Agreement against the Public Policy
Introduction:
“Public Policy is whatever the government plans and chooses to do or even not do for the public”
These are the famous lines by Thomas Dye. The plans formulated and implemented keeping in mind the welfare of the public are referred to as ‘Public Policies’. It can also be said that public policies are one of the numerous techniques of governing the land effectively. Various laws, guidelines and regulations concerning a specific topic combined together form these policies. Public policies are not fixed in nature; on the contrary they are constantly evolving and are open to changes. In the case of P. Rathinam v. Union of India, the Hon’ble Supreme court declared that the expression public policy should be open for modifications and expansions.[1] The framing of public policy is a very dynamic and intricate process which requires the presence of a public forum. All policy drafting forums work with a single goal in their minds, which is to ensure the welfare of the people. It is important to have a public policy and follow it because those decisions made by the government on behalf of the people and for the people, have a perpetual effect on nearly every facet of life, including education, security and health care.[2] Having a well-organized public policy will make sure to turn the dream of every citizen of having an enhanced and improvised life style into reality.
“Ex turpi causa non oritur actio”
This is a Latin maxim which translates to the meaning that no action can be undertaken for an act which is found to be illegal by nature. This is one of the defences provided to the defender in a suit which is in pursuance of the principle of public policy, meaning no person should be the beneficiary of his illegal act.[3] It was also declared that any agreement formulated which is found to be contradictory to the policies of the public will be declared null and void.
[1] P Rathinam v. Union of India, AIR 1994 SC 1844.
[2] Md Nazirul Islam Sarker, What is the importance of Government and Public Policy and how does good Public Policy becomes bad policy?, RESEARCHGATE (Apr. 9, 2019), https://www.researchgate.net/post/What_is_the_importance_of_Government_and_Public_Policy_and_how_does_good_Public_Policy_becomes_bad_policy.
[3] Adarsh Singh Thakur, Ex Turpi Causa Non Oritur Actio, IPLEADERS (04/11/2021, 18:02), https://blog.ipleaders.in/ex-turpi-causa-non-oritur-actio/.
This authority of interpreting the policies lies with the Indian Judiciary. In Gherulal Parekh v. Mahadevdas Maiya[4] the Supreme Court declared that if an agreement is declared to be void as it is contradictory to public policy, it cannot be challenged under the grounds of freedom to enter into a contract. It also emphasized Section 23 of the Indian Contract Act, 1872 [5] which specifies that any agreement which affects the process of administration of Justice will be declared to be void in nature.
AGREEMENTS AGAINST THE PUBLIC POLICY:
AGREEMENT WITH AN ENEMY:
The constitution of India doesn’t explicitly define the term ‘Enemy Nation’ but it can be inferred that it denotes to a county or a government which is declared to be hostile by the Government of India or which is not lawfully recognised by the government. Any country with which India has an ongoing war scenario might also be declared as an enemy nation. Therefore, in order to preserve the integrity of the country, any agreements formulated with a nation which is declared to be an enemy nation will be declared to be void. Agreements articulated with a person holding the citizenship of an enemy nation will also be acknowledged as void in nature. Declaring these kinds of agreements to be illegal and void in nature is said to uphold the public policy and prevent the possible injury which can be inflicted on the country. However, an exception is provided where the agreement is commissioned before a nation is declared an enemy with a citizen of that nation. In the case where the agreement is formulated before the conflict between the nations and one of the nation’s is declared to be an enemy by the other during the later stage, such agreements with either stand suspended or be dissolved. The right to choose either of these two options is vested upon the parties involved in the contract.
INTERFERING THE COURSE OF JUSTICE:
The process of delivering justice should be left uninterrupted and be allowed to take its natural flow where events get unfolded. Any interruption to this natural system will lead to justice not being delivered. An agreement formulated to prevent a person from testifying in a suit or with respect to bribing the presiding judge of a case are some of the examples where thecourse of justice is perverted. These agreements which pervert the process of reinstating justice will be considered to be void since they are against the public policies. An agreement drafted with a person to withdraw the criminal suit filed in the court in exchange of money is also considered to be against the public policy and will be declared void.
[4] Gherulal Parekh v. Mahadevdas Maiya, AIR 1959 SC 781.
[5] Indian Contract Act, 1872, § 23, Acts of Parliament, 1872 (India).
AGREEMENT TO COMMIT A CRIME ON A THIRD PARTY:
The agreement framed and duly acknowledged by the parties for the commission of a crime against a third party will be considered to be illegal and be declared void since it is against the public policies. If an agreement is formulated with the presence of an intent to commit a crime, to defraud or to manipulate another person, it will be declared void ab initio. Any agreements which are formulated for the sole purpose of providing compensation for a criminal act committed will also be considered to be against the public policies. They will also follow the same pattern and be declared illegal and void.
AGREEMENTS CORRUPTING PUBLIC LIFE:
A public officer, who is a person duly elected by the government to carry out its functions effectively, is expected to deliver his duty with utmost patriotism and loyalty. Any agreement which involves the distortion of the morals and duties of a public officer will be termed as null and void. In simple terms, the agreement formulated to corrupt any public officer and prevent him/her from carrying out their duties will be declared illegal and will cease to exist. This declaration is justified as the act of corruption is held strongly opposed to the policies of the public. In the case of Ratanchand Hirachand v. Askar Nawaz Jung[6] the agreement acknowledged by both the parties was declared to be void in nature since it was discovered that one of the parties tried to influence the minister and corrupt the decision-making process.
AGREEMENT IN RESTRAINT OF MARRIAGE:
An agreement which poses any impediment to the right to marry of a person, who is not a minor, will be declared to be void. Both Sections 23 and 26 of the Indian Contract Act, 1872 are involved in the enforcement of this declaration. It is the Hon’ble Supreme Court’s decision that any agreement which enforces marriage as one of its clauses will be declared null and void as it opposes the public policy. The agreements formulated for the purpose marriage brokerages are also frowned upon by the Indian Judiciary. That is, if an agreement is drafted for procuring a fixed sum of money for finalizing the marriage of a person, it will be considered to be contradictory to the public policies and will be declared void
Conclusion :
The formation and effective implementation of the public policies are considered to be quintessential for the governing of a nation. It can also be inferred that having a productive public policy will ensure the prosperity of the nation. So along with constituting them, it is essential to eliminate any barrier which are proven to be opposed to them. Section 23 of the Indian Contract Act, 1872 ensures this aspect where any agreement which contradicts the public policies will be eradicated and be declared void. Since the right to declare an agreement as void under the grounds that it opposes the public policies is vested with the Indian Judiciary, the courts have an immense responsibility on their shoulders to keenly scrutinize the nature of every agreement presented to them. Considering the fact that all agreements are different and have intricate variations in them, the courts must be cautious to meticulously consider all the details presented to them before declaring the validity or invalidity of the agreement. Once an agreement is declared void as it is against the public policy, it cannot be sued in the court under the grounds that every person is vested with the right to enter into a contract. It is to be noted that such agreements will be declared illegal and the parties lose their rights to sue for the enforcement of that contract. Thus, the declaration of the validity of an agreement is regarded as a final verdict from the courts end and the courts should keenly analyse the facts present in the case and priorities the reinstatement of Justice.
ARTICLE BY PRIYA DARSHINI S
[6] Ratanchand Hirachand v. Askar Nawaz Jung, AIR 1976 AP 112.
Reference: Indian contract act pdf