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TMI Blog2015 (2) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... unconscionable sum would be clearly opposed to the public policy of India and likely to be interfered with under Section 34 (2) (b) (ii) of the Act. The above clauses clearly constitute an unconscionable restraint on the right of one of the parties to seek legal redress. The clauses are hit by Section 28 of the Contract Act. What is even strange is that even a copy of the said agreement is not made available to the other party. The Petitioner was only allowed to see/read the agreement. The Petitioner was required to contact the Centre Director with prior appointment. In fact, it is the Petitioner s case that he was not even given a copy of the agreement. It shocks the judicial conscience that the Arbitrator mechanically proceeded to pass an Award in favour of the Respondent on the basis of the aforementioned patently illegal clauses of the contract. The Court is unable to sustain the impugned Award of the learned Arbitrator - the impugned Award is hereby set aside. The petition is allowed. - JUSTICE S. MURALIDHAR For The Petitioner : Mr. K.K. Rohatgi, Advocate. For the Respondent : Mr. Himanshu Pathak, Advocate. JUDGMENT 1. The challenge in this petition under Section 34 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illing to continue for another term of three years. 6. As part of the agreement, the Petitioner was asked to give to the Respondent three signed undated blank cheques. If there was a dispute between the parties, the Petitioner had to bear the entire arbitration expenses which would not be less than Rs.10,000 per hearing before the Arbitrator. A further clause permitted the Respondent to hold back 10% of the gross salary of the Petitioner which was to be held in a sincerity fund which was interest free and repayable after three years. As a result although the Petitioner s monthly salary was fixed at Rs.72,222 after deducting Rs.7,222 he was left only with Rs.65,0000 as a carry home pay. 7. The Petitioner states that in view of the extremely one sided arbitrary clauses in the contract, he rescinded the contract on 20th July 2012 and left the services of the Respondent. The Respondent failed to pay the Petitioner the amount in the sincerity fund which was due to him. After leaving the services of the Respondent, the Petitioner shifted from Lucknow to Chandigarh. It is only when he returned to Lucknow to look after the affairs of his old property on 20th March 2014, he found a speed po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said notice is required to be delivered to the Centre Director/Centre Manager by Regd. AD post or hand delivered but duly acknowledged to be received so that there would be ambiguity regarding the contents of your notice and its serving upon Aakash Institute (Lucknow Centre). The notice for 3 months can be given only between 15th November to 28th November in any year after completion of the initial period of three years. If any employee gives notice at any time other than specified, it will not be accepted and will be invalid as per the terms between the above mentioned period, it will be assumed he/she is going to complete the coming next session. 12. Clauses 7 (d), 7(e) and 7 (f) read as under: 7(d) In case you are unable to adhere to the said mandatory notice period, you would be liable to pay to Aakash Institute (Lucknow Centre) a minimum pre-estimated pre-determined damage to the tune of double the gross-salary for the deficient notice period or the remaining period of the academic year/contract period of three years, whichever is higher e.g. if a person quits on 31st October of any given year after completion of three years, he/she will be required to pay 4 x 2 x Y rupees as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned cheque are drawn to ensure the encashment of the said cheques. Cheque nos are 328569, 328570 and 328571 drawn Punjab National Bank, Aliganj, Lucknow, (UP) Signature................... In case, the above said cheque gets dishonoured on its presentation to the banker for the reason of insufficient funds, a/c closed, stop payment or any other reason, you shall be deemed to commit an offence u/s 138 of N.I. Act and the appropriate proceedings shall be initiated against you before the appropriate courts of law. Aakash Institute (Lucknow Centre) is further authorized to take appropriate legal action to recover the balance amount if any. Wilful intentional breach of this contract would attract liability upon the employee for compensatory exemplary damages in addition to contractual liabilities mention in clause 7(d) and 7(k) and under any other provision of this manual. 14. The above clauses appear to the Court to be wholly unconscionable and opposed to public policy and, therefore, hit by Section 23 of the Contract Act. An award based on the above clauses which promise the Respondent to recover an unconscionable sum would be clearly opposed to the public policy of India and likely t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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