# Non-Competes in India[^about] India voids post-employment non-compete agreements under Section 27 of the Indian Contract Act, 1872 — no matter how reasonable in time, area, or scope — leaving only a narrow sale-of-goodwill exception, in-term covenants, confidentiality, targeted non-solicitation, garden leave during notice, and cost-based employment bonds. ## Are post-employment non-compete agreements enforceable in India? {#post-employment-noncompetes} **Short answer.** No. India voids post-employment non-compete agreements by statute. Section 27 of the Indian Contract Act, 1872 makes any agreement that restrains someone from exercising a lawful profession, trade, or business void *to that extent*, and the Supreme Court has held that a service covenant operating after employment ends is void — a position it calls *completely settled* [^stat-s27-void][^krishan-murgai-void][^percept-settled]. This makes India fundamentally different from a *reasonableness* jurisdiction such as England or Singapore. India codified the rule in 1872, so an Indian court does not weigh a post-employment covenant's duration or geography against the employer's interest — a clause that restrains a former employee from competing is simply void under Section 27 [^stat-s27-void]. "Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void."[^stat-s27-void] The Supreme Court settled the post-employment position decades ago. In *Superintendence Co. of India v. Krishan Murgai*, it held that a covenant extended past the end of the service is void under Section 27 [^krishan-murgai-void]. "Under Section 27 of the Contract Act, a service covenant extended beyond the termination of the service is void."[^krishan-murgai-void] The Court reaffirmed and generalized that rule in *Percept D'Mark (India) v. Zaheer Khan*, describing the law on post-contractual restraints as fixed [^percept-settled]. "The legal position with regard to post-contractual covenants or restrictions has been consistent, unchanging and completely settled in our country."[^percept-settled] The narrow things an Indian employer *can* protect — the goodwill it buys in an acquisition, its genuine confidential information, in-term exclusivity, and cost-based training bonds — are each addressed in the questions below. > [!NOTE] > **Practice note.** > > Do not paper an Indian employee with a US- or UK-style non-compete form and assume a court will enforce or narrow it because it looks *reasonable*. India treats a post-employment non-compete as void rather than reforming it, so a covenant copied from a reasonableness jurisdiction gives an Indian employer no enforceable restraint at all [^stat-s27-void][^krishan-murgai-void]. ## Does it matter if an Indian non-compete is short, narrow, or paid for? {#reasonable-noncompete} **Short answer.** No. A post-employment non-compete does not become enforceable in India because it is limited to a few months, a small area, or supported by a payment. Unlike England's *reasonableness* doctrine, Section 27 admits no reasonableness or *partial restraint* saving for a post-term covenant unless it fits a statutory exception, and the Delhi High Court reaffirmed in 2025 that a restraint on post-employment work is void [^krishan-murgai-no-reasonableness][^q2-percept-s27][^varun-tyagi-void]. In *Krishan Murgai*, the Supreme Court drew the line that separates Indian law from the English approach: the *reasonableness* test that rescues a narrowly tailored covenant elsewhere does not apply to a Section 27 case at all, except within the sale-of-goodwill exception [^krishan-murgai-no-reasonableness]. "Neither the test of reasonableness nor the principle of that the restraint being partial was reasonable are applicable to a case governed by Section 27 of the Contract Act, unless it falls within Exception 1."[^krishan-murgai-no-reasonableness] *Percept* states the operative rule directly: a covenant reaching past the term of the contract is void and unenforceable [^q2-percept-s27]. "Under Section 27 of the Contract Act (a) a restrictive covenant extending beyond the term of the contract is void and not enforceable."[^q2-percept-s27] This is not a fading doctrine. In *Varun Tyagi v. Daffodil Software*, decided in June 2025, the Delhi High Court held that an employment-contract term restricting a worker's right to take up employment after the contract ends is void under Section 27 [^varun-tyagi-void]. "In view of the above, it is clear that any terms of the employment contract that imposes a restriction on right of the employee to get employed post-termination of the contract of employment shall be void being contrary to Section 27 of the ICA."[^varun-tyagi-void] > [!CAUTION] > **Drafting note.** > > Do not try to save a post-employment non-compete by trimming its duration, shrinking its territory, or attaching a payment. None of those moves brings an Indian covenant within Section 27, because the statute has no reasonableness gateway for post-term restraints — the covenant is void either way [^krishan-murgai-no-reasonableness][^q2-percept-s27]. ## Can an Indian employer restrict competition during employment? {#during-employment} **Short answer.** Yes. A negative covenant that binds an employee to serve the employer exclusively *during* the employment is not treated as a restraint of trade and does not fall under Section 27, and a court may, in its discretion, enjoin breach of that negative promise under Section 42 of the Specific Relief Act, 1963 [^golikari-in-term][^sra-s42]. The Supreme Court drew the during- versus post-employment line in *Niranjan Shankar Golikari v. Century Spinning & Mfg. Co.*, holding that an in-term exclusive-service covenant is outside Section 27 [^golikari-in-term]. "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."[^golikari-in-term] The Court was explicit that timing is what changes the analysis — the objections that defeat a covenant after employment ends do not apply while the contract is still running [^q3-golikari-distinction]. "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."[^q3-golikari-distinction] The same distinction reaches beyond employment. In *Gujarat Bottling Co. v. Coca Cola Co.*, the Supreme Court upheld an in-term exclusive-dealing covenant in a commercial franchise, reasoning that a restriction confined to the life of the contract is not a restraint of trade — and *Percept* confirms the doctrine is not limited to employment contracts [^gujarat-in-term][^q3-percept-not-confined]. "As held by this Court in Gujarat Bottling vs. Coca Cola (supra), this doctrine is not confined only to contracts of employment, but is also applicable to all other contracts."[^q3-percept-not-confined] The procedural mechanism is Section 42 of the Specific Relief Act, which lets a court enjoin breach of a negative covenant even though it cannot order the affirmative service to be performed — though that relief is discretionary and conditioned on the plaintiff's own performance of the contract [^sra-s42]. > [!CAUTION] > **Drafting note.** > > An in-term exclusivity or *whole-time service* covenant is enforceable, but it must be confined to the period the employment or contract is actually running — the moment it purports to operate after the relationship ends, it crosses into Section 27 and is void. Draft the obligation to expire with the contract, and rely on Section 42 of the Specific Relief Act for an injunction during the term [^golikari-in-term][^sra-s42]. ## Are customer and employee non-solicitation clauses enforceable in India? {#non-solicitation} **Short answer.** Sometimes — a targeted non-solicitation clause is more defensible than a non-compete, but the outcome is fact-sensitive. Indian courts have upheld a non-solicitation-of-employees clause as a restriction on the contracting *parties* rather than on the employees, and have granted only narrow injunctions against soliciting a former employer's customers — but they will not let a *confidentiality* or non-solicitation theory become a monopoly over the departing worker's clients [^wipro-not-hit][^desiccant-injunction][^amex-monopoly]. On employee non-solicitation, the Delhi High Court in *Wipro Ltd. v. Beckman Coulter International* treated a clause barring one company from soliciting the other's staff as a restriction on the companies, not on the employees, so it fell outside Section 27 [^wipro-parties][^wipro-not-hit]. "In my view, therefore, the non-solicitation clause does not amount to a restraint of trade, business or profession and would not be hit by Section 27 of the Indian Contract Act, 1872 as being void."[^wipro-not-hit] Critically, the remedy is a claim against the contracting party, not an order preventing the employees themselves from being hired [^wipro-remedy]. "The remedy lies in the claim for damages and an injunction against solicitation in future."[^wipro-remedy] The setting matters: *Wipro* arose between two contracting *companies*, so it most directly supports a business-to-business non-solicitation clause. An employer's clause aimed at its *own* departing employee is on weaker ground and is read against the right-to-livelihood limit below. On customer non-solicitation, the relief Indian courts will grant is narrow. In *Desiccant Rotors International v. Bappaditya Sarkar*, the Delhi High Court refused to bar a former employee from working for a competitor at all; the only restraint it imposed was an injunction against approaching the plaintiff's own suppliers and customers [^desiccant-injunction], and even then it stressed that the employee's right to livelihood prevails over the employer's wish to be free of competition [^desiccant-livelihood]. "It is this attempt to protect themselves from competition which clashes with the right of the employees to seek employment where so ever they choose and in a clash like this, it is clear that the right of livelihood of the latter must prevail."[^desiccant-livelihood] The outer limit is set by *American Express Bank v. Priya Puri*, where the Delhi High Court rejected the idea that an employer can lock up its customer base through a former employee [^amex-monopoly]. "In my opinion no Bank should be allowed to create monopolies on the ground that they have developed exhaustive data of their clients/customers."[^amex-monopoly] > [!CAUTION] > **Drafting note.** > > A *narrowly drawn* non-solicitation clause is the more defensible cousin of a non-compete in India, but do not over-read it. An employee non-solicitation clause is enforced against the contracting party as damages or an anti-solicitation injunction, never as a no-hire bar on the workers; and a customer non-solicitation clause cannot be stretched into a *de facto* non-compete that fences off the former employee's livelihood [^wipro-remedy][^desiccant-livelihood]. ## Is garden leave enforceable in India? {#garden-leave} **Short answer.** Only during the notice period, while the employee is still on the rolls. Garden leave inside the notice period works as an *in-term* exclusive-service covenant, which Section 27 does not reach [^q5-golikari-in-term]; but a *garden leave* clause that operates after the employee has ceased employment is prima facie in restraint of trade and hit by Section 27 — even though the employer keeps paying — because it stops the former employee from working elsewhere [^vfs-garden-leave][^vfs-obstruct]. In *VFS Global Services v. Suprit Roy*, the Bombay High Court considered a clause requiring a departed employee to sit out a period after leaving, with pay, and held it to be a post-cessation restraint that Section 27 voids [^vfs-garden-leave]. "The Garden Leave Clause is therefore, prima facie in restraint of trade and is hit by Section 27 of the Contract Act."[^vfs-garden-leave] The court's reasoning was that paying a former employee to stay idle is still an obstruction of their ability to earn a living elsewhere [^vfs-obstruct]. "To obstruct on employee who has left service from obtaining gainful employment elsewhere is not fair or proper."[^vfs-obstruct] > [!CAUTION] > **Drafting note.** > > Structure garden leave as part of the *notice period* — the employee remains employed, on payroll, and bound by in-term duties — rather than as a sit-out that begins after employment ends. A garden-leave obligation that runs after cessation functions as a post-term non-compete and is void under Section 27, and adding a salary does not cure it [^vfs-garden-leave][^vfs-obstruct]. ## Are employment bonds and minimum-service clauses enforceable in India? {#employment-bonds} **Short answer.** Yes, when they recover a genuine cost rather than penalize departure. A minimum-service clause backed by liquidated damages is not a restraint of trade under Section 27 — the Supreme Court held in 2025 that such a clause furthers the employment relationship instead of restraining future work — and any recovery is capped at *reasonable compensation* under Section 74 of the Contract Act [^vijaya-furtherance][^stat-s74]. In *Vijaya Bank v. Prashant B. Narnaware*, decided in May 2025, the Supreme Court upheld a clause requiring an employee either to serve a minimum term or pay a fixed sum, reasoning that the obligation operated within the employment rather than restricting later employment [^vijaya-furtherance]. "The object of the restrictive covenant was in furtherance of the employment contract and not to restrain future employment."[^vijaya-furtherance] The Court concluded that the bond was neither a restraint of trade nor contrary to public policy [^vijaya-holding]. "In light of the aforesaid discussion, we are of the view the restrictive covenant in clause 11(k) of the appointment letter does not amount to restraint of trade nor is it opposed to public policy."[^vijaya-holding] The clause in *Vijaya Bank* arose in a public-sector bank and required either a three-year minimum service or payment of a fixed sum; the Court treated that sum as reasonable compensation for the employer's retention interest and the real cost and burden of fresh recruitment, not as a penalty calibrated to deter resignation. A bond is a damages mechanism, not a penalty, and Section 74 limits what the employer can actually recover to reasonable compensation not exceeding the stipulated sum [^stat-s74]. "the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for."[^stat-s74] > [!NOTE] > **Practice note.** > > Tie an employment bond to a legitimate, documented interest — recruitment, replacement, or training expense the employer actually incurred — and keep the stipulated sum proportionate and amortized over the service period, so that leaving early is not made illusory. A bond pegged to a real pre-estimated expense recovers reasonable compensation under Section 74; a round-number *penalty* set only to deter resignation, untethered from any cost, is liable to be cut down or struck as unreasonable. Because *Vijaya Bank* arose in a public-sector setting, a private employer should be ready to evidence the cost or operational loss its bond recovers [^vijaya-furtherance][^stat-s74]. ## Is there a sale-of-business or goodwill exception to India's non-compete ban? {#sale-of-business} **Short answer.** Yes, but it is narrow. Exception 1 to Section 27 lets someone who sells the *goodwill* of a business agree not to compete within reasonable local limits while the buyer carries on a like business, and the Indian Partnership Act, 1932 adds express *notwithstanding Section 27* carve-outs for partners — covering both an outgoing partner's restraint and restraints made on dissolution. A purely financial or minority-investor exit, with no goodwill transferred, does not qualify [^stat-s27-exception1][^partnership-s36][^partnership-s54]. Exception 1 is the one statutory escape from the Section 27 ban, and it exists so a buyer can protect the goodwill it pays for [^stat-s27-exception1]. "One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business."[^stat-s27-exception1] Parliament added parallel exceptions for partnerships, which underscores how the rule works: a restraint is valid only where the statute expressly says so. The Partnership Act validates a restraint on an *outgoing* partner — the closest analogue to a departing stakeholder — where the limits are reasonable [^partnership-s36], and a like restraint among partners on dissolution [^partnership-s54]. "Partners may, upon or in anticipation of the dissolution of the firm, make an agreement that some or all of them will not carry on a business similar to that of the firm within a specified period or within specified local limits; and notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable."[^partnership-s54] > [!CAUTION] > **Drafting note.** > > Tie a sale-of-business non-compete to the goodwill actually sold, keep it within reasonable local limits, and place it in the purchase agreement — not the seller's employment contract. A covenant bootstrapped onto continued employment, or imposed on a founder who keeps only a minority financial stake without transferring goodwill, falls outside Exception 1 and is void under Section 27 [^stat-s27-exception1][^partnership-s54]. ## What can an Indian employer protect instead of a non-compete? {#what-to-protect} **Short answer.** Genuine confidential information, targeted non-solicitation, in-term exclusivity, garden leave during notice, and cost-based bonds — applied to employees and to independent contractors alike, because Section 27 reaches non-employment contracts too. A confidentiality clause that protects real trade secrets is enforceable, but it cannot be written so broadly that it bars the former employee from working in their field [^vfs-confidentiality][^amex-freedom]. India has no standalone trade-secrets statute, so protection is built from contract and the equitable action for breach of confidence. The Bombay High Court confirmed in *VFS Global* that a clause protecting genuine commercial or trade secrets is not a restraint of trade [^vfs-confidentiality]. "A clause prohibiting an employee from disclosing commercial or trade secrets is not in restraint of trade."[^vfs-confidentiality] The boundary is that confidentiality cannot be used as a back-door non-compete. *American Express Bank v. Priya Puri* held that an employee's freedom to move for a better position is a vital right that an employer cannot curtail by labelling ordinary customer information *confidential* [^amex-freedom]. "Freedom of changing employment for improving service conditions is a vital and important right of an employee which cannot be restricted or curtailed on the ground that the employee has employer's data and confidential information of customers which is capable of ascertainment on behalf of defendant or any one else, by an independent canvass at a small expense and in a very limited period of time."[^amex-freedom] Because Section 27 applies to all contracts, not just employment, an employer cannot escape the ban by engaging a worker as a consultant or independent contractor — the same rules govern, as Section 27's reach in *Percept* (an agency contract) and *Gujarat Bottling* (a franchise) confirms [^q8-percept-not-confined]. These freedoms are reinforced by the constitutional right to practise any profession or carry on any trade or business [^const-art19]. > [!CAUTION] > **Drafting note.** > > Build the protection program around what Indian law actually enforces: a confidentiality clause tied to identifiable trade secrets, a narrow non-solicitation clause, in-term exclusivity, garden leave inside the notice period, and a cost-based bond — used consistently for employees and contractors. Do not define *confidential information* so broadly that it sweeps in the worker's general skill and experience, which would make the clause a *de facto* non-compete and void under Section 27 [^vfs-confidentiality][^amex-freedom]. [^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-06-03. License: CC BY 4.0. Steven Obiajulu, J.D. is not admitted to practise law in India. This article summarizes publicly available India legal sources for general information only — it is not legal advice and does not create a lawyer–client relationship. It may not reflect the most recent legal developments and is provided without warranty as to accuracy or completeness; verify against the primary sources cited and consult a locally qualified lawyer before relying on it. [^stat-s27-void]: **Indian Contract Act, 1872, § 27** — "Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void." *Indian Contract Act, 1872, § 27.* [^krishan-murgai-void]: **Superintendence Co. of India (P) Ltd. v. Krishan Murgai** — "Under Section 27 of the Contract Act, a service covenant extended beyond the termination of the service is void." *Superintendence Co. of India (P) Ltd. v. Krishan Murgai, (1981) 2 SCC 246.* [^percept-settled]: **Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan** — "The legal position with regard to post-contractual covenants or restrictions has been consistent, unchanging and completely settled in our country." *Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan, (2006) 4 SCC 227.* [^krishan-murgai-no-reasonableness]: **Superintendence Co. of India (P) Ltd. v. Krishan Murgai** — "Neither the test of reasonableness nor the principle of that the restraint being partial was reasonable are applicable to a case governed by Section 27 of the Contract Act, unless it falls within Exception 1." *Superintendence Co. of India (P) Ltd. v. Krishan Murgai, (1981) 2 SCC 246.* [^q2-percept-s27]: **Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan** — "Under Section 27 of the Contract Act (a) a restrictive covenant extending beyond the term of the contract is void and not enforceable." *Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan, (2006) 4 SCC 227.* [^varun-tyagi-void]: **Varun Tyagi v. Daffodil Software Pvt. Ltd.** — "In view of the above, it is clear that any terms of the employment contract that imposes a restriction on right of the employee to get employed post-termination of the contract of employment shall be void being contrary to Section 27 of the ICA." *Varun Tyagi v. Daffodil Software Pvt. Ltd., FAO 167/2025 (Delhi High Court, June 25, 2025).* [^golikari-in-term]: **Niranjan Shankar Golikari v. Century Spinning & Mfg. Co.** — "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." *Niranjan Shankar Golikari v. Century Spinning & Mfg. Co., AIR 1967 SC 1098.* [^sra-s42]: **Specific Relief Act, 1963, § 42** — "Notwithstanding anything contained in clause (e) of section 41, where a contract comprises an affirmative agreement to do a certain act, coupled with a negative agreement, express or implied, not to do a certain act, the circumstance that the court is unable to compel specific performance of the affirmative agreement shall not preclude it from granting an injunction to perform the negative agreement: Provided that the plaintiff has not failed to perform the contract so far as it is binding on him." *Specific Relief Act, 1963, § 42.* [^q3-golikari-distinction]: **Niranjan Shankar Golikari v. Century Spinning & Mfg. Co.** — "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." *Niranjan Shankar Golikari v. Century Spinning & Mfg. Co., AIR 1967 SC 1098.* [^gujarat-in-term]: **Gujarat Bottling Co. Ltd. v. Coca Cola Co.** — "Since the negatice stipulation in paragraph 14 of the 1993 Agreement is confined in its application to the period of subsistence of the agreement and the restriction imposed therein is operative only during the period the 1993 Agreement is subsisting, the said stipulation cannot be held to be in restraint of trade so as to attract the bar of section 27 of the Contract Act." *Gujarat Bottling Co. Ltd. v. Coca Cola Co., (1995) 5 SCC 545.* [^q3-percept-not-confined]: **Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan** — "As held by this Court in Gujarat Bottling vs. Coca Cola (supra), this doctrine is not confined only to contracts of employment, but is also applicable to all other contracts." *Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan, (2006) 4 SCC 227.* [^wipro-not-hit]: **Wipro Ltd. v. Beckman Coulter International S.A.** — "In my view, therefore, the non-solicitation clause does not amount to a restraint of trade, business or profession and would not be hit by Section 27 of the Indian Contract Act, 1872 as being void." *Wipro Ltd. v. Beckman Coulter International S.A., 131 (2006) DLT 681 (Delhi HC).* [^desiccant-injunction]: **Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar** — "The injunction only restrains Defendant No. 1 from approaching the plaintiff‟s suppliers and customers for soliciting business which is in direct competition with the business of the plaintiff." *Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar, CS(OS) No. 337/2008 (Delhi HC, 2009).* [^amex-monopoly]: **American Express Bank Ltd. v. Priya Puri** — "In my opinion no Bank should be allowed to create monopolies on the ground that they have developed exhaustive data of their clients/customers." *American Express Bank Ltd. v. Priya Puri, (2006) III LLJ 540 (Delhi HC).* [^wipro-parties]: **Wipro Ltd. v. Beckman Coulter International S.A.** — "It is a restriction cast upon the contracting parties and not on the employees." *Wipro Ltd. v. Beckman Coulter International S.A., 131 (2006) DLT 681 (Delhi HC).* [^wipro-remedy]: **Wipro Ltd. v. Beckman Coulter International S.A.** — "The remedy lies in the claim for damages and an injunction against solicitation in future." *Wipro Ltd. v. Beckman Coulter International S.A., 131 (2006) DLT 681 (Delhi HC).* [^desiccant-livelihood]: **Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar** — "It is this attempt to protect themselves from competition which clashes with the right of the employees to seek employment where so ever they choose and in a clash like this, it is clear that the right of livelihood of the latter must prevail." *Desiccant Rotors International Pvt. Ltd. v. Bappaditya Sarkar, CS(OS) No. 337/2008 (Delhi HC, 2009).* [^q5-golikari-in-term]: **Niranjan Shankar Golikari v. Century Spinning & Mfg. Co.** — "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." *Niranjan Shankar Golikari v. Century Spinning & Mfg. Co., AIR 1967 SC 1098.* [^vfs-garden-leave]: **VFS Global Services Pvt. Ltd. v. Suprit Roy** — "The Garden Leave Clause is therefore, prima facie in restraint of trade and is hit by Section 27 of the Contract Act." *VFS Global Services Pvt. Ltd. v. Suprit Roy, 2008 (2) Bom CR 446 (Bombay HC).* [^vfs-obstruct]: **VFS Global Services Pvt. Ltd. v. Suprit Roy** — "To obstruct on employee who has left service from obtaining gainful employment elsewhere is not fair or proper." *VFS Global Services Pvt. Ltd. v. Suprit Roy, 2008 (2) Bom CR 446 (Bombay HC).* [^vijaya-furtherance]: **Vijaya Bank v. Prashant B. Narnaware** — "The object of the restrictive covenant was in furtherance of the employment contract and not to restrain future employment." *Vijaya Bank v. Prashant B. Narnaware, 2025 INSC 691.* [^stat-s74]: **Indian Contract Act, 1872, § 74** — "the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for." *Indian Contract Act, 1872, § 74.* [^vijaya-holding]: **Vijaya Bank v. Prashant B. Narnaware** — "In light of the aforesaid discussion, we are of the view the restrictive covenant in clause 11(k) of the appointment letter does not amount to restraint of trade nor is it opposed to public policy." *Vijaya Bank v. Prashant B. Narnaware, 2025 INSC 691.* [^stat-s27-exception1]: **Indian Contract Act, 1872, § 27 (Exception 1)** — "One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business." *Indian Contract Act, 1872, § 27, Exception 1.* [^partnership-s36]: **Indian Partnership Act, 1932, § 36(2)** — "A partner may make an agreement with his partners that on ceasing to be a partner he will not carry on any business similar to that of the firm within a specified period or within specified local limits; and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable." *Indian Partnership Act, 1932, § 36(2).* [^partnership-s54]: **Indian Partnership Act, 1932, § 54** — "Partners may, upon or in anticipation of the dissolution of the firm, make an agreement that some or all of them will not carry on a business similar to that of the firm within a specified period or within specified local limits; and notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable." *Indian Partnership Act, 1932, § 54.* [^vfs-confidentiality]: **VFS Global Services Pvt. Ltd. v. Suprit Roy** — "A clause prohibiting an employee from disclosing commercial or trade secrets is not in restraint of trade." *VFS Global Services Pvt. Ltd. v. Suprit Roy, 2008 (2) Bom CR 446 (Bombay HC).* [^amex-freedom]: **American Express Bank Ltd. v. Priya Puri** — "Freedom of changing employment for improving service conditions is a vital and important right of an employee which cannot be restricted or curtailed on the ground that the employee has employer's data and confidential information of customers which is capable of ascertainment on behalf of defendant or any one else, by an independent canvass at a small expense and in a very limited period of time." *American Express Bank Ltd. v. Priya Puri, (2006) III LLJ 540 (Delhi HC).* [^q8-percept-not-confined]: **Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan** — "As held by this Court in Gujarat Bottling vs. Coca Cola (supra), this doctrine is not confined only to contracts of employment, but is also applicable to all other contracts." *Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan, (2006) 4 SCC 227.* [^const-art19]: **Constitution of India, art. 19(1)(g)** — "All citizens shall have the right— (g) to practise any profession, or to carry on any occupation, trade or business." *Constitution of India, art. 19(1)(g).*