increment letters from 1979 to 2006 it appears that not only respondent's salary was increased but also he was granted additional facilities like in the 1985 respondent became entitled for entertainment allowance. In 1986 became entitled for company car scheme. In 1995 respondent was promoted as Assistant General Manager Marketing with benefit of soft furnishing domestic servant apart from salary. In 1996 respondent was promoted as General Manager.
11. ' Letters of increment of salary issued from time to time are identical giving details of benefit, which employees of appellant were entitled with ex-gratia is exclusive of such increment which may inform by covenant through the covenant order 2007-2008. Revised pay-scale issued on 12-1-2007 was in all respects identical of the revised pay-scale letters issued from time to time except that in the last para.. Of letter restrictive covenant has been inserted which reads as under:--- "If you have to leave this job due to any reason you will not join, for at least for a period of two years, any such company/organization either in the private or public sector which directly or indirectly competes with Exide Pakistan Limited in any of its products."
12. ' The appellant alleged that respondent in writing accepted the terms and conditions as set out in the letter dated 12-6-2007 containing restrictive covenant.
13. ' On the other hand respondent specifically denied and said that appellant manoeuvred the letter by inserting "I accept terms and conditions as set out above".
14. ' The respondents case is that, he accepted the letter of increment in normal course without taking note that appellant has put additional terms in it. The question, "whether respondent accepted restrictive covenant incorporated in the letter dated 12-6-2007" can be answered only after recording of evidence. However it is yet to be answered, whether such restrictive covenant can be introduced after respondent had served appellant company for almost more than 35 years. Any change in the terms and conditions of the service to the disadvantage of employee cannot be made without the consent of an employee. Principle of equality of bargaining is to be looked into while taking into consideration a clause introduced in terms and conditions of the employment after 35 years of service to the disadvantage of the employee.
15. ' In the case of Karnal Distillery Co., Ltd. And others v. Ladhi Parshad Jiswal and another, AIR 1958 Punjab 190 it was held that"-- "Presumption of undue influence is raised where the Court regards the transaction as prima facie unfair and the person who is benefited by it, is required to show, that in fact it was a fair and reasonable deal, and he did not take advantage of his position or of the necessitous circumstances or inexperience of the other."
16. ' Section 16 of the Contract Act deals with the matter relating to contract said to be induced by "undue influence".
17. ' In terms of subsection (3) of section 16 of the Contract Act if it is established that a person who is in a position to dominate the will of another entered into a contract with him and if the transaction appeared either on the face of it or the evidence adduced to be unconscionable, the burden is upon the person who was dominating the will of another to prove that such contract was not inducted by undue influence.
18. ' We would not like to discuss this aspect of the matter in detail, as same may prejudice interest of either of the parties before the trial Court except to say that appellant has not placed on record any document that such restrictive covenant was incorporated in the letter issued to all employees on their pay-rolls and all have accepted the same.
19. ' Be that as it may, a restrictive covenant if it is for a reasonable period of time, for a reasonable area where party was asked not to indulge in activity, Court can grant relief to a party complaining violation of covenant. The Court has also to see while enforcing restrictive covenant that employee may take advantage of secret information which information he had acquired while discharging his duty against the interest of employer. The respondent, admittedly, joined service as sales representative, during 37 years of service in sales department of the appellant and as such it cannot be said that while discharging his official duty as sales representative/Deputy General Manager Marketing, respondent acquired any information about quality control formulated, developed by the appellant-company.
20. ' As regards the apprehension of the appellant that respondent being sales representative can use information of appellant's client such apprehension in our view is also unfounded for the reason that appellant company is engaged in manufacturing and sale of lead acid battery such batteries are available in the market at retailer outlet situated in various markets of every city and town and the lists of such dealers are easily available from the association of traders.
21. ' The respondent's salary was increased on 6-6-2006 from Rs,7,39,268 to Rs,1,01978 and a sum of Rs,62,710 increment was given from the last salary he was drawing whereas by a letter dated 12-6- 2007 only an increment of Rs,7,462 was given and further restrictive covenant was incorporated in the letter informing about the increment in the salary. Neither any description nor any change in the nature of respondent duty was made and the respondent remained officer to look after sale of the appellant battery for South Zone. We would like to mention he was promoted as General Manager Marketing South Zone in the year, 1996 and remained on the said post upto date of his resignation i,e, 4-12-2007. No restrictive covenant was incorporated in the letter of increment issued from time to time in the absence of any material on record that due to change in the nature of the duty of the respondent it became necessary for the appellant to insert restrictive covenant in terms and condition of the employment and such restriction cannot be termed in our tentative view as reasonable restriction.
22. ' Ms. Sana Minhas learned Advocate for the appellant in support of her contention while relying upon the case of Hafeezullah Khan and 2 others v. Al-Haj Chaudhri Barkat Ali and 2 others, PLD 1998 Kar. 274, the Honourable High Court held that "sanctity of contracts where parties have lawfully entered into mutual commitments, with open eyes and free volition, maturing into contractual obligations such cannot easily be allowed a unilateral and wilful disclaimer".
23. 'The question, whether incorporated restrictive covenant in a letter communicating increment in the salary issued every year, after 30 years of service can be termed as entering into a contract with open eyes and free volition is not free of doubt. Respondent exclusively denied that he was put on notice about restrictive covenant incorporated in the letter of increment of salary and respondent has not given consent to the clause inserted in the letter with mala fide intention and blackmailing him. Respondent's case is apart from that there was no restrictive covenant and he is not bound by any covenant, the respondent drew our attention to a letter of resignation dated 4- 12-2007 the Managing Director of the Company recorded that "resignation in compliance to understanding on call back from forced leave, he may be formally released" interviews of selected is scheduled on Saturday (December). We would like to mention here that respondent in his counter-affidavit alleged that on 8-9-2008 on mobile phone, Chairman used vulgar words on telephone and then instructed him not to attend the office in future with effect from 10-9- 2007. On the intervention of the Managing Director, Chairman reviewed the decision and called the respondent again to rejoin the office after submitting letter of regret. The defendant accordingly submitted letter of regret dated 9th September, 2008 whereby it was mutually agreed between the management of the appellant company and respondent that defendant will leave the service of the appellant at opportunity of time and perhaps it is for this reason that the chairman of the appellant company noted on the resignation letter that the same in compliance to understanding and call back from forced leave, what we have stated hereinabove in our tentative view that respondent has not acquired any secret information in discharging of this duty to put restriction upon him to join service of another organization engaged in a business of similar nature as a person engaged in sale department at best respondent apart from acquiring knowledge of sales representative in this specified field may have also know to some extent about the clients of the appellant but merely because respondent may have some information or knowledge about client of appellant company dealers who used to sell the batteries their name along with address are easily available in the market and as such, such information in any way cannot be termed as any secret information.
24. ' Another aspect with which to disentitle the appellant company from the relief of injunction is laches on his part in approaching Court seeking protection under the covenant even if for the sake of argument we accept that there was a legal binding reasonable restrictive covenant and respondent acquire some information which may affect business of the appellant, the, appellant on account of laches is not entitled for injunction.
25. ' Although in the memo of plaint appellant alleged that appellant came to know about the joining of the respondent's employment in the organization engaged in competitive business on the 3rd of May, 2008 and served legal notice dated 24-5-2008, the respondent tendered resignation on 4-12- 2007 to release him from the duty before 3-10-2008. The appellant on 1-1-2008 issued a certificate of appreciation and on the same good wishes called to start of the journey for better tomorrow was posted to respondent on his address of company which he joined, the appellant then forwarded relating to annual subscription and membership fee to the respondent on 27-3-2C08 at the address of the competitive company joined by the respondent. On the basis of these documents we are of the view that right from day one appellant had knowledge about joining of respondent as in company engaged in a similar nature of business of the appellant, but right from 1-1-2008 till 4-5-2008 when notice was served and then filing of the suit. On 28-5-2008, the appellant has not taken any action to restrain the respondent from violating restrictive covenant whatever the right appellant may have by his own conduct, the appellant is now not entitled to equitable relief of injunction alleged some information if any may by time despite having notice of violation and not taking action for about 5 months' inaction on the part of the respondent immediately on having information to restrain the respondent from using secret information he may have received in discharge of his duties disentitle the appellant as such information by the time has already been dilated, learned Single Judge discussed the principle of law granting injunction in the matter pertaining to restrictive clause in detail and as such we are not reproducing such discussion again. The appellant failed to make out a prima facie case nor balance of convenience lies in his favour to call for interference in the order which is impugned herein.