Independent News Service Private Limited v Anuraag Muskaan is a landmark Delhi High Court judgment addressing the enforceability of negative covenants and post-termination restrictions in media employment contracts under Section 27 of the Indian Contract Act, 1872.
Factual Background and Exclusive Service Agreement
Independent News Service Private Limited operates the 24-hour Hindi news channel India TV. The media house recruited news presenter Anuraag Muskaan on January 16, 2012, under a fixed two-year employment agreement. The company agreed to pay a monthly professional fee of 95,833 rupees and assigned the presenter to high-profile broadcasts including prime-time bulletins, Super Fast 200, and special news programs. The broadcaster claimed substantial promotional expenditures were incurred to build the presenter's public profile.
The employment contract contained restrictive covenants requiring exclusive service. Under the agreement, the presenter was barred from rendering services to any competing television channel during the two-year tenure and for an additional period of one year following termination or expiry. On February 8, 2013, the presenter submitted an immediate resignation, accompanied by a cheque for 5,74,998 rupees representing six months of professional fees under the contract termination terms. The presenter subsequently joined rival broadcaster India News as a senior special correspondent on February 16, 2013.
Petitioner Claims and Interim Injunction Petition
India TV filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, before the Delhi High Court. The company sought an interim injunction restraining the presenter from appearing on-screen, anchoring, hosting, or associating his voice, image, and personal attributes with any competing television network until January 16, 2014, and for twelve months thereafter. The broadcaster argued that the contract was non-terminable by the employee and that the negative covenant remained fully enforceable during the subsisting contractual term.
The broadcaster contended that allowing an anchor to join a direct competitor during an active contract undermined commercial investments in brand development. Counsel for the company submitted that negative covenants during the active period of employment do not violate Section 27 of the Indian Contract Act, 1872, because the restriction operates while the contractual relationship continues.
Defense Arguments on Restraint of Trade and Determinable Contracts
Senior counsel representing the respondent anchor opposed the interim injunction on multiple legal grounds. First, the defense argued that the contract was determinable under Section 14 of the Specific Relief Act, 1963, because the agreement specified that failure to discharge contractual duties resulted in liability to pay six months of professional fees. Under Section 41 of the Specific Relief Act, an injunction cannot be granted to prevent the breach of a contract whose performance cannot be specifically enforced.
Second, the respondent submitted that enforcing a post-resignation restriction on professional employment violates Section 27 of the Indian Contract Act, 1872, and infringes the fundamental right to practice any profession under Article 19(1)(g) of the Constitution of India. Counsel emphasized the unequal bargaining power between individual employees and corporate employers in standardized employment contracts.
Judicial Analysis and Precedents on Section 27
Justice Manmohan Singh reviewed established Indian jurisprudence governing negative covenants in commercial and employment agreements. The court examined the principles articulated in Wipro Limited v Beckman Coulter International S.A. and Superintendence Company of India v Krishnan Murgai to distinguish between restrictions operating during an active employment term and covenants extending post-termination.
The High Court highlighted that courts view employer-employee restrictive covenants with strict scrutiny because standard-form contracts rarely reflect equal bargaining strength. A negative covenant that prevents an individual from securing alternative employment post-termination amounts to an impermissible restraint of trade under Section 27. The law does not permit an employer to force a former employee into idleness. For related legal procedures, see our analysis of Delhi High Court rulings on Section 11 arbitration petitions and broader frameworks governing cyber laws and digital media governance.
High Court Ruling and Contractual Remedies
The Delhi High Court held that while negative covenants operating during the actual subsistence of an employment relationship are generally valid, post-termination prohibitions restraining an individual from taking up employment with competitors are void under Section 27. Because the respondent had tendered his resignation and deposited the stipulated six-month compensation, an absolute injunction preventing him from working for another news channel could not be granted.
The court clarified that the petitioner's legal remedy lay in claiming damages through arbitration proceedings rather than compelling specific performance of personal services through an injunction. The ruling affirms that negative covenants cannot be used to restrict professional mobility or create monopolies over skilled talent in the media broadcasting industry.