Supreme Court of India · 2020-07-22
SHIV RAJ GUPTA vs COMMISSIONER OF INCOME-TAX, DELHI IV
- Citation / case number
- SC 2015/10183
- Court
- Supreme Court of India
- Petitioner
- SHIV RAJ GUPTA
- Respondent
- COMMISSIONER OF INCOME-TAX, DELHI IV
- Author
- HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN
- Bench
- HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN, HON'BLE MR. JUSTICE NAVIN SINHA, HON'BLE MS. JUSTICE INDIRA BANERJEE
Judgment text excerpt
The Supreme Court addressed the legality of a restrictive covenant in a Deed of Covenant dated 13.04.1994, which prohibited Shri Shiv Raj Gupta from engaging in the manufacturing or marketing of Indian Made Foreign Liquor (IMFL) or beer for a period of 10 years. The Court held that such restrictive covenants are enforceable under Section 27 of the Indian Contract Act, 1872, provided they are reasonable in terms of duration and geographical scope. The appeal was dismissed, affirming the validity of the non-competition fee of Rs. 6,60,00,000 as a legitimate consideration for the covenant.