Post-employment Non-solicitation clauses restricting employment opportunities are void under Section 27 of the Indian Contract Act, as they infringe on the right to work and lack enforceable proprietary interest.

JUDGMENT

TEJAS KARIA, J

1. The Appellant has filed the present Appeal under Section 104 read with Order XLIII Rule 1(R) of the Code of Civil Procedure, 1908 (“CPC”), being aggrieved by the order dated 03.06.2025 (“Impugned Order”), passed by the learned District Judge-06 (South), Saket Courts, South Delhi (“Trial Court”) in CS DJ 353/2025 (“Suit”).

2. The Impugned Order has allowed an interim injunction in favour of the Respondent restraining the Appellant from working with Digital India Corporation (“DIC”) and National E-Governance Division (“NeGD”) until the final disposal of the Suit filed before the learned Trial Court.

3. Vide the impugned order, it was held that the Respondent had a prima facie case against the Appellant, the balance of convenience lay in favour of the Respondent and if the alleged proprietary information, intellectual property, insider knowledge, source code, as the case maybe, is disclosed by the Appellant, the same shall be detrimental to the Respondent and its employees and will result in an irreparable injury to the Respondent.

FACTUAL BACKGROUND:

4. The dispute has arisen out of the Employment of the Appellant with the Respondent. The Appellant is an Information Technology Engineer and was employed as an Associate in the affiliate company of the Respondent on 29.07.2021, and was transferred to the employment of the Respondent on 01.01.2022. An Employment Agreement dated 01.01.2022 (“Employment Agreement”) was executed between the Appellant and the Respondent to give effect to the employment of the Appellant.

5. The Employment Agreement contained a Non-Solicitation and Non- Compete Clause. The Non-Solicitation and Non-Compete Clause is as follows:

“ D. Non-solicitation and Non-Compete 2.16 The Employee shall not, directly or indirectly, either as an individual on his/her own account or in any capacity or function, during the employment period and for a period of 3 (three) years following the cessation of employment engage into the following:

i. Solicit or attempt to solicit any of the business associates to entice such business associates in any manner or offer/provide substantially the same or competing services as provided by the Company and its affiliates to such business associates; or ii. Directly or indirectly solicit or associate or advise or undertake employment or otherwise deal with any business associate where the Employee first contacted, or was contacted by, or introduced to the business associate in any manner in connection with any business/professional assignments of Company and its affiliates; or iii. Directly or indirectly solicit, associate, advise or otherwise deal with any of the existing Employees of the Company and its affiliates or any person who was employed by the Company and its affiliates within two years prior to such action.”

6. The Respondent was engaged by the DIC pursuant to Letters of Intent dated 01.12.2021, 15.06.2023 and 27.11.2024, which required specialized software professionals, specifically full stack developers, in connection with a high-priority government initiative titled POSHAN Tracker (“Project”). This project is aimed at enhancing nutritional outcomes for children across the country and holds significant public importance. The said engagement remains valid up to 30.06.2026. The relationship between the Respondent and the DIC is that of a ‘Business Associate’.

7. The Respondent had assigned the Appellant to work on the Project as a full stack developer, with effect from January 2023. The Appellant, who was assigned by the Respondent to the Project from January 2023, underwent extensive specialized training, reflecting a considerable investment made by the Respondent. Owing to his enhanced expertise, the Appellant was elevated to a leadership role, wherein he was entrusted with oversight of key project modules and active engagement with stakeholders.

8. The Appellant resigned from his job in the Respondent company on 06.01.2025 and thereafter, served a notice per