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Report No. 199

Section 17: Reliefs to be granted by Court

As already stated in the definition of 'Court', Court means a Civil Court of competent jurisdiction and includes the consumer fora under the Consumer Protection Act, 1986 and arbitration tribunals under the Arbitration of Conciliation Act, 1996.

"17(1) Without prejudice to the provisions in the Indian Contract Act, 1872 (9 of 1872), Specific Relief Act, 1963 (47 of 1963), Sale of Goods Act (3 of 1930) or to the provisions of any other law for the time being in force, where the Court comes to the conclusion having regard to sections 5, 6, 9 to 14 that a contract or a term thereof is either procedurally or substantively unfair or both, the Court may grant any one or more of the following reliefs:-

(a) refusing to enforce the contract or the term thereof;

(b) declaring the contract or the term is unenforceable or void;

(c) varying the terms of contract so as to remove the unfairness;

(d) refund of the consideration or price paid;

(e) compensation or damages;

(f) permanent injunction;

(g) mandatory injunction; or

(h) any other relief which the interests of justice require as a consequence of the non-enforcement of the contract or the term thereof which is unfair:

Provided that where the contract or its term is procedurally unfair as stated in section 5, the person who suffers the disadvantage may, at his option, insist that the contract or term shall be performed, and that he shall be put in the position in which he would have been if the conduct, manner or circumstances referred to in that section did not permit the disadvantageous term to form part of the contract.

(2) For the purpose of granting the reliefs under subsection (1), the Court may determine if any of the terms of the contract which are unfair are severable and thereafter whether and to what extent and in what manner, the remaining terms of the contract can be enforced or given effect to."

The Court under section 17 can grant one or more of the reliefs on the basis of the provisions (other than 3, 4, 7, 8) i.e. unfairness:

(a) refusing to enforce the contract or the term thereof;

(b) declaring the contract or the term void;

(c) varying the terms of the contract so as to remove the unfairness;

(d) refund of the consideration or price paid;

(e) compensation or damages;

(f) permanent injunction;

(g) mandatory injunction; or

(h) any other relief which the interests of justice require.

As in section 19 of the Contract Act, 1872, we have added a proviso in section 17 as follows:

"provided that where the contract or its term is procedurally unfair as stated in section 5, the person who suffers the disadvantage may, in his option, insist that the contract or term shall be performed, and that he shall be put in the position in which would have been if the conduct, manner or circumstances referred to in that section did not permit the disadvantage term to form part of the contract."

Sub section (2) of section 17 deals with severability of terms.

"18. The provisions of this Act (other than sections 3, 4, 7 and 8)

(1) shall apply to all contracts entered into after the commencement of this Act; and

(2) shall not apply to

(a) contracts and relations between employers and workmen under the labour laws in force;

(b) public employment under the Central Government or a State Government or their instrumentalities or under local authorities;

(c) employment under public sector undertakings of the Central Government or a State Government;

(d) employment under corporations or bodies established by or under statutes made by Parliament or State Legislatures;

(e) contractual terms in respect of which measures are provided in international treaties or agreements with foreign countries to which the Central Government is a signatory."



Unfair (Procedural and Substantive) Terms in Contract Back




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