Negative covenant in personal service contracts is enforceable by injunction only when necessary to protect legitimate interests.

A negative covenant in a contract of personal service may be considered for injunction despite the general bar on specific enforcement of such contracts, but relief is discretionary under the Specific Relief Act, 1963. An injunction will be refused where it would directly or indirectly compel specific performance of the service contract or impose an unreasonable restraint on the employee's freedom of occupation. The restraint must be reasonably necessary to protect the employer's legitimate interests and must not be injurious to the public. On the facts stated, no sufficient basis was shown to justify enforcement, even in a limited form, so interim relief was denied.

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Issues: Whether a negative stipulation in a contract of personal service can be enforced by injunction and, if so, whether the stipulation should be enforced in whole or in part on the facts of the case.

Analysis: A negative covenant in a contract of personal service is not void merely because it operates during the term of employment, and the bar against specific enforcement of personal service contracts does not, by itself, prevent consideration of an injunction to restrain breach of a negative stipulation. Under the Specific Relief Act, 1963, the grant of injunction remains discretionary, and Sections 41(e) and 42 do not compel enforcement in every case. The controlling principle is that an injunction will not be granted where its effect would be to indirectly compel specific performance of a personal service contract or impose an unreasonable restraint on the employee's freedom of occupation. The restraint must be reasonably necessary to protect the employer's legitimate interests and must not be injurious to the public. On the material before the Court, no sufficient basis was shown for concluding that enforcement of the covenant was necessary for the plaintiffs' protection, even in a limited form.

Conclusion: The negative stipulation was not enforceable by injunction on the facts proved, and the prayer for interim relief failed.

Ratio Decidendi: A negative covenant in a contract of personal service may be enforced by injunction only where enforcement is reasonably necessary to protect the employer's legitimate interests and does not amount, directly or indirectly, to compelling specific performance of the personal service contract or to imposing an unreasonable restraint on the employee's occupation.

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