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1967 SCC OnLine SC 72 : (1967) 2 SCR 378 : AIR 1967 SC 1098 :
(1967) 1 LLJ 740 : (1967) 2 SCJ 317
In the Supreme Court of India
(BEFORE R.S. BACHAWAT AND J.M. SHELAT, JJ.)
NIRANJAN SHANKAR GOLIKARI … Appellant;
Versus
CENTURY SPINNING AND MANUFACTURING CO.
LTD. … Respondent.
Civil Appeal No. 2103 of 1966*, decided on January 17, 1967
Advocates who appeared in this case:
A.K. Sen, Senior Advocate (Rameshwar Dial and A.D. Mathur,
Advocates, with him), for the Appellant;
S.V. Gupte, Solicitor-General of India (R.P. Bhatt, R.A. Gagrat and
G.L. Sanghi, Advocates, and B.R. Agarwala, Advocate of Gagrat and
Co., with him), for the Respondent.
The Judgment of the Court was delivered by
J.M. S HELAT, J.— This appeal by special leave is against the
judgment and order of the High Court of Maharashtra confirming an
order of injunction against the appellant.
2. The respondent company manufactures amongst other things tyre
cord yarn at its plant at Kalyan known as the Century Rayon. Under an
agreement dated January 19, 1961 Algemene Kunstzijde Unie of
Holland (hereinafter referred to as “AKU”) and Vereinigte Clanzstoff
Fabrikan AG of West Germany (hereinafter referred to as “VCF”) agreed
to transfer their technical know-how to the respondent Company to be
used exclusively for the respondent Company's tyre cord yarn plant at
Kalyan in consideration of 1,40,000 Deutsche Marks payable to them by
the respondent Company. Clause 4 of that agreement provided that the
Century Rayon should keep secret until the termination of the
agreement and during three years thereafter all technical information,
knowledge, know-how, experience data and documents passed on by
the said AKU and VCF and the Century Rayon should undertake to enter
into corresponding secrecy arrangements with its employees. The
respondent Company thereafter invited applications for appointments in
its said plant including appointments as Shift Supervisors. On
December 3, 1962 the appellant sent his application stating therein his
qualifications. By its letter dated March 1, 1963 the respondent
Company offered the appellant the post of a Shift Supervisor in the said
tyre cord division stating that if the appellant were to accept the said
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offer he would be required to sign a contract in standard form for a
term of five years. On March 5, 1963 the appellant accepted the said
offer agreeing to execute the said standard contract. On March 16,
1963 he joined the respondent Company and executed on that day the
said contract Ex. 28.
3. Clause 6 of the agreement provided:
“The employee shall, during the period of his employment and
any renewal thereof, honestly, faithfully, diligently and efficiently to
the utmost of his power and skill
(a) * * *
(b) devote the whole of his time and energy exclusively to the
business and affairs of the company and shall not engage directly or
indirectly in any business or serve whether as principal, agent,
partner or employee, or in any other capacity either full time or part-
time in any business whatsoever other than that of the company.”
Clause 9 provided that during the continuance of his employment as
well as thereafter the employee shall keep confidential and prevent
divulgence of any and all information, instruments, documents, etc., of
the company that might come to his knowledge. Clause 14 provided
that if the company were to close its business or curtail its activities
due to circumstances beyond its control and if it found that it was no
longer possible to employ the employee any further it should have
option to terminate his services by giving him three months' notice or
three months' salary in lieu thereof. Clause 17 provided as follows:
“In the event of the employee leaving, abandoning or resigning
the service of the company in breach of the terms of the agreement
before the expiry of the said period of five years he shall not directly
or indirectly engage in or carry on of his own accord or in partnership
with others the business at present being carried on by the company
and he shall not serve in any capacity, whatsoever or be associated
with any person, firm or company carrying on such business for the
remainder of the said period and in addition pay to the company as
liquidated damages an amount equal to the salaries the employee
would have received during the period of six months thereafter and
shall further reimburse to the company any amount that the
company may have spent on the employee's training.”
4. The appellant received training from March to December 1963 and
acquired during that training, knowledge of the technique, processes
and the machinery evolved by the said collaborators as also of certain
documents supplied by them to the respondent Company which as
aforesaid were to be kept secret and in respect of which the respondent
Company had undertaken to obtain secrecy undertakings from its
employees. According to the evidence, the appellant as a Shift
Supervisor was responsible for the running of shift work, control of
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labour and in particular with the specifications given by the said AKU.
5. No difficulty arose between the appellant and the respondent
Company until about September 1964. The appellant thereafter
remained absent from 6th to 9th October, 1964 without obtaining leave
therefor. On 10th October, he took casual leave. On October 12, he
applied for 28 days' privilege leave from October 14, 1964. Before that
was granted he absented himself from the 14th to 31st October, 1964.
On October 31, he was offered salary for 9 days that he had worked
during that month. On November 7, 1964, he informed the respondent
Company that he had resigned from October 31, 1964. The respondent
Company by its letter of November 23, 1964 asked him to resume work
stating that his said resignation had not been accepted. On November
28, 1964 the appellant replied that he had already obtained another
employment.
6. It is clear from the evidence that in October he was negotiating
with Rajasthan Rayon Company at Kotah which was also manufacturing
tyre cord yarn and got himself employed there at a higher salary of Rs
560 per month than what he was getting from the respondent
Company. The respondent Company thereupon filed a suit in the court
at Kalyan claiming inter alia an injunction restraining the appellant
from serving in any capacity whatsoever or being associated with any
person, firm or company including the said Rajasthan Rayon till March
15, 1968. The Company also claimed Rs 2410 as damages being the
salary for six months under clause 17 of the said agreement and a
perpetual injunction restraining him from divulging any or all
information, instruments, documents, reports, trade secrets,
manufacturing process, know-how, etc. which may have come to his
knowledge. The appellant, while admitting that he was employed as a
Shift Supervisor, denied that he was a specialist or a technical
personnel asserting that his only duty was to supervise and control
labour and to report deviations of temperature etc. He also alleged that
the said agreement was unconscionable, oppressive and executed
under coercion and challenged its validity on the ground that it was
opposed to public policy. He challenged in particular clauses 9 and 17
of the said agreement on the ground that whereas clause 9 was too
wide as it was operative not for a fixed period but for life time and
included not only trade secrets but each every aspect of information,
clause 17 precluded him from serving elsewhere in any capacity
whatsoever which meant a restraint on his right to trade or to carry on
business, profession or vocation and that such a term was unnecessary
for the protection of the respondent Company's interests as an
employer.
7. The trial court on a consideration of the evidence led by the
parties held : (1) that the respondent Company had established that
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the appellant had availed himself of the training imparted by the said
AKU in relation to the manufacture of tyre cord yarn, the operation of
the spinning machines and that he was made familiar with their know-
how, secrets, techniques and information; (2) that his duties were not
merely to supervise labour or to report deviations of temperature as
alleged by him; (3) that the said agreement was not void or
unenforceable; (4) that he committed breach of the said agreement;
(5) that as a result of the said breach the respondent company suffered
loss and inconvenience and was entitled to damages under clause 17
and lastly that the Company was entitled to an injunction. On their
findings the trial court passed the following order:
“(1) The injunction is granted, against the defendant and he is
restrained from getting in the employ of or being engaged or
connected as a Shift Supervisor in the manufacture of tyre cord yarn
or as an employee under any title discharging substantially the same
duties as a Shift Supervisor in Rajasthan Rayon, Kotah or any other
company or firm or individual in any part of India for the term
ending 15th March, 1968.
(2) The defendant is further restrained during the said period and,
thereafter, from divulging any of the secrets, processes or
information relating to the manufacture of tyre cord yarn by
continuous spinning process obtained by him in the course of and as
a result of his employment with the plaintiffs,”
8. It is clear that the injunction restrained the appellant only from
serving as a Shift Supervisor and in a concern manufacturing tyre cord
yarn by continuous spinning process or as an employee under any
designation substantially discharging duties of a Shift Supervisor. It
was also confined to the period of the agreement and in any concern in
India manufacturing tyre cord yarn.
9. In the appeal filed by him in the High Court, the plea taken by
him as to undue influence and coercion was given up. The High Court,
agreeing with the trial court, found that the evidence of Dr
Chalishhazar, Mehta and John Jacob established that the appellant had
been imparted training for about nine months during the course of
which information regarding the special processes and details of the
machinery evolved by the said collaborators had been divulged to him.
It also found that as a result of his getting himself employed in the said
rival company, not only the benefit of training given to him at the cost
of the respondent Company would be lost to it but that the knowledge
acquired by him in regard to the said continuous spinning process
intended for the exclusive use of the respondent company was likely to
be made available to the rival Company which also was interested in
the continuous spinning process of tyre cord. The High Court further
found that though the machinery employed by the said Rajasthan
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Rayon might not be the same as that in the respondent Company's
plant the know-how which the appellant acquired could be used for
ensuring continuous spinning yarn. The High Court further found that
Rajasthan Rayon started production of tyre cord yarn from January
1965, that is, two or three months after the appellant joined them
along with two other employees of the respondent Company, that the
cumulative effect of the evidence was that the appellant had gained
enough knowledge and experience in the specialised continuous
spinning process in the tyre cord yarn division of the respondent
Company and that it was evident that he left the respondent
Company's employment only because the said Rajasthan Rayon
promised him a more lucrative employment. The High Court concluded
that it was not difficult to imagine why the appellant's services were
considered useful by his new employers and that the apprehension of
the respondent Company that his employment with the rival company
was fraught with considerable damage to their interest was well-
founded and justified its prayer for an injunction restraining him from
undertaking an employment with the said rival manufactures.
10. As regards the challenge to the validity of clauses 9 and 17, the
High Court held that though the said agreement was with the
respondent Company and the company carried on other businesses as
well, the employment was in the business of Century Rayon. The
appellant was employed as a Shift Supervisor in that business only, the
training given to him was exclusively for the spinning department of
the tyre cord division and his letter of acceptance was also in relation to
the post of a Shift Supervisor in that department. The High Court
therefore concluded that clauses 9 and 17 related only to the business
in the tyre cord division and therefore restraints contained in those
clauses meant prohibition against divulging information received by the
appellant while working in that Division and that clause 17 also meant
a restraint in relation to the work carried on in the said spinning
department. Therefore the inhibitions contained in those clauses were
not blanket restrictions as alleged by the appellant, and that the
prohibition in clause 17 operated only in the event of the appellant
leaving, abandoning or resigning his service during the term of and in
breach of the said agreement. On this reasoning it held that clause 17,
besides not being general, was a reasonable restriction to protect the
interests of the respondent Company particularly as the company had
spent considerable amount in training, secrets of know-how of
specialised processes were divulged to him and the foreign
collaborators had agreed to disclose their specialised processes only on
the respondent Company's undertaking to obtain corresponding secrecy
clauses from its employees and on the guarantee that those processes
would be exclusively used for the business of the respondent Company.
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Furthermore, clause 17 did not prohibit the appellant even from
seeking similar employment from any other manufacturer after the
contractual period was over. The High Court lastly found that there was
no indication at all that if the appellant was prevented from being
employed in a similar capacity elsewhere he would be forced to idleness
or that such a restraint would compel the appellant to go back to the
Company which would indirectly result in specific performance of the
contract of personal service.
11. Counsel for the appellant raised the following three contentions :
(1) that the said agreement constituted a restraint on trade and was
therefore opposed to public policy, (2) that in order to be valid and
enforceable the covenant in question should be reasonable in space and
time and to the extent necessary to protect the employer's right of
property, and (3) that the injunction to enforce a negative stipulation
can only be granted for the legitimate purpose of safeguarding the
trade secrets of the employer. He argued that these conditions were
lacking in the present case and therefore the respondent company was
not entitled to the enforcement of the said stipulation.
12. As to what constitutes restraint of trade is summarised in
Halsbury's Laws of England (3rd Edn.), Vol. 38, at p. 15 and onwards.
It is a general principal of the common law that a person is entitled to
exercise his lawful trade or calling as and when he wills and the law has
always regarded jealously any interference with trade, even at the risk
of interference with freedom of contract as it is public policy to oppose
all restraints upon liberty of individual action which are injurious to the
interests of the State. This principle is not confined to restraint of trade
in the ordinary meaning of the word “trade” and includes restraints on
the right of being employed. The court takes a far stricter view of
covenants between master and servant than it does of similar
covenants between vendor and purchaser or in partnership agreements.
An employer, for instance, is not entitled to protect himself against
competition on the part of an employee after the employment has
ceased but a purchaser of a business is entitled to protect himself
against competition per se on the part of the vendor. This principle is
based on the footing that an employer has no legitimate interest in
preventing an employee after he leaves his service from entering the
service of a competitor merely on the ground that he is a competitor.
[Kores Manufacturing Co. Ltd. v. Kolak Manufacturing Co. Ltd.1]. The
attitude of the courts as regards public policy however has not been
inflexible. Decisions on public policy have been subject to change and
development with the change in trade and in economic thought and the
general principle once applicable to agreements in restraints of trade
have been considerably modified by later decisions. The rule now is that
restraints whether general or partial may be good if they are
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reasonable. A restraint upon freedom of contract must be shown to be
reasonably necessary for the purpose of freedom of trade. A restraint
reasonably necessary for the protection of the covenantee must prevail
unless some specific ground of public policy can be clearly established
2
against it. [E. Underwood & Son Ltd. v. Barker ]. A person may be
restrained from carrying on his trade by reason of an agreement
voluntarily entered into by him with that object. In such a case the
general principle of freedom of trade must be applied with due regard
to the principle that public policy requires for men of full age and
understanding the utmost freedom of contract and that it is public
policy to allow a trader to dispose of his business to a successor by
whom it may be efficiently carried on and to afford to an employer an
unrestricted choice of able assistants and the opportunity to instruct
them in his trade and its secrets without fear of their becoming his
competitors. [Fitch v. Dewes3]. Where an agreement is challenged on
the ground of its being a restraint of trade the onus is upon the party
supporting the contract to show that the restraint is reasonably
necessary to protect his interests. Once, this onus is discharged, the
onus of showing that the restraint is nevertheless injurious to the public
is upon the party attacking the contract. [See Cheshire's Law of
Contract, (6th Edn.) 328, Mason v. Provident Clothing and Supply Co.
4
Ltd. and A.G. of Commonwealth of Australia v. Adelaide Steamship Co.
5
Ltd. ].
13. The courts however have drawn a distinction between restraints
applicable during the term of the contract of employment and those
that apply after its cessation. [Halsbury's Laws of England (3rd Edn.),
Vol. 38, p. 31]. But in W.H. Milsted & Son Ltd. v. Hamp6 where the
contract of service was terminable only by notice by the employer, Eve,
J. held it to be bad as being wholly one-sided. But where the contract is
not assailable on any such ground, a stipulation therein that the
employee shall devote his whole time to the employer, and shall not
during the term of the contract serve any other employer would
7
generally be enforceable. In Gaumont Corporation v. Alexander clause
8 of the agreement provided that—
“the engagement is an exclusive engagement by the corporation
of the entire service of the artiste for the period mentioned in clause
2 and accordingly the artiste agrees with the corporation that from
the date hereof until the expiration of her said engagement the
artiste shall not without receiving the previous consent of the
corporation do any work or perform or render any services
whatsoever to any person, firm or company other than the
corporation and its sub-lessees”.
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On a contention that this clause was a restraint of trade, Porter, J. held
that restrictions placed upon an employee under a contract of service
could take effect during the period of contract and are not in general
against public policy. But the learned Judge at p. 1692 observed that a
contract would be thought to be contrary to public policy if there were a
restraint, such as a restraint of trade, which would be unjustifiable for
the business of the claimants in the case. He however added that he
did not know of any case, although it was possible, there might be one,
where circumstances might arise in which it would be held that a
restraint during the progress of the contract itself was an undue
restraint. He also observed that though for the most part, those who
contract with persons and enter into contracts which one might for this
purpose describe as contracts of service, have generally imposed upon
them the position that they should occupy themselves solely in the
business of those whom they serve but that it would be a question
largely of evidence how far the protection of clauses of that kind would
extend, at any rate during the existence of the contract of service.
Therefore, though as a general rule restraints placed upon an employee
are not against public policy, there might, according to the learned
Judge, be cases where a covenant might exceed the requirement of
protection of the employer and the court might in such cases refuse to
enforce such a covenant by injunction. In William Robinson & Co. Ltd.
8
v. Heuer the contract provided that Heuer would not during this
engagement without the previous consent in writing of William
Robinson & Co., “carry on or be engaged directly or indirectly, as
principal, agent, servant or otherwise, in any trade, business or calling,
either relating to goods of any description sold or manufactured by the
said W. Robinson & Co. Ltd., … or in any other business whatsoever”.
Lindley, M.R. there observed that there was no authority whatsoever to
show that the said agreement was illegal, that is to say, that it was
unreasonable or went further than was reasonably necessary for the
protection of the plaintiffs. It was confined to the period of the
engagement, and meant simply that “so long as you are in our employ
you shall not work for anybody else or engage in any other business”.
There was, therefore, according to him, nothing unreasonable in such
an agreement. Applying these observations Branson, J. in Warner
Brothers Pictures v. Nelson9 held a covenant of a similar nature not to
be void. The defendant, a film artist, entered into a contract with the
plaintiffs, film producers, for fifty-two weeks, renewable for a further
period of fifty-two weeks at the option of the plaintiffs, whereby she
agreed to render her exclusive service as such artist to the plaintiffs,
and by way of negative stipulation not to render, during the period of
the contract, such services to any other person. In breach of the
agreement she entered into a contract to perform as a film artist for a
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third person. It was held that in such a case an injunction would issue
though it might be limited to a period and in terms which the court in
its discretion thought reasonable.
14. A similar distinction has also been drawn by courts in India and
a restraint by which a person binds himself during the term of his
agreement directly or indirectly not to take service with any other
employer or be engaged by a third party has been held not to be void
and not against Section 27 of the Contract Act. In Brahmaputra Tea Co.
Ltd. v. Scarth10 the condition under which the covenantee was partially
restrained from competing after the term of his engagement was over
with his former employer was held to be bad but the condition by which
he bound himself during the term of his agreement, not, directly or
indirectly, to compete with his employer was held good. At p. 550 of
the report the court observed that an agreement of service by which a
person binds himself during the term of the agreement not to take
service with any one else, or directly or indirectly take part in, promote
or aid any business in direct competition with that of his employer was
not hit by Section 27. The Court observed:
“An agreement to serve a person exclusively for a definite term is
a lawful agreement, and it is difficult to see how that can be unlawful
which is essential to its fulfilment, and to the due protection of the
interests of the employer, while the agreement is in force.”
[See also Pragji v. Pranjiwan11 and Lalbhai Dalpatbhai & Co. v.
12 13
Chittaranjan Chandulal Pandya ]. In Deshpande v. Arbind Mills Co.
an agreement of service contained both a positive covenant viz. that
the employee shall devote his whole-time attention to the service of the
employers and also a negative covenant preventing the employee from
working elsewhere during the term of the agreement. Relying on Pragji
V. Pranjiwan Charlesworth v. MacDonald14, Madras Railway Company v.
15 16
Rust , Subba Naidu v. Haji Badsha Sahib and Burn & Co. v.
17
MacDonald as instances where such a negative covenant was
enforced, the learned Judges observed that Illustrations (c) and (d) to
Section 57 of the Specific Relief Act in terms recognised such contracts
and the existence of negative covenants therein and that therefore the
contention that the existence of such a negative covenant in a service
agreement made the agreement void on the ground that it was in
restraint of trade and contrary to Section 27 of the Contract Act had no
validity.
15. Counsel for the appellant, however, relied on Ehrman v.
18
Bartholomew as an illustration where the negative stipulation in the
contract was held to be unreasonable and therefore unenforceable.
Clause 3 of the agreement there provided that the employee shall
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devote the whole of his time during the usual business hours in the
transaction of the business of the firm and shall not in any manner
directly or indirectly engage or employ himself in any other business, or
transact any business with or for any person or persons other than the
firm during the continuance of this agreement. Clause 13 of the
agreement further provided that after the termination of the
employment by any means, the employee should not, either on his sole
account or jointly with any other person, directly or indirectly supply
any of the then or past customers of the firm with wines etc. or solicit
for orders any such customers and should not be employed in any
capacity whatsoever or be concerned, engaged or employed in any
business of a wine or spirit merchant in which any former partner of the
firm was engaged. Romer, J. held these clauses to be unreasonable on
the ground that clause 3 was to operate for a period of 10 years or for
so much of that period as the employer chose and that the word
“business” therein mentioned could not be held limited by the context
to a wine merchant's business or in any similar way. So that the court,
while unable to order the defendant to work for the plaintiffs, is asked
indirectly to make him do so by otherwise compelling him to abstain
wholly from business, at any rate during all usual business hours. The
other decision relied on by him was Mason v. Provident Clothing and
Supply Co. Ltd.,. This was a case of a negative covenant not to serve
elsewhere for three years after the termination of the contract. In this
case the court applied the test of what was reasonable for the
protection of the plaintiffs' interest. It was also not a case of the
employee possessing any special talent but that of a mere canvasser.
This decision, however, cannot assist us as the negative covenant
therein was to operate after the termination of the contract. Herbert
19 20
Morris v. Saxelby and Attwood v. Lamont are also cases where the
restrictive covenants were to apply after the termination of the
employment. In Commercial Plastics Ltd. v. Vincent21 also the negative
covenant was to operate for a year after the employee left the
employment and the Court held that the restriction was void inasmuch
as it went beyond what was reasonably necessary for the protection of
the employer's legitimate interests.
16. These decisions do not fall within the class of cases where the
negative covenant operated during and for the period of employment as
in Gaumont Corporation case and Warner Brothers v. Nelson where the
covenant was held not to be a restraint of trade or against public policy
unless the agreement was wholly one-sided and therefore
unconscionable as in W.H. Milsted & Son Ltd. v. Hamp or where the
negative covenant was such that an injunction to enforce it would
indirectly compel the employee either to idleness or to serve the
employer, a thing which the court would not order as in Ehrman v.
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Bartholomew. There is, however, the decision of a Single Judge of the
Calcutta High Court in Gopal Paper Mills v. Malhotra22 a case of breach
of a negative covenant during the period of employment. This decision,
in our view, was rightly distinguished by the High Court as the period of
contract there was as much as 20 years and the contract gave the
employer an arbitrary power to terminate the service without notice if
the employer decided not to retain the employee during the three years
of apprenticeship or thereafter if the employee failed to perform his
duties to the satisfaction of the employer who had absolute discretion
to decide whether the employee did so and the employer's certificate
that he did not, was to be conclusive as between the parties. Such a
contract would clearly fall in the class of contracts held void as being
one-sided as in W.H. Milsted & Son Ltd. v. Hamp. The decision in Gopal
Paper Mills v. Malhotra therefore cannot further the appellant's case.
17. The result of the above discussion is that considerations against
restrictive covenants are different in cases where the restriction is to
apply during the period after the termination of the contract than those
in cases where it is to operate during the period of the contract.
Negative covenants operative during the period of the contract of
employment when the employee is bound to serve his employer
exclusively are generally not regarded as restraint of trade and
therefore do not fall under Section 27 of the Contract Act. A negative
covenant that the employee would not engage himself in a trade or
business or would not get himself employed by any other master for
whom he would perform similar or substantially similar duties is not
therefore a restraint of trade unless the contract as aforesaid is
unconscionable or excessively harsh or unreasonable or one-sided as in
the case of W.H. Milsted & Son Ltd. Both the trial court and the High
Court have found, and in our view, rightly, that the negative covenant
in the present case restricted as it is to the period of employment and
to work similar or substantially similar to the one carried on by the
appellant when he was in the employ of the respondent Company was
reasonable and necessary for the protection of the company's interests
and not such as the court would refuse to enforce. There is therefore no
validity in the contention that the negative covenant contained in
clause 17 amounted to a restraint of trade and therefore against public
policy.
18. The next question is whether the injunction in the terms in
which it is framed should have been granted. There is no doubt that the
courts have a wide discretion to enforce by injunction a negative
covenant. Both the courts below have concurrently found that the
apprehension of the respondent Company that information regarding
the special processes and the special machinery imparted to and
acquired by the appellant during the period of training and thereafter
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might be divulged was justified; that the information and knowledge
disclosed to him during this period was different from the general
knowledge and experience that he might have gained while in the
service of the respondent Company and that it was against his
disclosing the former to the rival company which required protection. It
was argued however that the terms of clause 17 were too wide and that
the court cannot sever the good from the bad and issue an injunction to
the extent that was good. But the rule against severance applies to
cases where the covenant is bad in law and it is in such cases that the
court is precluded from severing the good from the bad. But there is
nothing to prevent the court from granting a limited injunction to the
extent that is necessary to protect the employer's interests where the
negative stipulation is not void. There is also nothing to show that if the
negative covenant is enforced the appellant would be driven to idleness
or would be compelled to go back to the respondent Company. It may
be that if he is not permitted to get himself employed in another similar
employment he might perhaps get a lesser remuneration than the one
agreed to by Rajasthan Rayon. But that is no consideration against
enforcing the covenant. The evidence is clear that the appellant has
torn the agreement to pieces only because he was offered a higher
remuneration. Obviously he cannot be heard to say that no injunction
should be granted against him to enforce the negative covenant which
is not opposed to public policy. The injunction issued against him is
restricted as to time, the nature of employment and as to area and
cannot therefore be said to be too wide or unreasonable or unnecessary
for the protection of the interests of the respondent Company.
19. As regards clause 9 the injunction is to restrain him from
divulging any and all information, instruments, documents, reports,
etc. which may have come to his knowledge while he was serving the
respondent Company. No serious objection was taken by Mr Sen
against this injunction and therefore we need say no more about it.
20. The appeal fails and is dismissed with costs.
———
*
Appeal by Special Leave from the Judgment and Order dated 28th April, 1966 of the
Bombay High Court in First Appeal No. 526 of 1965.
1
(1959) Ch 108, 126
2
(1899) 1 Ch 300 CA
3
(1921) 2 AC 158, 162-167
4
1913 AC 724
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5
1913 AC 781, 796
6
(1927) 2 AC 158, 162-167
7
(1936) 2 ALI ER 1686
8
(1898) 2 Ch 451
9
(1937) 1 KB 209
10
ILR (XI) Cal 545
11
5 Bom LR 872
12
AIR 1966 Guj 189
13
48 Bom LR 90
14
ILR 23 Bom 103
15
ILR 14 Mad 18
16
ILR 26 Mad 168
17
ILR 36 Cal 354
18
(1898) I Ch 671
19
1916 AC 688
20
1920 3 KB 571
21
3 ALL ER 546
22
AIR 1962 Cal 61
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