Neosky India Limited & Anr. v. Mr. Nagendran Kandasamy & Ors.
“80. Thus, the position that emerges is that the doctrine of restraint of trade, as embodied under Section 27 of the Indian Contract Act, 1872, applies when the contract comes to an end. A clear distinction exists between a non-compete clause that operates during the subsistence of employment or an Agreement, and one that is sought to be enforced post-termination. While a restrictive covenant during the term of employment may be legally permissible, any such restraint operating after the termination of employment or expiry of the agreement is subject to the rigours of Section 27. Once the NCA has come to an end by efflux of time, or ceases to apply due to the termination of employment, it cannot be enforced post expiry of the Contract.
84. Allowing them to be extended based on prima facie observations would violate Section 27 of the Indian Contract Act, 1872, and would amount to imposing an unreasonable restriction on the respondents‟ right to practice their trade or profession, which is protected under Article 19(1)(g) of the Constitution of India.”
— Team AMLEGALS
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