 understand the persons who are on a higher pedestal to understand that because as we all say that if the foundation is strong then the building is strong. So to understand from a person who can make the foundation strong is I can say fundamentally one of the most fundamental thing to be understood and there couldn't be a better occasion to understand as to how the contract agreements and public policy as such would be there. And once we have a speaker who is also known not only for his knowledge as well as for the way he's an erudite manner he expresses it in a simplified form. Without taking much time I would request sir to take things forward because students are I will say students not only the students of law as such but all those who join us on the live law that is on the Facebook, YouTube they're all students who are wanting to learn and before that we would all request again what we have also written on our invite, keep maintaining the social distancing, keep wearing the masks and contribute to the society at large in whatever manner you can do economically, physically, emotionally because the way things are going on even a mental sport and an emotional sport is enough to support a person. As I have reminded a famous dialogue of Shah Rukh Khan, so just give that word to a common man that it gives the spirit a pep up and there's another feeling that immunity is one of the important facets of life and they say if you are happy and you can make people happy that brings the immunity level to much better than even the medicines. We can go all gaga about immunization that you should go for vaccination but right now we have to understand how the contract agreements and public policies are important aspects as a lawyer, as a traditional officer, as a judge to understand all those, to have a bird eye view in a one hour session round I would request sir to take things forward. Vikas ji I need to share the screen so you have to give me the constraints. Good evening and thank you very much for that warm introduction. I must first of all apologize to Vikas ji because he has literally been chasing me for a session for a couple of months and due to my pressing schedule I was not able to come to this platform but we have it right now. His ability to get the best minds to share the idea of law and the knowledge of law is something that I keenly have followed and I personally appreciate him for all the efforts that he has put in in bringing this lecture series together. I should also thank all the participants for having joined me today evening. These are tough times, tough challenging times around us. It's not easy to focus on academics or a learning environment with so much that is happening in this pandemic around us. We all in one way or the other have been affected by the loss of somebody who is very near and dear to us. The pandemic has shaken many of us have been tested positive. We should remain positive, not only testing positive. So I think if you have taken time to join the session, let me personally thank you. It's encouraging. From the participants list I see a lot of my students. Now I'm a little worried because you know if you're giving a lecture in front of students they are pretty smart and they tend to quiz you, question you on the right things. So let me see if my students can actually interact with me today. Friends I have no intention again to give a lecture. I don't believe in giving a one-side lecture. I think we should get into an interaction, we should get into some kind of a discussion. I think it's a mutual learning environment. This is no this is not a classroom environment. So I think if you guys need to share an idea put across your views, I think I'll be more than happy to receive those suggestions and those comments and those ideas as well. So please keep this session as interactive as possible. I would encourage you in which way platform you can do that through the use of the chat box or if you're allowed to unmute please do that. So we'll keep this session in a dialogue format and I prefer that. Friends the topic that I've chosen is something that is very close to my area of research and practice and very close to what I've written a couple of years back. This is the cover page of the book. To be honest it's a edited work. Most of the writings are from my students who have written articles on different aspects of contracts and public policy and I'm just going to take a clue from this book itself. You will find this book online. It's there for your read if anybody wishes to read about what is going to be spoken today. I would request you to go to a website called nlspub.ac.in Okay nlspub.ac.in. Now I'm sure in North India and many of us think pub is something else where the bar is there but friends the pub here means publication so don't take it otherwise. So it is nlspublication.ac.in that's the website. You will see the soft copy of this book and most of the cases that I'm going to refer to friends in terms of illustration or case studies or case examples are all part of this book. So I'll be using some recent cases in the last one or two years when I give you some illustrations of what I attempt to speak about. So friends you know when I press the R-glass figure so that yeah no it's fine. So you know interestingly friends we are talking about today the concept of public policy in contracts and agreements. Now as lawyers as practitioners as law students as somebody who is in the legal fraternity I'm sure contract was our basic subject it was the foundational subject and really went on to discuss a law called the arbitration law which happens to be the more practice subject right. So ADR arbitration comes later on and interestingly right from the first year to the last year I'm sure very often they're not in law schools you ought to come across this term called public policy. Now the term public policy is interesting. Interesting for seven reasons and among them the reasons are that when you look at section 23 of the Indian contract act the determination of public policy is left to the courts the judiciary right. So this section very clearly says that the judiciary and the courts may determine what is public policy in contract. Similarly you know when you go back to the ONGC case versus SOAP IITS what the Supreme Court said how it can intervene in arbitral awards how it has intervened in taxation matters. I think the Supreme Court time and again or the judiciary as it were time and again has defined or attempted to define public policy or has probably intervened on the ground of public policy right. So this is like a judicial weapon if I can use that term if I'm permitted to use that term it's a judicial weapon to actually try and intervene in private matters. It's quite amazing that you know this term that is public policy has been defined to be quite an unruly horse and this is not something that is used by Indian judges for the first time it has been used by American judges and by judges in United Kingdom as well because the challenges of defining public policy remains across the legal system and the judiciary you know like a whip of public policy can intervene into private matters and hold that private matter as not being enforceable or as not being valid. However from time to time I think the judiciary has attempted to probably say what is the test of public policy right one two and three fundamental law of the land security of the state. So they have defined they have said okay based on this we will say that this award or this act is not in favor of public policy but the point is you know have we really understood the term public policy do we know what it means can we clearly categorize this as what is public policy and what is not public policy. Is there a certainty in trying to understand this term do we know which kind of contracts or agreements public policy can be challenged and the most interesting part is you know when we look at the aspect of public policy somewhere down the lane you know we think about three things right first we think about public interest public policy is public interest that's what you know a lot of authors have attempted to say and it has been said in few judgments as well. Secondly we say public policy is public morality I'll tell you what this morality seems to be uh uh vis-a-vis public policy and the third thing we say public policy is uh you know kind of national security or national interest so no there is public interest there is public morality and there is public security there are three aspects to this public policy. So when you talk about this interest morality and security is that a sufficient test for the judiciary to intervene in contracts. Now there are a lot of being writings and criticism of this a lot of people think that this is quite a thing that should not be interfered with and a lot of people think that this is not the right thing we should have something else the public policy test is it does not give certainty to understanding of the law but to be honest you know if you ask me what is public policy I have always felt that it is a guardian of rights right this is my way of dealing with public policy I always have believed that public policy is nothing but a guardian of rights where the court feels that rights have to be protected on the ground of public policy to have intervene and there are numerous examples about it and hence I must say that the judiciary has used this as not only the custodian of the constitution we say that the judiciary is but it's also a judiciary is the guardian of rights and public policy is one such element in which the judiciary gets moral ethical and legal authority to intervene in protecting rights of individuals and that's where probably there is some kind of a justification of the use of the term public policy and giving the courts the right to do so. I did attempt to list out the issues that we will discuss for the day and the issues are before I come to that you know I was just going through and trying to ask my colleague to get me some information about how many times the courts have used public policy in their judgment. Now this is not in terms of say they have used it as a ratio but they have generally you know looked into discussions and so this is just a random search. First let me tell you I did look into a very interesting article of 2016 from the United States and the author and from there I got this idea he actually searched that how much did the US Supreme Court use the term public policy and for a matter of nearly 40 years he said the US Supreme Court used the term public policy nearly 7,000 times right. So they have used the terminology nearly 7,000 times that is what his article had to suggest but remember this is not public policy these are the contradictions public policy that has been used in all kinds and forms of cases. So I tried to research about how much did the Indian Supreme Court use this from 1951 onwards and I found that the Supreme Court has used it in 611 times which probably clearly tells that it is quite popularly used in cases and it is probably one of those you know challenges that is taken up before the courts. So if the courts have taken it for 611 times that is the top court I am sure the lower court should have used it for more number of times. This clearly now shows that the term public policy is of some interest and I think we need some attention to understanding this we have to play some significant role in defining this probably looking at its application as well. Okay so I am going to start off with one of the illustrative cases that you know came before me and I will just try and probably share it with you. So we had an interesting case about an institution that employed an African national who was here on you know a student visa but they employed him and you know of course I am not sure whether when you have a student visa you are allowed to work and you know there are some challenges about his employment you know he was not paid later on for a couple of months by the institution. So obviously you know he was he had qualified himself in law he had done his PhD in law in India please know. So as a lawyer he said this is not done I am entitled to this payment so he does serve legal notice for the remainder of his payment and later on the matter comes for an adjudicatory process. The first thing that was asked in this case is you know could he be under employment you know did he have the requisite legal documents for employment. He was here just to study but he got himself employed. Now he is seeking enforcement of a contract because he is asking his dues and he is asking for payment of his salary and now suddenly the institution you know defends and says look this is a contract that has to be held void and it is not in public policy at all because this guy has not legally entitled to work in India and hence because this is void he cannot actually make a claim for his salary. Now I think when we talk about public policy friends interestingly when I look at what public policy can mean if suppose there is a migrant you know staying in India can you enter into a contract with a migrant who probably is not legally entitled to stay in India right if his stay is illegal can a contract of employment be made. Now I believe that when I said that public policy can be public interest public morality and public security please note when we apply the term public security I have tried to do some kind of a research on what public security can mean and can this case come under public security because please note you are violating a given law which probably does not give you you know the permission for employment right and in this case whether the candidate who is seeking enforcement and salary and whether the institutions have violated a given law of the land to some extent yes they might have done so right and hence in this context if the adjudicatory body has to determine that this is a contract that is against public policy because it encourages people to come on one visa and work and that is not really something that the state should encourage that is not something even citizens of any country should encourage to some extent then we try and understand oh fine this is how public policy in contract should apply right so I think to some extent in all of these when I talk about the role of the courts I find the courts have played a very significant role a very you know very important role and in some cases where probably you know they have uphold public policy in some cases they have not but I think they have reasons why they did not do that so the courts have played probably a very significant role in probably adjudicating matters and saying this is what public policy is to be honest friends public policy is like you know it's like a protectionist policy right it tries to protect the interest of different stakeholders for example it can protect the interest of the parties to the contract it can protect the interest of third parties that is outsiders it can protect the interest of the state like in the example that I gave you if public policy has to be protected in that contract it is the interest of the state it is the interest of the government it is the interest of the society that the adjudicatory officer had to protect right so you can't encourage such kinds of contract because they're in violation of a given law right so I think the courts then definitely have a clear role as defined to either see that yes we are in favor of this or we may not be in favor of that Interestingly you know time and again we have seen public policy being adopted by the courts and in different matters I think you know if you look at the taxation matters of Vodafone the trains energy case the different kinds of arbitral awards that is being challenged right now very often they're not when public policy is applied by the courts I do not have so much of a problem but today most of the commercial matters are going to arbitration and the arbitrators now are getting very powerful in application of public policy the commercial courts are getting very powerful in application of public policy so when you know when when the top court doesn't you know there is a lot of transparency there is a lot of you know scrutiny and it's a reportable judgment but when an arbitrator decides to apply public policy unfortunately unless the arbitral award is challenged and the challenge is accepted you know the scrutiny in public is not that because arbitral awards are usually confidential in those circumstances how that public policy is applied becomes a very critical issue in many of these cases and hence you know some authors believe that this term public policy because it's not so much defined has given unreasonable powers in the hands of the arbitrators to decide certain matters and is it good not sure sure right anyway that's that's the other side in which we have to evaluate whether we need some kind of a legislative understanding of what public policy is so let's take you know certain other examples and let me share with you the fact that when I say okay you know interestingly we are all experts of public policy we have attained the expertise and COVID-19 has helped us all to become experts in public policy but we have become experts in public policy of health thanks to COVID-19 each one of us has an opinion on the you know vaccine pricing each one has an opinion about the second dose each one has an opinion about what should be charged should it be free because you know public health is public policy right now if I just take an example of public health and public policy you know I'm reminded of this national pharmaceutical pricing authority not many of us actually know about it and that's the reason I have taken that example national pharmaceutical pricing authority now this is an authority that actually fixes prices for essential medicines life saving and others there are a lot of drugs more than 400 drugs have been listed under this pricing authority and basically what we do is we fix prices right because you know they should not be profiteering from this so pharma companies have to sell it at a fixed price so that is that regulation on public health and public policy but the question is if there is an attempt please note to sell these life saving pharmaceutical medicines beyond the price that is fixed so if there is a contract if there is an agreement obviously we'll all say that this is an agreement against public policy because pricing please note underlying is of public concern it's not only contracts contracts there's different elements prices one of the elements in contract it's one of the elements in contract right so if the prices are say not that the policy expects you to charge right that kind of an agreement or a contract is actually supposed to be against public policy right and hence when I apply the pricing mechanism one of my students asked me said if a contract is against public policy so if it's overpriced because the law fixes a price now I'm sure you know that code vaccines there is a price cap right I'm sure some of us have paid it the Sputnik V vaccine also is price capped I'm not sure it's capped or is it market driven anyway there is a price to it and the government may regulate that now once there is a regulation anything that is about against public policy the point that all of you have to notice if it goes beyond it whether the contract is legal or merely why because please not friends if a contract or an agreement is just against public policy it does not meet the contract illegal necessarily it makes the contract only what so public policy is not about creation of an box of illegality of acts or conducts not necessary so it is only trying to regulate the wrong behavior correct the wrong behavior if possible and that job is given to the courts so public policy tries to say okay look this behavior is permitted and this behavior is not permanent because interestingly friends what contract has become today is to be honest sometimes contract becomes an instrument of exploitation where the inequality of bargain right right now there is a huge demand and supply gap right now the demand is more of vaccines and supply is less because of this inability a contract could be used to exploit consumers and citizens in those context I think the protectionist policy of public policy protectionist policy has to become in place and that's the basic reason why I believe that when it comes to the guardian of rights or guardian of protecting rights public policy plays a very critical do take the second instance of employment most of you in the legal profession would know that the first proper definition of public policy came in the brochanath ganguly case which was an employment contract because it was then that the courts realized that employment contracts are subject to exploitation subject to unreasonable causes subject to unreasonable conditions because the employer is in a higher bargaining position and the employees probably has to just you know agree to those terms now an employment contract is a private contract and why should public policy come to the private contract probably because it is important to protect the rights of employees it's important to send a message across to employers that unless you're fair reasonable the contracts will not have any enforcement but look from brochanath ganguly I think friends we have come a long way long way in the sense that today employers you know apply something what I say is the mischief rule and that's where you know I always believe can public policy catch that mischief always because contractual clauses are becoming you know very very unique you know there is a lot of experimentation lot of innovation in contractual clause there are new clauses that are coming every day I'm sure some of you have heard about some of the recent clauses it's not so very recent but you know there is a clause called escrow agreements quite quite you know not something that I had even studied already so you know there are some very innovative clauses that keep coming and some of the employer tries to trap the employee into those kinds of clauses that track him right so I'm sure most of you have seen the clauses on indemnity or employment where employees have to sign a three-year bond and give three lakh rupees right I've always said the public policy in employment bond is about the fact that can the contract be mutual to both the parties if there are employers in the house please give me some attention you know I have seen some of these employment bonds what do they say they say that you know sign them has to work in our company for three years and in between if he leaves within those three years he has to give three lakh rupees right that is generally how it is termed in contract but I've asked employers who have come for consultation they have said that's fine if you think you know it should be in favor of public policy how should you draft it you should say that in case I fire the employee within these three years I will give him three lakh rupees you know the point is there is a duty of the employee that should be a duty of the employer it should be equal to both the parties how can you know a contract just have obligation towards one party mutuality of obligation please note mutuality of obligation mutuality of liabilities is the cornerstone of public policy a contract cannot have obligations only for one party that only he has to do he is liable and I have no duties I have no liabilities friends I did come across a very interesting case of 2019 from the Delhi High Court in which interestingly you know the contract was made in such a fashion that you know liability for damages was completely removed how it was done I don't know whether it was negotiated properly but it was read properly because in contracts very often they're not negotiations reviews and drafting plays a very critical role whether it was adequately done or not I'm not sure but the court then simply said you know you can't have a you know there is a law on damages it's giving you that you can't have a contract which says you know what is given by law is not given by the contract right so you know a contract cannot in any way diminish rights already granted to individual sensitivities that's another cornerstone of public policy right if the contract infringes your rights that is already granted by a statue that's clearly what contracts cannot stand for they have to be avoid because the law gives you rights and contracts cannot take away their rights please note when I say take away they cannot even abridge it or waive that right so when employees have certain rights given by statutes I think they have the right to see it enforceable despite a contract having been there you know friends one of the interesting issues of public policy in contracts have always been and this is quite very popular and I can ask you this question right now let me ask you I think you know when I said a dialogue I think it's the right time to have you know can I have a choice of law in my contract what do you what do you guys think let me just go and put the chat box on can I have a choice of law in a domestic contract okay let me be more specific can I have a choice of law in a domestic contract is it possible okay so interestingly in most contracts there are two things there is a something called choice of forum and there is a choice of law can I have one choice of law in a contract in India two responses three Raghavendra is coming with yes Subramanya is also saying no I don't think so okay yeah because you know contract uses that freedom isn't it you can agree to anything that you want so let's assume that me and Vikasji are making a contract in India can we choose Singapore law as being applicable to our contract we are we permitted to do that interesting responses from all lawyers I hope if you're law students your answers if they're wrong forgiven but if you're lawyers your answers okay saving class now you know you know go back to this very interesting proposition of what I say as the mischief rule okay now what is a mischief rule and the mischief rule you know I try to do some kind of mischief in a contract try and experiment now for example me and Vikasji making a contract and we choosing Singapore law right do you have the absolute freedom to choose any law that is applicable to your contract for example when we say choice of forum can you choose arbitration before quotes as choice of forum right the answer is yes because the law in India very clearly says that you are permitted to go in for an alternate dispute resolution before you go to the courts so choice of forum France is definitely acceptable and it's one of the exceptions under section 28 right of the Indian contract so you have the freedom to choose the forum you can do consolation before arbitration you can do arbitration before quotes that is something that law has always allowed you to but what about choice of law now you say that I want arbitration okay but I want the Singapore contract law to apply see as the forum Singapore arbitration law is the procedure you know what is the substantive law applicable to the contract France interestingly you know remember in most other jurisdictions you know what is public policy public policy is the law of the land right now if it is the law of the land how can me and because G escape the law of the land and take Singapore law because we think Singapore law is best so when I say the Indian contract law applies to the territory of India what does that mean if it's applied to the territory of India does it apply to the citizens of India who are making contracts in India are Indian citizens given the freedom to go and choose Singapore law friends please not I can choose Singapore law right but should it have any close nexus or connection to the subject matter of the contract or can I randomly choose any other law that is applicable to it friends remember you know when you talk about public policy the point is if suppose me and because go to Singapore we do arbitration that we ask the Singapore law to be applied by the Singapore arbitrators then later on because comes here and he wants to enforce the decree or the arbitral law whatever he goes to the Indian court do you think the Indian judges will you know appreciate Singapore law and say ha ha yeah apply Karlo Chandigarh main I miss go apply Karling why would Indian judges even intervene in such a law because they're not experts about Singapore law they're experts about Indian law Indian contract so you know when it comes to choice of law you know this is kind of a gray area because there are a couple of cases one is the 2006 case another is 2013 TDM TDM infrastructure case there is a WSG case where the courts have very clearly said that two Indians cannot choose a foreign law as a law applicable this is against public policy and I believe I go by that judgment if it's an international contract you can choose a foreign law it's possible but that foreign law please note again is not for you to choose it has to have some close connection to the subject matter of the contract you know it's not like you know you go and say let us choose Kenyan law or African law or some other it has to have some close connection to the subject matter of the contract so I think public policy in certain clauses of contracts are also something that have very clearly been adjudicated upon right so right you know we just go a little bit further let's take you know public policy in social institutions because don't take me otherwise this is a kind of my favorite topic so you know you should pardon me if I indulge a little bit more in this because you know interestingly I told you public policy is public interest public morality and public security but and you can dispense with the slide I think so you don't want the slide because now a lot of people have known people would like to see you on the full screen that's what I'm saying okay that's okay no problem okay you guys want to see me more than what I have to present I'm really glad for that okay on the lighter side okay very happy okay Dr. Malik Arjun is with us he's a contract expert himself so sir Namaskar really privileged to have you sir sir I was just saying about public policy now you know now I think it makes sense because I know who my audience is because I will most focusing on my slides so what is public policy in terms of you know social institutions you know I have a couple of examples to share with you and these are examples that have always taken during some of my presentations you know there was this very interesting case called baby M case in the United States it starts from there so these are what we call as the surrogacy contracts in India we have a baby M case in India as well it is called the baby manju's case the Yamada case so you know when you look at how the United States dealt in that case the surrogacy contracts case you know surrogacy law is about the social institution of marriage you know adoption children we are yet to get the bill please note the bill is pending I think the 2019 bill is already there I'm sure we should get a law in place but the fact is all throughout so far the relationship of surrogacy has been a tripartite contractual arrangement between the intending parents who want a child to the fertility clinics and to the surrogate mothers right I don't know if you know this and this is something for Dr. Malik Arjunayasar because he's one of my role models and someone I'm a real fan of sir we have always sent in contract law when we teach contract law that consent is important free consent we say coercion undue influence fraud and misrepresentation and mistake vitiate consent consent is very important but sir you will be surprised to know that our surrogacy clinics have designed a contract in which they have what is known as irrevocable consent let's test oblique policy now here okay because this is not we don't have a judgment yet I'm actually awaiting a judgment on this so this is like an experimental case study for now you must be wondering sir what do you mean by any irrevocable consent can contracts have irrevocable consent can you force somebody inside a contract I think if somebody wants to come out of contract he or she should be able to come out of the contract the consequence of the breach yes of course you have to be right but what do you mean by irrevocable consent is there what is irrevocable friends you know the interesting part here is it's over happened please not in a case I can't give you the name because confidentiality and so on and so forth so a surrogate mother who accepted to take the you know embryo into her womb she obviously you know signed the documents and said okay for the next nine months I will have this fetus in my womb and then I'll hand over the child to the attending parents whatever is the compensation I'll take it and go but what happened was in between because of physiological challenges and changes she changed her mind after 10 weeks and without informing the fertility clinic and without informing the attending parents she went in for an MTP medical termination of pregnancy and under that you know her single consent was sufficient now the fertility clinics have understood this case study so much that nowadays saying look any surrogate mother must give us an irrevocable that means she cannot revoke her consent within those nine months if once agreed you will deliver the child and only then you will leave the counseling actually insists on that irrevocability that means it is a one-time agreement you can't go back on now if you ask me and if there are women in this house who believe in you know right of women for medical termination and you can do medical termination for the health of the woman it is your bodily autonomy you have a right to decide and you can probably change that decision after 10 weeks I don't think there is anything wrong about it and I'm not sure whether that irrevocable consent part of that contract should be held against public policy debatable most of us may think it is in favor of public policy because once you agree to something you better fulfill that commitment but I told you about the physiological challenges and changes and problems that women face during pregnancy can I change my mind and if it's good for my health which is physical and mental well be why shouldn't I have the ability to do the same what I intend to communicate friends with this surrogacy example is contracts are being designed to protect one institution or one person as against the other who has made this contract it's a fertility clinic who has made this contract to protect the interning balance but does it look against the surrogate mother probably yes and is the surrogate mother having a choice other than to sign the contract because probably the bargaining capacity is far lesser as compared to what is that within the fertility clinic assembly enterprise so somewhere you know I believe the role of public policy is to catch such mischievous clauses and terms in contract to moderate business and human right interest because as I told you it's the guardian of protecting private rights public policy is that guardian and I think if the courts take this initiative of determining what is the level of public policy in India I think to a larger extent they would have served the interest of the legal system as well the interesting proposition that I'm going to place before you again it's going to be a challenge of how is public policy protecting social institutions or how is public policy determining social institutions okay how many of you think that a pre-nuptial agreement is valid in India is it possible to have a pre-nuptial agreement I've already discussed this several times but let me again ask the audience let me see what response I get in the chat box what do you think hey Kamath this is if it's Aditya Kamath the one that I know that's an unfair answer Aditya okay is pre-nuptial agreement valid in India why not I know I am one who always thinks that you know we lawyers should always answer yes when a client comes and asks you this question nothing is impossible in India it's always possible only thing you have to know how to make it possible right so why can't pre-nuptial agreements be valid in India it's invalid in India many of you are saying why why why is it invalid see I believe that pre-nuptial agreements are very much fine if it's valid in the United States why shouldn't it be valid in India because I think most of you are saying no for the simple reason is I think you all believe that pre-nuptial agreements are against public policy basically because what do pre-nuptial agreements do they try to infringe certain rights that are given to women in terms of maintenance the custody of the child and so on and so forth right so I think that is where somewhere most of us think that it's not valid right but I believe that if you have seen the 2016 Bombay High Court judgment the Bombay High Court has said pre-nuptial agreements can be enforceable in India provided it does not infringe the rights of women that are granted by the statute right let me give one instance in which a pre-nuptial agreement can be valid and cannot or need not be opposed to public policy if suppose you know me and my fiance right we have our individual properties before marriage right we have enough money immobile land and we want to keep it separate we don't want to mix it as matrimonial property after marriage we want to clearly keep it separate segregated a pre-nuptial agreement can be made in India for that purpose but of course maybe most of you have said yes because to some extent you know it may infringe the rights of women right of children the best interest of the child it actually probably infringes family and social values in India right so I think again public policy interference into social institutions like family marriage and then there is a contract that is actually designed in those circumstances also raises the challenge of why the discussion of public policy becomes relevant and important of course you know the issue of public policy is always based on public opinion and to some extent let me talk about one interesting cross when it comes to section 27 the most popular section to determine what is public policy so section 27 of the Indian contract at friends says that an agreement in respect of trade is void right it has always said that and we always say whenever there is a violation of section 27 there is a violation of section 23 as well and under section 27 I'm sure most of you have read a lot of cases but one of the most interesting clauses that you should do the non-compete the non-solicitation the confidentiality these are normal crosses friends I'm sure you have heard about them in other languages but the clause that I'm very interested in is called the right of first refusal clause the right of first refusal clause right it is RFRO clause that's how it will be shot at this point so if you go to the Zahir Khan case the Urat Singh case you'll definitely see how this right of first refusal clause comes into place but look at public policy dimension over here friends the courts have said that a contract cannot restrain somebody's freedom of trade occupation and business especially when it comes to B to E contracts that is business to employee contracts B to E but the same courts have said that the right of first refusal clause is valid when it is B to B contract especially when it is about shared transfer and restrictions on shared transfer liability so the same clause is valid in one case because the parties are in an equal position as against what parties are in other positions so again over there what one will have to appreciate and understand friends is that the concept of public policy is quite fluid it's quite flexible and it is for the judges to determine where and how this test should be applied which clearly brings down to this fact that the judges have adopted two mechanisms one if they think that the whole contract with its main purpose and object is against public policy they have held the whole contract to be void but where they found a clause to be objectionable as being opposed to public policy only that clause has been read down right the doctrine of separation with the blue pencil rule all of that has come into place and any kind of operationalizing of that clause the courts have clearly you know resisted upon now you know I don't know how many of you understood that very small word in section 27 of the Indian contract that restraint friends there are 16 cases on restraint from high courts and Supreme Court on the word restraint there are two sections in which the words restraint appear section 27 restraint of trade and section 28 where is restraint of legal proceeding again let me talk to you about an interesting clause called the prescriptive clause have someone heard about a prescriptive clause by any chance some of you might have heard about it now again you know this is again kind of a mischief that is being played in contracts where you know parties are told that they must inform the claim within three months or four months this is a kind of a mischief to actually dodge any kind of period of limitation right so this is a prescription of claims prescription of defects for example let me tell you how this prescriptive clause operates in a real estate project now in real estate contracts you will notice that we have seen a lot of mischief by most of these builders and that's why you have the competition law the rera law that is coming into place to actually regulate the builders in the real estate sector but you know they have they actually had a ball game you know they had a ball time of having unreasonable contracts and clauses today in the real estate sector they have what is known as the defect liability period right it's for five years that a builder must repair any kind of defect in the structural aspect of the building right that's what the rera law kind of gives a prescription about the defect liability period most works contract with PWD also have this defect liability period but now the law says you are liable for the defect liability period but now what both these builders do is they are very mischievously put this that once you come to know of the defect or once the defect is identified you must notify the builder within three months if you don't notify the builder within three months the builder's responsibility to repair the defect is extinguished his obligation will be terminated this is what is known as the prescription or prescriptive clauses so the prescriptive clauses in some way try to reduce or diminish the liability of the other party which is so prescribed by law so the law will say one thing but what I'll try and do is to play a mischief and reduce my liability in that that also is one of those kind of challenges that have arisen in trying to determine whether a contract or a clause is in favor of public policy or not fine the last point I'll close with this there was a very interesting empirical study that was made in the US and the empirical study said if suppose public policy is determined by legislative action it's defined by legislative action how much successful can it be before the courts of law like will the courts accept it and apply it and will you succeed this study in the United States said that you will succeed 66 percent of times if public policy is governed by legislation but if it's not governed by legislation if it's left to the judicial interpretation then the success rate is just 34 percent what does it say it says that when legislatures say is it it is codified there is certainty and then it is about interpretation and application but if it's led to the courts or the judiciary obviously there is a some degree of uncertainty some degree of discretion some degree of you know whether it will be applied or not applied and hence today if you look at the competition law and even the consumer protection act of 2019 to some extent actually the public policy and contracts have been codified we know there is some kind of certainty already there and the RERA is one such law that also has becoming you know trying to define what is public policy in certain kinds of context so legislature if they play a defining role the litigations are more certain the litigations have a clear outcome and hence in trying to lay the test of public policy I think the legislature should play a very very critical role they must come up with more specific legislations on these either on public interest or on public security or on public morality that would go a long way in protecting rights and in protecting contracts and making a contribution to contractual jurisprudence I need to cruise and allows you know some time for discussion if necessary but let me ask you a couple of things now we came across a very interesting rental agreement because you know this was a rental increment in the United States and the challenge was that this was an increment between same sex you know couples and the United States judge interestingly here you know speaks about public policy he says till same sex marriages legalized this was a time before it was legalized in some of the states in the United States so he says unless the same sex marriages legalized determining the element of this kind of an arrangement or agreement between this couple is a matter of public policy so you know I'm just closing with that kind of a dimension to only suggest friends that interestingly when we say public policy it's not necessarily of the public in nature or public in character public policy is probably quite personal in character at times and it can actually determine the rights in between the parties so as to look at maybe what is the popular perception popular opinion popular sentiment whether it is something that the consciousness of our society can be accepted in this circumstances whether it is right or wrong whether this kind of a behavior should be encouraged or not whether this is necessary in national interests or not and hence the judges have used all these kinds of rationals to intervene and determine the levels of contract finally I'll close by saying this that it's not only the clauses it's not only the contracts that are challenged on the ground with public policy interestingly you will also notice the performance of a contract sometimes is stopped because it is not in favor of public policy these are elements in government contracting right you will notice that the contract per se is not a problematic issue the clauses are not problematic issue but we have cases in which the courts have intervened in the performance because they have found that the performance of the contract is not in favor of public policy so that's an interesting you know way in which the courts have come into you know intervening because of course government contracts have a nature of public interest obviously I cannot deny that but it's not on the clause it's not on the contract itself but on the performance side right this was a case very recently of 2020 in a case of substituted performance that was expected and the courts have come down heavily and said that's not in public policy and ends the performance need not be so that difference was to take some discussion unfortunately I had some more discussion into the time constraint I had to cut short that but I think what is the purpose of my interaction is just to ignite your thought on these two terminologies ignite you know your mind to read more research more apply the element of these two words maybe you know it's important that we have just understood the significance of this in litigation in a practical study that's more than sufficient for right and that's the whole attempt but let me also say that the problem of this is not only in India my research tells me that it continues to be a challenge in the UK and it continues to be a challenge in the US as well so we are not new to this challenge and I think it's an interesting one it keeps the subject alive and I think that is the whole purpose of public policy thank you very much friends for your attention thank you for joining as well if you should you have any questions additions some suggestions to make I think we have a couple of minutes for that I hope with the permission of the guys two facets actually came out one was that it was one of the sessions where the participant kept on increasing it only showed that people shared it that you should join the session that the session is going on with number one and number two the way you have explained the progenar's judgment and again I'm by connecting all these dots I am reminded that relying upon progenar that equal pay for equal work just just here in this celebrated judgment of the deep thing again invoke section 23 and say that it's the public policy you would be entitled for full pay then there's a judgment of Uptron India versus Shamib Hanwe and it says that let's assume an employee is the said if you're absent for this much time your services are terminated it says it's again against the public policy services then again whether contractual employees they say that you are joined for 89 days your services can be our core terminus after 89 days again it's against the public policy it's it's so taking the entire arbitration the service jurisprudence along with this it shows the amount of knowledge and why your books are with and I will ask Mr forgive me for the pronunciation is wrong because I've been told by many people Dr. Manikai has joined what is his comments and I've asked him to unmute himself yeah thank you so much for inviting me on forum am i edible yeah at the outset congratulations to you and you have been giving a very important intellectual feast on every evening congratulations and you have been doing a great job and thanks sire for recognizing me on the screen and for giving the opportunity giving me this opportunity nevertheless I don't have a question but I would like to offer my comments and responses on two aspects one on the fluid nature of the concept of public policy the other on the new concept Mrs. Iran introduced now rather started excuse me debate on that that is irrevocable consent with respect to surrogacy agreements I think yeah with respect to that concept I hold a view that it should be held as against public policy when debated for the reason it's good that you went on to say voluntariness is there not even at the making of the contract you almost went on to say even after making of the contract if I am ready to bear the brunt of the bridge I have a freedom to bridge I really appreciate that idea in fact yes however ridiculous it is however wrong it is so far as contract law is concerned all that contract law looks at is if you are ready to compensate you can reach we can say so in some way probably you would say by all means you can say so well that being the case and on the other hand since the freedom of the surrogate mother has to be honored and there may be good reasons for that as well hence I hold a view oh since the idea of irrevocable concept cuts at the root of the contract law itself in limine it has to be dismissed if not let the courts hold it as the object of the act is against public policy as such it's wide and enforce unenforceable well that's my response to the to be shaped law you have spoken about and the next and important one is I'm so glad that you're focused on public policy alone though you started talking about contract law which is very important and less spoken area since it's a matter of interest for me too if you permit me uh I'm not be able to uh so do you want to share the screen yeah no no uh I can am I do I have permission yes permission let me share this quickly and tell for the benefit of uh audience I'm sorry I have not noted the case here it's so interesting that uh it comes back to your second question namely should public policy be legislated or should be left to the judges I am of the view that it should be left to the courts for the reason you did establish by quoting the statistics 66 and 30 percent what was established was was certainty is the object to introduce certainty or to do justice in a given case if the object is the second since certainty is always not to be adhered to rather some flexibility is required and the cases have to be decided on case to case basis that being the case I am of the view that there shall not be legislation in defining public policy it should be left to the uh courts to decide interestingly you must be going through this slide public policy is a vague and unsatisfactory term I'm sorry I'm not able to bring the case in which the observation is made the test is so fantastic two twin touchstones of public policy are advancement of public good and prevention of public mischief but who knows what is public good what is public mischief they are another set of vague words for which the fantastic test that comes is which I am very much appreciative of these questions namely whether something is in advancement of public good something is in prevention of public mischief have to be decided by judges not as men of legal learning suggesting that bundle up your legal knowledge and keep it aside and then as you must decide it as experienced and enlightened members of the community representing the highest common factor of public sentiment and intelligence probably this expression too needs interpretation but it makes sense well the rest you may ignore I was very fond of bringing this idea before and I was also suggesting that let the fluid nature of public policy continue let there not be any definition by any legislation and uh let the courts continue to decide it on the case to case basis I think with these two responses without taking much time I thank once again uh because for giving me an opportunity to share my thoughts on a fantastic lecture which Sairam has delivered thank you thank you Anandal thank you Vikas I have to thank Dr. Sairam for giving us a fascinating thought processes and I have to mind it the last time we had connected with Dr. Malika Arjun was on 21st of February when we had wished him on on his birthday and he's a principal in the KLE college so it's always a fascinating one true if I can just you know add to what Malika Arjun sir had to say the interesting part of this dimension of flexibility with the judiciary is rightly said by Lord Denning he said that you know when judiciary gets this right the judiciary can actually reflect the aspirations of every generation in determining public policy so public policy is not the reflection of only one generation public policy is dynamic it can change from generation to generation and it must reflect the consciousness of the generation in the society and hence it can definitely be something that can be altered modified changed and probably one of the reasons why the judges have been given the you know task of determining it so rightly under the law. Secondly sir when we talk about say I'll just talk about one such case study which some of our participants or audience will be interested you know in 2017 we got this IPL ticket so what IPL ticket does is it says that even if one ball is ball you will not get a refund so what had happened that time is in Bangalore unfortunately evening rains sir you know and the match was unfortunately not completed it's hardly 40 hours and within that 40 hours so he came to us to say can I challenge the IPL ticket conditions as being opposed to public policy of course you know it's one-sided who has bargained it yeah and just imagine if that's the condition even if one ball is balled you will not get a refund no partial refund no partial right now the justification that IPL gave us you know we are investing the place I've already come to the stadium the sponsor was there the kingfisher beer bottle is available over there Bangalore okay so guys please forgive me because you don't look at us in an envious manner so there is a kingfisher stand so you know so we have spent the money so the fans the fans cannot get it back right but my point was isn't a partial so sir if you recollect when I was reading how the consumer protection act 2019 is trying to reflect on contractual rights you will notice that the consumer protection act 2019 makes an attempt to look at this kind of behavior it says that if borrowers repay the loan early you can't impose a penalty that would be treated as unfair right so I think this unfairness of contract unfair trade practices I think to a larger extent seem to have been clarified thanks to the competition law and the consumer protection act because sir you will notice we were talking of unfairness in contracts in two stages one is the substantive nature of unfairness in terms of the clauses itself second is the procedural nature of the unfairness because you know most of us have to sign on dotted lines take it or leave it contract we cannot bargain it we cannot negotiate it and today even if you look at the insurance sector if you look at the IPL if you look at airlines everywhere the consumer has no bargain on the unreasonable clauses that are there and hence I think the determination of public policy over that becomes very clear for example during COVID-19 times the airlines refuse to give a refund they said you can rebook but we will not give you a refund because the you know COVID-19 you know sudden lockdown came into place so many issues do arise I think yeah it makes the subject interesting sir like you said thank you 22 questions one is employment contract states that in case in event of shorter notice the employee is required to compensate the employer based on the ctc but employer asks the employee to leave and notice period is not served then employer is liable to compensate on the basis of the basic pay and not ctc against public policy what does your take I am not understood that question entirely but he says the employee if he said let's assume there's a three months notice period and he says he gives one month then he has to give the employee has to give the full salary whereas if the company is to give a shorter period then they only have to pay the ctc I will just leave that no that's what I said so you know basically if I have to answer my perception of public policy is that there should be mutuality of obligation that is how I see it it cannot have unfairness or an upper hand to the employer that per se goes or defeats the whole purpose so that's my understanding of the same but I think you will see that such kinds of conditions are existing unfortunately you know I remember a case that I often share it with my students it's from Satyam computers and I often say this had that gentleman from Satyam computers not challenged his employment contract you would not have got that beautiful case on employment board so people like me and you unless we challenge it we don't get the citation we don't get a case law for discussion in lectures so I think somewhere you know if that unfairness exists it must be challenged and I think it must be put down but again let me tell you there's nothing like an absolute fairness doctor remember that there's nothing like that it never exists anywhere in more legal system so some degree is fine but if it's you know if it's so unfair that it shocks the conscious of a society the courts will definitely intervene so what you're probably saying is I'm not sure the details will have to be looked into it has to be studied before a comment can be said but I think this is a general answer that can be reduced to and agreement restraining and advice on joining any other company is head by section 27 of the Indian contract this is posted at 538 of the Indian contract kindly clarify it is it can be considered to be interesting to trade but depends upon again the details of the clause he has to read the judgment of the Zaheel Khan the famous regulator precept India versus Zaheel Khan yeah that is that will give him some insights yeah that is about the right of first official but I think what he's talking about is a non-compete clause that has a slightly different you know but some but a broad idea flows from that precept India versus Zaheel Khan yeah yeah that will be the last question hello me who that question and first of all I would like to thank Malika Juney sir because he has always been a very good guide for me since these many days sir is my role model as well and my senior Satish sir is also in this room and I would like to thank him also anyway sir straightly I will come to the point without wasting the valuable time of all the honorable and respected speakers Satish sir sir my question is see there is a service agreement between the company between the between an insurance company and the employee in which there is a clause stating that the employee has to work for two years from the date of joining failing wage he has to pay he has to compensate the company double the amount of the salary for the remaining period for which he is not going to serve so what I want to know is whether that particular clause or that agreement is become it can be termed as unfair unfair practice or is it against the public policy or it is hit by section 27 of Indian contract act wherein it states that an agreement in restraint of trade or profession is not valid so I just wanted your senior's input so that we can we can learn that's it sir I rest my question that's all sir I was just waiting to be given the chance to unmute myself and so you know you asked a full entire question of a chapter in that book so that has several cases regarding this this is a very common employment condition in most private sector contracts it is called employment bond now they've changed the name to call it indemnity bond if you ask me why they have changed it because they thought the amount in employment bond is treated as liquidated damages and liquidated damages under section 74 have to be reasonable so if you go to the jurisprudence very cleverly they have redesigned this contractual agreement and called it an indemnity bond indemnity unfortunately in India has only two sections there are very less case laws on it indemnity amount need not be reasonable we do not have too many cases that suggests so right whereas damages ought to be always reasonable the principle of unjust enrichment applies so that's the reason now they have cleverly titled this as indemnity which means for the remaining period of the term of the contract you have to pay something right double the salary specific amount two times something like that they'll clearly say it the point is that the courts have consistently held that the bond is fine because it has to be justified but when it comes to public sector undertaking they've asked why have you fixed two years why have you fixed six years what is the basis of this term what is the basis of the amount that you're claiming is it based for training for example there is a karnataka high court judgment which very clearly said if it is an amount that is spent for training then if you reduce the evidence regarding the same that amount then can be recovered because he has left too prematurely and the employer has lost the service and he has invested in his recruitment and that can be recovered from the employee so that justification despite in that contract it was written two lakhs 66,789 was held to be recovered to the employer that's how the high court applied the rule over there so the point is very clear that the conditions have to be reasonable the conditions have to be fair and the bond can be enforced okay sir I have one more small doubt sir with your permission I would like to submit it the thing is my colleague my colleague himself by name his name is Vinayak Riker what happened he was he went out of the office okay by telling the reporting managers that I'm not able to work under your what do you say like under your irrespective to be irrespectable behavior because the reporting managers have been very bad to him and he left the organization and the very next day the very next day he received a mail termination mail from the head office now he is asking me to challenge the termination before the labor court because and there is a service agreement for him that he has to work for two years and as far as my knowledge is concerned he worked there only for around seven or eight months or nine months so remaining one year he he was supposed to work aspect service agreement but now what he is saying because of the mental agony caused by the reporting manager's life I left the job and moreover I am not moreover he has not been given any showcase notice as well so now he's asking me to challenge that so what I am thinking so I am I want to take the inputs like whether if that service agreement is valid then question of challenging that before any code of law does not arise so now he's asking for my input as well so in that I am taking your advice also sir I think you know my opinion over there would be to challenge the unlawful you know nature of termination or dismissive as the case may be see I think basically the contract is an evidence it's a document it's a deed right but the actions based on the deeds are also relevant and important for example I can tell you about how the notices serve what are the grounds of that notice for example in one case that we know of suspension was undertaken but no grounds of suspension were mentioned right so I think see actions are also something that have to be in tune with public policy apart from the deed the document on the contract both have to match that's why I said that performance obligations are also something that are determined elements of public policy right so Mr. Malik you can read the judgment of Uptron India versus Shamivar 98 Supreme Court and then there's one another judgment of this thing which say that if it is an unfair agreement and let's assume they say after termination of two days it's bad it has been heard in terms of section 23 to be a bad just read that Uptron India 98 Supreme Court. Sir in the offer later it is clearly mentioned that we will take your questions separately. I am saying we will take the session separately. Okay sir. We will ask Dr. Malika to give us insights. Thank you sir. Yeah thank you for giving me an opportunity. Yes sir. I will ask Dr. Malika to express his views and then we will part for the day and tomorrow keeping in view the latest judgment of what is famously known as Maratha judgment do stay connected with us tomorrow to understand what has been laid down in Dr. Jayasree Lakshman, Lakshmana Rao Patil versus the Chief Minister judgment to understand how the reservation and what is the law laid down there and Dr. Malika would express his views and before that we will say keep on wearing your masks get your vaccination done and maintain the social distancing that's the only thing we'll right now be done. Yes sir your expression and then we will a formal vote of thanks to Dr. Sairam. Thanks because sir you're inviting me once again it's a double bonanza indeed. Well I did give my responses to a couple of the aspects and I thank you profusely one last thing since you give me the opportunity I'm wondering and according to me a piece of law under Indian contract and I mean under contract law are the protective devices against unilateral or standard upon contracts like even though I have given consent even by writing if the though I have given consent if the other party had plots to take away his responsibility from the fundamental duty under the contract the contract can be challenged on the ground of fundamental breach like that there are many protective devices reasonable notice fundamental breach sometimes the courts have said the terms are unreasonable hence we call the contract bad since such a weapon which according to me is the first piece of consumer legislation that is not invoked very often with respect to some of the questions that are asked before going to 27 or 28 or even to checking making the courts to check public policy let's try to challenge the validity of the contract by invoking the flaws that exist with unilateral or in other words standard upon contracts and by invoking the protective devices that are evolved by the courts to guard the weaker party I can stress stronger party and at these contracts called standard bomb I think with that note and giving that thought and making you think let about it here my views on a very interesting subject that is close to my heart thanks to because that's all thank you thank you Dr. Sainab Bhatt who rightly has said that he has ignited the thought and as they say normally in Hindi agas achha ho gatan jam to achha yo once he has ignited the right thoughts we will get the right moment for the thought process of the public policy and he has given the bird eye view one can always understand that and look forward especially for the students and those who are at the law field or otherwise they can also look forward because he has given some way forward he has shown the right light and we have to traverse through the entire distance thank you to Dr. Sainab Bhatt we are and I might by the fact that he accepted our invite yes it was quite we persisted and that's what we have learned that if you keep on persisting you can always achieve there's nothing impossible impossible it is said I'm I'm possible so and he was kind enough though he was not coming forth because of his personal engagements but he was kind enough to give us a lot of resource persons who have shared this knowledge their knowledge on this platform and that's make us quite popular amongst the students and after the session I will request Dr. Malekai also to we'll have him on the platform on one of the sessions and thank you to everyone stay safe stay blessed and tomorrow to understand the nuances of the Maratha judgment and the reservation the constitutional bench to stay connected with us Mr. P. S. Rajagopal a senior advocate from Karnataka High Court would share his insights on that judgment thank you and thank you once again to thank all the participants and thanks to Vikas and thanks to Dr. Malekai as well thank you so much good day