Expression “public policy” - Indian Laws - General

Expression public policy The elusive expression public policy appearing in section 23 of the Contract Act is a relative concept capable of modification in tune with the strides made by mankind in science and law. An important early judgment of the Court of Appeal, namely, Maxim Nordenfelt Guns and Ammunition Company v. Nordenfelt, [1893] 1 Ch. 630 [ Nordenfelt ], puts it thus: Rules which rest upon the foundation of public policy, not being rules which belong to the fixed or customary law, are capable, on proper occasion, of expansion or modification. Circumstances may change and make a commercial practice expedient which formerly was mischievous to commerce. But it is one thing to say that an occasion has arisen upon which to adhere to the letter of the rule would be to neglect its spirit, and another to deny that the rule still exists. The dicta which Lord Justice Fry cites from Hitchcock v. Coker [142. 6 A. E. 348], from Tallis v. Tallis [1 E. B. 391], and from Mallan v. May [11 M. W. 653], are all dicta in cases of partial restraint, where the reasonableness of the particular contract necessarily came under consideration. The necessary protection of the individual may in such cases be the proper measure of the reasonableness of the bargain. When Lord Justice Fry passes on [14 Ch. D. 366] to examine the question of the existence of the common law rule, he assumes, as it appears to me, without sufficient justification, that complete protection of the individual is the only reason which ought to lie at the root of the doctrine. But the reasonableness of the legal principle which forbids general restraint altogether is not the same thing as the reasonableness (as between the parties) of the bargain in any particular case. With regard to the argument that the rule, if it existed, would be an artificial one, and would therefore admit of no exceptions, the judgments of the Judges and of the House of Lords in the case of Egerton v. Earl Brownlow [4 H. L. C. 1], illustrate, I submit, the distinction between a fixed rule of customary law and a rule based on reason and policy. The latter may admit of exceptions, although the former may not. Anson in his Law of Contract states the same rule thus, at p. 216: Jessel, M.R., in 1875, stated a principle which is still valid for the Courts, when he said: You have this paramount public policy to consider, that you are not lightly to interfere with the freedom of contract ; and it is in reconciling freedom of contract with other public interests which are regarded as of not less importance that the difficulty in these cases arises . We may say, however, that the policy of the law has, on certain subjects, been worked into a set of tolerably definite rules. The application of these to particular instances necessarily varies with the conditions of the times and the progressive development of public opinion and morality, but, as Lord Wright has said, public policy, like any other branch of the Common Law, ought to be, and I think is, governed by the judicial use of precedents. If it is said that rules of public policy have to be moulded to suit new conditions of a changing world, that is true; but the same is true of the principles of the Common Law generally. In Halsbury s Laws of England, 3rd Edn., Vol. 8, the doctrine is stated at p. 130 thus: Any agreement which tends to be injurious to the public or against the public good is void as being contrary to public policy . It seems, however, that this branch of the law will not be extended. The determination of what is contrary to the so-called policy of the law necessarily varies from time to time. Many transactions are upheld now which in a former generation would have been avoided as contrary to the supposed policy of the law. The rule remains, but its application varies with the principles which for the time being guide public opinion. (at pages 432-434) * * * The doctrine of public policy may be summarized thus: Public policy or the policy of the law is an illusive (sic elusive) concept; it has been described as untrustworthy guide , variable quality , uncertain one , unruly horse , etc; the primary duty of a Court of Law is to enforce a promise which the parties have made and to uphold the sanctity of contracts which form the basis of society, but in certain cases, the Court may relieve them of their duty on a rule founded on what is called the public policy; for want of better words Lord Atkin describes that something done contrary to public policy is a harmful thing, but the doctrine is extended not only to harmful cases but also to harmful tendencies; this doctrine of public policy is only a branch of common law, and, just like any other branch of common law, it is governed by precedents; the principles have been crystallized under different heads and though it is permissible for Courts to expound and apply them to different situations, it should only be invoked in clear and incontestable cases of harm to the public; though the heads are not closed and though theoretically it may be permissible to evolve a new head under exceptional circumstances of a changing world, it is advisable in the interest of stability of society not to make any attempt to discover new heads in these days. [Gherulal Parakh v. Mahadeodas Maiya, 1959 (3) TMI 58 - SUPREME COURT [ Gherulal ] Public Policy has been defined by Winfield as- a principle of judicial legislation or interpretation founded on the current needs of the community see Percy H. Winfield, Public Policy in English Common Law . Harvard Law Rev. 76. ......Now, this would show that the interests of the whole public must be taken into account; but it leads in practice to the paradox that in many cases what seems to be in contemplation is the interest of one section only of the public, and a small section at that. The explanation of the paradox is that the courts must certainly weigh the interests of the whole community as well as the interests of a considerable section of it, such as tenants, for instance, as a class as in this case. If the decision is in their favour, it means no more than that there is nothing in their conduct which is prejudicial to the nation as a whole. Nor is the benefit of the whole community always a mere tacit consideration. The courts may have to strike a balance in express terms between community interests and sectional interests. So, here we are concerned with the general freedom of contract which everyone possesses as against the principle that this freedom shall not be used to subject a class, to the harassment of suits without valid or reasonable grounds...... Public policy does not remain static in any given community. It may vary from generation to generation and even in the same generation. Public policy would be almost useless if it were to remain in fixed moulds for all time. If it is variable, if it depends on the welfare of the community at any given time, how are the courts to ascertain it ? The judges are more to be trusted as interpreters of the law than as expounders of public policy. However, there is no alternative under our system but to vest this power with judges. The difficulty of discovering what public policy is at any given moment certainly does not absolve the judges from the duty of doing so. In conducting an enquiry, as already stated, judges are not hide-bound by precedent. The judges must look beyond the narrow field of past precedents, though this still leaves open the question, in which direction. They must cast their gaze. [Murlidhar Aggarwal v. State of U.P., 1974 (7) TMI 121 - SUPREME COURT,]