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(c) A contract of service is essentially a contract of trust and faith and the material resources, infrastructure, etc. of the employer cannot be allowed to be used by a rival, through the conduit of an employee divulging the confidential systems developed and used by the petitioner, and that too during the subsistence of the employee's service agreement with the employer.

28. Reliance was placed by the learned counsel for the petitioner on the principles laid down by the Supreme Court in the case of Niranjan Shankar Golikari vs. Century Spinning and Manufacturing Co. Ltd. (1967) 2 SCR 378 and Superintendence Company of India (P) Ltd. vs. Sh. Krishan Murgai (1981) 2 SCC 246, to urge that there was a clear distinction between cases containing a negative covenant preventing the employee from working elsewhere during the term of the agreement and cases containing a negative covenant not to serve elsewhere after the termination of the contract. The former were specifically enforceable, while the later made the agreement void on the ground that they were in restraint of trade and, therefore, hit by Section 27 of the Contract Act.

(b) The consequences for the breach of the negative covenant are not contained in the contract and, as such, the said covenant cannot be enforced.

(c) The negative covenant relied upon by the petitioner is in restraint of trade and, therefore, hit by Section 27 of the Contract Act.

33. First a look at Section 9 of the Arbitration and Conciliation Act, 1996, which reads as under:-

"9. Interim measures, etc., by Court. - A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a Court:-

35. The contention of the learned counsel for the respondent that since the consequences for the breach of the negative covenant are not contained in the contract and in view of the fact that no penal consequences, either of a civil nature or of a criminal nature, are spelt out for the aforesaid breach, the said negative covenant cannot be enforced, is, to my mind, equally specious and unsustainable in law.

36. Finally, as regards the submission of the learned counsel for the respondent that the covenant in the instant case is a negative covenant, which is in restraint of trade and the said covenant cannot, therefore, be enforced against the respondent, in my considered opinion, the Supreme Court in Golikari's case (supra) and in Murgai's case (supra) has unambiguously laid down the law in respect of negative covenants which are hit by Section 27 of the Contract Act and those which are valid under the said Act. In Golikari's case (supra), the injunction granted by the trial court was upheld by the High Court and finally by the Supreme Court on the premise that it was confined to the period of the agreement. The validity of Clause 17 of the agreement in the said case, which provided that in the event of the employee leaving, abandoning or resigning the service of the company before the expiry of the period of five years, he shall not directly or indirectly engage in the business at present being carried on by the company for the remainder of the said period, was upheld. It was found that Clause 17 did not prohibit the appellant from seeking similar employment from any other manufacturer after the contractual period was over. It was also found that there was no indication at all that if the appellant was prevented from being employed in a similar capacity elsewhere, he would be forced to idleness or that such a restraint would compel the appellant to go back to the company, which would indirectly result in specific performance of the contract to personal service. The following pertinent observations were made by the Court in paragraph-15 of the judgment:

"22. With respect, it may be pointed out that the injunction upheld in the Supreme Court case related to the negative covenant operating during the period of service. The court has repeatedly emphasised that Section 27 does not apply to a negative covenant operating during the period of service. The Supreme Court has not upheld in that case any restrictive covenant which prevented the employee from carrying on a similar business or working with a rival employer after the period of service. The injunction operating after the period of service was confined to the divulgence of trade secrets only. In the present case no such trade secrets, have been shown to have been imparted to the defendant."