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Report No. 199

Hence, we propose to define 'Court' in section 2(b) as follows:

"2(b): 'Court' means a Civil Court of competent jurisdiction and includes every Consumer Dispute Redressal Agency referred to in section 9 of the Consumer Protection Act, 1986 (68 of 1986) and an arbitral tribunal referred to clause (d) of sub section (1) of section 2 of the Arbitration and Conciliation Act, 1996 (26 of 1996)."

In addition, we propose section 2(c) to say that 'words and expressions not defined in this Act and define in the Indian Contract Act, 1872 (9 of 1872) shall have the meanings assigned to them in respectively in that Act'.

The scheme of the Bill is that 'procedural provisions and procedural unfairness' are dealt with together in Chapter II. Procedural provisions are in section 3, 4 while procedural unfairness is in section 5.

Section 3 deals with mere listing of the 'procedural provisions' of the Indian Contract Act, 1872, namely sections 15, 16, (19A), 17, 18, 19 which deal with 'voidable contracts' - that is, contracts which may be avoided if they are vitiated by coercion, undue influence, fraud, misrepresentation or absence of free consent. We nowhere use the word 'unfair' in this section.

Likewise, we propose section 4 to merely list the existing procedural provisions of the Specific Relief Act, 1963 - which deal with avoidance of contracts - namely, section 20(2)(a) (second part), section 20 (2)(c) and section 27(1) (a). Here too, we do not use the word unfairness.

After stating that sections 3 and 4 deal with 'procedural provisions' of the above said two enactments and taking care to see that we do not use the words 'procedural unfairness', we next come to the crucial provision, dealing with 'general procedural unfairness' under the proposed law in Chapter II.

We propose section 5 to deal with the concept of 'general procedural unfairness', a concept which we propose to introduce for the first time. The th Report of the Law Commission (1984) though it dealt with the concept of 'unfair terms', did not refer to the dichotomy of 'procedural' and 'substantive' unfairness. Section 67A as proposed in that report used the words 'unconscionable' in the first sub section which combined both procedure and substantive aspects. The second subsection 67(2) dealt with substantive unfairness. The present definition in this Bill is more comprehensive.

Unfair (Procedural and Substantive) Terms in Contract Back

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