Meaning of Public Policy in Law

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Gherulal Parekh vs Mahadeodas, 1959

In this case, the Apex Court made following observation: –

“Although the heads of public policy are not closed and if it is theoretically acceptable evolving a new head under extraordinary situations of an advancing world, it would be desirable in interest of stability of society not to try discovering new heads in these days.”

Ratanchand Hirachand vs Askar Nawaz Jang, 1976

The Andhra Pradesh High Court explained the scope of the public policy as follows:-

“The twin touchstone of public policy is the advancement of the public good and the prevention of public harm.”

Central Inland Water Transport Corporation Ltd. vs Brajonath Ganguly, 1986,

In this case, the Supreme Court of India expressed the view that in fact that the act of defining the term public policy is an uphill task or it is rather difficult to give a satisfactory definition of the term. However, the Apex Court explained the scope of public policy as follows:-

“The principle of public order must be and is subject to expansion or modification where appropriate. A Practice which was contemplated being absolutely usual at one point of time have now-a-days become disgusting and opposed to public conscience. If a particular case is not covered by any of the head of public policy, then the Court must in accordance with public good and public interest declare such practice to be opposed to public policy. In case, the determination of a case has not been covered by any authority, our Courts have before them the guiding light of the Preamble of Constitution. For lack of precedent, the Court can always be guided by this light and the principles set out in the fundamental rights and guiding principles enshrined in our Constitution.”

Secretary cum Chief Engineers Chandigarh vs H.O. Sharma, 1998

In this case, the Court formed an opinion that an agreement that if anyone has been promoted to the higher post, he/she would not claim higher salary is against the public policy and is unenforceable under Section 23 of Indian Contract Act, 1872.