Agreements in restraint of legal proceedings is void u/s 28

Section 28 of the Contract Contract An agreement enforceable by law is a contract. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Indian Contract Act. Act Act Greek πράξη was introduced on the recommendation of the Law Law νόμος: Positive command of sovereign or divine. One can be ruled either by a Statute, a Statue, or a Statement. Legislation is the rule-making process by a political or religious organisation. Physics governs natural law. Logical thinking is a sign of a healthy brain function. Dharma is eternal for Sanatanis. Judiciary > Show me the face, and I will show you the law. Some people know how to bend the law rather than break it. Commission in order to remove the anomalies created by the earlier Act. The position of law settled before the amendment[ 1997 amendment to the Section] was that Section 28 would invalidate only a clause in an agreement Contract An agreement enforceable by law is a contract. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Indian Contract Act. which restricts a party from enforcing his right absolutely or which limits the time Time χρόνος. Judicial: Where any expression of it occurs in any Rules, or any judgment, order or direction, and whenever the doing or not doing of anything at a certain time of the day or night or during a certain part of the day or night has an effect in law, that time is, unless it is otherwise specifically stated, held to be standard time as used in a particular country or state. (In Physics, time and Space never exist actually-“quantum entanglement”) यमः , पुं, (यमयति नियमयति जीवानां फलाफलमिति । यम् + अच् । विश्वे च कलयत्येव यः सर्व्वायुश्च सन्ततम् । अतीव दुर्निवार्य्यञ्च तं कालं प्रणमाम्यहम् ॥यमैश्च नियमैश्चैव यः करोत्यात्मसंयमम् । स चादृष्ट्वा तु मां याति परं ब्रह्म सनातनम् ॥ within which he may enforce his right. Section 28 before the amendment does not come into operation when contractual term spell out an extension of a right of a party to sue or spell out the discharge of a party from the liabilities.

Indian Contract Act 1872

28. Agreements in restraint of legal proceedings, void.-

(a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or

(b) which extinguishes the rights of any party thereto, or discharges any party thereto, from any liability,. under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent.

Exception 1.—Saving of contract to refer to arbitration Arbitration (ADR) A dispute settlement process whereby the parties agree to submit their differences to judges of their own choice and to abide by the decision of the judges. dispute that may arise.—

This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.

Exception 2.—Saving of contract to refer questions that have already arisen.—

Nor shall this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration.L

Exception 3.—Saving of a guarantee agreement of a bank or a financial institution Financial institutions It means any natural or legal person who conducts as a business one or more of the following activities or operations for or on behalf of a customer: 1. Acceptance of deposits and other repayable funds from the public. 2. Lending. 3. Financial leasing. 4. Money or value transfer services. 5. Issuing and managing means of payment (e.g. credit and debit cards, cheques, traveller's cheques, money orders and bankers' drafts, electronic money). 6. Financial guarantees and commitments. 7. Trading in: (a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.); (b) foreign exchange; (c) exchange, interest rate and index instruments; (d) transferable securities; (e) commodity futures trading. 8. Participation in securities issues and the provision of financial services related to such issues. 9. Individual and collective portfolio management. 10. Safekeeping and administration of cash or liquid securities on behalf of other persons. 11. Otherwise investing, administering or managing funds or money on behalf of other persons. 12. Underwriting and placement of life insurance and other investment-related insurance[5]. 13. Money and currency changing. .—

This section shall not render illegal a contract in writing by which any bank or financial institution stipulate a term in a guarantee or any agreement making a provision for guarantee for extinguishment of the rights or discharge of any party thereto from any liability under or in respect of such guarantee or agreement on the expiry of a specified period which is not less than one year from the date of occurring or non-occurring of a specified event for extinguishment or discharge of such party from the said liability.

(i)In Exception 3, the expression “bank” means—a “banking company” as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949).
(b)”a corresponding new bank” as defined in clause (da) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(c)”State Bank of India India Bharat Varsha (Jambudvipa used in Mahavamsha) is the name of this land mass. The people of this land are Sanatan Dharmin and they always defeated invaders. Indra (10000 yrs) was the oldest deified King of this land. Manu's jurisprudence enlitened this land. Vedas have been the civilizational literature of this land. Guiding principles of this land are : सत्यं वद । धर्मं चर । स्वाध्यायान्मा प्रमदः । Read more ” constituted under section 3 of the State Bank of India Act, 1955 (23 of 1955);
(d)”a subsidiary bank” as defined in clause (k) of section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);
(e)”a Regional Rural Bank” established under section 3 of the Reg, tonal Rural Banks Act, 1976 (21 of 1976);
(f)”a Co-operative Bank” as defined in clause (cci) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(g) “a multi-State co-operative bank” as defined in clause (cciiia) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); and
(ii)In Exception 3, the expression ‘a financial institution” means any Public financial institution within the meaning of section 4A of the Companies Act, 1956 (1 of 1956). [ Inserted dt. 5.1.2013]

In respect of the arbitration clause in an agreement requiring the claim A Claim A claim is “factually unsustainable” where it could be said with confidence before trial that the factual basis for the claim is entirely without substance, which can be the case if it were clear beyond question that the facts pleaded are contradicted by all the documents or other material on which it is based. to be filed within 90 days from the date the final bill was raised for payment. It was held that the said clause in the arbitration agreement limiting the time during which a claim A Claim A claim is “factually unsustainable” where it could be said with confidence before trial that the factual basis for the claim is entirely without substance, which can be the case if it were clear beyond question that the facts pleaded are contradicted by all the documents or other material on which it is based. can be made by a party would be clearly against public policy and would be void under Section 28 of the Contract Act. Supreme Court Supreme Court The Court of last resort. Supreme Court of India (26/01/1950),Supreme Court of the United States (1798),Supreme Court of UK (1/10/2009),Supreme Court of Canada (1949),International Court of Justice (22/05/1947),>Supreme Court Network in National Insurance Co. Ltd v. Sujir Ganesh Nayak and Co. and Anr. ; It was held that an agreement which curtails the period of limitation Period of limitation Arbitration: State of Himachal Pradesh and Another v. Himachal Techno Engineers and Another [2010] 8 SCR 1025 : (2010) 12 SCC 210; Assam Urban Water Supply & Sewerage Board v. Subash Projects & Mktg. Ltd. [2012] 1 SCR 403 : (2012) 2 SCC 624; Union of India v. Popular Construction Co. [2001] Supp. 3 SCR 619 : (2001) 8 SCC 470 and prescribes a shorter period than prescribed by law would be void as offending Section 28 of the Contract Act. This was so because such an agreement would seek to restrict a party from enforcing his right in court after the period prescribed under the agreement expires even though the period prescribed by law for enforcement of his relief has yet not expired. However, there was possibility of agreements which do not seek to curtail the time for enforcement of the right but which provide for forfeiture or waiver of a right itself if no action is commenced within the period stipulated by the agreement and such a clause would not fall within the mischief of Section 28 of the Act.

AVM SALES CORPORATION Corporation A legally established entity that can enter into contracts, own assets and incur debt, as well as sue and be sued—all separately from its owner(s). The term covers both for-profit and nonprofit corporations and includes nonstock corporations, incorporated membership organizations, incorporated cooperatives, incorporated trade associations, professional corporations and, under certain circumstances, limited liability companies. VS M/S ANURADHA CHEMICALS PVT LTD[SC 2012(2) SCC SCC Supreme Court Cases 315

RAJASTHAN STATE ELECTRICITY BOARD VS M/S UNIVERSAL PETROL CHEMICAL LTD[SC 2009(3) SCC 107