A non-solicitation clause in an employment contract does not amount to a restraint of trade and is not void under Section 27 of the Indian Contract Act, 1872. Soliciting customers to break their contracts with another party is a tort that can be committed by an ex-employee.

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, reported in (1974) Ch 129, John Michael Design plc v. Cooke and another, reported in (1987) 2 AER 332 and G.W. Plowman & Son, Ltd. v. Ash, reported in (1964) 2 AER 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., reported in AIR 1967 SC 1098.

4. But there is an old decision of a Division Bench of the Calcutta High Court which was decided on 21st July, 1874. It was the case of Madhub Chunder Poramanick v. Rajcoomar Doss & Ors., reported in (1875) (Vol. XIV) Bengal Law Reports Page 76. That ancient Division Bench judgment for the first time drew a distinction between the English law and the codified Indian Law and opined that the meaning that was to be ascribed to the word restraint was any kind of restraint. Therefore, any kind of restraint by which a person was prevented from exercising a lawful profession, trade or business was void. It did not matter whether that restraint was partial or appeared to be reasonable. That dictum was substantially followed by the Supreme Court in the case of Percept D— Mark (India) (P) Ltd. v. Zaheer Khan and Anr., reported in (2006) 4 SCC 227 : (AIR 2006 SC 3426) popularly known as the Zaheer Khan case and also by our Division Bench in Electrosteel Castings Ltd. v. Saw Pipes Ltd. & Ors., reported in 2005 (1) CHN page 612.

4A. Now, I come to the facts of this case.

5. The first respondent Samir Kumar Shaw is a B.Com. (Hons.) and joined as a data entry operator in the accounts department of the plaintiff in the year 2002. The second respondent Pritam Lala is a pass B.Sc. graduate and joined the same organisation in the same year as a Sales Executive in Technology Solutions. The third respondent is a B.Sc. and joined the same organisation in 2010 as a Support Executive in Technology Service.

6. All these three employees left the plaintiff company on 16th December, 2011. Prior to that it is alleged that they had incorporated a private limited company being the fourth respondent. They had applied for registration of this company on or about 22nd November, 2011. The fourth respondent company was incorporated on 10th December, 2011. At the time of their leaving the company, the first respondent was Senior Manager (Finance & Accounts) and Regional Manager (Procurement and Logistics), the second respondent was Senior Business Manager (Enterprise Sales, Technology Solutions) and the third respondent was the National Manager and Solution Architect.

7. The case of the plaintiff is like this.

8. The plaintiff has a very large business network with diverse clientele. They render services to them in the field of information technology. While rendering such service files, programmes, know how, formula are prepared by the plaintiff and stored in appropriate softwares. These programmes and files are customer specific or as the learned Counsel for the plaintiff describes them, customised to suit the need of specific clients. The details of these programmes, the clientele of the plaintiff and so on are contained in detail i