New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    In which of the following cases, the Supreme Court of

    India strack down a clause in the service agreement whereby service of a permanent employee could be terminated by giving 3 months notice, as treasonable and opposed to public policy?
    A Hakam Singh vs. Gammon India Correct Answer Incorrect Answer
    B Central Inland Water Transport Corp. Ltd. vs. Brojo Nath Correct Answer Incorrect Answer
    C S. G. Nayak vs. National Insurance Co. Correct Answer Incorrect Answer
    D State of Karnataka vs. Shree Rameshwarna Rice Mills Correct Answer Incorrect Answer

    Solution

    In Central Inland Water Transport Corp. Ltd v. Brojo Nath, the Supreme Court struck down a clause in service agreement whereby the service of a permanent employee could be terminated by giving him a 3 months’ notice or 3 months’ salary. It was held that such clause was unreasonable and against public policy and void under section 23 of Indian Contract Act. ………..Under section 24, if any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object is unlawful, the agreement is void. The agreement is, however, not always void in its entirety for it is well settled that if several distinct promises are made for one and the same lawful consideration, and one or more of them be such as the law will not enforce, that will not of itself prevent the rest from being enforceable.

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