India: Doctrine Of Blue Pencil

Last Updated: 7 January 2016
Article by Vishal Gera

Most Read Contributor in India, September 2016


According to Oxford Dictionary of English, Blue Pencil means to censor or to make cuts in a manuscript, film or other work. Blue Pencil was earlier used by the editors to make corrections in the copy. According to Black's Law Dictionary the Doctrine of Blue Pencil is a judicial 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. The Blue Pencil rule allows the courts only to strike down the offending provisions and enforce the rest of the agreement.

The general rule of law of contracts is that the illegal parts of a contract are illegal and hence unenforceable. But there are many contract containing one part or a clause as illegal and rest of the other parts as legal. The court in such cases strikes out the illegal part and enforces the legal one when the parts are severable. This is known as the concept of severability. "This is done when the rest of the contract effectuate the intention of the parties."1 The doctrine of severability created some problem i.e. it does not give power to the court to modify a restrictive covenant in jurisdiction.2 Based on the doctrine of severability, a new concept was evolved in 1843 in the case of Mallan v. May which later came to be known as Blue Pencil.3 The Blue Pencil Doctrine is mostly applied in cases where the noncompete agreement is a matter of dispute. Any contract in restraint of trade is void. But the courts have started taking different approach and validate such contract if reasonable. In case some clause is overbroad, then the court struck down that part by running a Blue Pencil. Under the Blue Pencil rule, the first approach is to read out the separable unreasonable clauses of the contract and then severing the part by running a blue pencil over it. The courts had widened the scope of application of blue pencil rule by rewriting the overbroad clauses.

The rule of blue pencil can be applied only "if the valid stipulation is not affected by the illegality of the other part then the valid part remains intact."4

"In Halsbury's Laws of England (4th Edn. Vol.9), p.297, para 430, it is stated that a contract will rarely be totally illegal or void and certain parts of it may be entirely lawful in themselves. The question therefore arises whether the illegal or void parts may be separated or 'severed' from the contract and the rest of the contract enforced without them. Nearly all the cases arise in the context of restraint of trade, but the following principles are applicable to contracts in general."5

The courts have started using the blue pencil test in contracts whereby the court may strike the part of the non-compete covenants in order to make the covenant reasonable.6 This was done to make an unenforceable covenant enforceable.


"The blue pencil test is sought to be introduced into public law from that field of private law which is concerned with the enforcement of contracts, in particular of contracts in restraint of trade."7 The 'doctrine of blue pencil' was evolved by the English and American Courts. This rule was established in the case of Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co Ltd wherein the court held that that the covenant is valid so far as it relates to the trade or business of a manufacturer of guns, gun mountings or carriages, gunpowder explosives or ammunition but was wide in its application for 25 years.8 Thus, the court struck down the part by running a blue pencil over it. The term blue pencil was used by Lord M.R. Sterndale in the case of Attwood v. Lamont when he observed that the part of a contract can be severed by running a blue pencil over it.9 In this case, Justice Bailhache said:

"Covenants of this kind are severable where the severance can be effected by striking out restrictions which are excessive with respect to area or subject matter or classes of customers, provided any such restriction is so expressed that it can be dealt with as a separate negative obligation, but the Courts will not split up a single restriction expressed in indivisible terms. As Mr. Matthews put it, the Courts will sever in a proper case where the severance can be performed by a blue pencil but not otherwise."10

All states have not adopted the rule of blue pencil. The states that use this doctrine to enforce the not compete contracts have distinct approaches in its application. There are some states that follow the strict rule of blue pencil and some follow liberal rule of blue pencil. "The strict blue pencil rule does not allow courts to rewrite overbroad non-compete agreements. Instead, the strict approach allows courts only to strike overbroad provisions and enforce what is left of the agreement."11 Whereas the liberal approach allows rewriting of the overbroad provisions.

The court in the case of Mason v. Provident Clothing and Supply co. Ltd.12 observed that "Blue pencil severance may be resorted to sparingly and only in cases where the part being removed is clearly severable, trivial and not part of the main purport of the restrictive covenant."13 The rule of blue pencil should be applied when the true construction of the clause cannot stand the test of reasonability without writing in or deleting some word from the clause14 and should not be use in such a manner so as to change the whole meaning.15 A three fold test was should be applied in order to see the applicability of the blue pencil rule:16

(a) The unenforceable provision can be severed without the necessity of adding or modifying the wording of what remains.

(b) The remaining terms continue to be supported by adequate consideration.

(c) The severance of the unenforceable provisions does not distort the parties' bargain so much that it materially differs from the contract the parties entered into ("does not so change the character of the contract that it becomes not the sort of contract that the parties entered into at all").

There were many interpretations to this rule of blue pencil. In the case of Daymond v. South West Water Authority17 Lord Bridge had observed that "an appropriate test of substantial severability should be applied. Nonetheless, on his approach there would appear to be at least two forms of the substantial severability test. First, when textual severance is possible, the test takes this form: is the valid text unaffected by, and independent of, the invalid text? Secondly, when textual severance is not possible so that the court must modify the text in order to achieve severance, the court may do this only if it is effecting no change in the substantial purpose and effect of the impugned legislation."18 Whereas in the case of Dunkley v. Evans19, Lord Lowry had a different view and observed that "an instrument that was on its face ultra vires could be upheld by using blue pencil only if textual severance could occur and if what was left also passed the substantial severance test".20

In various cases, the rule of blue pencil has been criticized and the court held that "the blue pencil test could not apply to an unenforceable definition within a non-compete covenant because the amendment would cause other provisions of the contract to be modified."21


The Indian Contract Act, 1872 provides that any part of the consideration or object is unlawful, and then the contract becomes void.22 This section also includes the application of Blue pencil rule.23 In the case of Babasaheb Rahimsaheb v. Rajaram Raghunath, the court observed the application of blue pencil in Indian contracts as well be holding that "in an agreement if different clauses are separable, the fact that one clause, is void does not necessarily cause the other clauses to fail"24. The court has applied this principle by holding that "the sub-clause making the award 'final and conclusive' was clearly separable from the main clause which made reference to an arbitrator imperative. The existence of the sub-clause or the fact that the subclause appears to be void does not in any way affect the right of the parties to have recourse to arbitration and does not make a reference to an arbitrator any the less an alternative remedy."25 In the case of D. S. Nakara v. Union of India26, the doctrine of severability was applied so as to retain the beneficial part of the relevant memorandum and make the same applicable to the pensioners irrespective of date of their retirement.

In India, the blue pencil doctrine is not only applicable on covenants dealing with restraint of trade or the noncompete covenants but is also applicable to Arbitration clauses.27 In the case of Sunil Kumar Singhal and another v. Vinod Kumar28, It was held that the offending part in the arbitration clause can be severed or marked by the blue pencil. The Courts have applied this doctrine to contract where some clause was redundant, unnecessary and opposed to public policy.29 The court held that if contract for sale of property with eight flats is illegal and void being contrary to building regulations and master plan, the agreement for sale of property with lesser number of flats, if permitted under Section 12, is enforceable.30

The Supreme court in the case of Shin Satellite Public Co. Ltd. v. Jain Studios Limited, provides that "the proper test for deciding validity or otherwise of an agreement or order is 'substantial severability' and not 'textual divisibility'. It is the duty of the court to severe and separate trivial or technical part by retaining the main or substantial part and by giving effect to the latter if it is legal, lawful and otherwise enforceable. In such cases, the Court must consider the question whether the parties could have agreed on the valid terms of the agreement had they known that the other terms were invalid or unlawful. If the answer to the said question is in the affirmative, the doctrine of severability would apply and the valid terms of the agreement could be enforced, ignoring invalid terms."31 Thus, the Indian court affirms the views of Lord Bridge and held that for application of blue pencil rule, substantial severability is necessary.


1 Tina L. Stark, Negotiating and drafting contract Boilerplate, 2003, ALM Publication, New York, page no. 541

2 Michel S. Sirkin, Lawrence K. Cagney, Executive Compensation, 2006, Law Journel Press

3 John Edwad Murry, Jr., Murry on Contracts, 5th Edition, Lexis Nexis Publication

4 Mallan v. May, (1843)11 Meeson and Welsby 653

5 Beed District Central cooperative bank limited v. state of Maharashtra and ors. MANU/SC/4348/2006 para 7

6 Wharton's concise Law dictionary, Universal law publishing co. g=PA120&lpg=PA120&dq=wharton+legal+dictionary+blu e+pencil

7 Thames water Authority v. Elmbridge Borough Council, [1983]1All ER836

8 [1894] A.C. 535

9 Attwood v Lamont [1920] 3 K.B. 571

10 Supranote 8

11 Griffin Toronjo Pivateau, Putting the Blue pencil down: An argument for specificity in non compete Agreements, March 2008, 86 Neb.L.Rev.672(2008), Available at: .

12 [1913] AC 724

13 Mason v. Provident Clothing and supply co. Ltd, [1913] AC 724

14 The Littlewoods Organisation Limited v. Paul Melvin Harris, MANU/UKWA/0071/1977

15 Polly Peck (Holdings) Plc. and Others v Trelford and Others, [1986] 2 W.L.R. 845

16 Beckett Investment Management Ltd & Ors v Glyn Hall & Ors, [2007] EWCA Civ 613

17 [1976] 1 All E.R. 39

18 Bradley, Judicial enforcement of ultra vires byelaws: the proper scope of severance, P.L. 1990, Aut, 293-300 A.W.

19 [1981] 1 W.L.R. 1522

20 Supranote 11

21 Francotyp-Postalia Ltd v Whitehead, [2011] EWHC 367

22 Section 24, Indian Contract Act, 1872

23 Meena R.L., Texbook On Contract Law Including Specific Relief, edition 2008, Universal Law Publication Co., Page no. 132

24 (1931) 33 BOMLR 260

25 Shin Satellite Public Co. Ltd. v. Jain Studios Limited, AIR2006SC963

26 1983 AIR 130

27 Union Construction Co. (P.) Ltd. v. Chief Engineer, Eastern Command, AIR 1960 All 72

28 2007 Indlaw ALL 2702

29 Cipla Ltd. v. Anant Ganpat Patil and Ors, 2008(1)ALLMR526

30 Canara Bank v. K.L. Rajgarhia, 2009(157)DLT344

31 Supranote 25

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.