12 October 2021 | ABP Network Private Limited v. Malika Malhotra | OMP (I) (Comm.) 292 of 2021| C Hari Shankar J | High Court of Delhi | 2021 SCC OnLine Del 4733

A TV anchor’s contract with a news network prohibited her from working with a competing business for six months post-employment. The agreement could be terminated by either party with ninety days’ notice. The anchor joined a competitor channel without serving the notice period. The news network applied for an injunction. An ad interim order was granted by Hari Shankar J (she had not appeared even though served), but later the petition was dismissed.

The first question considered was what is a contract determinable in its nature? The question arose because an injunction cannot be granted to prevent the breach of a contract that cannot be specifically enforced [Section 42 of the Specific Relief Act, 1963 (“SRA”)]. A contract that is determinable in its nature cannot be specifically enforced.

Analysing precedent, it was ruled that a contract which is determinable, whether by efflux of time or at the option of either of, or both, the parties, and whether preceded by the requirement of issuance of notice or any other pre-termination formality, or not, is, to be regarded as “in its nature determinable,” within the meaning of Section 14(d) Specific Relief Act (“SRA”).

The second question considered was could an injunction be granted to enforce a negative covenant. This question arose because if a case falls under Section 42 SRA, to enforce performance of a negative covenant, an injunction can be granted, Section 41 SRA notwithstanding.

The court however ruled, following precedent, that availability of the benefit of Section 42 SRA in a contract of employment of personal service, would be subject to the consequence of grant of such benefit not resulting in the employee being consigned to idleness or being forced to work for the employer. Hari Shankar J followed an ad interim order of the court in Independent News Service v. Anuraag Muskan, 2013 SCC OnLine Del 1270 (though not precedent, to maintain consistency) to say that considering the nature of the work of the respondent, she would be compelled to either work for the petitioner or idleness if the negative covenant were to be enforced. That apart, secondly, such a course would effectively be enforcing a positive covenant also.

Read the judgment here.