The Hon`ble Delhi High Court in desiccant Rotors International Pvt. Ltd v Bappaditya Sarkar & Anr5 analysed an agreement involving a marketing director from a manufacturer of evaporative cooling components, products and systems. As part of his employment contract with Desiccant, the officer agreed that two years after the termination of his employment contract, he would be bound by an agreement with Desiccant that would require him to keep business confidential and prevent him from competing with Desiccant and advertising for Desiccant`s customers, suppliers and employees. The employment contract expressly confirmed to the manager that he was dealing with confidential Desiccant documents, including: know-how, technology secrets, methods and processes, market sales and customer lists. After a few years of employment, the manager resigned and, within three months of his termination, joined a direct competitor of Desiccant as country manager for marketing and began contacting Desiccant`s customers and suppliers, regardless of the terms of his former employment contract. In an omission proceeding against the Director General of Desiccant, the High Court reiterated the principles set out in section 27 of the Act and the fundamental right of the individual to earn a living by carrying on an activity or profession of his or her choice. The High Court dismissed Desiccant`s argument that the restrictive agreements were primarily intended to protect its confidential and proprietary information and decided that, in the dispute, employers` attempt to protect themselves from competition and workers` right to seek employment where they wished should prevail over workers` right to exist. The High Court, however, allowed an injunction against the manager, which prohibited him from asking Desiccant`s customers and suppliers: s to come into force. 2. The employer shall make personal accident insurance available to the worker (personal accident insurance is annexed to this employment contract) Both the employer and the worker shall contribute to the above-mentioned premium scheme at the sole discretion of the undertaking. Article 21 of the Indian Constitution guarantees subsistence and, as it is a fundamental right, it is considered sacrosanct.
The validity of such restrictive agreements will be examined on the basis of the standards of acceptability, on the basis of a reflection on the duration and the area of restriction in question. Given the above and the approach of the courts (as briefly discussed here), the protection of the rights of a worker seeking employment takes precedence over the protection of the interests of the employer who wishes to protect himself from competition. In general, the courts have held that, despite an existing agreement between the employer and the worker, the right to existence of workers must take precedence. . . .