Courts can strike down unfair clause in contract: Panel

Ramkrishan Upadhyay

Chandigarh, September 3

It is well-settled law that the terms and conditions of the contract should be reasonable and if the same are unreasonable and opposed to public policy, these will not be enforced. The courts have power to strike down the unfair and unreasonable clause(s) contained in a standard format contract, especially, when the parties are not equal in bargaining power

While observing this, the State Consumer Disputes Redressal Commission, Chandigarh, comprising of Justice Raj Shekhar Attri, president, and Rajesh K Arya, member, dismissed an appeal of SS Farms, a banquet hall on the Kharar-Landran Road, SAS Nagar, challenging the order of the district commission.

The banquet hall was told to pay a compensation of Rs 10,000 to a city resident for not refunding the booking amount of a function which was cancelled by its owners due to Covid. The commission also directed to pay Rs 7,000 as litigation costs along with a refund of the booking amount of Rs 40,000 with interest.

Sunil Kumar Thakur of New Indira Colony, Mani Majra, had booked the hall on December 14, 2020, for a wedding function. He said he was compelled to make some alternative arrangement due to Covid-induced restrictions, but no refund of booking amount was given to him.

The counsel for the banquet hall claimed the booking amount was non-refundable as mentioned in the receipt. After hearing arguments, the commission said in view of the fact that the receipt was a pre-printed paper, this commission had no hesitation to say that the same was against the public policy and required to be adjudged as void as the same left no scope of bargaining for the respondent.