EMBEE SOFTWARE PRIVATE LTD Vs. SAMIR KUMAR SHAW

JUDGEMENT

(1.) The Court: Section 27 of the Indian Contract Act, 1872, is involved in this case. It enacts that every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. We are not concerned with the exception clause in that section, save and except for the purpose of interpreting the main section.

(2.) The scope of the law on the subject has to be ascertained first before entering into the facts of this case.

(3.) In England this branch of law is part of their common law. The employer may provide, in the contract of employment, that after cessation of the relationship between the employer and employee, the latter may be restrained from carrying on or being employed in a similar type of business within a reasonable geographical limit or for a reasonable length of time, (see the case of T. Lucas & Co. Ltd. v. Mitchell, 1974 Ch 129, John Michael Design pic v. Cooke and another, 1987 2 ALLER 332 and G. W. Plowman & Son, Ltd. v. Ash, 1964 2 ALLER 10. The same principle was followed and applied by our Supreme Court in the case of Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. Ltd., 1967 AIR(SC) 1098.