TC 126

AMITY INTRA MOOT COURT COMPETITION, 2025

IN THE HON’BLE SUPREME COURT OF UNION OF INDICA

SPECIAL LEAVE PETITION NO. /2025

(UNDER ARTICLE 136 OF THE CONSTITUTION OF INDICA)

IN THE MATTER OF:

ANJALI & OTHERS …PETITIONER
VS.
QUANTUM BYTE PVT. LTD. …RESPONDENT

UPON SUBMISSION TO THE HON’BLE CHIEF JUSTICE

AND HIS LORDSHIP’S COMPANION JUSTICES OF
THE HON’BLE SUPREME COURT OF INDICA

COUNSEL APPEARING ON THE BEHALF OF THE PETITIONER

MEMORANDUM OF ARGUMENTS ON BEHALF OF THE PETITIONER
 Amity Intra Moot Court Competition,2025

TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................

LIST OF ABBREVIATIONS..................................................

STATEMENT OF JURISDICTIONS .....................................

STATEMENTS OF FACTS .....................................................

ISSUES RAISED ......................................................................

SUMMARY OF ARGUMENTS ...............................................

ARGUMENTS ADVANCED....................................................

PRAYER ....................................................................................

MEMORIAL ON BEHALF OF THE PETITIONER

 Amity Intra Moot Court Competition,2025

LIST OF ABBREVIATIONS

❖ ABBREVIATIONS USED

S. NO ABBREVIATIONS FULL FORM

1. & And
2. AIR All Indica Reporter
3. Art. Article
4. Govt. Government
5. HC High Court
6. Hon’ble Honourable
7. i.e., In essence/ that is
8. SC Supreme Court
9. SCC Supreme Court Cases
10. Sec. Section
11. Vs. Versus

MEMORIAL ON BEHALF OF THE PETITIONER

 Amity Intra Moot Court Competition,2025

❖ STATUTE REFERRED:
1) Constitution of Indica
2) Indica Contract Act, 1872

❖ PROVISIONS USED:
1) Article 21, Constitution of Indica
2) Article 136, Constitution of Indica
3) Article 19 , Constitution of Indica
4) Section 17 (3), Indica Contract Act, 1872
5) Section 39, Indica Contract Act, 1872
6) Section 23 Indica Contract Act ,1872
7) Section. 27 Indica Contract Act,1872
8) Section 74 Indica Contract Act 1872

MEMORIAL ON BEHALF OF THE PETITIONER

 Amity Intra Moot Court Competition,2025

STATEMENT OF JURISDICTION

The Petitioners respectfully submit this memorandum before the The Hon’ble Supreme
Court of Republic of Indica as it has the original jurisdiction to try, entertain and
dispose of the present Special Leave Petitions by the virtue of Article 136 of the
Constitution of Indica.

Article 136 of The Constitution of Indiana is produced as follows:

Special leave to appeal by the Hon’ble Supreme Court

1) Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion,
grant special leave to appeal from any judgment, decree, determination, sentence or
order in any cause or matter passed or made by any court or tribunal in the territory of
Indica.
2) Nothing in clause (1) shall apply to any judgment, determination, sentence or order
passed or made by any court or tribunal constituted by or under any law relating to the
Armed Forces.

MEMORIAL ON BEHALF OF THE PETITIONER

 Amity Intra Moot Court Competition,2025

STATEMENTS OF FACTS

Background
Anjali Sharma, a software engineer, joined Quantum Byte Pvt. Ltd. on 5 February 2024 after signing
an employment contract containing restrictive covenants. The contract imposed a two-year non-
compete clause, prohibited union membership, barred her from making public statements about the
company, restricted her from working outside Jelly without permission, and imposed ₹10 lakhs as
liquidated damages for breach.

On 15 July 2025, Anjali joined a tech workers’ union and posted genuine criticism of company policies
regarding unpaid overtime and gender wage disparity. Consequently, on 5 August 2025, Quantum Byte
terminated her and demanded ₹10 lakhs in damages.

Both the Trial Court and the Jelly High Court upheld the validity of the contract and rejected Anjali’s
constitutional claims. Aggrieved, Anjali, with the support of the Digital Rights Collective, has
approached the Supreme Court under Article 136, challenging the enforceability of these restrictive
clauses.
Main Events
1. 5 February 2024 – Anjali Sharma joins Quantum Byte Pvt. Ltd. in Jelly as a software engineer after signing an employment
contract containing restrictive covenants.

2. Employment Contract Clauses –

. Two-year non-compete clause post-employment.

• Ban on union/trade association membership.

• Ban on public statements/social media posts about the company.

• Requirement of company’s permission for outside employment beyond Jelly metropolitan area.

• ₹10,00,000 liquidated damages for any breach.

3. 15 July 2025 – Anjali joins Software Workers United, a tech employees’ union, exercising her right to association.

4. Late July 2025 – Anjali makes truthful posts on Facebook criticizing unpaid overtime and gender-based disparities at
Quantum Byte.

MEMORIAL ON BEHALF OF THE PETITIONER

 Amity Intra Moot Court Competition,2025
5. 5 August 2025 – Quantum Byte terminates Anjali’s employment and issues a legal demand of ₹10,00,000 damages for
breach of contract.

6. Trial Court Decision – Trial court upholds the employment contract, enforces restrictions, and supports company’s claim for
damages.

7. High Court Appeal – Jelly High Court affirms trial court ruling, holding that constitutional rights do not apply to private
contracts and that the clauses are enforceable under contract law.

8. Special Leave Petition (SLP) – Anjali, supported by Digital Rights Collective, approaches the Supreme Court under Article
136, challenging the validity of the restrictive covenants and the damages clause.

MEMORIAL ON BEHALF OF THE PETITIONER

 Amity Intra Moot Court Competition, 2025

ISSUES RAISED

1. Whether, in the facts and circumstances of the present case, Fundamental Rights can be
invoked against a private employer, and whether the terms of a private employment
contract are amenable to judicial review on the touchstone of constitutional principles.

2. Whether the restrictive covenants contained in the appellant’s employment agreement

— including the prohibition on union membership, public expression, and the two-year
non-compete clause — are void and unenforceable under Sections 23 and 27 of the Indian
Contract Act, 1872 as being opposed to public policy and in restraint of trade.

3. Whether the contractual prohibition on the appellant from making public statements,
including on social media platforms, concerning the employer’s internal policies and
practices, amounts to an impermissible restriction on the right to freedom of speech and
expression under Article 19(1)(a) of the Constitution.

4. Whether the stipulation requiring the appellant to pay a sum of ₹10,00,000 as liquidated
damages for joining a trade union and making public statements constitutes an
unreasonable penalty under Section 74 of the Indian Contract Act, 1872 and infringes the
right to life and personal liberty guaranteed under Article 21 of the
Constitution.Participants are encouraged to frame additional issues based on the facts
presented.
 Amity Intra Moot Court Competition, 2025

SUMMARY OF ARGUMENTS
1. Whether, in the facts and circumstances of the present case, Fundamental Rights
can be invoked against a private employer, and whether the terms of a private
employment contract are amenable to judicial review on the touchstone of
constitutional principles.

The restrictions in Anjali’s contract cannot be justified simply because they arise from a private
agreement. In today’s world, where large corporations hold immense control over the lives of employees,
it would be artificial to say that constitutional values stop at the doors of private companies. Our
Constitution, through the idea of transformative constitutionalism, ensures that rights like dignity, free
speech, and association travel even into private spaces where inequality of power is stark. Courts have
already moved in this direction—whether in Vishaka Vs. State of Rajasthan 1997 (6) SCC 241 1, where
private employers had to follow constitutional standards to protect women, or in K.S. Puttaswamy Vs.
Union of India 2017 (10) SCC 2, where the right to privacy was extended against both State and non-State
actors. The principle is simple: private contracts cannot override basic freedoms. Even in Central Inland
water transport corporate Ltd. & ANR vs Brojo Nath Ganguly &ANR 1986 SCC 156 3 , the Supreme
Court struck down a contract clause that was unfair and one-sided, because freedom of contract ends
where exploitation begins. Looking globally, countries like Germany and South Africa also make
fundamental rights apply in private relationships (Drittwirkung). In Anjali’s case, the company’s
restrictions silence her speech, prevent her from joining associations, and control her livelihood—rights
guaranteed under Articles 19 and 21. Such conditions, when tested against constitutional morality and the
doctrine of proportionality, cannot stand. Therefore, these clauses are void and unenforceable.

2. Whether the restrictive covenants contained in the appellant’s employment agreement —

including the prohibition on union membership, public expression, and the two-year non-compete
clause — are void and unenforceable under Sections 23 and 27 of the Indian Contract Act, 1872 as
being opposed to public policy and in restraint of trade.

The restrictive covenants in Anjali’s contract are not only harsh but also legally void under the Contract
Act itself. Section 23 declares that any agreement opposed to public policy is unenforceable, and Section
27 makes it clear that restraints of trade are void. The clauses here go far beyond what is reasonable—
they ban her from joining unions, silence her from speaking publicly, and prevent her from seeking work
in the industry even after leaving. Such terms do not protect any genuine business interest but rather
impose economic servitude. In Central Inland water transport corporate Ltd. & ANRvs Brojo Nath
Ganguly &ANR 1986 SCC 4, the Supreme Court held that contracts which are unconscionable and
exploit the weaker party offend public policy. Similarly, in Percept D’Mark (INDIA) PVT LTD v. Zaheer
Khan Anr AIR 2006 SC 3426 5, a post-contractual restriction was struck down as a direct violation of
Section 27. Employment contracts are not negotiations between equals; an individual worker like Anjali
has little real bargaining power compared to a large corporation. Therefore, courts must look beyond the
form of consent and test such restrictions against fairness, public interest, and constitutional values. The
impugned clauses clearly fail this test—they are against public policy, destructive of individual freedom,
and hence void under Sections 23 and 27.

1
Vishaka Vs. State of Rajasthan 1997 (6) SCC 241
2
K.S. Puttaswamy Vs. Union of India 2017 (10) SCC
3
Central Inland water transport corporate Ltd. & ANR vs Brojo Nath Ganguly &A NR 1986 SCC
4
Central Inland water transport corporate Ltd. & ANR vs Brojo Nath Ganguly &ANR 1986 SCC
5
D’Mark (INDIA) PVT LTD v. Zaheer Khan Anr AIR 2006 SC 3426
 Amity Intra Moot Court Competition, 2025

3. Whether the contractual prohibition on the appellant from making public statements, including on social
media platforms, concerning the employer’s internal policies and practices, amounts to an impermissible
restriction on the right to freedom of speech and expression under Article 19(1)(a) of the Constitution.

The sweeping prohibition on Anjali from making any public statement—whether critical or even supportive of her
employer—strikes at the very heart of Article 19(1)(a), the right to freedom of speech and expression. While
reasonable restrictions can be imposed in the interest of protecting trade secrets or confidential business
information, a blanket gag order that silences an employee on all matters, including working conditions and gender
equality, is neither reasonable nor proportionate. Courts have consistently emphasised that the right to free
expression protects not only political views but also workplace grievances and participation in public discourse.
The restriction here is excessive—it curtails even harmless speech and extends beyond employment tenure,
effectively treating employees as voiceless subjects. In LIC v. Manubhai D. Shah 1992 SCC (3) 67 6, the Supreme
Court struck down restrictions on publication of critical views, reiterating that dissent and truthful observations are
part of free speech in a democracy. Moreover, applying the doctrine of proportionality, the company’s interest in
reputation cannot outweigh Anjali’s right to express genuine, truthful opinions about unfair labour practices. Such a
clause is oppressive, violative of public policy under Section 23 of the Contract Act, and constitutionally

4. Whether the stipulation requiring the appellant to pay a sum of ₹10,00,000 as liquidated damages for
joining a trade union and making public statements constitutes an unreasonable penalty under Section 74 of
the Indian Contract Act, 1872 and infringes the right to life and personal liberty guaranteed under Article
21 of the Constitution.Participants are encouraged to frame additional issues based on the facts presented.

The contractual clause that prevents Anjali from joining any trade union or professional association is a direct
assault on Article 19(1)(c), which guarantees the fundamental right to form associations and unions. This right is
not merely about collective bargaining—it is the foundation of workplace democracy and protection against
exploitation. To strip an employee of this right is to isolate her, leaving her without a voice in the industry. The
Supreme Court in All India Bank Employees’ Association vs. National Industrial Tribunal 1962 SCR
(3)2697recognised the significance of collective organisation as an extension of personal liberty. Even under
contract law, Section 23 bars agreements opposed to public policy; a clause suppressing unionisation is precisely
such an agreement, because it undermines labour rights which are integral to social justice. International standards,
including the ILO Conventions ratified by India, also safeguard the freedom of association. A private employer
cannot, under the garb of contractual freedom, extinguish a constitutional right that empowers workers against
inequality of bargaining power. Thus, the clause is not only void under the Contract Act but also unconstitutional,
as it nullifies the employee’s right to collective strength and fair working conditions.

6
LIC v. Manubhai D. Shah 1992 SCC (3) 67
7
All India Bank Employees’ Association vs. National Industrial Tribunal 1962 SCR(3)
 Amity Intra Moot Court Competition, 2025

ARGUMENTS ADVANCED

Issue 1: Whether, in the facts and circumstances of the present case, Fundamental Rights can be invoked
against a private employer, and whether the terms of a private employment contract are amenable to
judicial review on the touchstone of constitutional principles.

1. Invocation of Fundamental Rights against Private Employers – Expanding the Scope of Part III

1.1 It is humbly submitted that though traditionally Fundamental Rights have been enforced against the “State” under Article
12 of the Constitution, Indian constitutional jurisprudence has witnessed an expansive interpretation of rights where horizontal
application has been recognized in matters concerning dignity, equality, and liberty.

1.2 In Vishaka v. State of Rajasthan (1997) 6 SCC 241 8, the Hon’ble Supreme Court extended the guarantee of Article 14, 15,
and 21 into the realm of private employment to protect women against sexual harassment at the workplace. This case illustrates
that private actors cannot be allowed to escape scrutiny where violations of fundamental rights are at stake.

1.3 Similarly, in Justice K.S. Puttaswamy v. Union of India (2017) 10 SCC 1 9, the Hon’ble Court recognized the right to
privacy as an intrinsic part of Article 21 and emphasized its enforceability even in private spheres where dignity and autonomy
are compromised.

1.4 Hence, in Anjali’s case, where restrictions directly affect her freedom of association (Article 19(1)(c)), freedom of speech
(Article 19(1)(a)), and right to livelihood and dignity (Article 21), the cloak of private contract cannot immunize such
violations from constitutional scrutiny.

1.5 It is submitted that Quantum Byte Pvt. Ltd. Falls within the extended meaning of “State” under Article 12, as evolved by
judicial interpretation. In Ajay Hasia v. Khalid Mujib (1981) SCC (1) 10722 and Pradeep Kumar Biswas v. Indian Institute of
Chemical Biology (2002) AP ( CIVIL) 992 11, the Hon’ble Supreme Court held that even private bodies, if performing
functions of public importance, exercising deep control over citizens’ rights, or enjoying pervasive State support, may be
treated as “State.” Quantum Byte employs thousands of engineers, controls critical digital infrastructure, and significantly
impacts the right to livelihood and association of workers. Hence, its actions must be tested on the touchstone of Articles 14,
19, and 21, ensuring that constitutional morality prevails over absolute contractual freedom.

2. Public Law Element in Private Contracts

2.1 The test of amenability is not limited to the identity of the contracting party but extends to the nature of rights violated.
Employment contracts in the tech industry, especially where employees constitute a vulnerable class vis-à-vis powerful
corporations, cannot be treated as mere private bargains, but as instruments that implicate public law values.

2.2 In BCCI v. Cricket Association of Bihar (2016) 8 SCC 535 12, the Hon’ble Supreme Court held that even private bodies
discharging functions of public significance are subject to constitutional standards. By analogy, private corporations employing
thousands in the digital economy exercise immense economic and social power, affecting not only employees but also public
interest in labour standards and free expression.

2.3 Thus, the terms of Anjali’s contract are not mere “private” stipulations, but clauses with wide-ranging implications for
workers’ rights, industrial democracy, and constitutional freedoms.

8
Vishaka v. State of Rajasthan (1997) 6 SCC 241
9
Justice K.S. Puttaswamy v. Union of India (2017) 10 SCC 1
10
Ajay Hasia v. Khalid Mujib (1981) SCC (1) 722
11
Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002) AP ( CIVIL) 992
12
2 In BCCI v. Cricket Association of Bihar (2016) 8 SCC 535
 Amity Intra Moot Court Competition, 2025

3. Policy Reasons – The Doctrine of Unequal Bargaining Power

3.1 Employment contracts are not negotiated on an equal footing. The doctrine of unequal bargaining power, recognized in
Central Inland Water Transport Corporation v. Brojo Nath Ganguly (1986) 3 SCC 156 13, holds that contracts obtained under
economic duress or imposed through standard form “take it or leave it” agreements are void as they shock the conscience of
the Court.

3.2 Here, Anjali had no real choice but to sign the contract to secure her livelihood. Clauses restraining her union rights,
freedom of expression, and future employment are reflective of the “new serfdom” of the digital economy, where corporations
use contracts as instruments to override constitutional values.

3.3 To permit such clauses to stand unchallenged would privatize censorship and convert fundamental freedoms into
commodities subject to corporate control.

4. Humanized Constitutional Reasoning – The Spirit of Justice

4.1 The Constitution is not merely a text of governance but a charter of human dignity. The Hon’ble Supreme Court in Maneka
Gandhi v. Union of India (1978) 1 SCC 248 14emphasized that fundamental rights must be interpreted in a broad, purposive,
and humane manner, ensuring that procedure is fair, just, and reasonable.

4.2 Anjali’s lived reality exemplifies the plight of modern employees: silenced from speaking truth, barred from collective
bargaining, and restricted from future employment. If the Constitution cannot protect her against such contractual subjugation,
the very idea of justice, liberty, and fraternity becomes hollow.

4.3 Therefore, by invoking fundamental rights even against private actors, the Court would reaffirm that no individual in Indica
can be stripped of her basic freedoms by contractual terms, however “lawful” they may appear on paper.

Issue 2 : Whether the restrictive covenants contained in the appellant’s employment agreement —
including the prohibition on union membership, public expression, and the two-year non-compete
clause — are void and unenforceable under Sections 23 and 27 of the Indian Contract Act, 1872 as
being opposed to public policy and in restraint of trade.

2.1 Non-Compete Clause as Restraint of Trade

Section 27 of the Indian Contract Act, 1872 categorically renders void any agreement that restrains a person from exercising a
lawful profession, trade, or business.

The two-year blanket prohibition preventing Anjali from working in any technology company across Indica is manifestly
excessive, disproportionate, and unreasonable.

The Supreme Court in Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. (AIR 1967 SC 1098) 15recognized
that restraints during employment may be valid, but post-employment restrictions are prima facie void, unless narrowly
tailored to protect legitimate trade secrets.

Further, in Superintendence Co. v. Krishan Murgai (1980) 2 SCC 246 16, the Court invalidated wide non-compete clauses,
holding that the freedom of livelihood cannot be curtailed for protecting an employer’s commercial interests alone.

13
Central Inland Water Transport Corporation v. Brojo Nath Ganguly (1986) 3 SCC 156
14
Menka Gandhi v. Union of India (1978) 1 SCC 248
15
Niranjan Shankar Golikari v. Century Spinning & Manufacturing Co. (AIR 1967 SC 1098)
16
Superintendence Co. v. Krishan Murgai (1980) 2 SCC 246
 Amity Intra Moot Court Competition, 2025
Humanized Reasoning: Anjali, a young software engineer, cannot be expected to remain unemployed for two years simply
because her former employer fears competition. Such a restriction effectively denies her the right to livelihood and professional
growth.

2.2 Prohibition on Union Membership is Contrary to Public Policy

Section 23 of the Contract Act invalidates agreements opposed to public policy.

Prohibiting employees from joining trade unions undermines the very ethos of collective bargaining, recognized globally and
protected domestically.

Article 19(1)(c) guarantees the freedom to form associations and unions. While this is a fundamental right enforceable against
the State, private contractual clauses cannot override constitutional ethos.

In Balmer Lawrie Workers’ Union v. Balmer Lawrie & Co.1984 SCC Supl. 66317 the Court stressed the importance of trade
union activity as an instrument of industrial democracy.

Such a contractual clause, if upheld, would normalize coercive employment practices and erode the broader socio-economic
fabric of labor rights.

Humanized Reasoning: Preventing Anjali from joining a union is not just an attack on her autonomy, but on the collective
dignity of thousands of workers in the industry who rely on solidarity for better working conditions.

2.3 Restriction on Public Expression is Overbroad and Oppressive

The clause gagging Anjali from making any public statements, even if truthful and constructive, violates the principle of free
speech.

Courts have held that contracts curbing legitimate expression, even in private law, are unenforceable if they stifle public
discourse or are contrary to morality and fairness.

In LIC v. Consumer Education & Research Centre (1995) 5 SCC 482 18, the Court extended constitutional values into private
contractual arrangements where inequality of bargaining power existed.

Employers may justifiably protect confidential information, but a blanket prohibition on all public expression is
disproportionate and chilling.

Humanized Reasoning: By silencing Anjali, the company seeks not only to protect its reputation but to suppress genuine
grievances about wage disparities and unfair policies — concerns vital to the public interest.

2.4 Policy Concerns – Balancing Employer’s Interest with Employee Rights

Employers have a legitimate interest in safeguarding confidential information and trade secrets, but such interests must be
protected through reasonable and narrowly tailored clauses, not sweeping restrictions.

Indian courts, following a public policy approach, have consistently leaned in favor of protecting an individual’s right to
livelihood and autonomy over commercial interests.

Unreasonable restraints not only exploit employees but also stifle innovation, competition, and labor mobility, which are
essential for the growth of a democratic economy.

17
Balmer Lawrie Workers’ Union v. Balmer Lawrie & Co.1984 SCC Supl. 663
18
LIC v. Consumer Education & Research Centre (1995) 5 SCC 482
 Amity Intra Moot Court Competition, 2025

Issue 3 : Whether the contractual prohibition on the appellant from making public statements, including on
social media platforms, concerning the employer’s internal policies and practices, amounts to an
impermissible restriction on the right to freedom of speech and expression under Article 19(1)(a) of the
Constitution.

3.1 Freedom of Speech is the Cornerstone of Democracy

Article 19(1)(a) guarantees the fundamental right to free speech and expression, which is not limited to political discourse but
extends to workplace grievances, industrial practices, and matters of social justice.

In Romesh Thappar v. State of Madras (AIR 1950 SC 124), 19the Supreme Court held that freedom of speech is the very
foundation of all democratic organizations.

By gagging Anjali from voicing her views, the contract directly undermines the core democratic values of transparency,
accountability, and participatory governance.

Humanized Reasoning: A young employee like Anjali, raising genuine concerns about wage disparity and unpaid overtime, S
Should be applauded, not silenced. Her voice represents not just her individual experience, but that of countless silent workers.

3.2 Private Contracts Cannot Override Constitutional Ethos

Though fundamental rights are traditionally enforceable against the State, the Supreme Court has increasingly recognized that
constitutional values must inform private contractual relations, especially in cases of inequality of bargaining power.

In LIC of India v. Consumer Education & Research Centre (1995) 5 SCC 482 20, the Court extended Article 21 protections into
private employment, emphasizing that contracts cannot override basic human dignity.

Here, the blanket prohibition on Anjali’s speech, even if truthful and constructive, runs counter to the constitutional spirit of
free expression.

3.3 Overbreadth and Disproportionality

Reasonable contractual clauses may legitimately protect trade secrets or confidential information, but the present clause is
overbroad — covering all public statements, even those unrelated to confidential matters.

The doctrine of proportionality, as recognized in Modern Dental College v. State of Madhya Pradesh (2016) 7 SCC 353 21 civil
appeal number 4061 of 2009, requires restrictions on fundamental freedoms to be narrowly tailored and least restrictive.

By prohibiting all forms of expression, irrespective of content, the clause imposes a disproportionate and chilling effect on free
speech.

Anjali never disclosed any trade secrets or proprietary information of Quantum Byte; her statements concerned only workplace
issues such as unpaid overtime and gender wage disparity. Under the Indian Contract Act, protection extends to legitimate
business interests like trade secrets, not employee grievances. Courts, including in Niranjan Shankar Golikari vs century

19
Romesh Thappar v. State of Madras (AIR 1950 SC 124),
20
In LIC of India v. Consumer Education & Research Centre (1995) 5 SCC 482
21
Modern Dental College v. State of Madhya Pradesh (2016) 7 SCC 353
 Amity Intra Moot Court Competition, 2025
spinning and MFG co LTD 1967 AIR 109822, have upheld restrictions only to safeguard proprietary information. Further, the
right to raise concerns about labour conditions is protected under Articles 19(1)(a) and 19(1)(c). Labelling such disclosures as
“confidential” is against public policy under Section 23 ICA, as it suppresses transparency and constitutionally guaranteed
freedoms rather than protecting genuine business interests.

Illustration: If Anjali posts a neutral comment praising women in tech leadership, it would still violate the clause. Such a
sweeping gag is inherently unjust.

3.4 Matters of Public Concern Deserve Stronger Protection

Anjali’s statements were not frivolous; they related to unpaid overtime and gender wage disparity, both matters of pressing
public interest.

In Maneka Gandhi v. Union of India (1978) 1 SCC 248 23, the Court held that fundamental rights must be interpreted broadly
and purposively to ensure full justice.

Suppressing public discourse on workplace injustices deprives society of critical information necessary to advance labor
reforms and gender justice.

Humanized Reasoning: By silencing Anjali, the company silences every woman who struggles with wage disparity and every
worker burdened by unpaid overtime. This is not just a contract dispute — it is about the right of workers to tell their stories.

3.5 Comparative & Policy Perspective

Internationally, labor law frameworks recognize the right of workers to voice grievances. The ILO Convention on Freedom of
Association (C87) and Convention on the Right to Organize and Collective Bargaining (C98) underscore free expression as an
inseparable component of workers’ rights.

A democratic society cannot allow private corporations to impose contractual censorship, for it reduces employees into
voiceless subjects, contrary to constitutional morality and public policy.

22
Niranjan Shankar Golikari vs century spinning and MFG co LTD 1967 AIR 1098
23
Maneka Gandhi v. Union of India (1978) 1 SCC 248
 Amity Intra Moot Court Competition, 2025

Issue 4: Whether the stipulation requiring the appellant to pay a sum of ₹10,00,000 as liquidated
damages for joining a trade union and making public statements constitutes an unreasonable
penalty under Section 74 of the Indian Contract Act, 1872 and infringes the right to life and
personal liberty guaranteed under Article 21 of the Constitution.

4.1 Section 74 — Penalty, Not Genuine Pre-estimate of Damages

Section 74 of the Indian Contract Act prohibits the enforcement of contractual sums that amount to penalties rather than
genuine pre-estimates of loss.

In Fateh Chand v. Balkishan Dass (1963) 1 SCR 515 24, the Supreme Court clarified that courts must award reasonable
compensation, not arbitrary sums.

Similarly, in ONGC v. Saw Pipes Ltd. (2003) 5 SCC 705 25, the Court held that liquidated damages are enforceable only if they
reflect a genuine pre-estimate and are not excessive or punitive.

Here, the amount of ₹10 lakhs has no rational nexus with any actual or potential loss suffered by Quantum Byte. It is purely
penal and coercive, designed to deter unionization and silence dissent, rather than to compensate for genuine harm.

4.2 Violation of Article 21 — Right to Livelihood and Dignity

Article 21 protects not merely physical survival but also the right to livelihood, dignity, and autonomy (see Olga Tellis v.
Bombay Municipal Corporation, 1985 SCC (3) 545).26

Imposing an exorbitant penalty of ₹10 lakhs on a 27-year-old software engineer like Anjali has a crippling effect on her
financial security, effectively depriving her of her livelihood and future employability.

In Board of Trustees, Port of Bombay v. Dilipkumar Nadkarni (1983) 1 SCC 124 27, the Court recognized that the right to
livelihood is an integral part of Article 21.

By shackling Anjali with an unpayable debt for merely exercising her basic freedoms, the clause reduces her to economic
servitude, contrary to the dignity guaranteed under Article 21.

Humanized Reasoning: For a young professional, ₹10 lakhs is not just a number — it is a lifetime’s worth of savings. Forcing
her to pay such a sum for joining a union or expressing herself is equivalent to penalizing her very existence.

4.3 Public Policy and Unconscionability

Section 23 of the Indian Contract Act renders agreements void if they are opposed to public policy.

A clause that penalizes union membership — a right expressly recognized under Article 19(1)(c) — directly offends
constitutional morality.

In Central Inland Water Transport Corporation v. Brojo Nath Ganguly (1986) 3 SCC 156 28, the Supreme Court struck down
unconscionable contractual terms imposed by dominant employers on weaker employees.
Similarly, the damages clause here reflects gross inequality of bargaining power, where Anjali had no meaningful choice but to
accept oppressive terms.

24
Fateh Chand v. Balkishan Dass (1963) 1 SCR 515
25
ONGC v. Saw Pipes Ltd. (2003) 5 SCC 705
26
Olga Tellis v Bombay Municipal Corporation, 1985 SCC (3) 545).
27
Port of Bombay v. Dilipkumar Nadkarni (1983) 1 SCC 124
28
Central Inland Water Transport Corporation v. Brojo Nath Ganguly (1986) 3 SCC 156
 Amity Intra Moot Court Competition, 2025

4.4 Disproportionality and Chilling Effect

The penalty is disproportionate to the alleged breach — joining a union or posting truthful comments does not cause financial
loss to the company.

The doctrine of proportionality (Modern Dental College v. State of M.P., 2016 7 SCC 353) 29requires that restrictions be
narrowly tailored. Here, the penalty is not corrective but punitive, creating a chilling effect on all employees who may fear
financial ruin if they assert basic rights.

Such a clause weaponizes financial penalties to silence lawful conduct, which is antithetical to democratic labor rights.

4.5 Comparative and Policy Perspective

Internationally, clauses imposing punitive fines for union activity are considered unfair labor practices.

Under ILO Convention No. 98 (Right to Organize and Collective Bargaining), employees must not be penalized or financially
coerced for exercising union rights.

Enforcing such a clause in Indica would make the Republic appear as endorsing corporate authoritarianism over constitutional
democracy, setting a dangerous precedent.

29
Modern Dental College v. State of M.P., 2016 7 SCC 353
 Amity Intra Moot Court Competition, 2025

PRAYER

WHEREFORE, in the light of issues presented, authorities cited and arguments advanced, it is
most humbly and respectfully prayed and implored before this Hon’ble Supreme Court of
Indica, that it may be graciously pleased to adjudge and declare that –

1. The SLP is maintainable in the Hon’ble Supreme Court of Indica.

2. The contractual clauses imposed upon the Petitioner by Quantum Byte, including the two-year
pan-Indica non-compete restriction, the prohibition on union membership, the blanket gag order
on speech, and the requirement of prior permission to work outside Jelly, are unconstitutional,
arbitrary, and void being violative of Articles 14, 19 and 21 of the Constitution of Indica.

3. The said clauses are also void under Sections 23 and 27 of the Indica Contract Act, 1872, being in
restraint of trade, opposed to public policy, and destructive of fundamental freedoms.

4. The clause imposing liquidated damages of ₹10,00,000 upon the Petitioner is punitive,
unconscionable, and unenforceable in law.

5. The Hon’ble Court may be pleased to uphold the Petitioner’s right to livelihood, free association,
and free expression, free from unconstitutional restraints imposed by private employment
contracts.

6. Declare Quantum Byte amenable to Article 12 scrutiny as a State/quasi-State under the

Constitution.

AND/OR

Pass any other Order, Direction, or Relief which this Hon’ble Court may deem fit in the
best Interests of Justice, Fairness, Equity, and Good Conscience.

For this act of kindness, the respondent shall duty bound, shall humbly pray.

All of which is most humbly prayed

Counsel Appearing on Behalf of the Petitioner

MEMORIAL ON BEHALF OF THE PETITIONER