Court case(2006) 4 SCC 227

Zaheer Khan, the cricketer, appointed Percept D'Mark as his exclusive agent for media and endorsement work for a term of three years. Clause 31(b) obliged him, for a period after the agreement expired, not to accept any offer from a third party for such services unless he first gave Percept the opportunity to match it. On expiry he engaged another agency. Percept applied under s. 9 of the Arbitration and Conciliation Act 1996 for an interim injunction restraining him from dealing with others. A single judge of the Bombay High Court granted it; the Division Bench set it aside; Percept appealed.

The Supreme Court dismissed the appeal. A restriction that operates after the contract has ended and limits a person's freedom to deal with whom he pleases is a restraint of trade, and under s. 27 it is void however reasonable it may be (Niranjan Shankar Golikari and Gujarat Bottling protect only covenants operating during the term). The court also held that the agreement was one for personal services, which cannot be specifically enforced, and under s. 41(e) read with s. 14 no injunction can be granted to prevent the breach of a contract that would not be specifically enforced; s. 42 is confined to a negative stipulation coupled with a subsisting affirmative agreement. Further, an interim injunction could not restrain a party from entering into a contract with a third party which it was free to make.