On April 6, 1986, the Supreme Court decided Central Inland Water Transport Corporation v. Brojo Nath Ganguly. The case concerned a clause in the service rules of a government company that let it end an employee’s service. The Court held that courts will “strike down an unfair and unreasonable contract” “entered into between parties who are not equal in bargaining power.” Such a clause “ought, therefore, to be adjudged void under section 23” of the Contract Act.
The Court also defined the term: “An unconscionable bargain would, therefore, be one which is irreconcilable with what is right or reasonable.”