Law: Contract Act (IX of 1872)

Section: 27

Law: Specific Relief Act (I of 1877)

Section: 42, 54

Law: Civil Procedure Code (V of 1908)

Section: O.XXXIX, Rr. 1, 2

(a) Contract Act (IX of 1872) S. 27---Restraint of trade---Sale of goodwill---Contract having tendency to such restriant---Powers of Courts to consider restraint of trade---Scope and principles---Courts are empowered to consider restraint of trade upon the touchstone of reasonableness---Broad principles on reasonable restraint where good-will is sold are that the restraint sought to be imposed must be in the interest of the parties and such restraint should be justified in the public interest. (b) Specific Relief Act (I of 1877) Ss. 42 & 54---Contract Act (IX of 1872) S.27---Civil Procedure Code (V of 1908) O.XXXIX, Rr. 1 & 2---Interim injunction, grant of---Good-will, selling of---Dispute regarding restraint on business of photography---Plaintiff purchased shop owned by the defendant alongwith its equipment, fixtures and good-will---Agreement executed between the parties imposed restrain upon the defendant to carry on the similar business not only in that city but in the whole Province---Defendant denied such agreement and relied upon another agreement which was a novation of the agreement produced by the plaintiff---Contention by the plaintiff was that the defendant could not be allowed to do the same business in whole of the Province---Validity---Where the defendant was a skilled photographer, it would be unfair to deny his expertise to the residents of the city as the same would not be in the public interest---Placing of just, reasonable and fair restraint on the defendant both in terms of space and time was possible but vide restraint as contemplated by the agreement relied upon by the plaintiff could not be justified---Defendant was restrained from doing the same business in certain areas specified by the High Court for a period of five years---Application was allowed accordingly. H.B.F.C. v. Shahinshah Humayun House Building Cooperative Housing Society, Ltd. 1992 SCMR 19; Khatoon Begum v. Hyesons Corporation 1980 CLC 1666; Commentaries on the Contract Act by S. Sanjive Rao and Dr. Avtar Singh; Connors Brothers Ltd. v. Bernard Connors AIR 1941 PC 75; Mulluk Chand v. Surendra Nath AIR 1957 Cal. 217; Trego v. Hunt (1896) AC 7; Mc Ellistrim v.…