Generally an agreement whereby an employee is restrained to join the competitor will be violative of public policy as stipulated in section 27 of the Contract Act, 1872. A perusal of section 27 of the Contract Act would reveal that it contains the general rule that any agreement by which any lawful profession, trade or business is restrained shall be void but the precedent says that the restrictive covenant is void if reasonable, however if the same is reasonable, the said clause will be valid.
 
 
 
 
 
In your specific case, we are of the view that though generally an agreement whereby an employee is restrained to join the competitor will be violative of public policy as stipulated in section 27 of the Contract Act, 1872, however, the restrictive covenant accepted by you as to time (for one year) is enforceable. According to your own that “you bound not to join any competitor for one year after resign or termination from current employer”. Such covenant is not void under the provisions of section 27 of the Contract Act. We can refer the following judgments in support of above contention:??
 
 
 
i.     BNS Air Services (Pvt.) Ltd. v. Anwar Ali and another (1987 MLD 3009).
 
ii.   Sunilchand C. Maumdar v. The Aryodaya Spg. and Wvg. Mills (AIR 1964 Gujrat 115)
 
iii.  Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. (AIR 1967 SC 1098).
 
 Beside above, recently the Honorable Court of Sindh High Court has laid down the principle on similar type of issue which was reported in 2008  PLD  583. We are reproduced here for your information and understanding.    
 
 
 
Following are the principles for application of restrictive covenant:
 
(a) a restraint of trade clause is void if unreasonable, however, if the same is reasonable the said clause is valid;
 
(b) a reasonable restraint of trade clause whereby an employee is prevented from entering into competition with his former employer or entering into an employment in same/similar business with a competitor of former employer, can be enforced by Court. The said enforcement can include a declaration or injunction or both, as the case may be;
 
(c) reasonableness of the clause will vary from case to case and will inter alia, depends upon the following:
 
(i) the extent of duration;
 
                    (ii) the extent of the geographical territory;
 
(d) the employer will only be able to obtain an injunction for information, know-how and details of customers/orders acquired by employee through some classified or secret information. However; no injunction can be obtained if the know-how is not acquired by employee through access of classified or secret information but rather during the normal course of employment;
 
(e) the restraint of trade clause should only be aimed at protecting interest of the employer and not aimed at penalizing the employee or causing him inconvenience;
 
(f) the restraint of trade clause should not be vague and generalized but should be rather specific. In case general a vague part of the restrictive covenant is separable from the substantive part, the Court while exercising doctrine of severance and by supplying construction will be empowered to uphold the substantive part of the restrictive covenant. However, where restraint of trade is not separable in the manner stated above, the Court will reject the entire clause without applying the doctrine of severance;
 
(g) the restraint of trade clause shall only be applicable to the particular type of business in which the employer is actually engaged in and not to any business activity in which the employer would possibly engage in the future. 
 
 
 
In another case Herbert Morris Ltd. v. Saxelby (1916) 1 AC 688:, the plaintiff was a leading manufacturer of hoisting machinery in the UK and the defendant was employed as a draughtsman, while under a contract he was prohibited from working in the same field for a period of 7 years after leaving the employment. The House of Lords held that the covenant was void as being very wide, for too longer of a period and unreasonable. In this judgment Lord Atkison distinguished between two situation i.e. where any employee had access to highly confidential information and a situation where the employee simply acquired expertise or skill during the normal course of his employment. It was observed that the employer was entitled to protection only in the former situation and not in the latter;
 
 
 
Hope the above discussion replies your question.
 
 
 
 
 
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