Dear Prabhat,
Nice of you to come up with a detailed answer.
Indian Contract Act is of 1872 vintage but has stood the test of time.
But changing times and circumstance necessitate amendment of the law.
Post-termination of a contract, any non-compete clause in the contract is void as they are treated as "restraint of trade" under Section 27 of Indian Contract Act, 1872. Legal experts note that provisions like non-compete are ubiquitous in modern international contracts, especially if parties have similar bargaining powers.
In the case of ‘Niranjan Shankar Golikari Vs the Century Spinning and Manufacturing Company Ltd.’ , the Hon’ble Supreme Court observed that-“restraints or negative covenants in the appointment or contracts may be valid if they are reasonable”.
Foreign judiciary subject to certain limitations and reasonable boundness, the non compete agreements are declared to be enforceable to the reasonable extent. For example: In ‘HRX Holdings Pty Ltd Vs Pearson(2012) FCA 161’, the Federal Court of Australia upheld a post employment restraint preventing a senior employee from competing with his former employer for two years. The court upheld the two years non compete clause with consideration
How contract is terminated makes a difference.
Pilot getting training for a aircraft and Jet/Indigo etc spending crores on training just o loose him to some other airline patching him/her is not in order.
Courts decide on matters arising in cut cases on case to case basis.
also I may add that Contract Act has stood the test of time though it over a hundred years old.
But the time to recognise:that contract is changing due to privatization, industrialization, urbanization globalization has come. Many new terms have come in contract for example e-contract, escrow agreement, joint venture agreement, contract farming, outsourcing contracts etc.
Any way learnt from your views.
Thanks for an informative discussion.
From India, Pune
3131Nice of you to come up with a detailed answer.
Indian Contract Act is of 1872 vintage but has stood the test of time.
But changing times and circumstance necessitate amendment of the law.
Post-termination of a contract, any non-compete clause in the contract is void as they are treated as "restraint of trade" under Section 27 of Indian Contract Act, 1872. Legal experts note that provisions like non-compete are ubiquitous in modern international contracts, especially if parties have similar bargaining powers.
In the case of ‘Niranjan Shankar Golikari Vs the Century Spinning and Manufacturing Company Ltd.’ , the Hon’ble Supreme Court observed that-“restraints or negative covenants in the appointment or contracts may be valid if they are reasonable”.
Foreign judiciary subject to certain limitations and reasonable boundness, the non compete agreements are declared to be enforceable to the reasonable extent. For example: In ‘HRX Holdings Pty Ltd Vs Pearson(2012) FCA 161’, the Federal Court of Australia upheld a post employment restraint preventing a senior employee from competing with his former employer for two years. The court upheld the two years non compete clause with consideration
How contract is terminated makes a difference.
Pilot getting training for a aircraft and Jet/Indigo etc spending crores on training just o loose him to some other airline patching him/her is not in order.
Courts decide on matters arising in cut cases on case to case basis.
also I may add that Contract Act has stood the test of time though it over a hundred years old.
But the time to recognise:that contract is changing due to privatization, industrialization, urbanization globalization has come. Many new terms have come in contract for example e-contract, escrow agreement, joint venture agreement, contract farming, outsourcing contracts etc.
Any way learnt from your views.
Thanks for an informative discussion.
From India, Pune
All our laws and acts are in force to-day were constituted a long back considering the frame of the society was existing and society of post era. There was significant change has come to our society and also lot of cahnages have taken place in the feild of culture. As on date nothing new has come but things are being interpreted case to case basis, keeping priority.
The main objective of the discussion in the forum is "Learning".
Thanks for contributing for restructuring.
From India, Mumbai
The main objective of the discussion in the forum is "Learning".
Thanks for contributing for restructuring.
From India, Mumbai
Hi All,
After working 13 years in a company and recently join another company. My ex company sent me an legal notice that I can't joint any competitor company. I remember that during my service i never heard any competitor word. However, I got to know that my ex company had made some change to their policy after my reveling. Due to to all these, my gratuity of 13yr is also stuck.
I need your support to understand clause 378, 420, 405, 406 and 407 IPC which they add in the legal notice to me.
Also, it has mention that i can't join any client or vendor for 24 months and due to all the above clause, i have to pay to ex company for the their loss.
Regards,
Sujit Singh
From India, Bengaluru
After working 13 years in a company and recently join another company. My ex company sent me an legal notice that I can't joint any competitor company. I remember that during my service i never heard any competitor word. However, I got to know that my ex company had made some change to their policy after my reveling. Due to to all these, my gratuity of 13yr is also stuck.
I need your support to understand clause 378, 420, 405, 406 and 407 IPC which they add in the legal notice to me.
Also, it has mention that i can't join any client or vendor for 24 months and due to all the above clause, i have to pay to ex company for the their loss.
Regards,
Sujit Singh
From India, Bengaluru
Hello Prabhat Sir,
I am facing some challenges with my existing employer. May I request your suggestion, please.
After working 13 years in a company and recently join another company. My ex-company sent me a legal notice that I can't joint any competitor company. I remember that during my service I never heard any competitor word. However, I got to know that my ex-company had made some change to their policy after my relieving. Due to all these, my gratuity of 13yr is also stuck.
I need your support to understand clause 378, 420, 405, 406 and 407 IPC which they add in the legal notice to me.
Also, it has mentioned that I can't join any client or vendor for 24 months and due to all the above clause, I have to pay to ex-company for their loss.
Regards,
Sujit Singh
From India, Bengaluru
I am facing some challenges with my existing employer. May I request your suggestion, please.
After working 13 years in a company and recently join another company. My ex-company sent me a legal notice that I can't joint any competitor company. I remember that during my service I never heard any competitor word. However, I got to know that my ex-company had made some change to their policy after my relieving. Due to all these, my gratuity of 13yr is also stuck.
I need your support to understand clause 378, 420, 405, 406 and 407 IPC which they add in the legal notice to me.
Also, it has mentioned that I can't join any client or vendor for 24 months and due to all the above clause, I have to pay to ex-company for their loss.
Regards,
Sujit Singh
From India, Bengaluru
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Dispciplinary Action.doc
CTC_SALARY_SLIP _FORM_(legal)(1 ).xls
DISCIPLINARY ACTION.ppt