P. N. BHAGWATI, M. U. SHAH, J.

( 1 ) THIS appeal raises an important question as to how far a negative stipulation in a contract of personal service can be enforced by the Court by grant of injunction. The facts giving rise to the appeal are few and may be briefly stated as follows. The plaintiffs are a partnership firm having their registered office in Ahmedabad and they carry on business inter alia as Managing Agents of diverse textile mills situate in Ahmedabad. One of those textile mills is Ashok Mills Limited Ahmedabad. The defendant is a Bachelor of Engineering of the Gujarat University and it is common ground that he was at the date of his appointment by the plaintiffs a fresh graduate from the University. By a letter of appoint ment dated 16th May 1962 the plaintiffs appointed the defendant as an Assistant Engineer on probation for a period of three months in Ashok Mills Limited Ahmedabad. On the expiration of the period of three months specified in the letter of appointment the probation was extended for a further period of three months and on the expiration of the said period the defendants appointment as an Assistant Engineer was confirmed and a contract dated 25th June 1963 was executed by and between the plaintiffs and the defendant. The contract provided that the defendant will diligently faithfully and to the best of his ability and capacity serve as an Assistant in the Engineering Department for a period of three years from 1st May 1963. During the period of the contract the defendant was to receive monthly basic salary of Rs. 230. 00 per month for the first year Rs. 270. 00 per month for the second year and Rs. 310. 00 per month for the third year. After the expiration of the period of the contract each party was at liberty to terminate the service by giving one months notice to the other. Clauses 7 and 9 of the contract contained what may be termed negative stipulations and since the entire controversy between the parties has centred round these stipulations it would be desirable to set them out in extenso. Clauses 7 and 9 of the contract ran as follows:7 That the said Assistant in Engineering Department shall devote his whole time and attention to the services of the firm 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 in any concern company or with individual as an Assistant in Engineering Department or otherwise in any capacity whatever be connected with an) firm or company in any part of India or elsewhere for the space of the said term or any portion of the unexpired period of the said term. 9 That the said Assistant in Engineering Department shall not leave the services of the said firm and shall not serve or engage himself directly or indirectly for any other person firm or company in India or elsewhere in any capacity whatever and if the said Assistant in Engineering Department attempts to do so. in addition to and without prejudice to any right that the firm may have to claim damages from him in respect of breach or attempted breach of this article of agree- ment by him. Pursuant to the contract the defendant served the plaintiffs as an Assistant in the Engineering Department of Ashok Mills Limited Ahmedabad from 1 May 1963. Though the period of the contract had not yet expired the defendant by his letter dated 15th January 1964 tendered his resignation from the post of Assistant in the Engineering Department and requested the plaintiffs to accept the resignation and to relieve him on or before 31 january 1964. The resignation was presumably given by the defendant as he wanted to take up service with another employer. The plaintiffs refused to accept the resignation and intimated to the defendant that they were not prepared to relieve the defendant from service. As the plaintiffs apprehended that the defendant would notwithstanding the refusal leave their service and join service with some other employer t

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