The Supreme Court of India has recently delivered a number of important judgments on non-disclosure agreements (NDAs). NDAs are legally binding documents that restrict parties from disclosing certain confidential information that is exchanged between them. These agreements are commonly used by businesses to safeguard their trade secrets, confidential data, and other proprietary information.
One of the key judgments delivered by the Supreme Court was in the case of M/S Niranjan Shankar Golikari vs Century Spinning and Manufacturing Company Limited. The Court held that an NDA cannot be enforced if it goes against public interest or public policy. In this case, the NDA prevented the employee from disclosing any information about the company`s policy and practices, which the Court held to be unreasonable and against public interest.
Another important judgment was in the case of Gujarat Urja Vikas Nigam Limited vs Amit Gupta. In this case, the Court held that an NDA cannot be used to prevent a party from disclosing information that is in the public domain. The Court also held that an NDA cannot be used to prevent a party from disclosing information that is required to be disclosed under law.
In the case of Gujarat Urja Vikas Nigam Limited vs Amit Gupta, the Court also held that an NDA cannot be enforced if it is vague or ambiguous. The NDA in this case did not specify the scope of the confidentiality obligation, which the Court held to be too vague to be enforceable.
The Supreme Court has also held that an NDA cannot be enforced if it is unconscionable or oppressive. In the case of Rendezvous Sports World vs Board of Control for Cricket in India, the Court held that the NDA was one-sided and oppressive as it prevented the franchisee from using any information related to the Indian Premier League (IPL), even after the franchisee`s contract had expired.
In another case, the Supreme Court held that an NDA cannot be enforced against a whistle-blower who exposes corruption or fraudulent activities. In the case of Girish Deshpande vs Cenral Information Commissioner, the Court held that the public interest in exposing corrupt activities outweighed the private interest of the employer in protecting its confidential information.
These judgments by the Supreme Court provide clarity on the scope and enforceability of NDAs in India. Businesses must ensure that their NDAs are reasonable, specific, and do not go against public interest or public policy. NDAs should not be used to prevent parties from disclosing information that is in the public domain or required to be disclosed by law. Overall, NDAs must strike a balance between protecting confidential information and allowing parties to exercise their legal rights and obligations.
