- (1.) THIS is an appeal from the judgment of the Joint First Class Sur-Judge at Ahmedabad. The respondents filed this suit against the appellant to restrain him from working in the Rohit Mills, as a weaving master. The appellant had agreed to serve the second respondents under an agreement dated March 28, 1944. The period of service was three years commencing from January 1, 1944. It appears from the record that the appellant was in the service of the second respondents as a weaving master for several years before this agreement was entered into. As the second respondents are the managing agents of a number of mills they reserved liberty to engage the appellant in any of the mills of which they were managing agents. With this general idea the agreement in question was entered into. Clauses 4, 8, 9 and 10 of the agreement are relevant. They run in these terms: 4.That the said weaving master will neither absent himself from his work without leave nor engage himself directly or indirectly to work for any other person firm or company in any capacity whatever nor attempt to impede his employers in their business nor divulge any of the secrets', information or connections to any other person whatever. 8.That the said weaving master shall devote his whole time and attention to the services of the said agents, or if so directed to other agencies, wherein any of the above partners is interested as such, as aforesaid during the said term of three years and shall not during the said term whether he be in the employment or not, get in the employ of or be engaged or be connected as weaving master or as an employee under any title discharging substantially the same duties he may be discharging here with any firm or company or individual in any part of India including. the Indian States for the space of the said years or any portion of the remaining period of the said term. 9.That the 'said weaving master shall not during the continuance of this agreement or thereafter divulge any of the secrets, process or information etc. relating to the manufacturers or generally relating to any affairs of the agents and companies for whom he may work as weaving master in pursuance of these presents. 10,.That the said weaving master hearby agrees not to leave the services of the said agents and not serve or engage himself directly or indirectly to work for any other person, firm or company in India, including the Native States in the same capacity and if the said weaving master attempts to do so the Agents have a right to prevent the said weaving master from doing so. The said agents shall have this right in addition to and without prejudice to any right they may have to claim damages from the said weaving master. . . .
(2.) AFTER working under this agreement for a year the appellant left the respondents'. service and joined the Rohit Mills as a weaving master. The Arvind Mills, in which the appellant was at the time actually engaged as a weaving master, and the managing agents, the second respondents, thereupon filed this suit. AFTER reciting the agreement and the fact that it is difficult to get weaving masters in present times the plaintiffs prayed for an injunction against the defendant from serving elsewhere in breach of the negative covenant contained in the agreement. The prayer is found in para. 12a of the plaint. By his written statement the appellant contended inter alia that the -agreement was not binding on him for the reasons mentioned therein. According to him he had not read and understood the agreement. It was further alleged that at the time of signing the agreement Mr. Kasturbhai of the second respondent firm had agreed that if the appellant obtained service elsewhere on a salary of Rs. 1,000 to 1,200 the second respondents will not object to the appellant accepting such service. The appellant further contended that the agreement was penal and inequitable and therefore should not be enforced. In the trial Court oral evidence was led and the trial Judge accepted the evidence of the second respondents' witnesses in preference to the evidence led on behalf of the appellant. Before us the learned Counsel for the appellant has not argued the question whether the agreement was binding or not. Having regard to the conclusion of the trial Court, he has frankly conceded that he cannot ask the Court to set aside that finding of fact. On behalf of the appellant three points only were urged before us: (1) Whether the covenants of this agreement are unreasonable and in restraint of trade. It was argued that the whole agreement was therefore unenforceable. (2) That this is not a case of granting injunction. The burden of proof is on the respondents and they have failed to show that an injunction is the proper remedy under the circumstances of the case. i (3) That even, if an injunction were to be granted, the terms thereof are so wide that the Court should either refuse to grant the injunction or modify the terms suitably. On the first question it must be pointed out that no issue had been raised in the trial Court to covers the contention that the agreement was void, as it was in restraint of trade. Counsel for the appellant drew our attention to issue No.4. On looking at the relevant portion of the judgment (para. 17) it appears that under this issue it was only contended that the clauses in question were hard, inequitable and penal and therefore the Court should not grant the injunction under the circumstances. I do not find any argument advanced in the trial Court that the agreement was in restraint of trade and therefore void under Section 27 of the Indian Contract Act. Mr. Amin cited several English decisions. I shall briefly deal with them towards the end of the case, as they were sought to be applied also in connection with the third point. It is sufficient to note at this stage that agreements of service, containing a negative cwenant preventing the employee from working elsewhere during the term covered by the agreement, are known to Indian Courts. They were enforced in Pragji v. Pranjiwan (1903) 5 Bom. L. R. 878, Charlesworth v. Macdonald (1898) I. L. R. 23 Bom. 103, Madras Railway Company v. Rust (1890) I. L. R. 14 Mad. 18 which was approved in Subba Naidu v. Haji Badsha Sahib (1902) I. L. R. 26 Mad. 168, and Bum & Co. v. Mcdonald (1908) I. L. R. 36 Cal. 354 Illustrations (c) and (d) to Section 57 of the Specific Relief Act in terms recognise such contracts and the existence of a negative covenant therein. It is therefore futile to contend that the existence of a negative covenant in a service agreement makes the agreement void on the ground that it is in restraint of trade and against the principles found in Section 27 of the Indian Contract Act. All agreements for personal service for a fixed period would, if the appellant's argument were; accepted, be void. An agreement to serve exclusively for a week, a day, or even for an hour necessarily prevents the person so agreeing to serve, from working during that period for anyone other than the person with whom he has so agreed. It can hardly be contended that such an agreement is void. In truth a man who works for a particular wage and for a certain period agrees to work in fact and such an agreement does not restrain him from doing, so. To hold otherwise Would, I think, be a contradiction in terms. In Pragji V. Pranjiwan, the Court dealt with this argument in these terms (p. 881) : The section extends to agreements of a. negative character such as are necessarily implied from contracts for whole time service, even if not expressed therein and the operation of. such contracts as contracts for service, appears in such cases to prevent the application of Section 27 of the Contract Act to, such negative agreements so far as they purport to impose restrictions only during the period of affirmative agreement for service.
(3.) THE decisions mentioned above show that the High Courts in India; have enforced such agreements and have enforced the negative covenant contained therein. It was contended that the restriction preventing the applicant from taking up service elsewhere in India including the Native States was unreasonable and very wide and made the agreement void. THE question whether a particular covenant in a particular agreement was unreasonably wide has to be decided by the nature of the agreement, the qualifications of the employee and the service he has to render, along with the places where the employee can get alternative service of the same -nature. I shall observe at this stage only that under the circumstances of this case, I do not think that the covenant is unreasonably wide, as contended by the appellant. 1 shall consider this aspect of the question in detail when dealing with the English cases. The second contention that no injunction should be granted must depend on the evidence on record. In the; plaint it is alleged that the appellant is a technical employee and in these days of war it is difficult to secure the services of technical men. It is pointed out that if technical employees were allowed arbitrarily to leave service,, after engaging themselves under a definite agreement for a fixed term, the working of" industrial concerns in these days would be impossible. In support of this contention Mr. Kasturbhai gave evidence. After referring to this point generally it was only pressed in a somewhat lukewarm fashion. I can' understand that attitude having regard to the evidence on record. It appears that in the trial Court also this point was not seriously urged. It is not disputed that the appellant is a man of experience and the agreement was made for a definite period of "three years at an increased salary to maintain stability of service of at technical employee. Having considered the evidence on record I do not see any reason to differ from the conclusion of the trial Court that this is a fit case for granting an injunction.;