The other day, I happened to read about – “The Doctrine Of Blue Pencil” in a judgement rendered by the Hon’ble Supreme Court. Sharing the summary of the legal principle which may be quite handy for the fellow legal practitioners out there.
Case – Beed District Central Coop. Bank Ltd. v. State of Maharashtra, (2006) 8 SCC 514
Bench – Justice S.B.Sinha & Justice Dalveer Bhandari
The “doctrine of blue pencil” was evolved by the English and American courts.
Blue pencil doctrine is judicial test/ standard for deciding whether to invalidate the whole contract or only the offending words. Under this standard, only the offending words are invalidated if it would be possible to delete them simply by running a blue pencil through them, as opposed to changing, adding, or rearranging words.
This doctrine holds that if courts can render an unreasonable restraint reasonable by scratching out the offensive portions of the covenant, they should do so and then enforce the remainder. Traditionally, the doctrine is applicable only if the covenant in question is applicable, so that the unreasonable portions may be separated.
The standard of blue pencil doctrine enables the court to strike parts of a covenant or contract not to compete, in order to make the covenant reasonable.
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