When can a contractual right be not waived?

  This Court elucidated the general principle that everyone has a right to waive and to agree to renounce an advantage of law or Rule made solely for the benefit and protection of the person in private capacity. If a party gives up the advantage that could be taken of a particular position in law, it cannot later be permitted to change and turn around so as to avail of that advantage. However, this Rule will not apply when there is a prohibition against contracting out of the statute, which prohibition would have its consequences or in case the waiver would be contrary to public policy. Further, a person cannot waive a right of a third person.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 7372 of 2021 

Decided On: 03.12.2021

Arce Polymers Private Limited  Vs. Alphine Pharmaceuticals Private Limited and Ors.

Hon'ble Judges/Coram:

L. Nageswara Rao, Sanjiv Khanna and B.R. Gavai, JJ.

Author: Sanjiv Khanna, J.

Dated: MANU/SC/1184/2021

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Whether Jurisdiction can conferred on court with consent of parties or by order of superior Court?

 Indisputably, it is a settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior Court, and if the Court passes a decree having no jurisdiction over the matter, it would amount to nullity as the matter goes to the roots of the cause. Such an issue can be raised at any stage of the proceedings. The finding of a Court or Tribunal becomes irrelevant and unenforceable/ inexecutable once the forum is found to have no jurisdiction. Similarly, if a Court/Tribunal inherently lacks jurisdiction, acquiescence of party equally should not be permitted to perpetuate and perpetrate, defeating the legislative animation. The Court cannot derive jurisdiction apart from the Statute. In such eventuality the doctrine of waiver also does not apply.1

Supreme Court of India

Dr. Jagmittar Sain Bhagat & Ors. vs Dir. Health Services,Haryana & ... on 11 July, 2013

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Whether breach of the rule of audi alteram partem will render the decision a nullity?

 Now this test, as pointed out by the Supreme Court itself is merely a workable test and it would not be correct to regard it as an infallible test applicable all circumstances. This test cannot be invoked for displacing the overwhelming weight of judicial authority which has consistently taken the view that breach of audi alteram partem renders the decision a nullity. Besides, audi alteram partem does not require that the court or tribunal must give to the person an opportunity to be heard even if he does not want it and is prepared to waive it. The principle of waiver ought to be implied as part and parcel of audi alteram partem rule. Where there is a waiver on the parts of the person concerned, there is really no breach of audi alteram partem. It is only where the person concerned has not waived observance of audi alteram partem that it can be said that non- observance constitutes breach of the rule rendering the decision a nullity. Furthermore, the test adopted by Justice Coleridge proceeds on an assumption that where a breach of a mandatory provision is incapable of being waived, it would be one going to jurisdiction and, therefor, an act in breach of it would be a nullity and, conversely, where the breach is capable of being waived, it cannot be one affecting jurisdiction and must consequently result only in irregularity and not nullity. This assumption is not well-founded. It is not correct to say that a defect cannot be waived if it goes to jurisdiction. It is undoubtedly true that where there is total lack of jurisdiction, waiver cannot held, for jurisdiction cannot be conferred by consent. But the fact that jurisdiction cannot be extended in one direction by consent does not necessarily mean that consent cannot extend jurisdiction in other directions. Many requirements have to be fulfilled before a tribunal has jurisdiction and there is no logical reason why consent should not be able to cure absence of some of those requirements even though it cannot cure absence of others. there may be contingent defects of jurisdiction which can be waived. Consequently, the fact that audi alteram partem can be waived does not automatically prove that breach of it does not go to jurisdiction. Moreover, in questions of those kind, we must adopt a functional approach and we do not see why nullity should be made to depend on total lack of jurisdiction. When can the law not regard a decision as nullity if it is arrived at in breach of a vital and basic principle of justice? The question of waiver has no relevance to the question of nullity. A nullity may be capable of waiver : it would be, where the rule violated is or laid down in the interest of the parties but not, where it is laid down in the interest of public policy. The circumstance that breach of Audi alteram partem is capable of being waived cannot therefore deflect us from the vivid we are taking. To hold that breach of audi alteram partem is a mere irregularity like any other defect in procedure, rendering an order or decision merely voidable by the court in a properly constituted proceeding would be to ignore the great importance and sanctity which is attached to this principle. Such an attempt to pull down this vital and basic principle from the high pedestal which several generations of English judges have assigned to it cannot meet with our approval and we must refuse to give our assent to it.

Gujarat High Court

East India Co. vs Official Liquidator And Anr. on 25 June, 1969

Equivalent citations: (1970) GLR 457

Bench: P Bhagwati, Vakil

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