- (1.) This appeal at the instance of the appellant company (origninal plaintiff) is directed against an interlocutory order passed by the High Court in F. A. O. (O. S.) 86 of 1979 refusing to grant temporary injunction in a suit which is still pending. Principally it raises two substantial questions : (a) whether a post-service restrictive covenant in restraint of trade as contained in clause (10) of the service agreement between the parties is void under Section 27 of the Indian Contract Act and (b) whether the said restrictive covenant, assuming it to be valid, is on its terms enforceable at the instance of the appellant company against the respondent
(2.) On March 21, 1980 we dismissed the appeal at the conclusion of the hearing and it was stated that our reasons will follow. We now proceed to give our reasons for the dismissal.
(3.) Briefly stated the facts are these. The appellant company carries on business as valuers and surveyors, undertaking inspection of quality, weighment, analysis, sampling of merchandise and commodities, cargoes, industrial products, machinery, textiles, etc. It has established a reputation and goodwill in its business by developing its own techniques for quality testing and control and possesses trade secrets in the form of these techniques and clientele. It has its head office at Calcutta and a branch at New Delhi and employs various persons as managers and in other capacities in Calcutta, New Delhi and other places. On March 27, 1971 the respondent was employed by the appellant company as the Branch Manager of its New Delhi office on terms and conditions contained in the letter of appointment issued to him on the same date. Clause (10) of the terms and conditions of employment placed the respondent under a post-service restraint that he shall not serve any other competitive firm nor carry on business on his own in similar line as that of the appellant company for two years at the place of his last posting. Since it is vital we set out the said clause which ran thus :- "10. That you will not be permitted to join any firm of our competitors or run a business of your own in similar lines directly and/or indirectly, for a period of two years at the place of your last posting after you leave the company.";