| Court: | Delhi High Court |
| Head Notes: | Restrictive covenants in employment contracts which operate after cessation of employment are unenforceable (i) It is now well settled that post-service restrictive covenants in employment contracts, which operate after cessation of employment, are unenforceable under Indian law. (ii) 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. Percept D’Mark (India) (P) Ltd. v. Zaheer Khan, (2006) |
| Law: | Other Laws |
| Section(s): | Section 27 of the Indian Contract Act, 1872 |
| Counsel(s): | Mr. Tanmaya Mehta, Ms. Nupur Kumar, Ms. Rashmi Gogoi, Mr. Ambuj Tiwari, Mr. Arjun Nagrath, Advs. Mr. J. Sai Deepak, Sr. Adv. with Mr. Utkarsh Joshi, Mr. Anirudh Suresh, Ms. Anjali Menon, Ms. Kanishka Sharma, Advs. Mr. Venkatesh Kumar, Adv. for R-4 and 5. |
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| Uploaded By | Advocate Swati Khandelwal |
| Date of upload: | August 16, 2025 |
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