Post-employment restraint void under contract law; interim injunction refused for lack of prima facie case and irreparable harm.

A post-employment restraint preventing employees from joining a competitor after leaving service was held void and unenforceable under Section 27 of the Indian Contract Act, 1872, and therefore could not be enforced by injunction. The court also found that the plaintiffs had not established a strong prima facie case, balance of convenience, or irreparable injury to justify interim equitable relief. Allegations of inducement and conspiracy were disputed on rival facts, making final findings unsafe at the interlocutory stage. Injunctive relief was declined because the covenant was contrary to public policy and could not restrain lawful employment mobility or business competition.

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Issues: (i) whether the plaintiffs were entitled to interim injunction restraining the defendants from employing or inducing the plaintiffs' employees and business associates; (ii) whether the post-employment restraint in the plaintiffs' employment contracts was enforceable and could support injunctive relief.

Issue (i): Whether the plaintiffs were entitled to interim injunction restraining the defendants from employing or inducing the plaintiffs' employees and business associates.

Analysis: The claimed acts of inducement and conspiracy were met with categorical denials supported by rival versions of the facts, making it unsafe at the interlocutory stage to record final findings on the disputed episodes. The Court also held that equitable relief could not be granted where the plaintiffs had not established a strong prima facie case, balance of convenience, or likelihood of irreparable injury. It further emphasised that an injunction should not be used to prevent employees from seeking better employment or to restrain lawful business competition.

Conclusion: The plaintiffs were not entitled to interim injunction and the application for such relief failed.

Issue (ii): Whether the post-employment restraint in the plaintiffs' employment contracts was enforceable and could support injunctive relief.

Analysis: The contracts contained a negative covenant restraining employees from joining a competitor for 12 months after cessation of employment. The Court treated such post-termination restraint as opposed to Section 27 of the Indian Contract Act, 1872, and therefore void, unenforceable, and against public policy. Since what the law prohibits cannot be enforced through an injunction, the covenant could not sustain the relief sought.

Conclusion: The post-employment restraint was unenforceable and could not justify injunction in favour of the plaintiffs.

Final Conclusion: Interlocutory relief was declined because the pleaded restraint was void and the plaintiffs had not shown a sufficient prima facie basis for equitable intervention.

Ratio Decidendi: A post-employment restraint that prohibits an employee from joining a competitor after leaving service is void under Section 27 of the Indian Contract Act, 1872, and an interim injunction will not be granted to enforce such a restraint absent a strong prima facie case, balance of convenience, and irreparable injury.

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