However, the Supreme Court of Niranjan Shankar Golikari v The Century Spinning And Mfg Co cited a judgment of the Supreme Court of Calcutta with approval. It clearly states: “An agreement to serve a person for a fixed term is a legitimate agreement and it is difficult to see how this can be illegal, which is essential for its realization and the adequate protection of the employer`s interests during the term of the agreement.” [Highlighted here only] Therefore, it implies that the restrictive agreements are valid for the duration of employment and are not contrary to section 27 of the Indian Contracts Act 1872. The validity of restrictive covenants may be considered if it applies to post-termination scenarios. For an obligation of employees to be valid, the employer should be able to prove that the obligation in question is necessary to prevent the diversion of the activity and that he has invested a certain amount in the training of a worker. Section 27 does not allow an employer to impose, directly or indirectly, a restriction that requires the worker to work for the employer or prevents the worker from working for a competitor. Courts have generally held that workers` right to subsistence must prevail over the interests of employers, regardless of an existing agreement between the two parties. Thus, in the case of the 2009 Article Desiccant Rotors International (P) Ltd v. Bappaditya Sarkar, the Delhi Supreme Court stated that in disputes between employers` attempts to protect themselves from competition and the right of workers to seek employment wherever they wish, “it is clear that the right to exist must prevail”. Some authors argue (and reasonably so) that the reason for the invalidity of restrictive agreements lies in the fact that their application would have the effect, paradoxically, of “preventing the worker from continuing to progress in the sector where he is most productive because of his increased expertise”. The question here is whether such a method of staff retention is effective, acceptable and legally applicable. This article discusses the applicability of the work obligation and the rights conferred on employers and workers under the agreement in the light of various court decisions.

For a work obligation to be valid under Indian law, it is necessary to demonstrate that it is necessary for freedom of negotiation. In the event that the employer can prove that the worker adheres to the competitor to disclose the trade secret, the court may issue a publication ban that prevents the worker from joining the competitor. In the event of a challenge to an agreement for breach of the trade restriction provision, the responsibility of the party supporting the treaty is to demonstrate that a restriction is reasonably necessary to protect its interests. [2] The validity of employment contracts may be challenged on the basis of section 27 of the Indian Contract Act. Section 27 of the Indian Contract Act, 1872 prohibits any agreement limiting trade and profession. Any agreement in commerce and profession in accordance with Article 27 shall not be concluded. If an employer has caused monetary expenses for the training of the worker for the job concerned, he may claim damages for the criminal damages he has suffered. This case was decided by Calcutta High Court on the scope of section 27 and section 74 of the Indian Contract Act. This case was related to an apprentice. .