In the High Court at Calcutta

Civil Appellate Jurisdiction

Appellate Side

The Hon’ble Mr. Justice Sabyasachi Bhattacharyya

And

The Hon’ble Mr. Justice Supratim Bhattacharya

FMAT No. 460 of 2025

IA No: CAN 1 of 2025

Parraj Automobiles Private Limited

– Versus –

Mr. Samiran Sinha

For the appellant : Mr. Avishek Guha,

Ms. Sonal Agarwal,

Ms. Arunika Dutta

For the respondent : Mr. Rabindranath Mahato,

Mr. Aritra Shankar Ray

Heard and reserved on : 03.02.2026

Judgment on : 10.02.2026

Sabyasachi Bhattacharyya, J.:-

1. The present appeal has been preferred against an order of refusal of

ad interim injunction.

2. The plaintiff/appellant has filed the suit, from which the instant

appeal arises, for the following reliefs:

(a) Leave may be granted under Order II Rule 2 of the Code of Civil

Procedure, 1908;

(b) A decree of specific performance may be passed in respect of the

terms, covenants and conditions of the letter of appointment dated 1

st

2

March, 2023 including but not limiting to Clauses 11, 12 and 15.3 thereof

as well as the employee non-disclosure undertaking dated 1

st March, 2023

and direct the Defendant to specifically perform its contractual obligation

thereunder;

(c) A decree may be passed for a sum of Rs. 3,00,000/- which may be

paid by the Defendant to the Plaintiff as liquidated damages in terms of

Clause 15.3 of the letter of appointment for the period served, the

mandatory one month notice period together with interest thereon on such

rate as this Learned Court may deem fit and proper;

(d) A decree of permanent injunction may be passed restraining the

Defendant directly or indirectly engaging or assigning himself in any

capacity whatsoever with any business or concerned that is engaged in

manufacturing, marketing, providing services identical to or similar to those

of the Plaintiff company for a period of two years from the date of cessation

of his employment with the Plaintiff;

(e) Pass a decree of permanent injunction restraining the Defendant

from soliciting, inducing, influencing or attempting to procure the resignation

of transfer of any employ7ee, agent or consultant of the Plaintiff company

whether directly or indirectly in violation of the contractual obligation

undertaken by him;

(f) A decree of permanent injunction may be passed restraining the

Defendant from disclosing, publishing or otherwise using directly or

indirectly any confidential propriety or business information, data or trade

secret belonging to the Plaintiff company including Customer List, pricing

data, financial records, operational procedure and marketing strategy;

3

(g) A decree of mandatory injunction may be passed mandating the

Defendant to immediately resign from the services which the Defendant is

presently engaged in, inasmuch as the Defendant is presently in service in

a firm which carries on the same business as that of the Plaintiff and as

such, is a direct competitor of the Plaintiff herein;

(h) Attachment before judgment;

(i) Injunction;

(j) Receiver;

(k) Commissioner;

(l) Costs;

(m) Such further and/or other reliefs;

3. In connection with the said suit, an application for temporary and

ad interim injunction has been filed by the plaintiff, which contains

the following prayers:

a) An order of temporary injunction may be passed, restraining the

Defendant from continuing employment with or rendering services to any

company or concern engages in competing business with the Plaintiff

company for a period of two years from the date of cessation of the

employment, and from soliciting or inducing any employee of the Plaintiff

to leave its service.

b) An order of injunction may be passed, restraining the Defendant from

using or disclosing any confidential information or trade secrets

belonging to the Plaintiff in any manner whatsoever.

c) Ad interim orders in terms of the above prayers

d) Costs incidental to this application may be directed to be paid by the

defendant to the plaintiff herein;

4

e) Such further and/or other orders may be passed as this Learned Court

may deem fit and proper;

4. Learned counsel for the plaintiff/appellant argues that the learned

Trial Judge, despite arriving at the finding that the plaintiff has

established a prima facie case, refused to grant ad interim injunction

at the ex parte stage on the ground that damages will provide

adequate relief and that the injury suffered is not irreparable. It is

contended that there are two components of the reliefs claimed in

the suit – one pertaining to specific performance of the employment

agreement and injunction, and the other to compensation by way of

damages.

5. In the appointment letter issued to the defendant/respondent, who

is an employee of the appellant-Company, there are several clauses

covering different facets. Clause 10 and its sub -clauses are

designed to protect the confidentiality of the secrets and specialised

data and information of the Company, Clause 11 pertains to the

non-competition, and Clause 12 speaks about non-solicitation.

6. It is alleged that the respondent, after having purportedly resigned

from the Company by an e-mail dated October 8, 2025, with effect

from the previous day, that is, October 7, 2025, left the appellant-

Company and joined a rival company running the same business as

the appellant next door, thus violating all the abovementioned

Clauses. It is argued that in respect of the violation of the non-

competitive, non-solicitation and confidentiality clauses, unless

5

injunction is granted immediately, the trade secrets and sensitive

data/information of the Company would constantly run the

imminent risk of being divulged , causing loses which are

incalculable. Thus, there is immediate urgency, requiring

injunction, in respect of violation of the said clauses.

7. Clause 15.3 of the employment contract, on the other hand,

mandates any employee of the Company , who has been confirmed

in service, to give one month‟s prior notice before resigning, the

penalty for violating which is liquidated damages of Rs.3,00,000/-

as per the said clause. The money claim, resulting in damages, is

restricted to the said clause, insofar as the frame of the suit is

concerned.

8. Thus, it is argued that the learned Trial Judge failed to distinguish

between the two components and, in spite of observing that a prima

facie case has been made out, refused to grant the entire injunction

sought by the plaintiff/appellant on the blanket finding that

damages would provide adequate alternative remedy.

9. Learned counsel for the appellant next argues that the defence of

the defendant/respondent on Section 27 of the Contract Act is

misconceived, since the bar under the said provision has been

diluted by recent judgments of this Court and the Hon‟ble Supreme

Court. Moreover, the non -competitive clause and the non -

solicitation clause in the employment agreement are inter-linked

with the confidentiality clause, since the worth of the respondent as

6

an employee to the competing business next door, where the

respondent has joined, directly gives rise to an apprehension that

the trade secrets, confidential information and internal data of the

appellant-Company would be compromised. As such, the non-

competitive and non-solicitation clauses cannot be divorced from

the confidentiality clause, which the plaintiff/appellant is otherwise

entitled to enforce in any event, without being fettered by Section

27.

10. Learned counsel submits that in terms of Section 42 of the Specific

Relief Act, 1963 (hereinafter referred to as “the 1963 Act”), even

negative covenants of an agreement can be enforced.

11. Learned counsel for the appellant next submits that the service of

the respondent, which was initially as a probationer, was

subsequently confirmed by a letter dated March 1, 2024. Hence, it

is argued that the rigour of Clause 15.3 is squarely applicable.

12. Learned counsel submits that by virtue of continuing as an

employee of the appellant-Company, drawing salary regularly even

after March 1, 2024, and by giving a resignation letter, the

respondent admitted the continuance of his service with the

appellant.

13. Learned counsel cites Haji Mohammed Ishaq Wd. S. K. Mohammed

and Others v. Mohamad Iqbal and Mohamed Ali and Co., reported at

(1978) 2 SCC 493 and Paramjeet Singh & another v. The State of M.P.

& others, reported at 2016 SCC OnLine MP 870 , to argue that the

7

Hon‟ble Supreme Court and a Division Bench of the Madhya

Pradesh High Court , respectively, categorically endorsed the

principle of implied contract by conduct. Thus, learned counsel

submits that the respondent, by his conduct, admitted to the

continuation of his contract of employment with the appellant -

Company at least till tendering the purported resignation letter.

14. Learned counsel next cites a co-ordinate Bench judgment of this

Court in Dr. Sudipta Banerjee v. L.S. Davar & Company and Others,

reported at 2022 SCC OnLine Cal 4479 , and Vijaya Bank and

Another v. Prashant B Narnaware, reported at 2025 SCC OnLine SC

1107, in support of his contention that the bar in Section 27 of the

Contract Act has since been diluted, taking into account the

exigencies of modern commercial enterprises.

15. Learned counsel appearing for the appellant next contends t hat

even if the respondent were to be construed to be still a probationer,

since the premature termination by the respondent of his service is

invalid in terms of Clause 15 of the employment agreement, which

contemplates prior written notice of 30 days, the respondent should

be deemed to continue in service with the appellant. Hence, the

proposition laid down in the judgments cited by the respondent, to

the effect that the bar under Section 27 of the Contract Act applies

to absolute as well as partial restrictions, is not attracted at all,

since such restriction should be deemed in the context of

8

continuing service of the respondent and not post -employment

restriction.

16. Learned counsel for the appellant relies on a letter dated October

28, 2025, written by one Mandira Mahapatra, allegedly an executive

(HR) of the appellant -Company, to the appellant -Company

indicating that the respondent was trying to poach her on behalf of

a rival company. Moreover, an e -mail of one Sandip Manna,

another employee of the appellant, written to the said Mandira

Mahapatra on December 14, 2025 also indicated that the said

Sandip Manna sought to leave the Company. It is alleged that the

said exodus from the appellant-Company came on the wake of the

appellant‟s purported resignation and was at the behest of the

respondent, which is squarely violative of the non-solicitation clause

in the employment agreement of the respondent.

17. Learned counsel appearing for the respondent, in reply, argues that

Section 27 of the Contract Act is an absolute bar to any restriction

on the exercise of a lawful profession, trade or business of an

employee, particularly after the termination of the employment

agreement containing such restrictive covenant. Learned counsel

places reliance on Superintendence Company of India (P) Ltd. v. Sh.

Krishan Murgai, reported at (1981) 2 SCC 246, where the Hon‟ble

Supreme Court categorically observed that the words “restrained

from exercising a lawful profession, trade or business” in Section 27

do not mean an absolute restriction, and are intended to apply to a

9

partial restriction, a restriction limited to some particular place,

etc.; otherwise, the first exception would have been unnecessary.

18. Learned counsel appearing for the respondent next contends that

whereas the communication dated March 1, 2024 made by the

appellant to the respondent, granting extension of the probation

period, is annexed to the affidavit-in-opposition, which is the same

date on which the alleged confirmation letter was given to the

respondent, the said extension letter was not disputed by learned

counsel for the appellant. Thus, it is evident that the appellant‟s

probation period was itself extended on March 1, 2024 till February

28, 2025. In the absence of proof of any further extension, the

probation period of the respondent came to an end on February 28,

2025. It is argued that the alleged confirmation letter, being

contrary to the extension letter, which is an admitted document,

ought to be disbelieved since the appellant could not hav e

simultaneously extended the probation period of the respondent

and also confirmed the respondent‟s service as a permanent

employee.

19. It is further pointed out that while the extension letter as well as the

original appointment letter of the respondent were counter-signed

by both parties, conspicuously, the purported confirmation letter

did not carry the signature of the respondent. Thus, the said

document is obviously a manufactured one.

10

20. Moreover, in the pre-suit communication made by the appellant to

the respondent on October 17, 2025, there was no whisper of the

alleged confirmation dated March 1, 2024. Rather, it was contended

in the said Advocate‟s letter of the appellant that the letter of

appointment had been renewed and extended on two occasions on a

yearly basis, that is, on March 1, 2024 and March 1, 2025, thereby

belying the story of confirmation, which is sought to be made out for

the first time before the court.

21. It is further submitted by the respondent that the concept of implied

confirmation cannot be invoked, in view of Clause 3 of the

respondent‟s appointment letter expressly clarifying that there

would be no automatic confirmation of the service, even after the

expiry of the probation period, unless the management confirms the

service in writing. Hence, as on the date of issuance of the

resignation letter, that is on October 8, 2025, the respondent was

not in service at all. In reply to the pre-suit letter of the appellant,

the respondent had pointed out that he was compelled to stay on in

the company by coercion, without there being any legitimate

extension of his service. Hence, the provisions of Section 27 of the

Contract Act clearly apply, as the respondent was not in service on

the date of tendering resignation.

22. Furthermore, there was also no liability on the part of the

respondent to give a prior notice of one month in terms of Clause

15.3 of the appointment letter before quitting the appellant‟s

11

employment, since the respondent was never confirmed in service at

the relevant juncture whereas the said clause is applicable only to

confirmed employees.

23. Learned counsel for the respondent next argues that Mandira

Mahapatra, who allegedly wrote the letter to the appellant indicating

that she was being lured out of the appellant-Company for a rival

company, does not feature in the employees‟ list of the appellant-

Company as annexed to the affidavit -in-reply of the appellant-

Company. Hence, the entire story of violation of the non-solicitation

clause by the respondent is fictitious.

24. Lastly, learned counsel for the respondent argues that the

restriction clause preventing the respondent from joining a ny

competitive business is violative of Section 27 of the Contract Act

and would deprive the respondent of his livelihood, since a person

with a marketing experience would obviously join a service, upon

leaving the appellant-Company, in a different company of the same

nature. The experience of the respondent being in the field of

marketing, the restrictive clause would prevent the respondent from

having any job at all, as his further employment would only be in

the same sphere of commercial activity. Thus, it is argued that the

learned Trial Judge was justified in refusing ad interim injunction.

25. Upon hearing learned counsel for both parties, this Court comes to

the following conclusions:

12

Section 27 of the Contract Act, 1872

26. In Sh. Krishan Murgai (supra)

1

, the Hon‟ble Supreme Court clearly

laid down the law to the effect that Section 27 of the Contract Act is

not confined to an absolute bar to exercising a lawful profession,

trade or business but also covers partial restrictions to such

exercise. In such context, the language of Section 27 acquires

relevance. The said Section is set out below:

“27. Agreement in restraint of trade, void.—Every

agreement by which any one is restrained from exercising a

lawful profession, trade or business or any kind, is to that extent

void.

Exception 1.—Saving of agreement not to carry on

business of which goodwill is sold. —One who sells the

goodwill of a business may agree with the buyer to refrain from

carrying on a similar business, within specified local limits, so

long as the buyer, of any person deriving title to the goodwill from

him, carries on a like business therein, provided that such limits

appear to the Court reasonable, regard being had to the nature of

the business.”

27. The plain language of the said provision is clear, to the effect that

every agreement restraining anyone from exercising a lawful

profession, trade or business of any kind is void to that extent. The

only exception provided in the said Section is in respect of one who

sells the goodwill of a business, who may agree with the buyer to

refrain from carrying on a similar business and within specified

local limits so long as the buyer or any person deriving title to the

goodwill from him carries on a like business therein, subject to the

1

Superintendence Company of India (P) Ltd. v. Sh. Krishan Murgai , reported at

(1981) 2 SCC 246

13

court construing such limit to be reasonable, regard being had to

the nature of the business.

28. The said exception is not attracted in the present case, since it is

nobody‟s case that the respondent used to sell the goodwill of the

appellant‟s business. Thus, going by the principle laid down in Sh.

Krishan Murgai (supra)

2

, the restrictive covenant in Clause 11 of the

appointment letter of the respondent is prima facie violative of

Section 27 of the Contract Act, 1872.

29. The said clause imposes a non-competition covenant whereby, even

after the departure of the concerned employee from the services of

the appellant-Company for any reason, the said employ ee cannot

enter into the service of a company studying, manufacturing or

selling products/services that are identical or similar to those as

done by the appellant-Company.

30. Thus, in the event it was to be established that the respondent had

left the appellant-Company at the relevant juncture, the restrictive

covenant contemplated in Clause 11 of the employment agreement

would stand void.

31. The appellant seeks to rely on two judgments in the context of

Section 27, none of which helps the appellant.

2

Superintendence Company of India (P) Ltd. v. Sh. Krishan Murgai , reported at

(1981) 2 SCC 246

14

32. In the co-ordinate Bench judgment of Dr. Sudipta Banerjee (supra)

3

,

the said Bench merely made a passing comment on the changing

times and the necessity to impose restrictions and recognized

negative covenants in service contracts, especially where it involved

specialized knowledge, as it must live up to the present needs.

However, the entire consideration in the said case revolved around a

covenant restricting disclosure of confidential information and

dissemination of trade secrets. On the final count, the co-ordinate

Bench modified the ad interim order challenged before it by

restraining the appellants therein from disclosing, divulging or

sharing confidential information gathered during the course of their

employment in any manner whatsoever.

33. Thus, insofar as the non-competition clause is concerned, the said

judgment cannot be taken to be an authority, although it might be

considered one in respect of the non-disclosure covenant. At best,

the said judgment can be construed as a precedent on Clause 10 of

the instant service contract, pertaining to the confidentiality clause.

34. In Vijaya Bank (supra)

4

, the second judgment relied on by the

appellant on such score, the Hon‟ble Supreme was considering

Section 27 of the Contract Act in the context of an early termination

clause. In the case before the Supreme Court, a minimum service

tenure for employees was incorporated in the service contract and

3

Dr. Sudipta Banerjee v. L.S. Davar & Company and Others , reported at 2022

SCC OnLine Cal 4479

4

Vijaya Bank and Another v. Prashant B Narnaware , reported at 2025 SCC

OnLine SC 1107

15

liquidated damages were imposed in the event of premature

resignation. In such backdrop, the Hon‟ble Supreme Court h eld

that there was no violation of Section 27 of the Contract Act.

However, the said judgment is also not a precedent for the

proposition that a restrictive clause preventing the employee from

joining a competitive business falls outside the purview of Section

27 of the Contract Act.

35. Accordingly, in the event it is found that the respondent had left the

service of the appellant at the relevant juncture, it cannot be held

that Section 27 of the Contract Act is not applicable, in which case

Clause 11 would have to be deemed as void.

Whether the employment of the respondent can be deemed to

continue till the date of the resignation

36. This issue is inter-linked with the previous one, inasmuch as the

position of a post-termination employee and that of an employee in

service would be different so far as the restrictive Clause of 27 of the

Contract Act is concerned. Even in the judgment cited by the

respondent, an employee in service was not held to have the benefit

of Section 27. It is also otherwise true, since if an employee is in

continuance of service in a particular company, there cannot be any

scope for holding that a non-competition clause restrained him from

exercising a lawfully profession or trade, since he is already in such

16

a profession and the restrictive covenant would be no restraint at

all.

37. To assess the present issue, the materials placed before the court

are to be looked into. The respondent relies on Clause 3 of the

employment agreement, which provides that there cannot be any

implied confirmation. As far as the purported confirmation letter

dated March 1, 2024, is concerned, we cannot but observe, at the

prima facie stage, that considerable doubt is cast on the said

document. Conspicuously, in the pre-suit communication made by

the appellant-Company through its advocate to the respondent on

October 17, 2025, that is, even after the resignation of the

respondent, no whisper of any confirmation found place. Rather, the

appellant-Company mentioned two occasions of extension of the

letter of appointment (which granted merely probationary rights to

the respondent), on March 1, 2024 and March 1, 2025, without any

such extension letter of March 1, 2025 having come on record. The

said legal notice itself demolishes the case of the appellant that

there was a confirmation issued to the respondent on March 1,

2024 since, if such confirmation letter was really in existence, there

could not be any conceivable reason why the same would not be

referred to in the communication dated October 17, 2025; rather, a

diametrically contrary case of extension of the probation period was

made out in the said communication.

17

38. Secondly, the appellant has not denied the extension letter dated

March 1, 2024, annexed to the affidavit-in-opposition of the

respondent before this Court. A confirmation letter is mutually

exclusive with a letter of renewal of the probation period. Hence, in

view of the appellant having admitted the existence of the letter

dated March 1, 2024 renewing the respondent‟s probation period,

the appellant‟s case of confirmation of the respondent‟s service on

the self-same date is demolished. There could not be any

simultaneous extension of probation and confirmation on the same

date, since the two would be mutually destructive.

39. That apart, we cannot brush aside the respondent‟s argument that

although the appointment letter of the respondent, which was

supposedly issued unilaterally by the appellant-Company, was

signed by both parties, as was the extension letter dated March 1,

2024, the purported confirmation letter dated March 1, 2024 was

conspicuously not counter-singed by the respondent.

40. As such, the allegation of confirmation of the respondent in his

probationary post is doubtful even on the basis of the case made

out by the plaintiff/appellant and the documents relied on by it.

41. However, insofar as the concept of implied contract by conduct is

concerned, Haji Mohammed

5

(supra) and Paramjeet Singh

6

(supra)

are authorities on such proposition. In the former, the Hon‟ble

5

Haji Mohammed Ishaq Wd. S. K. Mohammed and Others v. Mohamad Iqbal and Mohamed

Ali and Co., reported at (1978) 2 SCC 493

6

Paramjeet Singh & another v. The State of M.P. & others, reported at 2016 SCC OnLine

MP 870

18

Supreme Court quoted „Chitty on Contracts‟ (Twenty-third Edition)

to observe that express and implied contracts are both contracts in

the true sense of the term, for both arise from the agreement of the

parties, though in one case, agreement is manifested in words and

in the other case by conduct. In Paramjeet Singh

7

(supra), the

Division Bench of the Madhya Pradesh High Court similarly held

that a contract of employment can be entered into orally also, and

an existence of the contract or its extension can be gathered from

the circumstances available on record and by conduct of the parties

and implications.

42. In the present case, it has not been disputed that the respondent

continued in service even after his last extension expired on

February 28, 2024, as per the respondent‟s own case. In fact, in the

respondent‟s reply dated October 31, 2025 to the pre-suit

communication of the appellant dated October 17, 2025, the

respondent himself stated that the respondent‟s continuation in

service beyond February 28, 2025 was “purely under coercion and

compulsion‟‟ exerted by the appellant‟s Managing Director. Such

stand of the respondent is flimsy, since the respondent is a

professional and it is prima facie not credible that he was compelled

to work in the company for about eight(8) months, even after

termination of his service. Rather, by the said statement in his

7

Paramjeet Singh & another v. The State of M.P. & others, reported at 2016 SCC OnLine

MP 870

19

Advocate‟s letter dated October 31, 2025, the respondent clearly

admitted continuation in service beyond February 28, 2025.

43. That apart, the respondent continued to draw salary till the

tendering of his resignation in October 2025, which is borne out by

the annexures to the affidavit-in-reply filed by the appellant. There

is no specific dispute from the end of the respondent to such

drawing of salary.

44. Thirdly, by the very fact that on October 8, 2025 the respondent

specifically gave a “resignation letter” by way of email, stating

therein that his resignation would take effect from the previous day,

that is, on October 7, 2025, the respondent clearly admitted that he

continued to be in employment of the appellant-Company at least

till October 8, 2025.

45. The respondent has sought to mix up the two issue s, between

continuance in service and confirmation. However, there is a

penumbra zone inbetween, being that the respondent could very

well continue in probationary employment of the appellant even

without being confirmed.

46. As such, from the materials on record, a strong prima facie case has

been made out by the appellant that till the date of resignation, that

is, October 8, 2025, the respondent was in continuous service of the

appellant. Thus, the principle laid down in Haji Mohammed

8

(supra)

8

Haji Mohammed Ishaq Wd. S. K. Mohammed and Others v. Mohamad Iqbal and Mohamed

Ali and Co., reported at (1978) 2 SCC 493

20

and Paramjeet Singh

9

(supra) holds good insofar as by his conduct,

the respondent established the continuance of his service, in a

probationary capacity, if not as a confirmed employee.

Whether the employment of the respondent can be deemed to

have continued after the date of his resignation, in view of the

termination being invalid

47. Two scenarios of resignation have been contemplated in the

employment agreement of the respondent. The first, if the service of

the respondent/employee had already been confirmed, in which

case, Clause 15.3 would be applicable, and secondly, if he had not

been confirmed but continued in the capacity of a probationer, in

which eventuality Clause 15 would be applicable.

48. Since we have held prima facie that no case of confirmation has

been made out, the post-confirmation requirement of one month‟s

notice period, as contemplated in Clause 15.3 of the employment

agreement, is not attracted.

49. Therefore, it is only the termination of a probationer employee, as

embodied in Clause 15 of the employment contract, which is

germane. As per the said provision, the services of such an

employee may be terminated by the appellant-Company during the

probation period with immediate effect without any notice; however,

9

Paramjeet Singh & another v. The State of M.P. & others, reported at 2016 SCC OnLine

MP 870

21

the employee shall have to give a prior written notice of 30 days,

although the said Clause is silent as to the context in which such

notice is to be given. Even if, applying the principle of ejusdem

generis, we construe that such notice would be for termination of

service at the behest of the employee, reading the said sentence in

conjunction with the previous one, we do not find any sanction

contemplated within the four corners of the employment agreement

for non-compliance of such requirement.

50. As opposed to Clause 15.3, w here liquidated damages of Rs.

3,00,000/- is quantified as the penalty for premature resignation

post-confirmation without one months‟ notice, in Clause 15, there is

no such penalty imposed in case a written notice of 30 days‟ is not

given. Thus, it cannot be said that the fallout of not giving a notice

of 30 days in case of a probationer employee would be to attract any

penalty or would per se vitiate the termination itself.

51. In such view of the matter, the resignation tendered by the

respondent in the capacity of a probationer employee of the

appellant-Company could not by itself render the termination

invalid. Hence, it cannot be said that the employment of the

respondent with the appellant-Company continued after the

tendering of his resignation on October 8, 2025.

52. Thus, the rigours of Section 27 of the Contract Act, are clearly

applicable in the present case, since the respondent was rendered

an ex-employee after tendering his resignation on October 8, 2025

22

(with effect from October 7, 2025) , in respect of whom any

restrictive clause preventing joining service elsewhere, including the

non-competition covenant in Clause 11 of the appointment letter,

would have to be prima facie construed to be void.

Whether ad interim injunction could be granted in terms of

prayer (a) of the temporary injunction application in the Trial

Court

53. Prayer (a) of the injunction application seeks to restrain the

defendant/respondent from conti nuing employment with or

rendering services to any company or concern or engage in

competing business with appellant-Company for a period of two

years from the date of cessation of his employment with the

appellant-Company and from soliciting or inducing any employee of

the plaintiff to leave its service. Thus, there are two components in

the said prayer – non-competition and non-solicitation.

54. Insofar as the first component is concerned, the same comes within

ambit of the restrictive covenant embodied in Clause 11 (non-

competition) of the employment agreement and thus is prima facie

void under Section 27 of the Contract Act. Thus, the said

component of injunction cannot be granted.

55. However, Clause 12, restraining solicitation after leaving service,

does not come within the purview of Section 27. By itself, a restraint

on the employee, post-termination, from luring away or soliciting

23

any employee of the company to migrate to some other company

does not tantamount to a restraint on the employee from exercising

a lawful profession. The legal fiction created by Section 27 of the

Contract Act is applicable only to the person whose right to join a

lawful profession, trade or business is being restrain ed by a

restrictive covenant. The said legal fiction cannot be doubly

extended to take within its ambit a third party, who is not a party to

the employment agreement. Thus, the act of solicitation of a

different employee than the employee who enters into an agreement

with the company does not come within the purview of Section 27.

By luring other employees of the employer company to join other

competitive businesses, the concerned employee does not exercise

his own right to join a lawful profession, trade or business. Hence,

there is no legal bar to the restrictive clause of non-solicitation as

envisaged in Clause 12 of the employment agreement from being

enforced. Hence, there cannot be any legal bar to grant of the

second component of prayer (a).

Whether injunction could be granted in terms of prayer (b) of

the temporary injunction application

56. Prayer (b) of the injunction application seeks to enforce the

confidentiality covenant embodied in Clause 10 and Clause 10.2 of

the employment agreement between th e parties. Such

confidentiality clause is also strengthened by Clauses 2 and 3 of the

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Employee Non-Disclosure Agreement dated March 1, 2023 entered

into by the respondent contemporaneously with his appointment to

the appellant-Company. The said clauses were consciously entered

into by the respondent and are not barred under Section 27 of the

Indian Contract Act, 1872 or under any other law, for that matter.

In fact, the concept of privacy, in the commercial world, can also be

extended to a company engaged in a particular business. A

company or enterprise engaged in a particular business is definitely

entitled to retain its trade secrets and confidential information as

well as specialised data, which are an inseparable part of the

business. In fact, it is the core business ethics, trade practices and

modus operandi of a company which form the bulwark of its

competitive edge in the market. Thus, the confidentiality clause,

read with the non-disclosure undertaking, rightly prevent the

respondent from divulging the trade secrets or confidential

information of the appellant-Company to a third party, particularly

to a competitive business. Hence, the said covenants can definitely

be enforced. Consequentially, in the light of Section 42 of the

Specific Relief Act, 1963, such negative covenant c an also be

enforced by an order of injunction.

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Whether alternative remedy for damages is a bar to

injunction, as held by the learned Trial Judge

57. There are two distinct claims made in the suit. Relief (c) of the

plaint claims liquidated damages of Rs. 3,00,000/- on the strength

of Clause 15.3 of the employment agreement between the parties,

for alleged non-compliance of the mandatory notice period of one

month before resignation. Although there is some doubt as to

whether the respondent was actually confirmed in his post and,

consequentially, whether a post-confirmation scenario is applicable

to the respondent at all, fact remains that the plaint claim of

damages is restricted to such premature termination at the behest

of the plaintiff/respondent only.

58. However, insofar as reliefs (b) and (d) to (g) of the plaint are

concerned, those relate to the confidentiality and non-solicitation

covenants, as embodied in Clauses 10, 10.2 and 12 as well as

employees‟ non-disclosure agreement between the parties. Hence,

the second component of the plaint prayer distinctly relates to a

continuing cause of action for enforcement of the said negative

covenants in the employment agreement, in aid of which injunction

can be sought as per Section 42 of the Specific Relief Act.

59. On the basis of the materials before us, it is clear that the appellant

has every right to get an injunction on the said clauses, since the

appellant would be in imminent danger of the respondent divulging

the appellant‟s trade secrets, confidential or specialised data and

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information to a competitive business, particularly since the

respondent has allegedly joined a next-door rival of the appellant.

60. Although the name of Mandira Mahapatra does not feature in the

employees‟ list annexed to the affidavit-in-reply to the appellant, an

e-mail dated December 14, 2025 issued by one Sandip Manna, an

employee of the appellant-Company, whose name does feature in

the employees‟ list, shows that the said Sandip Manna admitted

Mandira Mahapatra to be an HR of the appellant-Company.

61. The appellant has produced a letter written by Mandira Mahapatra

to the appellant-company alleging that the respondent is trying to

coax her into leaving the appellant to join another company. A letter

written by another employee, the said Sandip Manna, to Mandira,

seeking to terminate his employment with the appellant-Company

soon after the respondent left his job, has also been produced. The

veracity of such communications will have to be ascertained at

subsequent stages of the injunction application and the suit;

however, those communications raise a sufficient prima facie

apprehension to justify injunction.

62. Thus, a prima facie case of there being apprehension of “poaching”

on employees has been made out by the appellant, in view of the

letter written by Mandira Mahapatra to the appellant indicating that

the respondent was attempting to broker away employees of the

appellant-Company to a rival company. Hence, the non-solicitation

clause also comes into play and there is imminent danger of the

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employees of the appellant being lured away from it by the

respondent on the basis of the materials before the learned Trial

Judge on the date of the impugned order.

63. The loss to be suffered by the appellant due to such apprehended

action of the respondent cannot be quantifie d; hence, the

appropriate remedy would not lie in damages but in injunction. In

fact, the learned Trial Judge failed to distinguish between the two

distinct categories of relief sought by the plaintiff/appellant –

damages and injunction – on the strength of separate and different

clauses in the employment contract, and mixed up the two to

observe in a blanket fashion that the injury to be suffered by the

plaintiff/appellant can be compensated by monetary compensation.

CONCLUSION

64. It is to be noted that at the ex parte ad interim stage, it is only the

averments made in the plaint and the injunction application which

are to be looked into. Although there is some leeway before the

court taking up an appeal against an ad interim refusal or grant of

injunction to look into further documents, such scope is available

only if a high case of gross suppression of material facts, evident

from the records, is made out. The Appellate Court normally cannot

enter into a roving enquiry by looking into new documents which

were not produced before the learned Trial Judge at the relevant

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point of time unless there is gross suppression of the material facts

before the Trial Court.

65. We do not find any such high ground of gross suppression having

been made out in the present case. The documents sought to be

relied on by the respondent for the first time before this Court are

required to be placed at the first instance before the Trial Court,

either by way of an application under Order XXXIX Rule 4 of the

Code of Civil Procedure or by way of a written objection to the

temporary injunction application.

66. It is a well-settled principle of law that at the stage of grant of ad

interim or temporary injunction, the plaintiff need not prove the

plaint case to the hilt. It would be sufficient if a prima facie triable

issue is raised and an arguable case for trial is made out.

67. Thus, from the discussions above, we find that although the ad

interim prayer of injunction restraining the respondent from joining

or continuing in service in a different company was rightly refused,

at the same time, the other injunctions sought by the

plaintiff/appellant ought to have been granted by the learned Trial

Judge on the basis of the averments made in the injunction

application and the plaint as well as materials produced before the

Trial Court by the appellant.

68. The argument of the appellant that the joining of the respondent in

a competitive business per se is inter-linked with disclosure of the

confidential information of the appellant-Company to such rival

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cannot be accepted. The respondent, being a marketing executive

and having acquired job experience with the appellant in such field

for some years, has an obvious expertise in that field alone, which is

a specialised sphere of business. Thus, it is obv ious that the

respondent would seek a similar employment in a different company

after leaving the service of the appellant. If a restraint order is

passed in that regard, only on the apprehension that such joining of

service would automatically imply disclosure of the trade secrets of

the appellant, the same would be too high a pedestal for the plaint

case to be placed on.

69. Thus, this Court is of the opinion that the joining or continuance of

service of the respondent with a rival company of the appellant does

not ipso facto lead to the inference that the trade secrets of the

appellant would be divulged by the respondent.

70. Accordingly, FMAT No.460 of 2025 is partially allowed on contest,

thereby modifying the impugned order, bearing Order No.2 dated

November 7, 2025 passed by the learned Civil Judge (Senior

Division), First Court at Paschim Medinipur in Other Suit No. 39 of

2025, to the effect that the defendant/respondent shall remain

restrained by an order of injunction from soliciting or inducing any

employee of the plaintiff/appellant-Company to leave its service as

well as from using or disclosing any confidential information or

trade secrets belonging to the plaintiff/appellant in any manner

30

whatsoever till disposal of the temporary injunction application by

the Trial Court.

71. It is made clear that the above findings have been arrived at only for

the purpose of deciding the prayers for injunction at the ad interim

stage and will be considered tentative in nature at subsequent

stages of the injunction application and the suit, which will be

disposed of by the learned Trial Judge independently on their own

merits, without being unnecessarily influenced in any manner by

the above observations or those made in the impugned order.

72. CAN 1 of 2025 is consequentially disposed of as well.

73. There will be no order as to costs.

74. Urgent certified copies, if applied for, be supplied to the parties

upon compliance of due formalities.

(Sabyasachi Bhattacharyya, J.)

I agree.

(Supratim Bhattacharya, J.)