High Court Round UpLegal RoundUpTribunals/Regulatory Bodies/Commissions Monthly Roundup

“For a contract to be enforceable, the restraint of trade clause must be reasonable.”

[Rajesh Kumar Gandhi v. Mukesh Dutt]


Read the interesting picks from the stories eported in first week of February.


Delhi High Court


Baazi v. WinZo| Trademark is used by a manufacturer or service provider to distinguish products from those of competitors: Here’s how Winzo appeared dishonest and unfair in adopting Baazi

Explaining the significance of a trademark, Asha Menon, J., observed that,

When people are satisfied with the products supplied by a manufacturer or service provider, they buy them on the basis of the trade mark and over time it becomes popular and well known. Thus, the use of a similar or identical trademark by a competitor in the same product would lead unwary customers to believe that it originates from the same source.

Read full report here…

Whether a ‘blade’ would be covered under S. 397 IPC as a deadly weapon? Del HC explains in view of settled position of law

Mukta Gupta, J., explained under what circumstances would Section 397 of penal Code, 1860 would be attracted.

Rae full report here…

Court under maintenance proceedings under S. 125 of CrPC, can usurp jurisdiction of Civil Courts? Del HC decides

Chandra Dhari Singh, J., decided a maintenance case wherein the marital status of the parties was the crux of the matter and expressed that,

“…there is no straight jacket formula for judging the validity of the marriage between the parties.”

Read full report here…


Kerala High Court


Is not taking treatment for mental illness to bring out a peaceful family atmosphere a form of cruelty and thus, a ground for divorce? Kerala HC answers

In an interesting case the Division Bench of A.Muhamed Mustaque and C.R. Sophy Thomas, JJ., held that not taking treatment for mental illness in order to bring out a peaceful and harmonious family atmosphere can also be counted as cruelty to the persons at the receiving end. Upholding the Family Court’s order granting divorce on the ground of cruelty, the Bench remarked,

“There is no merit in preserving intact a marriage, when the marital tie becomes injurious to the parties. When there is no rose, and only thorns left, and there is no scope for the plant to sprout again, there is no meaning in watering the same, knowing that it is dead forever.”

Read full report here…


Andhra Pradesh High Court


LGBTQ+ community’s right to reservation; Can a transgender claim to be appointed by reservation in spite of failure to secure minimum cut off marks in screening test? AP HC answers 

In a significant case wherein, a transgender had approached the Court seeking benefit of reservation for appointment in police department, M. Satyanarayana Murthy, J., denied to issue direction to the State in favour of the petitioner. The Bench, however, remarked,

“The State is unconscious of the directions issued by NALSA and failed to provide a specific column meant for gender identity for transgender in the proforma of application in the Notification dated 01.11.2018 and did not provide any reservation to transgenders, as they are socially and educationally backward and not in a position to compete with ordinary men and women.”

Read full report here…


National Company Law Tribunal


Operational Creditor is under obligation to recover money from its client and not agent: NCLT decides while dismissing a petition filed under S. 9 IBC

The Coram of H.V. Subba Rao (Judicial Member) and Chandra Bhan Singh (Technical Member) dismissed a petition filed under Section 9 of the IBC while noting that no operational debt existed under Section 5(8) and expressed that,

“Operational Creditor being the principal was always under obligation to recover the money from the client and not from his agent unless the agent failed to perform his duties.”

Read full report here…


Tis Hazari Court


For a contract to be enforceable, restraint of trade clause must be reasonable: Post-termination non-compete clauses are permissible in employment contracts under S. 27 of Contract Act? District Court explains

Holding that, post-termination non-compete clauses in employment contracts are “restraint of trade” and it is impermissible under Section 27 of the Act, Richika Tyagi, C.J-02, expressed that such agreements of restraint are vid because of being unfair and depriving an individual of his or her fundamental right to earn a living.

Read full report here…


Information Commissioner’ Office


Unsolicited marketing calls causing distress to people and disregard to their privacy rights: Would it lead to imposition of monetary penalty? Detailed decision of Information Commissioner’s Office

Andy Curry, Head of Investigations, on noting serious contravention of regulations 21 and 24 of the Privacy and Electronic Communication Regulations 2003 (PECR) has issued Home2sense Limited with a monetary penalty under Section 55A of the Data Protection Act, 1998.

“Home2sense’s dismissive and troubling response, coupled with its failure to disclose any details of its CDRs or any other information which might assist the Commissioner’s investigation shows, in the Commissioner’s view, a complete disregard for the privacy rights of the individuals whom it sought to contact.”

Read full report here…

Case BriefsForeign Courts

Information Commissioner’s Office,UK: Andy Curry, Head of Investigations, on noting serious contravention of regulations 21 and 24 of the Privacy and Electronic Communication Regulations 2003 (PECR) has issued Home2sense Limited with a monetary penalty under Section 55A of the Data Protection Act, 1998.

“Home2sense’s dismissive and troubling response, coupled with its failure to disclose any details of its CDRs or any other information which might assist the Commissioner’s investigation shows, in the Commissioner’s view, a complete disregard for the privacy rights of the individuals whom it sought to contact.”

Background

Home2sense is stated to have used a public electronic communication service for the purpose of making unsolicited calls for the purposes of direct marketing contrary to Regulation 21 of PECR.

What does Regulation 21 of PECR state? 

Regulation 21 applies to the making of unsolicited calls for direct marketing purposes. It means that if a company wants to make calls promoting a product or service to an individual who has a telephone number which is registered with the Telephone Preference Service Ltd (“TPS”), then that individual must have notified the company that they do not object to receiving such calls from it.

Further, Section 55A of the Data Protection Act, 1998 states that:

“(1) The Commissioner may serve a person with a monetary penalty if the Commissioner is satisfied that –

(a) there has been a serious contravention of the requirements of the Privacy and Electronic Communications (EC Directive) Regulations 2003 by the person,

(b) subsection (2) or (3) applies.

(2)  This subsection applies if the contravention was deliberate.

(3)  This subsection applies if the person –

(a)  knew or ought to have known that there was a risk that the contravention would occur, but

(b)  failed to take reasonable steps to prevent the contravention.

The PECR were enacted to protect the individual’s fundamental right to privacy in the electronics communication sector.

Commissioner on perusal of records was satisfied that 675,478 calls were transmitted by Home2sense for the purposes of direct marketing as defined by Section 122(5)DPA18.

Multiple breaches of Regulations 21 and 24 arose from the activities of Home2sense leading to unsolicited direct marketing calls being made to subscribers who were registered with the TPS and who had not notified Home2sense that they were willing to receive such calls and 62 complaints being made as a result.

What does Section 122(5) states?

“…direct marketing as “the communication (by whatever means) of advertising or marketing material which is directed to particular individuals”. This definition also applies for the purposes of PECR (see regulation 2(2) PECR and paragraphs 430 & 432(6) to Schedule 19 of the DPA18).”

Further the Commissioner also noted that deliberate contraventions of Regulations 21 and 24 of PECR were made.

The Commissioner notes Home2sense’s almost complete failure to engage with his investigation and its failure to provide any evidence to suggest it had taken any steps whatsoever to consider the privacy of the individuals who it sought to target. Home2sense’s failure to provide any such information suggests that no safeguards were implemented, and that Home2sense was more than simply negligent in its actions.

Elaborating further, it was also observed that, there were certain complaints which indicated that Home2sense provided misleading names to recipients of their calls and approached some individuals with false representations.

Commissioner has published detailed guidance for companies carrying out marketing explaining their legal requirements under PECR. The said guidance explained circumstances under which organisation can carry out marketing over the phone, by text, by email, by post or by fax.

Specifically the guidance states, that live calls must not be made to any subscriber registered with the TPS, unless the subscriber has specifically notified the company that they do not object to receiving such calls.

Another significant point that was noted was that Home2sense confirmed during the investigation that it did not obtain data from individuals directly and relied wholly on data purchased from third parties, although concerningly it failed to disclose details of its third party data providers or the sources of the data it used.

The Commissioner was highly concerned by Home2sense’s failure to engage with the Commissioner’s request for information about its third-party data providers, and inferred from that no due diligence into the veracity of the data was carried out.

In view of the volume of calls and complaints, it was clear that Home2sense failed to take any reasonable steps to prevent the contravention.

Monetary Penalty

While granting the monetary penalty, Commissioner took into account the following aggravating features:

  • Complaints evidence shows the calls were of a persistent nature and they were known to have caused distress, i.e. there were two recorded instances where Home2sense asked to speak to a named person whose relatives confirmed had passed away.
  • The Commissioner is satisfied that Home2sense carried out these calls, in the knowledge that its actions were likely to be in breach of PECR, with the intention of generating business to ultimately make a financial profit.
  • Home2sense appointed a Representative upon first contact from the Commissioner, however, that Representative was unreliable, dismissive, and uncooperative with the Commissioner’s investigation.
  • There is evidence of complaints continuing to be received regarding Home2sense following the Commissioner’s initial contact, which demonstrates that despite the concerns raised by the Commissioner, it continued to operate unabated.

Stating that making of unsolicited direct marketing calls is a matter of significant public concern, Commissioner decided the penalty in the sum of 200,000 Pounds, adding to this it was stated that if the full payment of the monetary penalty will be done by 2-3-2022, then the same will be reduced by 20%.[Home2sense Ltd. v. Ardeifi, decided on 31-1-2022]