The Indian Contract Act, 1872
§27 — Agreement in restraint of trade, void
Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Exception 1. — Saving of agreement not to carry on business of which good-will is sold. — One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business. * * * * *.