Study Material

Subject : Contracts 1
Prepared by: B.V.S.Suneetha
Assistant Professor
Damodaram Sanjivayya
National Law University
Sabbavaram.
1. Balfour v Balfour [1919] 2 KB 571
2. Merritt v Merritt [1970] 1 WLR 1211
EWCA Civ 11 QB 256
3. Carlil v Carbolic Smoke Ball company
4. Galloway v Galloway (1914) 30 TLR 531
5. Harvey v Facie [1893] UKPC 1
6. Pharmaceutical society v Boots Cash Chemist Ltd 2 WLR 427
7. Lalman Shukla V Gauri Datt 1913 40 ALJ 489
8. Boulton v Jones (1857) 2 H and N 564
9. Ramsgate v Victoria Montefiore (1866) LR 1 Ex 109
10.Henderson v Stevenson (1843) 3 Hare 100
11.Parker v South eastern railway [1877] 2 CPD 416
12.Brogden v Metropolitan Railway Co (1877) 2 AppCas 666
13.Henthorn v Fraser [1892] 2 Ch 27
14.Felthouse v Bindley (1862) EWHC CP J 35
15.Powell v Lee (1908) 99 LT 284
16.Thornton v Shoe lane parking ltd. [1970] EWCA Civ 2
17.Entores v Far Miles East Company [1955] EWCA Civ 3
20.Bhagwandas Goverdhandas Kedia vs. Girdharilal [1965] Insc 171
Parshottamdas & Co. & Ors.
21.Tweedle v Atkinson [1861] EWHC J57 (QB)
22.Chinnaya v Ramayya ILR (1876-82) 4 Mad 137
23.Durgaprasad v Baldeo 1880 3 ALL 221
24.Kedarnath v Gorie Muhammad (1887) ILR 14 Cal 64
25.Shuppu Ammal v K. Subramaniam 4 Ind Cas 1083
26.Khwaja Mohammad Khan v Hussaini Begum (1907) ILR 29 All 222
27.Mohireebibi v Dharmodas Ghose (1903) 30 Cal. 539
28.Leslie v Shiell [1914] 3 KB 607
29.Chikkam Ammiraju v Chikkam Seshamma (1917) 41 Mad 33
30.Derry v Peek [1889] UKHL 1
31.Peek v Gurney [1873] LR 6 HL 377
32.With v O’Flanagan [1936] Ch 575
33.Shri Krishnan v Kurukshetra University AIR 1976 SC 376
34.Mannu singh v Umadatt (1890) 12 All 523
35.Cundy v Lindsay LR 3 App Cas 459
36.Griffith v Brymer 1903 19 T.L.R. 434.
37.Ingram v Little [1961] 1 QB 31
38.Bai Vijili v Nansa Nagur (1886) I.L.R. 10 B. 152

39.Sumitra Devi Agarwal v Sulekha AIR 1976 Cal 196

40.Pearce v Brooks (1865) LR 1 Ex 213
41.Nordenfelt v Nordenfelt [1894] AC 535
42.Sb fraser v Bombay Ice Manufacturing Company (1905)ILR29BOM107

43.Guthing v Lynn (1831) 2 B7 Ad 232

44.Startup v Mcdonald (1843) 6 Mann & G 593
45.Dominion of India v Gaya Pershad AIR 1954 All 747 (A)
46.Caltex v Bhagwan Devi Marodia AIR1969SC405
47.Couturier v Hastie 1856] UKHL J3
48.Taylor v Caldwell [1863] EWHC QB J1
49.Henry v Krell [1903] 2 KB 740
50.Satyabrata Ghosh v Mugneeram 1954 SCR 310
51.Frost v Knight (1872) LR 7 Exch 111
52.Cutter v Powell 101 ER 573
53.Dominion of India v. All India Reporter AIR 1952 Nag 32
54.Hadley v Baxendale [1854] EWHC J70
55.Prema v Ahmed (1987) 1 GLR 462

INTENTION TO CREATE LEGAL

RELATIONS
 At first instance, judge Charles Sargant
held that Mr Balfour was under an
BALFOUR
obligation to support his wife.
V
JUDGMENT
BALFOUR
The Court of Appeal unanimously held
[1919] 2 KB 571 that there was no enforceable agreement,
although the depth of their reasoning
differed. Warrington LJ delivered his
BENCH
opinion first, the core part being this
WARRINGTON LJ, DUKE LJ AND passage.
ATKIN LJ
“The matter really reduces itself to an
FACTS absurdity when one considers it, because
if we were to hold that there was a
Mr Balfour was a civil engineer and
contract in this case we should have to
worked for the Government as the Director
hold that with regard to all the more or
of Irrigation in Ceylon (now Sri Lanka).
less trivial concerns of life where a wife,
Mrs Balfour was living with him. In 1915,
at the request of her husband, makes a
they both came back to England during Mr
promise to him, that is a promise which
Balfour's leave. But Mrs Balfour had
can be enforced in law. All I can say is
developed rheumatic arthritis. Her doctor
that there is no such contract here. These
advised her to stay in England, because the
two people never intended to make a
Ceylon climate would be detrimental to
bargain which could be enforced in law.
her health. Mr Balfour's boat was about to
The husband expressed his intention to
set sail, and he orally promised her £30 a
make this payment, and he promised to
month until she came back to Ceylon.
make it, and was bound in honour to
They drifted apart, and Mr Balfour wrote
continue it so long as he was in a position
saying it was better that they remain apart.
to do so. The wife on the other hand, so far
In March 1918, Mrs Balfour sued him to
as I can see, made no bargain at all. That
keep up with the monthly £30 payments.
is in my opinion sufficient to dispose of the
In July she got a decree nisi and in
case.”
December she obtained an order for
alimony. Then Duke LJ gave his. He placed weight
on the fact that the parties had not yet been
divorced, and that the promise had been will agree to forego my right to pledge
made still whilst as husband and wife. your credit. In the judgment of the
majority of the Court of Common Pleas in
In the Court below the plaintiff conceded
Jolly v Rees (1864) 15 C. B. (N. S.) 628,
that down to the time of her suing in the
which was affirmed in the decision of
Divorce Division there was no separation,
Debenham v Mellon (1880) 6 App. Cas.
and that the period of absence was a period
24 Erle C.J. states this proposition: “But
of absence as between husband and wife
taking the law to be, that the power of the
living in amity. An agreement for
wife to charge her husband is in the
separation when it is established does
capacity of his agent, it is a solecism in
involve mutual considerations.
reasoning to say that she derives her
That was why in Eastland v Burchell 3 authority from his will, and at the same
QBD 432, the agreement for separation time to say that the relation of wife creates
was found by the learned judge to have the authority against his will, by a
been of decisive consequence. But in this presumptio juris et de jure from marriage.”
case there was no separation agreement at What is said on the part of the wife in this
all. The parties were husband and wife, case is that her arrangement with her
and subject to all the conditions, in point husband that she should assent to that
of law, involved in that relationship. It is which was in his discretion to do or not to
impossible to say that where the do was the consideration moving from her
relationship of husband and wife exists, to her husband. The giving up of that
and promises are exchanged, they must be which was not a right was not a
deemed to be promises of a contractual consideration. The proposition that the
nature. In order to establish a contract mutual promises made in the ordinary
there ought to be something more than domestic relationship of husband and wife
mere mutual promises having regard to the of necessity give cause for action on a
domestic relations of the parties. It is contract seems to me to go to the very root
required that the obligations arising out of of the relationship, and to be a possible
that relationship shall be displaced before fruitful source of dissension and
either of the parties can found a contract quarrelling. I cannot see that any benefit
upon such promises. The formula which would result from it to either of the parties,
was stated in this case to support the claim but on the other hand it would lead to
of the lady was this: In consideration that unlimited litigation in a relationship which
you will agree to give me 30l. a month I should be obviously as far as possible
protected from possibilities of that kind. I constitute a contract appears to me to be
think, therefore, that in point of principle the arrangements which are made between
there is no foundation for the claim which husband and wife. It is quite common, and
is made here, and I am satisfied that there it is the natural and inevitable result of the
was no consideration moving from the relationship of husband and wife, that the
wife to the husband or promise by the two spouses should make arrangements
husband to the wife which was sufficient between themselves - agreements such as
to sustain this action founded on contract. I are in dispute in this action - agreements
think, therefore, that the appeal must be for allowances, by which the husband
allowed.” agrees that he will pay to his wife a certain
sum of money, per week, or per month, or
Lord Justice Atkin took a different
per year, to cover either her own expenses
approach, emphasising that there was no
or the necessary expenses of the household
"intention to effect legal relations". That
and of the children of the marriage, and in
was so because it was a domestic
which the wife promises either expressly
agreement between husband and wife, and
or impliedly to apply the allowance for the
it meant the onus of proof was on the
purpose for which it is given. To my mind
plaintiff, Mrs Balfour. She did not rebut
those agreements, or many of them, do not
the presumption.
result in contracts at all, and they do not
“The defence to this action on the alleged result in contracts even though there may
contract is that the defendant, the husband, be what as between other parties would
entered into no contract with his wife, and constitute consideration for the agreement.
for the determination of that it is necessary The consideration, as we know, may
to remember that there are agreements consist either in some right, interest, profit
between parties which do not result in or benefit accruing to one party, or some
contracts within the meaning of that term forbearance, detriment, loss or
in our law. The ordinary example is where responsibility given, suffered or
two parties agree to take a walk together, undertaken by the other. That is a well-
or where there is an offer and an known definition, and it constantly
acceptance of hospitality. Nobody would happens, I think, that such arrangements
suggest in ordinary circumstances that made between husband and wife are
those agreements result in what we know arrangements in which there are mutual
as a contract, and one of the most usual promises, or in which there is
forms of agreement which does not consideration in form within the definition
that I have mentioned. Nevertheless they consideration that really obtains for them
are not contracts, and they are not is that natural love and affection which
contracts because the parties did not intend counts for so little in these cold Courts.
that they should be attended by legal The terms may be repudiated, varied or
consequences. To my mind it would be of renewed as performance proceeds or as
the worst possible example to hold that disagreements develop, and the principles
agreements such as this resulted in legal of the common law as to exoneration and
obligations which could be enforced in the discharge and accord and satisfaction are
Courts. It would mean this, that when the such as find no place in the domestic code.
husband makes his wife a promise to give The parties themselves are advocates,
her an allowance of 30s. or 2l. a week, judges, Courts, sheriff's officer and
whatever he can afford to give her, for the reporter. In respect of these promises each
maintenance of the household and house is a domain into which the King's
children, and she promises so to apply it, writ does not seek to run, and to which his
not only could she sue him for his failure officers do not seek to be admitted. The
in any week to supply the allowance, but only question in this case is whether or not
he could sue her for non-performance of this promise was of such a class or not. For
the obligation, express or implied, which the reasons given by my brethren it
she had undertaken upon her part. All I can appears to me to be plainly established that
say is that the small Courts of this country the promise here was not intended by
would have to be multiplied one either party to be attended by legal
hundredfold if these arrangements were consequences. I think the onus was upon
held to result in legal obligations. They are the plaintiff, and the plaintiff has not
not sued upon, not because the parties are established any contract. The parties were
reluctant to enforce their legal rights when living together, the wife intending to
the agreement is broken, but because the return. The suggestion is that the husband
parties, in the inception of the bound himself to pay 30l. a month under
arrangement, never intended that they all circumstances, and she bound herself to
should be sued upon. Agreements such as be satisfied with that sum under all
these are outside the realm of contracts circumstances, and, although she was in
altogether. The common law does not ill-health and alone in this country, that out
regulate the form of agreements between of that sum she undertook to defray the
spouses. Their promises are not sealed whole of the medical expenses that might
with seals and sealing wax. The fall upon her, whatever might be the
development of her illness, and in MERRITT
whatever expenses it might involve her. To
V
my mind neither party contemplated such a
result. I think that the parol evidence upon MERRITT

which the case turns does not establish a

contract. I think that the letters do not
[1970] EWCA Civ 6
evidence such a contract, or amplify the
oral evidence which was given by the wife, [1970] 1 WLR 1211
which is not in dispute. For these reasons I
think the judgment of the Court below was
BENCH
wrong and that this appeal should be
allowed.” LORD DENNING J

FACTS

Mr Merritt and his wife jointly owned a

house. Mr Merritt left to live with another
woman. They made an agreement (signed)
that Mr Merritt would pay Mrs Merritt a
£40 monthly sum, and eventually transfer
the house to her, if Mrs Merritt kept up the
monthly mortgage payments. When the
mortgage was paid Mr Merritt refused to
transfer the house.

JUDGMENT

The Court of Appeal held that nature of the

dealings, and the fact that the Merritts
were separated when they signed their
contract, allowed the court to assume that
their agreement was more than a domestic
arrangement. Lord Denning MR stated:

“The husband and the wife were married

as long ago as 1941. After the war, in 1949
they got a building plot and built a house.
It was a freehold house, 133 Clayton Road, Early in 1966 they came to an agreement
Hook, Chessington. It was in the whereby the house was to be put in joint
husband’s name, with a considerable sum names. That was done. It reflected the
on mortgage with a building society. There legal position when a house is acquired by
they lived and brought up their three a husband and wife by financial
children, two daughters, now aged 20 and contributions of each. But, unfortunately,
17, and a boy now 14. The wife went out about that time the husband formed an
to work and contributed to the household attachment for another woman. He left the
expenses. house and went to live with her. The wife
then pressed the husband for some
arrangement to be made for the future. On
25 May, they talked it over in the
husband’s car. The husband said that he
would make the wife a monthly payment
of £40 and told her that out of it she would
have to make the outstanding payments to
the building society. There was only £180
outstanding. He handed over the building
society’s mortgage book to the wife. She
was herself going out to work, earning net
£7 10s a week. Before she left the car she
insisted that he put down in writing a
further agreement. It forms the subject of
the present action. He wrote these words
on a piece of paper:

‘In consideration of the fact that you will

pay all charges in connection with the
house at 133, Clayton Road, Chessington,
Surrey, until such time as the mortgage
repayment has been completed, when the
mortgage has been completed I will agree
to transfer the property in to your sole
ownership. Signed. John B. Merritt about to separate. They then bargain
25.5.66.’ keenly. They do not rely on honourable
understandings. They want everything cut
The wife took that paper away with her.
and dried. It may safely be presumed that
She did, in fact, over the ensuing months
they intend to create legal relations.
pay off the balance of the mortgage, partly,
maybe, out of the money the husband gave Counsel for the husband then relied on the
her, £40 a month, and partly out of her recent case of Gould v Gould', when the
own earnings. When the mortgage had parties had separated, and the husband
been paid off, he reduced the £40 a month agreed to pay the wife £12 a week ‘so long
to £25 a month. as he could manage it’. The majority of the
court thought that those words introduced
The wife asked the husband to transfer the
such an element of uncertainty that the
house into her sole ownership. He refused
agreement was not intended to create legal
to do so. She brought an action in the
relations. But for that element of
Chancery Division for a declaration that
uncertainty, I am sure that the majority
the house should belong to her and for an
would have held the agreement to be
order that he should make the conveyance.
binding. They did not differ from the
The judge, Stamp J, made the order; but
general proposition which I stated ([1969]
the husband now appeals to this court.
3 All ER at 730, [1970] 1 QB at 280):
The first point taken on his behalf by
‘When … husband and wife, at arm’s
counsel for the husband was that the
length, decide to separate and the husband
agreement was not intended to create legal
promises to pay a sum as maintenance to
relations. It was, he says, a family
the wife during the separation, the court
arrangement such as was considered by the
does, as a rule, impute to them an intention
court in Balfour v Balfour and in Jones v
to create legal relations.’
Padavatton. So the wife could not sue on
it. I do not think that those cases have any In all these cases the court does not try to
application here. The parties there were discover the intention by looking into the
living together in amity. In such cases their minds of the parties. It looks at the
domestic arrangements are ordinarily not situation in which they were placed and
intended to create legal relations. It is asks itself: would reasonable people regard
altogether different when the parties are the agreements as intended to be binding?
not living in amity but are separated, or
Counsel for the husband sought to say that between the parties afterwards. Finally,
this agreement was uncertain because of counsel for the husband said that, under s
the arrangement for £40 a month 17 of the Married Women’s Property Act
maintenance. That is obviously untenable. 1882, this house would be owned by the
Next he said that there was no husband and the wife jointly; and that,
consideration for the agreement. That point even if this house were transferred to the
is no good. The wife paid the outstanding wife, she should hold it on trust for them
amount to the building society. That was both jointly. There is nothing in this point
ample consideration. It is true that the either. The paper which the husband
husband paid her £40 a month which she signed dealt with the beneficial ownership
may have used to pay the building society. of the house. It was intended to belong
But still her act in paying was good entirely to the wife.
consideration. Counsel for the husband
I find myself in entire agreement with the
took a small point about rates. There was
judgment of Stamp J. This appeal should
nothing in it. The rates were adjusted fairly
be dismissed

CARLILL claimed it to be a cure for influenza and a

number of other diseases. (The 1889–1890
V
flu pandemic was estimated to have killed
CARBOLIC SMOKE BALL 1 million people.) The smoke ball was a
COMPANY rubber ball with a tube attached. It was

[1892] EWCA CIV 1 filled with carbolic acid (or phenol). The
tube would be inserted into a user's nose
and squeezed at the bottom to release the
COURT MEMBERSHIP vapours. The nose would run, ostensibly
flushing out viral infections.
JUDGE(S) SITTING
The Company published advertisements in
LINDLEY LJ, BOWEN LJ AND AL
the Pall Mall Gazette and other
SMITH LJ
newspapers on November 13, 1891,
FACTS
claiming that it would pay £100
The Carbolic Smoke Ball Co. made a (equivalent to £11,000 in 2018) to anyone
product called the "smoke ball" and who got sick with influenza after using its
product according to the instructions they replied with an anonymous letter that
provided with it. if it is used properly the company had
complete confidence in the smoke ball's
£100 reward will be paid by the Carbolic
efficacy, but "to protect themselves against
Smoke Ball Company to any person who
all fraudulent claims", they would need her
contracts the increasing epidemic influenza
to come to their office to use the ball each
colds, or any disease caused by taking
day and be checked by the secretary. Mrs.
cold, after having used the ball three times
Carlill brought a claim to court. The
daily for two weeks, according to the
barristers representing her argued that the
printed directions supplied with each ball.
advertisement and her reliance on it was a
£1000 is deposited with the Alliance Bank, contract between the company and her, so
Regent Street, showing our sincerity in the the company ought to pay. The company
matter. During the last epidemic of argued it was not a serious contract.
influenza many thousand carbolic smoke
JUDGMENT
balls were sold as preventives against this
disease, and in no ascertained case was the The Carbolic Smoke Ball Company,
disease contracted by those using the represented by H. H. Asquith, lost its
carbolic smoke ball. argument at the Queen's Bench. It
appealed straight away. The Court of
One carbolic smoke ball will last a family
Appeal unanimously rejected the
several months, making it the cheapest
company's arguments and held that there
remedy in the world at the price, 10s. post
was a fully binding contract for £100 with
free. The ball can be refilled at a cost of 5s.
Mrs. Carlill. Among the reasons given by
Address: “Carbolic Smoke Ball
the three judges were
Company”, 27, Princes Street, Hanover
Square, London. (1) that the advertisement was not a
unilateral offer to all the world but an offer
Mrs. Louisa Elizabeth Carlill saw the
restricted to those who acted upon the
advertisement, bought one of the balls and
terms contained in the advertisement
used it three times daily for nearly two
months until she contracted the flu on 17 (2) that satisfying conditions for using the
January 1892. She claimed £100 from the smoke ball constituted acceptance of the
Carbolic Smoke Ball Company. They offer
ignored two letters from her husband, a
(3) that purchasing or merely using the
solicitor. On a third request for her reward,
smoke ball constituted good consideration,
because it was a distinct detriment incurred Then, what is left? The first observation I
at the behest of the company and, will make is that we are not dealing with
furthermore, more people buying smoke any inference of fact. We are dealing with
balls by relying on the advertisement was a an express promise to pay £100. in certain
clear benefit to Carbolic events. Read the advertisement how you
will, and twist it about as you will, here is
(4)that the company's claim that £1000
a distinct promise expressed in language
was deposited at the Alliance Bank
which is perfectly unmistakable —
showed the serious intention to be legally
bound. The judgments of the court were as “£100. reward will be paid by the Carbolic
follows. Smoke Ball Company to any person who
contracts the influenza after having used
the ball three times daily for two weeks
Lord Justice Lindley according to the printed directions

Lindley LJ gave the first judgment on it, supplied with each ball.”

after running through the facts again. He He follows on with essentially five points.
makes short shrift of the insurance and First, the advertisement was not "mere
wagering contract arguments that were puff" as had been alleged by the company,
dealt with in the Queen's Bench. because the deposit of £1000 in the bank

“I will begin by referring to two points evidenced seriousness. Second, the

which were raised in the Court below. I advertisement was an offer made

refer to them simply for the purpose of specifically to anyone who performed the

dismissing them. First, it is said no action conditions in the advertisement rather than

will lie upon this contract because it is a a statement "not made with anybody in

policy. You have only to look at the particular." Third, communication of

advertisement to dismiss that suggestion. acceptance is not necessary for a contract

when people's conduct manifests an
Then it was said that it is a bet. Hawkins,
intention to contract. Fourth, that the
J., came to the conclusion that nobody ever
vagueness of the advertisement's terms
dreamt of a bet, and that the transaction
was no insurmountable obstacle. And fifth,
had nothing whatever in common with a
the nature of Mrs. Carlill's consideration
bet. I so entirely agree with him that I pass
(what she gave in return for the offer) was
over this contention also as not worth
good, because there is both an advantage
serious attention.
in additional sales in reaction to the
advertisement and a "distinct "inconvenience" of using it, and the
inconvenience" that people go to when company got the benefit of extra sales.
using a smoke ball.

LORD JUSTICE BOWEN

GALLOWAY
Bowen LJ's opinion was more tightly
V
structured in style and is frequently cited.
Five main steps in his reasoning can be GALLOWAY

identified. First, he says that the contract (1914) 30 TLR 531

was not too vague to be enforced, because
it could be interpreted according to what
ordinary people would understand by it. BENCH
He differed slightly from Lindley LJ on
JUDGE MITCHELL.
what time period one could contract flu
and still have a claim (Lindley LJ said a
"reasonable time" after use, while Bowen FACTS
LJ said "while the smoke ball is used"),
The presumption that the husband is the
but this was not a crucial point, because
supporting spouse, and thus by definition
the fact was that Mrs. Carlill got flu while
that the wife is the dependent spouse,
using the smoke ball. Second, like Lindley
controls until evidence has been presented
LJ, Bowen LJ says that the advert was not
tending to show that the wife is not in fact
mere puff because £1000 was deposited in
a dependent spouse, and the husband has
the bank to pay rewards. Third, he said that
not borne his burden in such cases until he
although an offer was made to the whole
has offered evidence tending to show that
world, the contract was not with the whole
his wife is neither substantially dependent
world. Therefore, it was not an absurd
upon him for her maintenance and support
basis for a contract, because only the
nor substantially in need of maintenance
people who used it would bind the
and support by him.
company. Fourth, he says that
communication is not necessary to accept JUDGEMENT
the terms of an offer; conduct is and Finding by the trial court that plaintiff wife
should be sufficient. Fifth, good had been gainfully employed prior to her
consideration was clearly given by Mrs. marriage to the defendant and was "able-
Carlill because she went to the bodied, intelligent and capable to find
employment" was not sufficient to support ranged from $60 to $90 depending upon
the trial court's conclusion that plaintiff whether she worked on weekends.
was not a dependent spouse within the
On 27 October 1977 the plaintiff left a
meaning of, as it did not include a finding
message for her husband informing him
that the plaintiff had a reasonable
that she was planning to spend the night at
opportunity to but did not adequately
the motel in Wilson. The defendant called
support herself.
the plaintiff at about 6:00 p.m. and told her
William A. Smith, Jr., for plaintiff that he wanted her to come to Raleigh and
appellant. take all of her belongings out of the house
they were occupying. The next day, the
The plaintiff instituted this action against
plaintiff complied with the defendant's
the defendant for alimony pendente lite,
request.
permanent alimony and attorney's fees by
the filing of a complaint on 21 November The plaintiff's evidence further tended to
1977. During the hearing before the trial show that she then moved to her parents'
court on these matters, the plaintiff motel in Wilson. She helped with the work
presented evidence tending to show that at the motel when she was needed but was
she and the defendant were married to not paid a regular salary and did not want a
each other on 17 August 1973. During the regular salary. In addition to room and
latter part of 1975, the parties separated board, however, the plaintiff's mother
and lived apart for approximately one year. occasionally gave her money for car
They reunited in December of 1976 and payments when she needed such money
moved their residence to Raleigh. Prior to and gave her "some spending money." The
that time, the plaintiff had been working plaintiff testified that she did not have any
part-time in her parents' motel in Wilson. regular source of income and that the
Despite her husband's objections, the defendant had not provided any support for
plaintiff continued to work at the motel in her since their separation. In addition,
Wilson after the couple had moved to evidence was introduced tending to show
Raleigh. She normally worked at the motel that the defendant had a gross income of
from 9:00 a.m. until 3:00 p.m., but about less than $13,200 per year and a net
twice every three weeks she was required income of approximately $8,400 per year.
to stay at the motel overnight. The
The defendant introduced evidence tending
plaintiff's weekly salary during this period
to show that he objected to the plaintiff
working at the motel during their marriage dependent spouse within the intent and
and asked her to quit working there. He meaning of the General Statutes of North
testified that she often failed to return from Carolina. From the entry of judgment
the motel until 6:00 p.m. or 7:00 p.m. and reflecting these findings and conclusions
would at times return as late as 9:00 p.m. by the trial court, the plaintiff appealed.
In addition, he testified that she spent the
MITCHELL, Judge.
night at the motel from three to five times
a month during this period. Only a dependent spouse is entitled to
alimony or alimony pendente lite. G.S. 50-
At the conclusion of the hearing on these
16.2 and 16.3. A dependent spouse is by
matters, the trial court found among other
definition married to a supporting spouse
things that the defendant had ordered the
since a dependent spouse always has a
plaintiff out of their home on 27 October
spouse "upon whom [he or she] is actually
1977 and had provided no support for the
substantially dependent or from whom [he
plaintiff since that time. The trial court
or she] is substantially in need of
also found that the plaintiff was gainfully
maintenance and support." Conversely, a
employed prior to the marriage and living
supporting spouse is by definition married
in her own apartment and was, at the time
to a dependent spouse. Therefore, a
of the hearing, "able-bodied, intelligent
determination that one spouse is a
and capable to find employment." The trial
supporting spouse is a determination that
court further found that the plaintiff had, at
the other is a dependent spouse and vice
the time of the hearing, no salary other
versa.
than room, board and spending money as
provided by her parents and that the A dependent spouse is "a spouse, whether

defendant had a net income of husband or wife, who is actually

approximately $8,400 per year. Based substantially dependent upon the other

upon its findings, the trial court concluded spouse for his or her maintenance and

that the defendant abandoned the plaintiff support or is substantially in need of

on 27 October 1977. The Court also maintenance and support from the other

concluded that the plaintiff was not spouse." A wife is actually substantially

substantially dependent upon the defendant dependent upon her husband for her

for her maintenance and support or in maintenance and support or in substantial

substantial need of maintenance and need of support by him if she is incapable

support and was not, therefore, a of adequately providing for herself or is

capable of adequately providing for herself wife is neither substantially dependent
but does not have a reasonable opportunity upon him for her maintenance and support
to do so. nor substantially in need of maintenance
and support by him. G.S. 50-16.1(3). Such
Once it is established, however, that the
evidence may be presented in the form of
defendant is the plaintiff's husband and
evidence tending to show that the wife is
that he is capable of supporting her, the
in fact adequately supporting herself or is
defendant is presumed to be the supporting
capable of adequately supporting herself
spouse provides in part that, "A husband is
and has a reasonable opportunity to do so
deemed to be the supporting spouse unless
but has not sought to support herself. Cf.
he is incapable of supporting his wife."
Conrad v. Conrad, 252 N.C. 412, 113
This sentence of the statute establishes a
S.E.2d 912 (1960) (capacity of supporting
presumption that a male spouse is the
husband to earn rather than actual earnings
supporting spouse and, conversely, that the
considered in determining amount of
female is the dependent spouse. The
alimony); Robinson v. Robinson, 10 N.C.
defendant did not seek during the hearing
App. 463, 179 S.E.2d 144 (1971) (same).
before the trial court, nor has he sought
before this Court, to challenge this The trial court in the present case found
presumption on the ground that it that the plaintiff wife had been gainfully
constitutes unconstitutionally gender based employed prior to her marriage to the
discrimination. Therefore, we are not defendant and was "able-bodied,
required to express an opinion here with intelligent and capable to find
regard to the very substantial constitutional employment." This finding was not
questions which would arise should this sufficient, however, to support the trial
portion of the statute be challenged on court's conclusion that the plaintiff was not
constitutional grounds. a dependent spouse within the meaning of
G.S. 50-16.1(3), as it did not include a
The presumption that the husband is the
finding that the plaintiff had a reasonable
supporting spouse, and thus by definition
opportunity to but did not adequately
that the wife is the dependent spouse,
support herself.
controls until evidence has been presented
tending to show that the wife is not in fact Additionally, the evidence presented
a dependent spouse. The husband has not would not have supported such a finding.
borne his burden in such cases until he has Evidence of a reasonable opportunity by
offered evidence tending to show that his the wife to adequately support herself
might have been shown by introducing
evidence, if any existed, that the plaintiff
did not make reasonable efforts to obtain
employment for which she was suited and INVITATION TO OFFER
which was available, that she had refused
employment opportunities that were
HARVEY V FACIE
available to her, or that she had been
employed in a manner which would have 1893 UKPC 1
adequately supported her but terminated
RULING COURT:
such employment in order to establish her
status as a dependent spouse. As the JUDICIAL COMMITTEE OF THE
defendant failed to offer sufficient PRIVY Council
evidence to overcome the presumption that FACTS
the plaintiff was a dependent spouse, the
Letters were written back and forth
trial court erred in concluding in the order
appealed from that the plaintiff was not a Harvey – Will you sell us bumper hall
dependent spouse. pen? Telegraph lowest price -answer paid.

We additionally note that the order Facey – Lowest price for bumper hall is
appealed from was entered more than one $900.
year ago and that some change in the
Harvey – We agree to buy bumper hall for
conditions of the parties is likely. Further,
the sum of $900 asked by you.
the record on appeal does not reflect any
evidence with regard to the reasonable Harvey sued for specific performance of

value of attorney's fees sought by the this agreement and for an injunction to

plaintiff. For the reasons previously stated, restrain the town of Kingston from taking

the order of the trial court from which the conveyance of the property (Facey was

plaintiff has appealed will be vacated and previously engaged in negotiations to sell

the cause remanded to the trial court for a the land to Kingston)

new hearing with regard to the plaintiff's PROCEDURAL HISTORY

application for alimony pendente lite and
Trial court dismissed the action on the
counsel fees and for such other actions as
ground that the agreement did not disclose
accord with applicable law and the present
a concluded contract. Appealed by
status of the parties.
plaintiffs, Supreme court of Jamaica
reversed the decision. Defendant’s of Kingston to sell a piece of property to
appealed to the judicial committee of privy Kingston City. On 7 October 1893, Facey
council was traveling on a train between Kingston
and Porus and the appellant, Harvey, who
ISSUE
wanted the property to be sold to him
Was there an explicit offer from Facey to rather than to the City, sent Facey a
sell the land for $900 to Harvey? telegram. It said, "Will you sell us Bumper

HOLDING Hall Pen? Telegraph lowest cash price-

answer paid". Facey replied on the same
No, there was not.
day: "Lowest price for Bumper Hall Pen
RULE £900." Harvey then replied in the
following words. "We agree to buy
An offer CAN NOT be implied by writing.
Bumper Hall Pen for the sum of nine
It can only be concrete and sound…The
hundred pounds asked by you. Please send
appellants can’t imply that Facey made an
us your title deed in order that we may get
offer when he, as a matter of fact, did not
early possession."
make an offer.
Facey, however refused to sell at that
REASONING
price, at which Harvey sued. Harvey had
(from Harvey) 1st question was
his action dismissed at trial but won his
willingness to sell, 2nd question asks the
claim on the Court of Appeal, which
lowest price. Facey only replied to the
reversed the trial court decision, declaring
second question in regard to the price.
that a binding agreement had been proved.
Harvey treated his response as an
The appellants obtained leave from the
unconditional off to sell them the price
Supreme Court of Judicature of Jamaica to
named. Only binding aspect is the lowest
appeal to the Queen in Council (i.e. the
price in regard to a contract being formed.
Privy Council). The Privy Council
Agreement could have ONLY been legit if
reversed the Supreme Court's opinion,
Facey responded to the third telegram from
reinstating the appeals court's decision and
Harvey.
stating the reason for its action.
The case involved negotiations over a
The Privy Council advised that no contract
property in Jamaica. The defendant, Mr
existed between the two parties. The first
LM Facey, had been carrying on
telegram was simply a request for
negotiations with the Mayor and Council
information, so at no stage did the
defendant make a definite offer that could argued that under the Pharmacy and
be accepted. Lord Morris LC gave the Poisons Act 1933, that was an unlawful
following judgment practice. Under s 18(1), a pharmacist
needed to supervise at the point where "the
DISPOSITION
sale is effected" when the product was one
Reversed, judgment to the trial court in listed on the 1933 Act's schedule of
favour of Harvey is restored. poisons. The Society argued that displays
of goods were an "offer" and when a
shopper selected and put the drugs into
their shopping basket, that was an
"acceptance", the point when the "sale is
effected"; as no pharmacist had supervised
PHARMACEUTICAL SOCIETY OF
the transaction at this point, Boots was in
GB
breach of the Act. Boots argued that the
V
sale was effected only at the tills.
BOOTS CASH CHEMIST
JUDGMENT
[1953] 1 All ER 482, [1953] 2 WLR 427
Both the Queen's Bench Division of the
High Court and the Court of Appeal sided
with Boots. They held that the display of
BENCH
goods was not an offer. Rather, by placing
SOMERVELL LJ, BIRKETT LJ AND the goods into the basket, it was the
ROMER LJ customer that made the offer to buy the

FACTS goods. This offer could be either accepted

or rejected by the pharmacist at the cash
Boots Cash Chemists had just instituted a
desk. The moment of the completion of
new way for its customers to buy certain
contract was at the cash desk, in the
medicines. Shoppers could now pick drugs
presence of the supervising pharmacist.
off the shelves in the chemist and then pay
Therefore, there was no violation of the
for them at the till. Before then, all
Act.
medicines were stored behind a counter
meaning a shop employee would get what Somervell LJ said,

was requested. The Pharmaceutical “Whether that is a right view depends on

Society of Great Britain objected and what are the legal implications of this
layout, the invitation to the customer. Is it been placed in the receptacle the customer
to be regarded as an offer which is himself is bound and he would have no
completed and both sides bound when the right without paying for the first article to
article is put into the receptacle, or is it to substitute an article which he saw later of
be regarded as a more organised way of the same kind and which he perhaps
doing what is done already in many types preferred. I can see no reason for implying
of shops — and a bookseller is perhaps the from this arrangement which the
best example - namely, enabling customers Defendants have referred to any
to have free access to what is in the shop implication other than that which the Lord
to look at the different articles and then, Chief Justice found in it, namely, that it is
ultimately, having got the ones which they a convenient method of enabling
wish to buy, coming up to the assistant customers to see what there is and choose
and saying "I want this"? The assistant in and possibly put back and substitute
999 times out of 1,000 says "That is all articles which they wish to have and then
right", and the money passes and the go up to the cashier and offers to buy what
transaction is completed. I agree entirely they have so far chosen. On that
with what the Lord Chief Justice says and conclusion the case fails, because it is
the reasons he gives for his conclusion admitted that then there was supervision
that in the case of the ordinary shop, in the sense required by the Act and at the
although goods are displayed and it is appropriate moment of time. For these
intended that customers should go and reasons, in my opinion, the appeal should
choose what they want, the contract is not be dismissed. ”
completed until, the customer having
Birkett LJ followed on by saying,
indicated the articles which he needs, the
shop-keeper or someone on his behalf “The short point of the matter was, at what

accepts that offer. Then the contract is point of time did the sale in this particular

completed. I can see no reason at all, that shop at Edgware take place? My Lord has

being I think clearly the normal position, explained the system which has been

for drawing any different implication as a introduced into that shop (and possibly

result of this layout. The Lord Chief other shops since) in March 1951. The two

Justice, I think, expressed one of the most ladies in this case, Miss Mainwaring and

formidable difficulties in the way of the Miss Marrable, who went into that shop,

suggestion when he pointed out that, if the each took a particular package containing

Plaintiffs are right, once an article has poison from the particular shelf, put it into
their basket, came to the exit and there think I am bound to say in this case the
paid. It is said upon the one hand that sale was made under the supervision of a
when the customer takes the package from pharmacist. By using the words 'The sale
the poison section and puts it into her is effected by, or under the supervision of,
basket the sale there and then takes place, a registered pharmacist', it seems to me
On the other hand, it is said the sale does the sale might be effected by somebody not
not take place until that customer who has a pharmacist. If it be under the
placed that package in the basket comes to supervision of a pharmacist, the
the exit. pharmacist can say 'You cannot have that.
That contains poison'. In this case I
The Lord Chief Justice dealt with the
decide, first that there is no sale effected
matter in this way, and I would like to
merely by the purchaser taking up the
adopt these words:
article. There is no sale until the buyer's
"It seems to me therefore, applying offer to buy is accepted by the acceptance
common sense to this class of transaction, of the money, and that takes place under
there is no difference merely because a the supervision of a pharmacist. And in
self-service is advertised. It is no different any case, I think, even if I am wrong in the
really from the normal transaction in a view I have taken of when the offer is
shop. I am quite satisfied it would be accepted, the sale is by or under the
wrong to say the shopkeeper is making an supervision of a pharmacist".
offer to sell every article in the shop to any
I agree with that and I agree that this
person who might come in and that he can
appeal ought to be dismissed.
insist by saying 'I accept your offer'".

Then he goes on to deal with the

illustration of the bookshop and continues:

"Therefore, in my opinion, the mere fact

that a customer picks up a bottle of
medicine from the shelves in this case does
not amount to an acceptance of an offer to
sell. It is an offer by the customer to buy. I
daresay this case is one of great
importance, it is quite a proper case for
the Pharmaceutical Society to bring, but I
 the reward offered by plaintiff under the
hand bills issued by him.

An appeal is filed against the order of

subordinate court in the High Court of
Allahabad in order to provide claim of Rs.
49 to the appellant.

Statutes and provisions involved:

OFFER MUST BE COMMUNICATED § 2 (h), and 8 of Indian Contracts Act,

TO THE OFFEREE 1872

Issues Dealt:

1. Whether the claim of Rs. 499 should be

LALMAN SHUKLA
provided to the appellant or not?
V
2. Whether subordinate court’s decision
GAURI DATT
was according to the general principles of
1913 40 ALJ 489 law or not?

FACTS

BENCH In the January, 1913 defendant’s nephew

has absconded from his house and in order
BANNERJI J.
to find his nephew he sent all his servants
BACKGROUND to different parts, so that he can be traced

Plaintiff was a servant of defendant who at his position. Defendant was among

was sent to Hardwar for finding the those several servants who were sent for

nephew of his master, who has absconded the search of master’s child. He was sent

from his house. The servant was able to to Hardwar from Cawnpore and there he

find the missing child and he was was able to trace the child and for this

rewarded with two sovereigns and Rs. 20. accomplishment he was awarded with two

Later on after 6 months when he was sovereigns and Rs. 20 when he returned to

dismissed from his work he brought a suit Cawnpore. In the meantime when plaintiff

against his masters claiming Rs. 499 for was at the search of child defendant issued
a hand bill offering reward of Rs. 501 to
the person who traces the missing child It was contended by the respondents that
and defendant was totally ignorant of this there must be an acceptance to offer in
reward. order to convert it into a contract and
assent is the basic essential in order to
constitute a contract. At the time he was
Later on after 6 months of this incident tracing the boy he was unaware about this
plaintiff brought a suit against his master reward associated with child, so without
claiming Rs. 499 stating that the master knowledge how can it create a contract
had promised to the person who will find between parties.
the missing child a reward. He alleged his
master of not providing reward for the
specific performance of his promise. It was also argued by them that at the time
of tracing the missing child he was acting
CONTENTIONS OF BOTH THE
as a servant and thus fulfilling the
PARTIES
responsibilities and obligations for which
PETITIONERS he was sent to Hardwar from Cawnpore.

The petitioners strongly contended that JUDGMENT

performance of an act is sufficient for
It was held by the Honorable Court that
providing rewards attached with such
knowledge and assent about a proposal is
performance. They stated that it is
must in order to convert a proposal into
immaterial that whether person performing
enforceable agreement and in the present
the act has knowledge of rewards
case plaintiff was neither aware nor has
associated with it or not. He also argued
assent about the particular act. It was also
that § 8 of the Indian Contracts Act, 1872
said by the Honorable Judge that plaintiff
states that performance of a condition of
was merely fulfilling his obligations at the
proposal is an acceptance of proposal and
time when he was tracing the boy.
in the present case the condition was that
the person who will find the missing child So, the appeal was dismissed and it was
will be rewarded and thus as per this held that plaintiff was not entitled to claim
provision he has fulfilled the condition, reward for finding the missing boy. In this
hence plaintiff is entitled to claim reward. case it was highlighted by the Honorable
High Court of Allahabad that knowledge
RESPONDENTS
and acceptance of a proposal are the basic
essentials in order to constitute a valid
contract. If the person gives his assent and performance by other party. An offer can
then performs the condition of proposal be revoked or terminated under certain
than only he is entitled to claim rewards conditions.
associated with such proposal.
KINDS OF OFFER
CONCLUSION
There are two kinds of offer which are as
It can be concluded that through this case follows:-
it was clearly established that firstly,
GENERAL OFFER – General offer is
acceptance or assent is a must for
made to the public at large. It may be
converting a proposal into enforceable
accepted by any person who fulfills the
contract. Secondly, parties must have
necessary conditions.
knowledge about the proposal and without
knowledge of the proposal it cannot SPECIFIC OFFER – Specific offer is

converted into agreement even if condition made to a particular person. No right of

associated with such proposal is fulfilled. action accrues to persons other than those
to whom the offer is made.

FACTS
BOULTON
The defendant i.e. Jones sent a written
V
order for goods to a shop which is owned
JONES by Brocklehurst and which was addressed
to him by name. Unknown to the
{1857} 2H AND N564
defendant, Brocklehurst had earlier that
day sold and transferred his business to

BENCH Boulton.But Boulton fulfilled the order

and delivered the goods to the defendant
POLLOCK CB
without notifying him that he had taken
BRAMWELL B over the business. The defendant accepted
the goods and consumed them in the belief
that they had been supplied by
FACTS
Brocklehurst. When he received Boulton’s
This case is based on the offer made to a invoice he refused to pay it claimimg that
particular person. In Contract Law, an he had intended to deal with Brocklehurst
offer is a promise in exchange for personally, since he had dealt with them
previously and had a set-off on which he person’s name another person cannot sue
had intended to rely. upon it, except in cases of agency.

ISSUES “CHANNELL B” said that the plaintiff is

clearly not in a situation to sustain this
1 Is whether Jones is liable to pay
action, for there was no contract between
Boulton?
himself and the defendant. The case is not
2 Is it the duty of the Brocklehurst or one of Principal and agent; it was a
Boulton to inform about the takeover of contract made with B, who had
the business to Jones? transactions with the defendant and owed

3 Can Boulton claim the amount of the him money, and upon which A seeks to

goods which was used by the Jones? sue.” So, the Jones will not be liable to pay
{Section 64 will also apply} which talks
JUDGEMENT
about rescissions of a voidable contract.
The court held that the defendant i.e. Jones
COMMENT
was not liable for the price. When a
Contract is made for the identity of the Originally the contract is between

person is important to the Contract. Hence, Brocklehurst and Jones has no idea that

there was no Contract. “POLLOCK” said now the business is taken over by the

that the rule of law is clear, that if you Boulton. Jones assumed that he placed an

propose to make a contract with A, then B order to Brocklehurst which is the original

cannot substitute himself for A without party to the contract but not to the Boulton.

your consent and to your disadvantage, Only the person to whom the offer is made
securing to himself all the benefit of the can acceptit. No other party can accept on
contract. behalf of the either party. According to me

“MARTIN B” said that where the facts the judgement which is given in this case

prove that the defendant never meant to is right according to the facts of the case.

contract with A alone, B can never force a Acceptance is only made by that person to
contract upon him, he was dealt with A, whom it is given. For example- Contract to
and a contract with no one else can be set write a book or perform a concert, paint a
up against him. portrait then no other person can adopt the

“BRAMWELL B” said that I do not lay it contract.

down because a contract was made in one Pollock CB

 The point raised is, whether the facts other person can interpose and adopt the
proved did no shew an intention on the contract. As to the difficulty that the
part of the defendants to deal with defendants need not pay anybody, I do not
Brocklehurst. The plaintiff, who succeeded see why they should, unless they have
Brocklehurst in business, executed the made a contract either express or implied. I
order without any intimation of the change decide the case on the ground that the
that had taken place, and brought this defendants did not know that the plaintiff
action to recover the price of the goods was the person who supplied the goods,
supplied. It is a rule of law, that if a person and that allowing the plaintiff to treat the
intends to contract with A, B. cannot give contract as made with him would be a
himself any right under it. Here the order prejudice to the defendants.
in writing was given to Brocklehurst.
Possibly Brocklehurst might have adopted
the act of the plaintiff in supplying the
goods, and maintained an action for their
price. But since the plaintiff has chosen to
sue, the only course the defendants could
take was to plead that there was no REVOCATION OF OFFER,
contract with him. IMPORTANCE OF TIME IN A
CONTRACT
Bramwell B

The admitted facts are, that the defendants

sent to a shop an order for goods,
supposing they were dealing with
RAMSGATE VICTORIA HOTEL
Brocklehurst. The plaintiff, who supplied
the goods, did not undeceive them. If the V
plaintiff were now at liberty to sue the MONTEFIORE
defendants, they would be deprived of
FACTS
their right of set-off as against
Brocklehurst. When a contract is made, in In this case defended who applied to buy
which the personality of the contracting shares in the company in June and also
party is or may be of importance, as a paid a deposit into the company account.
contract with a man to write a book, or the So, the offer was not accepted in a
like, or where there might be a set-off, no reasonable time by the company. The
acceptance took place in November and Based on the nature of a proposal, once
the company informed the defendant that communicated, remains open until it lapses
shares had been allotted to him and that the or is withdrawn. Under normal
balance of the purchase price should be circumstances, there is no obligation for
paid. But at that time the value of the the proposer to keep his proposal open
shares was less and the defendant refused indefinitely.
to accept the shares and the court held the
He may revoke it at any time before
refusal justified because such a proposal
acceptance. Furthermore, one of the
should have been accepted within a
conditions that automatically revoke the
reasonable time. The period between June
proposal is the lapse of time either
and November was clearly not reasonable.
specified or reasonable time limits. As in
the above case the court accepted and
judged against the plaintiff because no
Issues: The issues in the above case deal
specific time was prescribed by the
with: Revocation of offer by lapse of time
company and they did not communicated
and provides for two situations:
their acceptance within a reasonable time
Lapse of time occurring upon the limit.
expiration of the time prescribed in the
The offer lapsed after the reasonable time
proposal for its acceptance. Therefore, the
not because this must be implied in the
issue in the case was that there was no
offer but because failure to accept the offer
specific time limit for the acceptance of
within a reasonable time.
the offer given by the defended by the
company. Moreover, the proposer at the beginning
when he was submitting his application
By the lapse of a reasonable time, in the
forms to be allotted shares did not allow
above case the acceptance was
such a long period of time and as a result
communicated after a reasonable or
he was winner of the case and the court
practiced time. The issue in the case is
accepted his refusal to pay the share price
based on the lapse of a reasonable time
when the acceptance was communicated to
since there was no specific time was
him. Lesson learned: Firstly, from the
assigned for the acceptance.
above case I have learned that an offer can
JUDGMENT be made from any party in the contract.
It is not necessarily or compulsory that the 2. Where an offer is stated to be open
offer should come from the party who ones for a reasonable length of time in
the object consideration. As, in the above which the chance for acceptance
case the offer comes from the buyer of the open utile the lapse of the
shares which are owned and to be allotted reasonable time. The reasonable
by the company. Secondly, I have learned time is based on the nature and the
about the revocation of an offer in which custom of the business which
the proposer can claim that the offer is determines for how long the door
revoked. Based on this case the revocation for the acceptance is open or what
was made based on the lapse of a is the range of time that is
reasonable time which is accepted by both acceptable for giving the
parties. acceptance after the proposal is
communicated.
Although the plaintiff which sued the
defendant in the court but because of the
lapse of a reasonable time the court judge
against the plaintiff because they didn’t
have an specific time prescribed for the
acceptance and also the reasonable time
was lapsed. To conclude my learning from
the case: The communication of proposal
can be from any party who wants to
conclude the contract with the second
party. And in the case, two possible
situations could be seen;

1. Where an offer is stated to be open ACCEPTANCE

for a specific length of time in

which the time would be prescribed
either by the proposer or by the
acceptor. So, when the acceptance BROGDEN
is not given or communicated
V
during the specified time the
proposal is revoked. METROPOLITAN RAILWAY
COMPANY
 (1876–77) L.R. 2 APP. CAS. 666 The House of Lords (The Lord Chancellor,
Lord Cairns, Lord Hatherley, Lord
Selborne, Lord Blackburn, and Lord
COURT Gordon) held that a contract had arisen by

JUDICIAL COMMITTEE OF THE conduct and Brogden had been in clear

HOUSE OF LORDS breach, so he must be liable. The word

"approved" on the document with
FACTS
Brogden's name was binding on all the
Mr Brogden, the chief of a partnership of partners, since Brogden was the chief
three, had supplied the Metropolitan partner, even though the standard signature
Railway Company with coals for a number of “B. & Sons” was not used. A mere
of years. Brogden then suggested that a mental assent to the agreement's terms
formal contract should be entered into would not have been enough, but having
between them for longer term coal supply. acted on the terms made it so. Lord
Each side's agents met together and Blackburn also held that the onus of
negotiated. Metropolitan's agents drew up showing that both parties had acted on the
some terms of agreement and sent them to terms of an agreement which written
Brogden. Brogden wrote in some parts agreement had not been, in due format,
which had been left blank and inserted an executed by either, lies upon person
arbitrator who would decide upon alleging such facts. A key extract from
differences which might arise. He wrote Lord Blackburn's judgment [Lord
"approved" at the end and sent back the Blackburn was one of the most
agreement documents. Metropolitan's distinguished judges of his time]:
agent filed the documents and did nothing
“I have always believed the law to be this,
more. For a while, both acted according to
that when an offer is made to another
the agreement document's terms. But then
party, and in that offer there is a request
some more serious disagreements arose,
express or implied that he must signify his
and Brogden argued that there had been no
acceptance by doing some particular thing,
formal contract actually established.
then as soon as he does that thing, he is
bound. If a man sent an offer abroad
saying: I wish to know whether you will
JUDGMENT
supply me with goods at such and such a
price, and, if you agree to that, you must
ship the first cargo as soon as you get this them; that was the justification. That case
letter, there can be no doubt that as soon as is referred to in a book which I published a
the cargo was shipped .the contract would good many years ago, Blackburn on
be complete, and if the cargo went to the Contracts of Sale, and is there translated.
bottom of the sea, it would go to the Brian gives a very elaborate judgment,
bottom of the sea at the risk of the orderer. explaining the law of the unpaid vendor's
So again, where, as in the case of Ex parte lien, as early as that time, exactly as the
Harris, a person writes a letter and says, I law now stands, and he consequently says:
offer to take an allotment of shares, and he “This plea is clearly bad, as you have not
expressly or impliedly says, If you agree shewn the payment or the tender of the
with me send an answer by the post, there, money;” but he goes farther, and says (I
as soon as he has sent that answer by the am quoting from memory, but I think I am
post, and put it out of his control, and done quoting correctly), moreover, your plea is
an extraneous act which clenches the utterly naught, for it does not shew that
matter, and shews beyond all doubt that when you had made up your mind to take
each side is bound, I agree the contract is them you signified it to the Plaintiff, and
perfectly plain and clear.” your having it in your own mind is
nothing, for it is trite law that the thought
But when you come to the general
of man is not triable, for even the devil
proposition which Mr. Justice Brett seems
does not know what the thought of man is;
to have laid down, that a simple
but I grant you this, that if in his offer to
acceptance in your own mind, without any
you he had said, Go and look at them, and
intimation to the other party, and
if you are pleased with them signify it to
expressed by a mere private act, such as
such and such a man, and if you had
putting a letter into a drawer, completes a
signified it to such and such a man, your
contract, I must say I differ from that. It
plea would have been good, because that
appears from the Year Books that as long
was a matter of fact.
ago as the time of Edward IV, Chief
Justice Brian decided this very point. The I take it, my Lords, that that, which was
plea of the Defendant in that case justified said 300 years ago and more, is the law to
the seizing of some growing crops because this day, and it is quite what Lord Justice
he said the Plaintiff had offered him to go Mellish in Ex parte Harris accurately says,
and look at them, and if he liked them, and that where it is expressly or impliedly
would give 2s. 6d. for them, he might take stated in the offer that you may accept the
offer by posting a letter, the moment you enough), that if a draft having been
post the letter the offer is accepted. You prepared and agreed upon as the basis of a
are bound from the moment you post the deed or contract to be executed between
letter, not, as it is put here, from the two parties, the parties, without waiting for
moment you make up your mind on the the execution of the more formal
subject. instrument, proceed to act upon the draft,
and treat it as binding upon them, both
But my Lords, while, as I say, this is so
parties will be bound by it. But it must be
upon the question of law, it is still
clear that the parties have both waived the
necessary to consider this case farther
execution of the formal instrument and
upon the question of fact. I agree, and I
have agreed expressly, or as shewn by
think every Judge who has considered the
their conduct, to act on the informal one. I
case does agree, certainly Lord Chief
think that is quite right, and I agree with
Justice Cockburn does, that though the
the way in which Mr. Herschell in his
parties may have gone no farther than an
argument stated it, very truly and fairly. If
offer on the one side, saying, Here is the
the parties have by their conduct said, that
draft,—(for that I think is really what this
they act upon the draft which has been
case comes to,)—and the draft so offered
approved of by Mr. Brogden, and which if
by the one side is approved by the other,
not quite approved of by the railway
everything being agreed to except the
company, has been exceedingly near it, if
name of the arbitrator, which the one side
they indicate by their conduct that they
has filled in and the other has not yet
accept it, the contract is binding.
assented to, if both parties have acted upon
that draft and treated it as binding, they
will be bound by it. When they had come
so near as I have said, still it remained to
execute formal agreements, and the parties
evidently contemplated that they were to
exchange agreements, so that each side
should be perfectly safe and secure,
knowing that the other side was bound. POSTAL RULE
But, although that was what each party
contemplated, still I agree (I think the Lord
Chief Justice Cockburn states it clearly HENTHORN
 V letter, to sell a house to B at a certain
price." The communication of the proposal
FRASER
is complete when B receives the letter. The
communication of the proposal is

2 CH 27 complete when B receives the letter."

(b) B accepts A’s proposal by a letter sent

by post. (b) B accepts A’s proposal by a
BENCH
letter sent by post." The communication of
LORD HERSCHELL the acceptance is complete, The
communication of the acceptance is
4. Communication when complete.—The
complete," as against A when the letter is
communication of a proposal is complete
posted; as against A when the letter is
when it comes to the knowledge of the
posted;" as against B, when the letter is
person to whom it is made. —The
received by A. as against B, when the
communication of a proposal is complete
letter is received by A."
when it comes to the knowledge of the
person to whom it is made." The (c) A revokes his proposal by telegram. (c)
communication of an acceptance is A revokes his proposal by telegram." The
complete,— as against the proposer, when revocation is complete as against A when
it is put in a course of transmission to him the telegram is despatched. The revocation
so as to be out of the power of the is complete as against A when the
acceptor; as against the acceptor, when it telegram is despatched." It is complete as
comes to the knowledge of the proposer. against B when B receives it. It is
The communication of a revocation is complete as against B when B receives it."
complete,— as against the person who B revokes his acceptance by telegram. B’s
makes it, when it is put into a course of revocation is complete as against B when
transmission to the person to whom it is the telegram is despatched, and as against
made, so as to be out of the power of the A when it reaches him. B revokes his
person who makes it; as against the acceptance by telegram. B’s revocation is
person to whom it is made, when it comes complete as against B when the telegram
to his knowledge. Illustrations is despatched, and as against A when it
reaches him."
(a) A proposes, by letter, to sell a house to
B at a certain price. (a) A proposes, by FACTS
The defendant and the claimant were importance of this decision's ratio is that a
situated at Liverpool and Birkenhead postal acceptance will only be valid at the
respectively. The defendant called at the time of posting if it is reasonable for the
office of the claimant in order to negotiate offeror to expect an acceptance by post.
the purchase of some houses. The The fact that both parties were living in
defendant handed the claimant a note different towns justifies the inference that
giving him the option to purchase some both parties had contemplated that a letter
houses within 14 days. On the next day, sent by post was a mode by which
the defendant withdrew the offer by post, acceptance might be communicated
but his withdrawal did not reach the
claimant until 5 P.M. Meanwhile, the
claimant responded by post with an
unconditional acceptance of the offer,
which was delivered to the defendant after
its office had closed. The letter was opened
by the defendant the next morning.

JUDGEMENT

The Court of Appeal ordered that the

claimant was entitled to specific
performance. Lord Herschell argued:
"Where the circumstances are such that it
must have been within the contemplation
of the parties that, according to ordinary
usage of mankind, the post might be used
as a means of communicating the
acceptance of an offer, the acceptance is
complete as soon as it is posted."

SIGNIFICANCE

The case is based on a line of decision

starting with Adams v Lindsell (1818),
according to which the acceptance was
valid at the time of posting. The
 MERE SILENCE IS NOT —The communication of proposals, the
ACCEPTANCE acceptance of proposals, and the
revocation of proposals and acceptances,
respectively, are deemed to be made by
FELTHOUSE any act or omission of the party
proposing, accepting or revoking, by
V
which he intends to communicate such
BINDLEY
proposal, acceptance or revocation, or
which has the effect of communicating it."

(1862) 11 CB (NS) 869; [1862] EWHC FACTS

CP J35; 142 ER 1037
Paul Felthouse was a builder who lived in
London. He wanted to buy a horse from
his nephew, John Felthouse. After a letter
BENCH
from the nephew concerning a discussion
WILLES J, BYLES J about buying the horse, the uncle replied

KEATING J saying,

Section 2(b) of Contract Act 1872- When "If I hear no more about him, I consider

the person to whom the proposal is made the horse mine at £30.15s."

signifies his assent thereto, the proposal is The nephew did not reply. He was busy at
said to be accepted. A proposal, when auctions on his farm in Tamworth. He told
accepted, becomes a promise. the man running the auctions, William

3. Communication, acceptance and Bindley, not to sell the horse. But by

revocation of proposals.—The accident, Bindley did. Uncle Felthouse

communication of proposals, the then sued Bindley in the tort of conversion

acceptance of proposals, and the - using someone else's property

revocation of proposals and acceptances, inconsistently with their rights. But for the

respectively, are deemed to be made by Uncle to show the horse was his property,

any act or omission of the party he had to show there was a valid contract.

proposing, accepting or revoking, by Bindley argued there was not, since the

which he intends to communicate such nephew had never communicated his

proposal, acceptance or revocation, or acceptance of the uncle's offer.

which has the effect of communicating it. JUDGMENT

The court ruled that Felthouse did not have no complete bargain at that time. On the
ownership of the horse as there was no 1st of January, 1861, the nephew writes,
acceptance of the contract. Acceptance
"I saw my father on Saturday. He told me
must be communicated clearly and cannot
that you considered you had bought the
be imposed due to silence of one of the
horse for £30. If so, you are labouring
parties. The uncle had no right to impose a
under a mistake, for 30 guineas was the
sale through silence whereby the contract
price I put upon him, and you never heard
would only fail by repudiation. Though the
me say less. When you said you would
nephew expressed interest in completing
have him, I considered you were aware of
the sale there was no communication of
the price."
that intention until before the horse was
sold at auction on 25 February. The To this the uncle replies on the following

nephew's letter of 27 February which was day,

submitted as evidence by Felthouse was "Your price, I admit, was 30 guineas. I

judged to be the first instance of offered £30.; never offered more: and you
communication where the acceptance was said the horse was mine. However, as
communicated to the offeror there may be a mistake about him, I will
(Felthouse).And by this time, the horse split the difference. If I hear no more
had already been sold. Accordingly about him, I consider the horse mine at
Felthouse had no interest in the property. £30 and 15s."

Willes J delivered the lead judgment. It is clear that there was no complete

“I am of opinion that the rule to enter a bargain on the 2nd of January: and it is

nonsuit should be made absolute. The also clear that the uncle had no right to

horse in question had belonged to the impose upon the nephew a sale of his

plaintiff's nephew, John Felthouse. In horse for £30 and 15s. unless he chose to

December, 1860, a conversation took place comply with the condition of writing to

between the plaintiff and his nephew repudiate the offer. The nephew might, no

relative to the purchase of the horse by the doubt, have bound his uncle to the bargain

former. The uncle seems to have thought by writing to him: the uncle might also

that he had on that occasion bought the have retracted his offer at any time before

horse for £30, the nephew said that he had acceptance. It stood an open offer: and so

sold it for 30 guineas, but there was clearly things remained until the 25th of February,
when the nephew was about to sell his
farming stock by auction. The horse in likely construction: and, if so, it is clear
question being catalogued with the rest of that the plaintiff cannot recover. But,
the stock, the auctioneer (the defendant) assuming that there had been a complete
was told that it was already sold. It is clear, parol bargain before the 25th of February,
therefore, that the nephew in his own mind and that the letter of the 27th was a mere
intended his uncle to have the horse at the expression of the terms of that prior
price which he (the uncle) had named, £30 bargain, and not a bargain then for the first
and 15s.: but he had not communicated time concluded, it would be directly
such his intention to his uncle, or done contrary to the decision of the court of
anything to bind himself. Nothing, Exchequer in Stockdale v. Dunlop to hold
therefore, had been done to vest the that that acceptance had relation back to
property in the horse in the plaintiff down the previous offer so as to bind third
to the 25th of February, when the horse persons in respect of a dealing with the
was sold by the defendant. It appears to me property by them in the interim. In that
that, independently of the subsequent case, Messrs. H. & Co., being the owners
letters, there had been no bargain to pass of two ships, called the " Antelope" and
the property in the horse to the plaintiff, the "Maria," trading to the coast of Africa,
and therefore that he had no right to and which were then expected to arrive in
complain of the sale. Liverpool with cargoes of palm-oil, agreed
verbally to sell the plaintiffs two hundred
Then, what is the effect of the subsequent
tons of oil,- one hundred tons to arrive by
correspondence? The letter of the
the "Antelope," and one hundred tons by
auctioneer amounts to nothing. The more
the "Maria." The "Antelope" did
important letter is that of the nephew, of
afterwards arrive with one hundred -tons
the 27th of February, which is relied on as
of oil on board, which were delivered by
shewing that he intended to accept and did
H. & Co. to the plaintiffs. The "Maria,"
accept the terms offered by his uncle's
having fifty tons of oil on board, was lost
letter of the 2nd of January. That letter,
by perils of the sea. The plaintiffs having
however, may be treated either as an
insured the oil on board the "Maria,"
acceptance then for the first time made by
together with their expected profits
him, or as a memorandum of a bargain
thereon, it was held that they had no
complete before the 25th of February,
insurable interest, as the contract they had
sufficient within the statute of frauds. It
entered into with H. & Co., being verbal
seems to me that the former is the more
only, was incapable of being enforced.
Byles J delivered to Morrisons, it was held that the
defendants were liable to the plaintiffs.
I am of the same opinion, and have
nothing to add to what has fallen from my
Brother Willes.

Keating J

I am of the same opinion. Had the question

POWELL
arisen as between the uncle and the
nephew, there would probably have been V

some difficulty. But, as between the uncle LEE

and the auctioneer, the only question we
257 S.W. 308 (TEX. CIV. APP. 1923),
have to consider is whether the horse was
the property of the plaintiff at the time of 99 LT 284
the sale on the 25th of February. It seems
to me that nothing had been done at that
BENCH
time to pass the property out of the nephew
and vest it in the plaintiff. A proposal had KING’S BENCH DIVISION
been made, but there had before that day
Section 2(b) of Contract Act 1872- When
been no acceptance binding the nephew.
the person to whom the proposal is made
Willes J. signifies his assent thereto, the proposal is
said to be accepted. A proposal, when
Coats v. Chaplin is an authority to shew
accepted, becomes a promise
that John Felthouse might have had a
remedy against the auctioneer. There, the 3. Communication, acceptance and
traveller of Morrisons, tradesmen in revocation of proposals.—The
London, verbally ordered goods for communication of proposals, the
Morrisons of the plaintiffs, manufacturers acceptance of proposals, and the
at Paisley. No order was given as to revocation of proposals and acceptances,
sending the goods. The plaintiffs gave respectively, are deemed to be made by
them to the defendants, carriers, directed to any act or omission of the party
Morrisons, to be taken to them, and also proposing, accepting or revoking, by
sent an invoice by post to Morrisons, who which he intends to communicate such
received it. The goods having been lost by proposal, acceptance or revocation, or
the defendants' negligence, and not which has the effect of communicating it.
—The communication of proposals, the renewed written promise to pay in a letter
acceptance of proposals, and the to appellant, dated May 30, 1917, all of
revocation of proposals and acceptances, which supplemental pleadings were
respectively, are deemed to be made by properly excepted to and denied by
any act or omission of the party appellee. The case was tried before the
proposing, accepting or revoking, by justice of the peace and judgment rendered
which he intends to communicate such for defendant. On appeal to the county
proposal, acceptance or revocation, or court, it was tried before a special judge,
which has the effect of communicating it." the appellee being the regular county
judge, and Judgment again rendered for
defendant. From this judgment plaintiff
FACTS appeals.

Appellant, as plaintiff below, sued Opinion.

Appellee on April 25, 1922, in the justice
Appellant only has one assignment of
court, on a written order signed by
error, which is multiplicitous. In this
appellee, for a set of law books, entitled
assignment it sets up all the alleged errors
"Standard Encyclopedia of Procedure."
of which it complains, and under it sets out
This order was dated May 23, 1916. The
eight propositions. Only a part of these are
order called for delivery of the books as
propositions of law, and these so mixed
published at $6.50 per volume, all volumes
with argument as to be difficult of
in excess of 26 to be furnished free, and
ascertainment. Its brief does not comply
provided payment of $8 on September 1,
with the rules, but we have, nevertheless,
1916, and $3 per month for the remainder,
considered the salient points raised. There
with privilege of paying $9 each three
is an agreed statement of facts, but no
months. Appellee defended on three
findings of fact nor conclusions of law
grounds, as follows: First, that the order
made by the trial court. Nor is it made to
was procured through fraud; second,
appear that any such were requested. Only
failure of consideration; and, third, the
one witness, the appellee, testified, all
statutes of limitation. Appellant, by
other evidence being documentary.
supplemental petition, pleaded waiver by
appellee on any question of fraud or failure
of consideration, and that appellee had
JUDGEMENT
tolled the statute of limitation by a
We think appellee's testimony clearly offer was made only as a compromise.
establishes his pleas of fraud and limitation This is not denied nor contradicted by
unless same were defeated by his letter to appellant. The undisputed testimony shows
appellant, dated May 30, 1917. This letter that appellant did not ship any more books
as shown in the record, and omitting the to appellee, that it kept the $10 sent, and
parts not pertinent to our inquiry, that it sent the local expressman for the
contained the following language: books to be reshipped to it. He declined to
receive same from appellee because not
"I want to make you the proposition to pay
properly boxed, but we think this
you $25.00 and reship you the books, and I
immaterial. We think that there was
will pay freight on same. The books are in
sufficient evidence to authorize the trial
as good condition as when I opened them,
court in finding that appellant accepted
for the reason that they are not suited to
appellee's offer of compromise and that it
my practice and therefore have not been
could not, therefore, sue upon the original
used.
contract. This would sustain a judgment
"I am inclosing you my check for $10.00. against appellant.
If you will accept my proposition I will
If the trial court did in fact find that the
immediately send you the other $15.00. If
order sued upon was supplanted by a
you do not accept this, then I will pay you
compromise between the parties on May
for the books as I can. At any rate do not
30, 1917, inasmuch the suit was not filed
ship me any more of the books, I cannot
until April 25, 1922, nearly five years
use them."
later, we think he could also have found
It appears that when this letter was written for the appellee on his plea of limitation
appellee had paid nothing on the books even as applied to the new agreement,
and that, due to failure to pay the which would also support his judgment.
installments called for in the order, the
Appellant contends, however, that
appellant had exercised its option,
appellee's letter was not a compromise
provided for in the order, of declaring the
offer, but a renewed promise to pay for the
full amount due, and had demanded
books, in the following language of his
payment in full. Appellee testified that it
letter: "If you do not accept this, then I will
was in response to threats to sue him made
pay for the books as I can" — and urges
in letters of appellant that he wrote the
that this defeats his plea of limitation. In
letter above quoted from, and that such
order for a new promise to pay to toll the
statutes of limitation it must contain an
unqualified admission of a just subsisting
indebtedness and express a willingness to
pay it. Krueger v. Krueger, 76 Tex. 178,
12 S.W. 1004, 7 L.R.A. 72. In the instant
case, neither the amount of the debt nor
that it is just appears to have been admitted
by appellee in said letter, and his promise
to pay is expressly contingent upon his
ability to pay. Being, to that extent at least,
a conditional promise to pay, the burden
was cast upon the plaintiff, if it depended
upon such new promise, to prove that
appellee was in fact able to pay within
such time as would stop the running of the STANDARD FORM OF CONTRACT
statute of limitation against it. Lange v.
Caruthers, 70 Tex. 718, 8 S.W. 604. A
finding of the trial court against the HENDERSON

appellant on this issue would likewise V

support a judgment against it.
STEVENSON
We have taken occasion in this opinion to
[1873] SLR 1198
set out some of the issues on which the
trial court, under the evidence, could have
found against the appellant. It is not the
FACTS
province of this court to pass upon the
weight of testimony. There being evidence Plaintiff bought a steamer ticket. Which

to support the judgment of the trial court, contained on the face, words “Dublin to

in the absence of his findings of fact and White heaven” on the back, certain terms,

conclusions of law, this court must affirm one of which excluded liability of the Co.

the judgment below. for loss, injury or delay to the passenger or

his luggage. Plaintiff had not seen back of
Affirmed.
the ticket not there was any indication on
the face about the conditions on the back.
Plaintiff’s luggage was lost by the ship PRINCIPLE
wreck caused by the fault of Co’s servants.
“Where a written document is presented to
ISSUES a party for acceptance, a reasonably
sufficient notice shall be given of the
Can the plaintiff recover from the
presence of terms and conditions. Notice
company?
will be regarded as sufficient if it will
Plaintiff claimed : convey to the minds of people in general

- that they failed to complete their part of that ticket contains conditions.

the contract REASONABLE NOTICE

- that the conditions on the ticket were It is the duty of the person delivering the
insufficient to protect them against the document to give adequate notice to the
consequences from near future. offeree of the printed terms and conditions.

HELD Otherwise acceptor is not bound by these

terms.
Plaintiff was entitled to recover his loss
from the Company inspite of exemption
clause. PARKER

SOUTH EASTERN RAILWAY [1877]

JUDGEMENT 2 CPD 416

Plaintiff could not be said to have accepted

the a term which he has not seen, of which BENCH
he knew nothing and which is not in any
MELLISH LJ, BAGGALLAY LJ,
way ostensibly connected with that which
BRAMWELL LJ
is printed and written upon the face of the
contract presented to him. The result FACTS
would have been otherwise, if words like
Mr. Parker left a bag in the cloakroom of
“for conditions see back” had been printed
Charing Cross railway station, run by the
on face of the ticket to draw the
South Eastern Railway Company. On
passengers’ attention to the place where
depositing his bag and paying two pence
the conditions were printed.
he received a ticket. On the front it said
"see back". On its back, it stated that the on the front or on the back of the ticket.
railway was excluded from liability for ”
items worth £10 or more. Mr. Parker failed
COURT OF APPEAL
to read the clause as he thought the ticket
was only a receipt of payment. However, The majority of the Court of Appeal held

he admitted that he knew the ticket there should be a retrial. They said that if

contained writing. Mr. Parker's bag, which Mr Parker knew of the conditions he

was worth more than £10, was lost. He would be bound. If he did not know, he

sued the company. The question of law put would still be bound if he was given the

to the court was whether the clause applied ticket in such a way as amounted to

to Mr. Parker. At trial the jury found for "reasonable notice". Mellish LJ said the

Mr. Parker as it was reasonable for him not following.

to read the ticket. I am of opinion, therefore, that the proper

JUDGMENT direction to leave to the jury in these cases

is, that if the person receiving the ticket
Divisional Court
did not see or know that there was any
Lord Coleridge CJ, Brett J and Lindley J writing on the ticket, he is not bound by
decided in favour of Mr. Parker, upholding the conditions; that if he knew there was
the jury award. Lindley J remarked, writing, and knew or believed that the
writing contained conditions, then he is
On the finding of the jury, I think we
bound by the conditions; that if he knew
cannot say that the defendants did not
there was writing on the ticket, but did not
accept the article, to be taken care of by
know or believe that the writing contained
them, without any special terms.
conditions, nevertheless he would be
Henderson v Stevenson, therefore, is
bound, if the delivering of the ticket to him
undistinguishable from this case, except
in such a manner that he could see there
for the words “see back,” which did not
was writing upon it, was, in the opinion of
appear on the face of the ticket in that case.
the jury, reasonable notice that the writing
But the findings here make that distinction
contained conditions. ”
immaterial. After the conclusions of fact
which the jury have drawn, it is, upon the Baggallay LJ concurred, and predicted that
authority of that case, quite immaterial the same result would be reached by the
whether the special terms relied on were jury (in Mr Parker's favour). Bramwell LJ
dissented, holding that reasonable notice
should be a question of law, and that he at Farringdon Hall with the BBC. He took
would have decided in favour of the a ticket from the machine and parked his
railway company. car. It said

"this ticket is issued subject to the

conditions of issue as displayed on the
premises". And on the car park pillars near
the paying office there was a list, one
excluding liability for "injury to the
Customer howsoever that loss, mis-
delivery, damage or injury shall be
caused".

Three hours later he had an accident before

getting into his car. The car park argued
that the judge should have held the matter
THORNTON
regulated by this contract, not tort.
V
JUDGMENT
SHOE LANE PARKING LTD
Lord Denning MR held that the more
onerous the clause, the better notice of it
needed to be given. Moreover, the contract
[1970] EWCA CIV 2
was already concluded when the ticket
came out of the machine, and so any

COURT MEMBERSHIP condition on it could not be incorporated

in the contract.
JUDGE(S) SITTING
“The important thing to notice is that the
LORD DENNING MR, MEGAW LJ
company seek by this condition to exempt
AND SIR GORDON WILMER
themselves from liability, not only for
FACTS damage to the car, but also for injury to
the customer howsoever caused. The
Francis Thornton, "a freelance trumpeter
condition talks about insurance. It is well
of the highest quality", drove to the
known that the customer is usually insured
entrance of the multi-storey car park on
against damage to the car. But he is not
Shoe Lane, before attending a performance
insured against damage to himself. If the
condition is incorporated into the contract and gets a ticket. He cannot refuse it. He
of parking, it means that Mr. Thornton cannot get his money back. He may protest
will be unable to recover any damages for to the machine, even swear at it. But it will
his personal injuries which were caused remain unmoved. He is committed beyond
by the negligence of the company. recall. He was committed at the very
moment when he put his money into the
We have been referred to the ticket cases
machine. The contract was concluded at
of former times from Parker v South
that time. It can be translated into offer and
Eastern Railway Co (1877) 2 CPD 416 to
acceptance in this way: the offer is made
McCutcheon v David MacBrayne Ltd
when the proprietor of the machine holds it
[1964] 1 WLR 125. They were concerned
out as being ready to receive the money.
with railways, steamships and cloakrooms
The acceptance takes place when the
where booking clerks issued tickets to
customer puts his money into the slot. The
customers who took them away without
terms of the offer are contained in the
reading them. In those cases the issue of
notice placed on or near the machine
the ticket was regarded as an offer by the
stating what is offered for the money. The
company. If the customer took it and
customer is bound by those terms as long
retained it without objection, his act was
as they are sufficiently brought to his
regarded as an acceptance of the offer: see
notice before-hand, but not otherwise. He
Watkins v Rymill (1833) 10 QBD 178,
is not bound by the terms printed on the
188 and Thompson v London, Midland
ticket if they differ from the notice,
and Scottish Railway Co [1930] 1 KB 41,
because the ticket comes too late. The
47. These cases were based on the theory
contract has already been made: see Olley
that the customer, on being handed the
v Marlborough Court Ltd [1949] 1 KB
ticket, could refuse it and decline to enter
532. The ticket is no more than a voucher
into a contract on those terms. He could
or receipt for the money that has been paid
ask for his money back. That theory was,
(as in the deckchair case, Chapelton v
of course, a fiction. No customer in a
Barry Urban District Council [1940] 1 KB
thousand ever read the conditions. If he
532) on terms which have been offered
had stopped to do so, he would have
and accepted before the ticket is issued.
missed the train or the boat.
In the present case the offer was contained
None of those cases has any application to
in the notice at the entrance giving the
a ticket which is issued by an automatic
charges for garaging and saying "at
machine. The customer pays his money
owner's risk," i.e., at the risk of the owner "conditions" is used, it would be better
so far as damage to the car was concerned. prefaced with the word "exempting,"
The offer was accepted when Mr Thornton because the exempting conditions are the
drove up to the entrance and, by the only conditions that matter for this
movement of his car, turned the light from purpose.) Telescoping the three questions,
red to green, and the ticket was thrust at they come to this: the customer is bound
him. The contract was then concluded, and by the exempting condition if he knows
it could not be altered by any words that the ticket is issued subject to it; or, if
printed on the ticket itself. In particular, it the company did what was reasonably
could not be altered so as to exempt the sufficient to give him notice of it.
company from liability for personal injury
Mr. Machin admitted here that the
due to their negligence.
company did not do what was reasonably
Assuming, however, that an automatic sufficient to give Mr. Thornton notice of
machine is a booking clerk in disguise - so the exempting condition. That admission
that the old-fashioned ticket cases still was properly made. I do not pause to
apply to it. We then have to go back to the inquire whether the exempting condition is
three questions put by Mellish LJ in Parker void for unreasonableness. All I say is that
v South Eastern Railway Co, 2 CPD 416, it is so wide and so destructive of rights
423, subject to this qualification: Mellish that the court should not hold any man
LJ used the word "conditions" in the bound by it unless it is drawn to his
plural, whereas it would be more apt to use attention in the most explicit way. It is an
the word "condition" in the singular, as instance of what I had in mind in J
indeed the lord justice himself did on the Spurling Ltd v Bradshaw [1956] 1 WLR
next page. After all, the only condition that 461, 466. In order to give sufficient notice,
matters for this purpose is the exempting it would need to be printed in red ink with
condition. It is no use telling the customer a red hand pointing to it - or something
that the ticket is issued subject to some equally startling.
"conditions" or other, without more: for he
But, although reasonable notice of it was
may reasonably regard "conditions" in
not given, Mr. Machin said that this case
general as merely regulatory, and not as
came within the second question
taking away his rights, unless the
propounded by Mellish L.J., namely that
exempting condition is drawn specifically
Mr. Thornton "knew or believed that the
to his attention. (Alternatively, if the plural
writing contained conditions." There was
no finding to that effect. The burden was opinions on where the contract was
on the company to prove it, and they did concluded. Furthermore, Sir Gordon
not do so. Certainly, there was no evidence Wilmer distinguished this from the other
that Mr. Thornton knew of this exempting ticket cases based upon the fact that a
condition. He is not, therefore, bound by it. human clerk proffered the ticket and the
buyer had the opportunity to say I do not
Mr. Machin relied on a case in this court
like those conditions.
last year - Mendelssohn v Normand Ltd.
[1970] 1 QB 177. Mr. Mendelssohn The car park at Shoe Lane was demolished
parked his car in the Cumberland Garage in early 2014
at Marble Arch, and was given a ticket
which contained an exempting condition.
There was no discussion as to whether the
condition formed part of the contract. It
was conceded that it did. That is shown by
the report in the Law Reports at p. 180.
Yet the garage company were not entitled
to rely on the exempting condition for the
reasons there given.
ENTORES LTD
That case does not touch the present,
V
where the whole question is whether the
exempting condition formed part of the MILES FAR EAST CORP
contract. I do not think it did. Mr.
[1955] EWCA CIV 3,
Thornton did not know of the condition,
and the company did not do what was [1955] 2 QB 327
reasonably sufficient to give him notice of
it.
JUDGEs SITTING:
I do not think the garage company can
TOM DENNING, BARON DENNING,
escape liability by reason of the exemption
NORMAN BIRKETT, 1ST BARON
condition. I would, therefore, dismiss the
BIRKETT, HUBERT PARKER,
appeal.”
BARON PARKER OF WADDINGTON
Megaw LJ and Sir Gordon Wilmer agreed
with the onerous point but reserved their
FACTS of cathodes at a price of £239 10s. a ton.
The offer was sent by Telex from England
Entores was a London-based trading
offering to pay £239 10s. a ton for 100
company that sent an offer by telex for the
tons, and accepted by Telex from Holland.
purchase of copper cathodes from a
The question for our determination is
company based in Amsterdam. The Dutch
where was the contract made?
company sent an acceptance by telex. The
contract was not fulfilled and so Entores When a contract is made by post it is clear
attempted to sue the owner of the Dutch law throughout the common law countries
company for damages. The controlling that the acceptance is complete as soon as
company, Entores, was based in the UK the letter is put into the post box, and that
and under English law Entores could only is the place where the contract is made.
bring the action in the UK (serve notice of But there is no clear rule about contracts
writ outside the jurisdiction) if it could made by telephone or by Telex.
prove that the contract was formed within Communications by these means are
the jurisdiction, i.e. in London rather than virtually instantaneous and stand on a
Amsterdam. different footing.

JUDGMENT The problem can only be solved by going

in stages. Let me first consider a case
Denning LJ, delivered the leading
where two people make a contract by word
judgment. He said that the postal rule
of mouth in the presence of one another.
could not apply to instantaneous
Suppose, for instance, that I shout an offer
communications, such as telephone or
to a man across a river or a courtyard but I
telex: if a phoneline "went dead" just
do not hear his reply because it is drowned
before the offeree said "yes", it would be
by an aircraft flying overhead. There is no
absurd to assume that the contract was
contract at that moment. If he wishes to
formed and the parties would not have to
make a contract, he must wait till the
call each other back. The same applied to
aircraft is gone and then shout back his
telex. Since the contract was therefore only
acceptance so that I can hear what he says.
formed when and where the telex was
Not until I have his answer am I bound. I
received, the place of formation was
do not agree with the observations of Hill J
London.
in Newcomb v De Roos.
there was a completed contract by which
the defendants agreed to supply 100 tons
Now take a case where two people make a contract. The clerk at Manchester must get
contract by telephone. Suppose, for through again and send his complete
instance, that I make an offer to a man by sentence. But it may happen that the line
telephone and, in the middle of his reply, does not go dead, yet the message does not
the line goes "dead" so that I do not hear get through to London. Thus the clerk at
his words of acceptance. There is no Manchester may tap out his message of
contract at that moment. The other man acceptance and it will not be recorded in
may not know the precise moment when London because the ink at the London end
the line failed. But he will know that the fails, or something of that kind. In that
telephone conversation was abruptly case, the Manchester clerk will not know
broken off: because people usually say of the failure but the London clerk will
something to signify the end of the know of it and will immediately send back
conversation. If he wishes to make a a message "not receiving." Then, when the
contract, he must therefore get through fault is rectified, the Manchester clerk will
again so as to make sure that I heard. repeat his message. Only then is there a
Suppose next, that the line does not go contract. If he does not repeat it, there is
dead, but it is nevertheless so indistinct no contract. It is not until his message is
that I do not catch what he says and I ask received that the contract is complete.
him to repeat it. He then repeats it and I
In all the instances I have taken so far, the
hear his acceptance. The contract is made,
man who sends the message of acceptance
not on the first time when I do not hear,
knows that it has not been received or he
but only the second time when I do hear. If
has reason to know it. So he must repeat it.
he does not repeat it, there is no contract.
But, suppose that he does not know that
The contract is only complete when I have
his message did not get home. He thinks it
his answer accepting the offer.
has. This may happen if the listener on the
Lastly, take the Telex. Suppose a clerk in a telephone does not catch the words of
London office taps out on the teleprinter acceptance, but nevertheless does not
an offer which is immediately recorded on trouble to ask for them to be repeated: or
a teleprinter in a Manchester office, and a the ink on the teleprinter fails at the
clerk at that end taps out an acceptance. If receiving end, but the clerk does not ask
the line goes dead in the middle of the for the message to be repeated: so that the
sentence of acceptance, the teleprinter man who sends an acceptance reasonably
motor will stop. There is then obviously no believes that his message has been
received. The offeror in such Apart from the contract by Telex, the
circumstances is clearly bound, because he plaintiffs put the case in another way. They
will be estopped from saying that he did say that the contract by Telex was varied
not receive the message of acceptance. It is by letter posted in Holland and accepted
his own fault that he did not get it. But if by conduct in England: and that this
there should be a case where the offeror amounted to a new contract made in
without any fault on his part does not England. The Dutch company on
receive the message of acceptance - yet the September 11, 1954, wrote a letter to the
sender of it reasonably believes it has got English company saying: "We confirm
home when it has not - then I think there is having sold to you for account of our
no contract. associates in Tokyo: 100 metric tons
electrolitic copper in cathodes: £239 10s.
My conclusion is, that the rule about
for longton c.i.f. U.K./ Continental main
instantaneous communications between
ports: prompt shipment from a Japanese
the parties is different from the rule about
port after receipt of export licence:
the post. The contract is only complete
payment by irrevocable and transferable
when the acceptance is received by the
letter of credit to be opened in favour of
offeror: and the contract is made at the
Miles Far East Corporation with a first
place where the acceptance is received.
class Tokyo Bank. The respective import
In a matter of this kind, however, it is very licences to be sent directly without delay
important that the countries of the world to Miles Far East Corporation." The
should have the same rule. I find that most variations consisted in the ports of
of the European countries have delivery, the provisions of import licence
substantially the same rule as that I have and so forth. The English company say
stated. Indeed, they apply it to contracts by that they accepted the variations by
post as well as instantaneous dispatching from London the import
communications. licence, and giving instructions in London

Applying the principles which I have for the opening of the letter of credit, and

stated, I think that the contract in this case that this was an acceptance by conduct

was made in London where the acceptance which was complete as soon as the acts

was received. It was, therefore, a proper were done in London.

case for service out of the jurisdiction. I am not sure that this argument about
variations is correct. It may well be that
the contract is made at the place where
first completed; not at the place where the
BENCH
variations are agreed. But whether this be
so or not, I think the variations were J.C. SHAH, K.N. WANCHOO AND M.

accepted by conduct in London and were HIDAYATULLAH, JJ

therefore made in England. Both the BACKGROUND

original contract and ensuing variations
For the formation of a contract, an offer
were made in England and leave can
must be made and accepted. The contract
properly be given for service out of the
is deemed to be complete only when the
jurisdiction.
acceptance of such offer is expressly or
I am inclined to think also that the contract impliedly communicated to the offeror.
is by implication to be governed by The earlier laws regarding contracts did
English law, because England is the place not envisage the formation of contracts
with which it has the closest connection. through instantaneous modes of

I think that the decisions of the master and communication such as telephone which

the judge were right, and I would dismiss facilitate formation of contract between

the appeal. parties in different territories

instantaneously. Therein, the question of
the place of formation of contract arises
which was decided in this case.

FACTS

On July 22nd 1959 Kedia Ginning Factory

and Oil Mills (appellant) of Khamgaon
entered into a contract over telephone to
BHAGWANDAS GOVERDHANDAS supply cotton seed cakes to M/s.
KEDIA Girdharilal Parshottamdas and Co.

VS. (respondents) of Ahmedabad. The

respondents commenced an action against
GIRDHARILAL PARSHOTTAMDAS
the appellant in the City Civil Court of
& CO. & ORS.
Ahmedabad for failing to supply cotton
seed cakes as per the aforementioned
agreement. The respondents contended
1966 AIR 543, 1966 SCR (1) 656
that the cause of action for the suit arose at CONTENTIONS OF RESPONDENTS
Ahmedabad as the appellant’s offer to sell
The making of an offer is a part of cause of
was accepted at Ahmedabad and the
action in a suit for damages for breach of
appellant was to be paid for the goods
contract. Hence, the court in whose
through a bank in Ahmedabad. The
territorial jurisdiction such offer was made
appellant contended that the respondents’
can try such suit.
offer to purchase was accepted at
Khamgaon; the delivery and payment of The contract is formed where the

the goods were also agreed to be made in acceptance of offer is intimated to the

Khamgaon and the City Civil Court of offerree. Hence, the court in whose

Ahmedabad did not have jurisdiction to try territorial jurisdiction such acceptance of

the suit. The City Civil Court of offer was intimated can try such suit.

Ahmedabad held that it had jurisdiction as JUDGMENT

the acceptance of the offer was intimated
A contract comes into existence when an
to the offerree at Ahmedabad and that is
offer is accepted and the acceptance of the
where the contract was made. The
offer is intimated through anexternal
appellants filed a revision application in
manifestation by speech, writing or other
the High Court of Gujarat which was
act recognised by law. However, an
rejected. Then, the appellants preferred an
exception to this rule has been made in the
appeal to the Supreme Court with special
interest of commercial expediency. When
leave.
a contract is negotiated through post, the
ARGUMENTS communication of acceptance is deemed to

CONTENTIONS OF APPELLANT be complete when the acceptance of offer

is put into a course of transmission to the
In the case of a contract by telephone, only
offerer. The same rule is applicable in case
the court within whose territorial
of a contract by telegram. Mere making of
jurisdiction the acceptance of offer is
an offer does not form part of the cause of
spoken into telephone has jurisdiction to
action for damages for breach of contract
try any suit regarding the contract.
which has resulted from acceptance of the
Sections 3 and 4 of the Indian Contract Act offer (Baroda Oil Cakes Traders v.
(1872) are applicable in determining the Purshottam Narayandas Bagulia and Anr.
place where a contract is made and not the AIR1954Bom491).Though sections 3 and
decisions of UK courts. 4 of the Contract Act speak about the
communication, acceptance and revocation Though the Contract Act is applicable in
of a proposal and acceptance respectively, India, it was drafted in England and
the Act does not expressly deal with the English common law permeates it.In
place where a contract is made and in Entores Ltd. v. Mills Far East Corporation,
determining the same, the interpretation it was held that a contract made by
clauses in section 2 of the Act must be telephone is complete only where the
taken into consideration. acceptance is heard by the proposer
[offeror in English common law] because
In the case of a telephone conservation, the
generally an acceptance must be notified to
contract is only complete when the answer
the proposer to make a binding contract
accepting the offer is made [Denning LJ in
and the contract emerges at the place
Entores Ltd. v. Mills Far East Corporation,
where the acceptance is received and not at
(1955) 2 Q.B.D. 327]. In the majority of
the place where it is spoken into the
European countries and the US, the
telephone. In cases of contracts by
generally accepted rule based on the theory
correspondent or telegram, a different rule
of consensus ad idem is that the contract is
prevails and acceptance is complete as
made in the district where the acceptance
soon as a letter of acceptance is posted or a
is spoken. The Indian Contract Act (1872)
telegram is handed in for dispatch.
did not envisage the formation of contracts
through an instantaneous mode of In Carrow Towing Co. v. The Ed Mc
communication such as telephone. The William, (46 D.L.R. 506), it was held:
exception of commercial expediency “Where a contract is proposed and
applicable to contracts formed via post is accepted over the telephone, the place
not applicable to contracts made through where the acceptance takes place
telephone. Hence, the Hon’ble Court held constitutes the place where the contract is
that the trial Court was right in taking that made. Acceptance over the telephone is of
a part of the cause of action arose within the same effect as if the person accepting it
the jurisdiction of the Civil City Court. had done so by posting a letter, or by
Ahmedabad, where acceptance was sending off a telegram from that place”. In
communicated by telephone to the an old English case Newcomb v. De Roos
respondents. The appeal was dismissed [(1859) 2 E & E 271], Hill J. observed:
with costs. “Suppose the two parties stood on different
sides of the boundary line of the district:
DISSENTING OPINION BY JUSTICE
and that the order was then verbally given
HIDAYATULLAH
and accepted. The contract would be made contracts made through post would not be
in the district in which the order was applicable to contracts made over the
accepted.” telephone.

Where the speech is fully heard and

understood there is a binding contract and
in such a case the only question is as to the
place where the contract can be said to be
completed. The acceptance was put in the
course of transmission at Khamgaon and
under the words of the Contract Act, it is
difficult to say that the contract was made
at Ahmedabad where the acceptance was
heard and not at Khamgaon where it was
spoken. Section 4 of the Act covers in its
language a contract through telephone. The
decision in Entores case was based on
interpretation of common law whereas in
the instant case, the interpretation of
statutory law is in question. Hence, the
contract was completed at Khamgaon
where the acceptance was spoken.

CASE COMMENT

In this case, the court decided the question

of the place of origin of the cause of action CONSIDERATION
in a suit for breach of contract made over
telephone. Here, the court also clarified the
rules regarding the communication, TWEDDLE V ATKINSON

acceptance and revocation of proposal and (1861) 1 B&S 393

acceptance with respect to a contract made
over the telephone. The decision further
clarified that the rule of communication JUDGE(S) SITTING
and acceptance of offer applicable to
 WIGHTMAN J, CROMPTON J, effectively ignore the intention of the
BLACKBURN J fathers.

FACTS

The son and daughter of the parties HELD

involved in this dispute were getting
The groom’s claim was rejected by the
married. As such, the father of the groom
court. It was held that the groom was not a
and father of the bride entered into an
part of the agreement between the fathers
agreement that they would both pay sums
and he did not provide any consideration
of money to the couple. Unfortunately, the
for the promise made by the father of the
father of the bride died before he paid the
bride. Also, as a stranger to the contract,
money to the couple and the father of the
the son could not enforce it. On this basis,
son died before he could sue on the
the court found in favour for the executor
agreement between the parties.
of the will.
As a result of this, the groom brought a
REASONS
claim against the executor of the will for
the payment that was previously agreed Wightman held that there was precedent

between the fathers. that a stranger to the consideration of a

promise can still have an action if the
ISSUE
relationship is close enough (Bourne v
The primary issue for the court was Mason, 1669). Despite this precedent, he
whether or not the son could, as a third maintains that the current position is that
party to the agreement, enforce the no stranger to the consideration can take
contract between the fathers, which was action, even if it was for his benefits.
ultimately for the benefit of him and his
Crompton examines whether there was
wife.
consideration from the son and holds that
It was argued that the intention of the natural love and affection (from the
agreement between the fathers was for the marriage) was not sufficient consideration.
couple to derive a benefit from the This is in contrast to Provender where the
payment of the money. Moreover, it was governing ethic was honour; here the
argued that preventing the son from being governing paradigm is exchange and
able to enforce the contract would reciprocity. Crompton further says it
would be "a monstrous proposition" if an
individual would be able to sue for a In the Madras High Court
contract but not be able to be sued under it.

Blackburn deals with an agency argument

Equivalent Citation:
that natural love and affection trickles
from the father to the son and this entitles ILR (1876-82) 4 Mad 137

son to sue in his father's place (as if he had BENCH

provided the consideration). Blackburn
INNES J, KINDERSLEY J.
holds that the cases say that natural love
and affection are not sufficient FACTS
consideration for an action
A lady transferred her property which
consisted of certain lands to her daughter
(defendant), by a deed of gift. Such deed
was registered. One of the terms of the gift
deed was that the daughter would pay a
sum of Rs. 653/- every year to the lady’s
sister (plaintiff). The defendant executed
an Iqrarnama or agreement in favour of the
plaintiff promising to do the same. The
defendant failed to pay the annual amount
to the plaintiff. Hence, the plaintiff sued
the defendant for the recovery of the same.

ISSUE

Whether the plaintiff can bring an action

against the defendant for the amount
promised in a contract where the
consideration for such promise has been
furnished by the mother of the defendant
(plaintiff’s sister)?

ARGUMENTS ADVANCED
CHINNAYA V RAMAYYA
CONTENTIONS BY THE PLAINTIFF
ILR (1876-84) 4 Mad 137
The consideration for the defendant’s Innes J drew similarities between the
mother to gift the property to the defendant instant case and the English case Dutton v.
was defendant’s promise to pay an annuity Poole [(1677) 2 Levinz 210]. In Dutton v.
to the plaintiff. Hence, the plaintiff is Poole, a man had a daughter of
entitled to sue the defendant to recover the marriageable age and wanted to sell a
same. portion of wood that he possessed at the
time to meet his daughter’s wedding
CONTENTIONS BY THE
portion. The man’s son (defendant)
DEFENDANT
promised to pay the daughter (plaintiff)
The plaintiff had not furnished any £.1000 if the man forbore from selling the
consideration under the contract. Hence, wood. The man forbore but the defendant
she is not entitled to sue the defendant for failed to pay the promised sum. The
the recovery of the amount promised to daughter and her husband sued the
her. defendant for the sum. Though the

JUDGMENT defendant made the promise to his father

and the father furnished the consideration
According to section 2(d) of the Indian
for it, it was clear that the contract was
Contract Act (1872), “When, at the desire
made for the benefit of the plaintiff. The
of the promisor, the promisee or any other
court held that it would be highly
person has done or abstained from doing
inequitable to deprive the plaintiff of the
or does or abstains from doing, or
money and held the defendant liable to pay
promises to do or abstain from doing,
the same to her.
something, such act or abstinence or
promise is called a consideration for the Innes J observed that prior to the creation

promise. From this definition, it is clear of the contract in question, the plaintiff had

that in a valid contract the consideration been receiving a sum of money out of her

need not flow from the promisee only. It sister’s estate. When the lady transferred

could flow from any other person who is the same to her daughter, the defendant,

not a party to such contract. The Hon’ble the contract stipulated that the same

Court in this case, upheld this point of law arrangement be continued by her. When

in the plaintiff’s right to recover the the plaintiff’s sister transferred the

annuity due to her from the defendant property to the defendant, the plaintiff

under the contract in question but their suffered a loss of annuity that she had been

reasons for the same were different. receiving so far. It was held that such loss
formed the consideration for the promise. Consideration must be moved at the
Hence, the plaintiff was deemed to have desire of the promisor
given the consideration.
DURGAPRASAD
Kindersley J also arrived at the same
V
conclusion but his reasoning was different.
The deed of gift and the defendant’s BALDEO
agreement to pay the annuity to the
plaintiff were executed at the same time.
1880 3 ALL 221
Thus, they could be considered parts of the
same transaction. The defendant’s promise FACTS
to pay the plaintiff was the consideration
The plaintiff sued to establish an
for the defendant’s mother to transfer the
agreement in writing by which the
property to the defendant. Hence, the
defendants promised to pay him a
defendant’s failure to pay the same would
commission on articles sold through their
amount to breach of contract and would
agency in a azar in which they occupied
entitle the plaintiff to sue her for the
shops, in consideration of the plain tiff
recovery of the same. The defendant was
having' expended, money in the
held liable to pay the annuity to the
construction of such bazar. Such money
plaintiff.
had not been- expended by the plaintiff at
the request of the defendants nor had it
been expended by him for them
voluntarily, but it had been expended by
him voluntarily.

In this case there was a contract between A

and B. According to the contract A was
supposed to provide for all requirements to
B to run the market and the profits were
agreed to be shared between the parties.
Upon C`s request, B made the market
available for 24 hours for a consideration
from C. Thereafter C refused to give
remuneration to B on the ground that he
(C) has no consideration from B.
Afterwards B claimed remuneration from
KEDARNATH BHATTACHARJI VS
A for rendering additional work to which
A refused. GORIE MAHOMED

EQUIVALENT CITATIONS
JUDGEMENT
(1887) ILR 14 CAL 64
The agreement was void being without
consideration as it had not moved at the
IN CALCUTTA HIGH COURT
desire of A. Hence the Court decided that
the additional work done by B was not
BENCH: W C PETHERAM,
wanted by A and hence B cannot claim
BEVERLEY
anything from A.

The plaintiff is a Municipal Commissioner

of Howrah and one of the trustees of the
Howrah Town Hall Fund. Some time ago,
it was in contemplation to build a Town
Hall in Howrah, provided the necessary
funds could be raised, and upon that state
of things being existent, the persons
interested set to work to see what
subscriptions they could get. When the
subscription list had reached a certain
point, the Commissioners, including the
plaintiff, entered into a contract with a
contractor for the purpose of building the
Town Hall, and plans of the building were
submitted and passed, but as the
subscription list increased, the plans
increased too, and the original cost, which
was intended to be Rs. 26,000, has
swelledbup to Rs. 40,000; but for the
whole Rs. 40,000 the Commissioners, consideration; it contains all the essential
including the plaintiff, have remained elements of a contract which can be
liable to the contractor as much as for the enforced in law by the persons to whom
original contract, because the additions to the liability is incurred. In our opinion, that
the building were made by the authority of is the case here, and therefore we think
the Commissioners and with their sanction. that both questions must be answered in
the affirmative, because, as I have already
The defendant, on being applied to,
said, we think that there is a contract for
subscribed his name in the book for Rs.
good consideration, which can be enforced
100, and the question is, whether the
by the proper party, and we think that the
plaintiff, as one of the persons who made
plaintiff can enforce it, because he can sue
himself liable under the contract to the
on behalf of himself and all persons in the
contractor for the cost of the building, can
same interest, and, therefore, we answer
sue, on behalf of himself, and all those in
both questions in the affirmative, and we
the same interest with him, to recover the
consider that the Judge of the Small Cause
amount of the subscription from the
Court ought to decree the suit for the
defendant.
amount claimed, and we also think that the
plaintiff ought to get his costs including

JUDGEMENT the costs of this hearing

Persons were asked to subscribe, knowing REASONING

the purpose to which the money was to be Section 25 of the Indian Contract Act,
applied, and they knew that on the faith of 1872 states openly that “an agreement
their subscription an obligation was to be made without consideration is void”. In
incurred to pay the contractor for the work. other words, the presence of consideration
Under these circumstances, this kind of is essential for a contract to be valid.
contract arises. The subscriber by
Section 2(d) of the Indian Contract Act,
subscribing his name says, in effect,--In
1872, talks of Consideration for a promise
consideration of your agreeing to enter into
is “When the promisor wishes, the fiancé
a contract to erect or yourselves erecting
or any other person has done or abstained
this building, I undertake to supply the
from doing, or does or refrains from
money to pay for it up to the amount for
doing, or promises to do or refrain from
which I subscribe my name. That is a
doing something, such act or abstinence
perfectly valid contract and for good
or Promise.” It is the price paid by one BENCH
party for the promise of the other. The
J STANLEY, W BURKITT
consideration is the benefit that
corresponds to the parties to a contract. FACTS

The consideration may be “right, interest, This appeal arises out of a suit brought by
profit or benefit” for one of the parties. It the plaintiff Muhammad Rustam Ali Khan
may also be ‘some indulgence, prejudice, against his wife for restitution of conjugal
loss or responsibility given, suffered or rights. The plaintiff is the son of Khwaja
assumed by the other. Muhammad Khan, a Nawab of Dholepur,
and was married to the defendant Husaini
Begam, who is the daughter of a wealthy
SHUPPU AMMAL AND ANR. VS K.
resident of Moradabad, now deceased, on
SUBRAMANIAM AND ORS
the 2nd of November 1877. At the time of
4 IND CAS 1083 the marriage the plaintiff's father agreed to
give the defendant Rs. 500 a month for
pin-money. The plaintiff and the defendant
BENCH lived together from the year 1883 up to the

R BENSON, OFFG., K AIYAR year 1896, when she left her husband and
went to her father's house on the ground,
as she alleges, of her husband's
FACTS misconduct. She subsequently sued her
father-in-law for arrears of the monthly
JUDGEMENT
annuity, agreed to be paid to her, up to
1901, and obtained a decree in the terms of
MUHAMMAD RUSTAM ALI KHAN a compromise. Her father-in-law failing to
VS pay the annuity after the date of this
decree, a suit was instituted by the
HUSAINI BEGAM
defendant against him for arrears of it,
IN ALLAHABAD HIGH COURT from the 1st of May 1901 to the 31st of

EQUIVALENT CITATIONS October 1903. The Court below dismissed

her suit, but upon appeal to this Court the
(1907) ILR 29 ALL 222
decision of that Court was reversed and a
decree passed in her favour.
During the pendency of that suit, the suit further states that she has what she
which has given rise to this appeal was describes as magnificent houses of her
instituted. In his plaint the plaintiff makes own in the city of Moradabad, and that she
serious charges against his wife, alleging is willing that her husband should live with
not merely that she had become immoral, her in that city as he formerly did or
but that she had actually committed arrange for a separate house at Moradabad.
adultery and was at the time, as a She charges in answer to the suit that it
consequence of that adultery, pregnant. was brought in consequence of the
The following is the allegation in institution of the suit for arrears of pin-
paragraph (6) of the claim: "Although her money.
parents are dead, yet the defendant lives
JUDGEMENT
alone at Moradabad, where there is no near
relative of hers who may look after and Both the Courts below have found that

take care of her. She wanders about there is no reasonable apprehension of

wherever she likes and has become danger to the life of the defendant if she

immoral. Moreover, she has now became goes and lives with her husband in his

pregnant by adultery." It is a significant house, or of serious maltreatment. The

fact that it only occurred to the husband to learned District Judge in the course of his

institute a suit for restitution of conjugal judgment says: "It is urged that the case at

rights when the wife had taken legal steps present pending in appeal before the High

to recover her arrears of annuity from his Court between the appellant in this case

father. And it is also significant that he and the respondent's father shows that

should desire to resume connubial enmity exists and the fact that the

relations with a person in the condition in respondent charged her with having

which he alleges his wife to be. committed adultery indicates that he

would maltreat her were she to be
In her defence the defendant avers that
compelled to live with him. I do not think
owing to the enmity subsisting between
that these facts are sufficient to warrant
her and the plaintiff she has strong
the conclusion that the danger of the
apprehension of danger to her life. She
woman being maltreated is so great as to
further alleges acts of immorality on the
justify the Court in a refusal to grant a
part of her husband, and that owing to
decree for restitution of conjugal rights,
pressure exercised by his father he had
and I note that the parties have admittedly
shamelessly charged her with adultery. She
lived together after the institution of the
suit by the appellant against the sufficient case, exercise that jurisdiction
respondent's father." From this we gather which is attributed to the Kazee by the
that in the opinion of the learned judge Fatwa (if the law indeed warrants such a
there is some danger. The last remark of jurisdiction) of selecting a proper place of
the learned Judge refers to a visit paid by residence for the wife other than the
the plaintiff to the defendant in husband's house." Lord Herschell, L.C., in
Moradabad. the course of his judgment in Mackenzie v.
Mackenzie (1895) A.C., 384 dismissing
A case such as the present must, as Mr.
the question whether in an action in
Karamat Husain has rightly said, be
Scotland for adherence by the husband,
decided according to the Muhammadan
which corresponds to a suit for restitution
law
of conjugal rights in England, misconduct
If it be granted that according to the on his part short of cruelty or other
Muhammadan law a husband may sue to matrimonial offence may be a ground for
enforce his right to the custody of his wife, refusing relief, observes (at p, 390): "It
and that, if her defence be legal cruelty, seems to me open to question whether the
she must prove cruelty of the nature just Courts ought in all cases to disregard the
described, it does not follow that she has conduct of the party who invokes their aid
no other defences to a suit for the in an action for adherence, and to decree
restitution of conjugal right. In the case it in all cases where a matrimonial offence
which we have cited their Lordships say cannot be established by the defender. It is
(at p. 712): "The marriage tie amongst; certain that a spouse may, without having
Muhammadans is not so indissoluble as it committed an offence which would justify
is among Christians. The Muhammadan a decree of separation, have so acted as to
wife, as has been shown above, has rights deserve the reprobation of all right-
which the Christian, or at least the English, minded members of the community. Take
wife has not against her husband. An the case of a husband who has heaped
Indian Court might well admit defences insults upon his wife, but has just stopped
founded on the violation of those rights, short of that which the law regards as
and either refuse its assistance to the saevitia or cruelty; can he, when his own
husband altogether, or grant it only upon misconduct has led his wife to separate
terms of his securing the wife in the herself from him, come into Court and,
enjoyment of her personal safety and her allowing his misdeeds, insist that it is
other legal rights; or it might, on it
bound to grant him a decree of maltreatment and violence. We think that
adherence?" the charge of immorality and adultery,
which has not been substantiated, is of so
cruel a nature as to justify a Court in
Now we have it here that the defendant left refusing to grant him a decree for
her husband's house and came to restitution of conjugal rights. The
Moradabad in 1896. From that time until defendant in view of all the facts has
the time when the suit out of which this established that she has reasonable
appeal has arisen was instituted, namely, grounds for believing that her health and
on the 12th of July 1904, plaintiff took no safety would be endangered if she returned
steps to obtain restitution of conjugal to her husband's house at Dholepur. We
rights. It was only when the suit for arrears arrive at this conclusion as an inference of
of pin-money was instituted by his wife law from the facts found and admitted in
against his father that he took action. This the lower Courts.
suggests the idea that the suit was not
The defendant states in her defence, and it
instituted with a view to renew happy
is not denied, that she has property worth
connubial relations, but with the sinister
between 4 and 5 lakhs of rupees, and has
object of giving trouble and annoyance to
houses in the city of Moradabad suitable to
his wife. We find him in the plaint itself
the position in life of her husband, She
heaping the vilest insults upon her. He
says that she has no objection to her
charges her with immorality and with
husband residing with her in one of her
adultery. In view of her parentage, position
houses as he did formerly, and that she has
and fortune, this charge, if untrue, is sheer
no objection to resume connubial relations
cruelty. If the plaintiff believed that there
with him in her own home or in a separate
was any truth in it, it is hard to understand
house, if he so choose, in Moradabad. We
why he should desire to resume conjugal
think under the circumstances that this
relations with a woman who had proved so
offer is not unreasonable. The course then
faithless. If he believes it to be true, as we
which we propose to adopt is to allow this
must assume he does, can we say that the
appeal, set aside the decrees of the Courts
defendant has not any ground for
below, and dismiss the plaintiff's suit upon
reasonable apprehension, that, if she return
the defendant's undertaking, as mentioned
to Dholepur, a native State, in which she
in the written statement, to live with her
could not invoke the protection of the
British law, she will be subject to
husband in Moradabad and there resume interest with respect to some houses
conjugal relations with him. belonging to the respondent. At the time,
the respondent was a minor and attained
If this undertaking be not fulfilled, liberty
21 years of age only in the month of
is reserved to the plaintiff to seek in
September of the same year. In the absence
another suit restitution of conjugal rights.
of Brahmo Dutt from Calcutta, the whole
We accordingly allow the appeal, set aside
transaction was carried out by his attorney
the decrees of the Courts below and
Kedar Nath Mitter and the money was
dismiss the plaintiff's suit with costs in all
advanced by his manager, Dedraj. It was
Court
claimed that while the transaction was
being considered, the respondent’s mother
and guardian, Smt. Jogendranundinee
Dasi, had sent a letter through her attorney,
Mr. Bhupendra Nath Bose, revealing the
MINOR minority of the respondent and intimated
to Mr. Kedar Nath Mitter that any money
MOHIREEBIBI
lent to the respondent would be at the
V
lender’s own peril. The deed of mortgage
DHARMADAS GHOSE contained a declaration by the respondent
that hehad attained majority and the
7 CWN 441
mortgagee’s assent to lend him money was
obtained upon assurance of the same. Mr.

BENCH OF JUDGES Kedar Nath Mitter was aware of the

respondent’s status as a minor. On
LORD MCNAUGHTON, LORD
10th September 1895, the respondent and
DAVEY, LORD LINDLEY, SIR FORD
his mother initiated an action for the
NORTH, SIR ANDREW SCOBLE, SIR
declaration of the mortgage as void and
ANDREW WILSON, JJ
sought cancellation of the same. The Court
FACTS of First Instance granted the relief sought
by the respondent and the Appellate Court
On 20th July, 1895 the respondent
dismissed the appeal of the appellants.
Dharmodas Ghose executed a mortgage in
After the institution of this appeal, Mr.
favour of Brahmo Dutt to secure the
Brahmo Dutt died and this appeal was
repayment of Rs. 20,000 at 12 per cent
prosecuted by his executors.
ARGUMENTS ADVANCED  The Indian Contract Act (1872)
does not deal with contract by
CONTENTIONS BY APPELLANTS
minors.
 The respondent was a major when
CONTENTIONS BY RESPONDENT
he executed the mortgage.
Brahmo Dutt and his agents, Mr. Kedar
 Neither the appellant nor his agent
Nath Mitter and Mr. Dedraj, possessed
had any notice that the respondent
knowledge of the respondent’s actual age.
was a minor.
Since the respondent was a minor at the
 The respondent made a fraudulent
time of executing the mortgage, the
declaration regarding his age and is
contract is void.
hence disentitled from seeking any
relief. JUDGMENT

 The knowledge of the respondent’s Though Mr. Brahmo Dutt was not
actual age which Mr. Kedar Nath personally present at the time of the
Mitter possessed should not be transaction, Mr. Mitter acted as his
imputed to the appellants as Mr. authorised agent in the transaction and Mr.
Dedraj acted as the agent of Dedraj too acted under his instructions in
Brahmo Dutt in this transaction. good faith believing Mr. Mitter to be Mr.
Dutt’s authorised agent. Hence, their
 The respondent is estopped by
Lordships held that the knowledge of the
section 115 of the Indian Evidence
respondent’s minority possessed by Mr.
Act, 1872 from claiming that he
Mitter was rightly imputed to Mr. Dutt.
was a minor at the time of
executing the mortgage. Section 115 of the Indian Evidence
Act,1872 was held to be not applicable in
 The respondent must repay the
the instant case as both the parties were
amount advanced according to
aware of the truth. Further, such provision
section 64 and 38 of the Indian
was held to be not applicable in the case of
Contract Act (1872); and section
minority as held in Nelson v. Stocker 4 De
41 of the Specific Relief Act
G. and J. 458 (1859). Their Lordships also
(1877).
relied on section 19 of the Indian Contract
Act (1872) which says that a fraud or
misrepresentation which does not cause
the consent to a contract of the party on Their Lordships, taking into consideration
whom such fraud is practised, or to whom sections 2, 10 and 11 of the Indian
such misrepresentation is made, does not Contract Act (1872), held that the Act
render the contract voidable. makes it essential that all contracting
parties should be “competent to contract,”
According to section 64 of Indian Contract
and expressly provides that a person who
Act (1872), when a person at whose
by reason of minority is incompetent to
option a contract is voidable rescinds the
contract cannot make a contract within the
contract, he must restore to the other party
meaning of the Act. Their Lordships also
any benefits that he might have received
considered various other provisions of the
from that party. Their Lordships found the
same Act to point out the void nature of a
same to be applicable only in the case of
contract by a minor. Sec. 68 states that if a
persons competent to contract and not in
person incapable of entering into a contract
the case of minors who are incompetent to
or any one whom he is legally bound to
contract. The decision of the lower courts
support is supplied by another person with
to decree in the respondent’s favour
necessaries suited to his condition in life,
without ordering him to return the money
the person who has furnished such supplies
advanced was upheld by the Privy
is entitled to be reimbursed from the
Council.
property of such incapable person.It is
clear from the Act that a minor is not liable
The impugned mortgage in the instant case
even for necessaries, and that no demand
was executed under the Transfer of
with respect to the same is enforceable
Property Act (1882). Section 7 of the
against him by law, though a statutory
aforementioned Act says that a person
claim is created against his property.
must be competent to contract in order to
Under sections 183 and 184 no person
be competent to transfer property. Section
under the age of majority can employ or be
4 of that Act provides that the chapters and
an agent. Again, under sections 247 and
sections of that Act which relate to
248, although a person under majority may
contracts are to be considered part of the
be admitted to the benefits of a
Indian Contract Act, 1872. Hence, the
partnership, he cannot be made personally
instant case was considered to fall
liable for any of its obligations; although
underTransfer of Property Act (1882).
he may on attaining majority accept those
obligations if he thinks fit to do so.
Their Lordships held that when there was the above definition of the proposal is also
no question of creation of a contract on valid for an offer. According to Section
account of one of the parties being a 2(B) of the Indian Contract Act, 1872,
minor, the question whether such a when the person to whom the proposal is
contract is void or voidable does not arise made signifies his assent thereto, the
at all as the contract itself is void ab initio. proposal is said to be accepted. A
The Indian Contract Act (1872) is proposal, when accepted, becomes a
exhaustive and imperative and clearly promise.
provides that a minor is not capable of
Offer is an open invitation by the promisor
entering into a contract. Their Lordships
for the acceptance of the terms and
further found no merit in interfering with
conditions of the undertaking, which when
the decisions of the lower courts not to
accepted by the promisee becomes binding
order the respondent to return the money
on both parties and the proposal becomes a
advanced. They relied on the decision in
promise. Hence the difference between an
Thurston v. Nottingham Permanent
offer (proposal) and a promise lies in
Benefit Building Society [L. R. (1902)1
acceptance of the offer (proposal).
Ch. 1 (1901); on appeal, L. R. (1903) App.
Cas. 6] wherein it was held that a Court of Under Section 2(h) it is said that an

Equity cannot say that it is equitable to agreement enforceable by law is said to be

compel a person to pay any moneys in a contract. American Law defines contract

respect of a transaction which as against in the following manner -A contract is a

that person the Legislature has declared to promise or a set of promises for the

be void and rejected the appellants’ claim breach of which the law gives a remedy or

for an equitable remedy. The appeal was the performance of which the law in some

dismissed. way recognizes as a duty.

According to Section 2(A) of the Indian

LESLIE LTD.
Contracts Act, 1872, when one person
signifies to another his willingness to do V.
or to abstain from doing anything, with a
SHEILL
view to obtaining the assent of that other
to such act or abstinence, he is said to (1914) 3 K.B.607

make a proposal. Hence, a proposal is FACTS

synonymous to offer. So, we can say that
 Defendant obtained loans from plaintiff that it would be an indirect way of
by fraudulently misrepresenting that he enforcing the contract. But, if the wrongful
was of full age at the time of contract. act though connected with the subject
Defendant sued him to recover the money. matter of the contract, yet is independent
of it in the sense of not being an act
ISSUES
contemplated by it, then infant can be
1) Whether defendants are entitled to liable.
equitable restitution against loan given to
In present case, since an action either on
minor?
torts or on quasi contractual claim would
2) Whether they could claim restitution be tantamount to enforcing the contract by
either under action for tort arising out of making defendant liable to pay the
contract, or of quasi-contractual claim? damages or restitution, hence, no such

JUDGEMENT action lies.

If an infant obtains property or goods by Lord Sumner further repeated the decision

misrepresenting his age, he can be in Sinclair in the case of R. Leslie Ltd v

compelled to restore it so long as the same Sheill that gave an understandable

is traceable in his possession. This is indication about the way that Lord Sumner

known as equitable doctrine of restitution. further helped to develop equity in regard

to this area. Since Sinclair’s decision
However, in present case, since the money
applied the qualification that equity
was spent by the defendant, there was
involves the principle of the receiver to
neither any possibility of tracing it nor any
recognise the obligation, “it is a decision
possibility of restoring the thing got by
which tends to confirm the formulation” as
fraud, for if the court will ask defendant to
is clearly seen in the R. Leslie case.
pay the equivalent sum as that of loan
received, it would amount to enforcing a This case is about a minor who has lied
void contract. Restitution stops when about his age in order to obtain a loan from
repayment begins and equity does not the plaintiff in order to recover the amount
enforce against minor any contractual of the advances on the reason that they had
obligation. obtained by fraudulent misrepresentation.

Infant can’t be held liable for a wrong In addition, as such, it was held that, in

when the cause of action is ex contractu or reliance of the formulation exemplified in

is so directly connected with the contract

Sinclair, that the minor could be forced to acquired by the defendant under the
pay back the money in which he borrowed. contract, or any property representing it.”.
Accordingly, Sumner’s judgement in this
Yet, the contract was not enforceable.
case brought up the existence of this Act,
Nevertheless, it was held; that “Sheill
and this shows that his decision helped in
could not be sued for deceit because that
the development of equity law.
would make a minor indirectly liable for
an unenforceable contract and the court To conclude, all the above cases
could only order restitution if the lender demonstrate how Lord Sumner helped in
could prove Sheill still possessed the his decisions to develop the equity law.
actual notes and coins he had borrowed.” Moreover, each case affected the
development of equity in a different way.
Efficiently, this evidently shows how the
For example, his decision in Blackwell v
reasoning in Sinclair will be capable to
Blackwell developed the equity in relation
apply as supportive argument in other
to half-secret trusts; the reasoning that was
cases even where the facts of these cases
provided is still in use nowadays in respect
are completely different. As a result, this
of this area of the law, which clearly
makes it easy to realise the method that
exemplifies its significance. Additionally,
Lord Sumner had used to assist in the
the way that Lord Sumner explained and
development of equity; he expanded upon
applied the reasoning in Blackwell
the legal principles which laid down in
exemplifies major the fact that subsequent
another cases such as; Sinclair v
cases applied the reasoning in Blackwell
Brougham.
further highlights the contribution of
Sumner’s explanations to the principle of
For instance, the principles which were
equity law with great clarity. In addition,
identified in Sheill are now accounted for
the decision in Leeds Industrial Co-Op v
under the Minors Contracts Act. Which,
Slack further specifies the importance of
provides that; “in relation to contracts
Sumner’s analysis in regards to damages
entered into after the commencement of
and injunctions ought to be effectuated.
the Act which are unenforceable against
the defendant (or which he repudiates)
Thus, Lord Sumner judgment in this case
because he was a minor when the contract
allows a straightforward explanation of
was made, the court may if it is just and
how damages may be awarded in
equitable to do so, require the defendant to
substitution for an injunction developed
transfer to the claimant any property
because of Sumner’s decision. In addition, SADASIVA AIYAR, J
because succeeded cases have extended
FACTS
upon the reasoning of Sumner further
demonstrates the cases significance. As The defendants are the appellants. The

such, it is palpable that equity in this area only question in this case is whether the

was developed with the assistance of release-dead Ex. A. was executed by the

Sumner’s judgments.  plaintiffs with their free consent or

whether it was obtained from the two
plaintiffs (mother and son) through the
exercise of coercion or undue influence or
both, brought to bear upon them by the
defendants (the younger brothers of the 1st
plaintiff's husband) and their father
Doraiyya through the 1st plaintiff's
husband Swami who threatened to commit
suicide unless the plaintiffs executed the
release deed in respect of their
reversionary rights in certain lands which
the 1st plaintiff's mother had sold without
necessity to the defendant's father's
vendor.

The lower Courts found

(a) that the 1st plaintiff's husband (the 2nd

CHIKKAM AMMIRAJU
plaintiff's, father) did threaten to commit
V suicide if the plaintiffs would not execute
SHESHAMA the release deed and that it was on account
of that threat working on their minds that
the plaintiffs executed the deed;
MADRAS HIGH COURT
(b) that such a threat was "coercion" and a
CITATIONS: deed brought about by such a threat is not
a deed executed with free consent and
34 IND CAS 578, (1917) 32 MLJ 494

BENCH
(c) that though the threat was not made by property. It means the same thing whether,
the defendants (the parties to the deed) but when a man kills himself, it is called an act
by their brother, the document was of suicide or a successfully accomplished
voidable as "coercion". attempt to commit suicide; and an attempt
to commit suicide is punishable under the
Used by a person who is not a party to the
Penal Code. Hence suicide and an attempt
deed also negatived free consent. On these
to commit suicide are acts forbidden by the
findings the plaintiffs suit for cancellation
Penal Code though the former cannot be
of the deed was decreed.
punished under the code as a dead man
REASONING cannot be punished. Provided the threat of

The Courts below ought to have held that the forbidden act does have the intended

any persuasion on the part of the 1st effect of bringing about the consent to the

plaintiff's husband who is no party to Ex. agreement, it does not matter who made

A, even if proved, cannot invalidate the the threat or to whose prejudice it was

document," Coercion is defined (Contract made.

Act, Section 15) as "committing, or Mr. Patanjali Sastriar for the appellants
threatening to commit, any act forbidden argued that the "prejudice" to the feelings
by the Indian Penal Code, or the unlawful or to the supposed spiritual welfare of the
detaining, or threatening to detain any wife and son of Swami by the carrying out
property to the prejudice of any person of Swami's threat was not the sort of
whatever, with the intention of causing any prejudice contemplated by Section 15 and
person to enter into an agreement". I think that the "prejudice" to Swami's own life by
the words "any person whatever" have the threatened act was immaterial as ho
been advisedly used by the legislature to was not a party to the deed. It is
indicate that the act need not be to the unnecessary to go into the question
prejudice of the person entering into the whether prejudice or injury to sentiments,
Contract. I think also that the words " to feelings or supposed spiritual welfare is
the prejudice of any person whatever," also contemplated in the definition of
which are separated by a comma from the coercion in the Contract Act.
previous word "property" relate both to the
I agree with the lower Courts that the
committing or threatening to commit an
prejudice to Swami's own life is sufficient
act forbidden by the Penal Code and to the
to bring his threat within the definition of
unlawful detaining or threatening to detain
"coercion," provided it was intended by
the person using the threat to bring about deed of adoption, as her relations (not the
the agreement thereby. Mr. Sastriar put the adopted boy) obstructed the removal of her
following question in support of his husband's corpse by her or her guardian to
contention : "Suppose A threatens to blow the cremation ground unless she executed
up the Taj Mahal unless B gives C a the deed.
pronote for Rs. 10,000 and suppose B is a
Collins, C.J. and Muthuswami Aiyar, J.,
man of such fine artistic feelings that to
held that the act of the defendants was an
save the noble structure, he gives the
unlawful act covered by Section 15 or
pronote, is the note voidable for coercion?"
Section 16 of the Contract Act. I think
I see no difficulty in answering the
that when a man uses a threat of suicide to
question in the affirmative, provided the
his wife and his son and they owing to the
court is able to arrive at the conclusion that
distress of mind caused by the strength of
the threat (which was to do an act of
that threat execute a document, they are
mischief or vandalism prohibited by the
persons "whose mental capacity" which, I
Penal Code to the prejudice of
take it, includes volitional freedom and
Government) was in-tended to bring about
strength) "is temporarily affected by
the execution of the pronote and did have
reason of mental distress" within the
that effect (I need not say that the mere use
meaning of that expression in Clause 2(b)
of the threat will not render the agreement
of Section 16 of the Contract Act.
voidable unless the agreement was not
only intended to be but was actually JUDGEMENT

"caused" by it. See Section 19 of the The court held in favour of the respondents
Contract Act and the explanation thoreto.) and dismissed the appeal. The court agreed

It is unnecessary to consider in detail the with the contention of Mr.Venkataramaih

question whether the release deed was that forbidden act is a wider term. It held

caused by undue influence. The line that suicide and attempt to commit suicide

between coercion (Section 15 of the are both punishable, but suicide is not

Contract Act) and undue influence punishable as it is impossible to reach that

(Section 16 of the Act) is sometimes thin person. The court observed that in

and it is possible to conceive of cases definition, the words “to prejudice to any

where the Act might fall under both beads. person whatsoever” are included. The

In Ranganayakamma v. Alwar Setti (1889) respondents will not execute such a deed

I.L.R. 13 Mad. 214 a widow executed a unless they were prejudicially affected by
the threat of the husband. This case does was issued, permission was refused and
not fall under the undue influence because the company ended up in liquidation.
the husband was not a party to the
Led by Sir Henry Peek, shareholders who
contract. The threat by the husband
had purchased their stakes in the company
amounted to coercion and the appeal by
on the faith of the statement sued the
the younger brothers of the husband was,
directors in misrepresentation.
thus dismissed.

MISREPRESENTATION AND
FRAUD JUDGMENT

DERRY V PEEK The House of Lords held that the

shareholders' action failed because it was
[1889] UKHL 1
not proved that the director lacked honest
belief in what they had said. Lord
Herschell, however, pointed out that
JUDGE(S) SITTING
although unreasonableness of the grounds
LORD HALSBURY L.C., LORD of belief is not deceitful, it is evidence
WATSON, LORD BRAMWELL, from which deceit may be inferred. There
LORD FITZGERALD, AND LORD are many cases, "where the fact that an
HERSCHELL alleged belief was destitute of all
FACTS reasonable foundation would suffice of
itself to convince the court that it was not
The Plymouth, the Devonport and District
really entertained, and that the
Tramways company issued a prospectus
representation was a fraudulent one."
stating that the company had permission to
use steam trams, which would replace their SIGNIFICANCE
horse-powered trams. In fact, the company The tort of deceit would have been
had no such permission because the right established only if the misstatements had
to use steam power was subject to the been fraudulently made. Derry v Peek thus
Board of Trade's consent. The company validated the perspective of the majority
applied, honestly believing that they would judges in the Court of Appeal in Heaven v
get permission because it was a mere Pender. That is, for there to be deceit or
formality. In reality, after the prospectus
fraud (which is the same) it must be shown GURNEY
that a defendant:

(i) knows a statement is untrue, or

1873 LR 6 HL 377
(ii) has no belief in its truth, or

(iii) is reckless as to whether it is true or

BENCH
false.
LORD CAIRNS R
Derry v Peek also outlined that no duty
would be required in relationship to non-
fraudulent misrepresentation, without the FACTS
presence of a contract, a fiduciary
The appellant purchased shares on the faith
relationship, fraud or deceit; but this was
of false statements contained in a
later overruled in Hedley Byrne v Heller.
prospectus issued by the promoters of the
The finding of fact that the directors "had company. The appellant was not a person
an honest belief in the statement" runs to whom shares have been allotted to on
contrary to the evidence that although they the formation of the company. He had
expected to get planning permission as a merely purchased shares from such
mere formality, they plainly knew that allottees.
they did not yet have that permission.
HELD

House of Lords held that the prospectus

was only addressed to the first applicants
for shares. It could not be supposed to
extend to others other than these. Thus the
appellant's action against the promoters
failed since the false statements in the
prospectus were not addressed to him.

The action failed because he had not in

fact relied on the prospectus but had
purchased the shares in the market. Lord

PEEK Cairns expressed his agreement with the

observations of Lord Chelmsford and Lord
V.
Colonsay that mere silence could not be a by the directors in the prospectus. share,
sufficient foundation for the proceedings: would in my opinion form no ground for
‘Mere non-disclosure of material facts, an action in the nature of an action for
however morally censurable, however that misrepresentation. There must, in my
non-disclosure might be a ground in a opinion, be some active misstatement of
proper proceeding at a proper time for fact, or, at all events, such a partial and
setting aside an allotment or a purchase of fragmentary statement of fact, as that the
share, would in my opinion form no withholding of that which is not stated
ground for an action in the nature of an makes that which is stated absolutely false
action for misrepresentation. There must,
in my opinion, be some active
misstatement of fact, or, at all events, such
a partial and fragmentary statement of fact,
as that the withholding of that which is not
stated makes that which is stated
absolutely false

RATIO

A prospectus for an intended company was

issued by promoters who were aware of
the disastrous liabilities of the business of
Overend and Gurney which the company
was to purchase. The prospectus made no
mention of a deed of arrangement under
which those liabilities were, in effect, to be
transferred to the company. The appellant
bought shares in the company and, when it
was wound up, he was declared liable as a
contributory and had to pay almost
andpound;100,000. He sought an
indemnity against the directors, alleging
misrepresentation and concealment of facts
 WITH V O’FLANNAGAN the point when the contract was signed. He
referred to Fry J in Davies v London
[1936] Ch 575
Provincial Marine Insurance that there is
no duty to disclose, even when someone

COURT OF APPEAL believes facts to be operating on another’s

mind. He noted fiduciary relationships can
bring an entire duty of disclosure.
BENCH Uberrimae fidei contracts, including
partnership and marine insurance, do too.
LORD WRIGHT MR
But also where in negotiations a statement
is false and then the representor discovers
FACTS it, though if he had said nothing he is
entitled to hold his tongue throughout. He
Dr O’Flanagan said truthfully in January
noted that a ‘representation made as a
1934 that his medical practice had takings
matter of inducement to enter a contract is
of £2000 pa. However, in May the takings
to be treated as a continuing
were only £5 a week because O’Flanagan
representation.’
had become ill. The contract was signed
with Mr With to buy the medical practice, Romer LJ stated,
but Mr O'Flanagan did not disclose the
“I agree. The only principle invoked by the
change in circumstances.
appellants in this case is as follows. If A
At trial the judge held that because the with a view to inducing B to enter into a
contract was not made uberrimae fidei. contract makes a representation as to a
Where a statement is rendered false by a material fact, then if at a later date and
change in circumstances there is a duty to before the contract is actually entered
disclose the change. A failure to do so will into, owing to a change of circumstances,
result in an actionable misrepresentation the representation then made would to the
knowledge of A be untrue, and B
subsequently enters into the contract in
JUDGMENT ignorance of that change of circumstances

Lord Wright MR held that Mr With could and relying upon that representation, A

rescind either because there was a duty to cannot hold B to the bargain. There is

point out the change in circumstance or ample authority for that statement and,

because the representation continued till indeed, I doubt myself whether any
authority is necessary, it being, it seems to SHRI KRISHNAN
me, so obviously consistent with the
VS
plainest principles of equity.”
THE KURUKSHETRA UNIVERSITY
Clauson J concurred.

SIGNIFICANCE
AIR 1976 SC 376, (1976) 1 SCC 311,
This affirms a general principle that any
1976 (8) UJ 15 SC
change to a fundamental reason for
contracting (supervening falsification)
must be communicated, where it is known BENCH
to one party. It does not matter what the
H KHANNA, P BHAGWATI, S M ALI
reason or motive is for not communicating
is, it need not be malicious or fraudulent,
but merely known to the representor
FACTS

What appears to have, been a clear case of

refusal of admission to the appellant or the
cancellation of his candidature at the
proper time has been completely bungled
and destroyed by the inherent
inconsistency and seemingly contradictory
stand taken by the respondent and lack of
proper vigilance on the part of the Head of
the Department of Law. The facts of the
present case lie within a very narrow
compass and only two short points of lay
have been raised before us by Mr. Kapil
Sibbal learned Counsel for the appellant

The appellant was a teacher in the

Government High School, Dumarkha in
the District of Jind (Haryana). The
University of Kurukshetra was running
law classes for three years course and had
extended the facility to persons who were Faculty. In between it appears that the
in service to attend the evening classes and appellant had been prosecuted for offences
complete the three years course in that under Sections 376, 366 and 363 I.P.C.
manner. The appellant decided to take the and was suspended during the period when
benefit of the facility given to the the case was going on against him. The
Kurukshetra University and joined LL.B. appellant was, however, acquitted and was
Part I classes some time in years 1971. reinstated by his employer on August 22,
According to the University statute a 1972. It would thus appear that on May 18,
student of the Faculty of Law was given 1973 as also on April 25, 1973 when he
the option to clear certain subjects in had applied for his Roll Number to clear
which he may have failed at one of the the subjects, the stigma of criminal case
examinations before completing the three- had been completely removed.
years course. The students were to appear
in six papers each year. In April 1972 the
petitioner appear in the annual HELD

examination of Part I but failed in three A copy of this letter is appended as

subjects, namely, Legal Theory, Annexture 'Rule 1' to this affidavit. A
Comparative Law and Constitutional Law perusal of this letter would show that the
of India. Subsequently he was promoted to petitioner had not been granted permission
Part II which he joined in the year 1972. by his employer to attend the law classes at
Under the University Statute the appellant the University. Furthermore, the
was to appear in Part II Examination in approximate distance between his station
April 1973. On April 26, 1973 the of posting and the University is more that
appellant applied for his Roll Number to fifty miles. Keeping in view the fact that
the University in order to reappear in the he was posted in the interior of District
subjects in which he had failed and to clear Jind, it is impossible that the petitioner
them but he was refused permission and could have attended the requisite number
according to the appellant without any of lectures. Evidently, the petitioner was
reason. The annual examination for Part II himself aware of the fact that he had not
was to be held on May 19, 1973 and the attended the requisite number of lectures,
appellant approached the University for It is also incorrect to suggest that the
granting him provisional permission to petitioner's name could be sent for the
appear subject to his getting the permission examination only if he had completed and
from his employer to attend the Law
required minimum attendance of lectures. connerned, shall be required from
The examination forms are always sent in each applicant:
December. Rule 2(b) of Ordinance 10 of
the Kurukshetra University Calendar,
Volume I, provides as under inter alia: (a) that the candidate has satisfied him by
the production of the certificate of a
Mr. Sibbal learned Counsel for the
competent authority that he has passed the
appellant submitted two points before us.
examinations which qualified him for
In the first place it was argued that once
admission to the examination; and
appellant was allowed to appear at LL.B.
Part II examination held on May 19, 1973 (b) that he has attended a regular course of

his candidature could not be withdrawn for study for the prescribed number of

any reason whatsoever in view of the acadamic years.

mandatory provisions of Clause 2(b) of the Certificate (b) will be provisional and can
Kurukshetra University Calender Vol. I, be withdrawn at any time before the
Ordinance X under which the candidature examination if the applicant fails to attend
could be withdrawn before the candidate the prescribed course of lectures before the
took the examination. Secondly it was end of his terra.
argued that the order of the University was
The last part of this statute clearly shows
mala fide because the real reason for
that the University could withdraw the
canceling the candidature of the appellant
certificate if the applicant had failed to
was the insistence of the District Education
attend the prescribed course of lectures.
Officer that the appellant should not have
But this could be done only before the
been admitted to the Law Faculty unless
examination. It is, therefore, manifest that
he had obtained the permission of his
once the appellant was allowed to take the
superior officers. In order to appreciate the
examination, rightly or wrongly, then the
first contention it may be necessary to
statute which empowers the University to
extract the relevant portions of the statute
withdraw the candidature of the applicant
contained in Kurukshetra University
has worked itself out and the applicant
Calender Volume I, Ordinance X. Clause 2
cannot be refused admission subsequently
of this Ordinance runs as follows:
for any infirmity which should have been
 The following certificates, signed looked into before giving the applicant
by the Principal of the permission to appear. It was, however,
College/Head of the Department submitted by Mr. Nandy learned Counsel
for the respondent that the names of the question of the appellant committing a
candidates who were short of percentage fraud did not arise. It is well settled that
were displayed on the Notice Board of the where a person on whom fraud is
College and the appellant was fully aware committed is in a position to discover the
of the same and yet he did not draw the truth by due diligence, was fraud is not
attention of the University authorities proved. It was neither a case of suggestion
when he applied for admission to appear in falsi, or suppression yeri. The appellant
LL.B Part II Examination, Thus the never wrote to the University authorities
appellant was guilty of committing serious that he attended the prescribed number of
fraud and was not entitled to any lectures. There was ample time and
indulgence from this Court. opportunity for the University authorities
to have found out the defect. In these
It appears from the averments made in the
circumstances, therefore, if the University
counter-affidavit that according to the
authorities acquiesced in the infirmities
procedure prevalent in the College the
which the admission form contained and
admission forms are forwarded by the
allowed the appellant to appear in part I
Head of the Department in December
Examination in April 1972, then by force
preceding the year when the Examination
of the University Statute the University
is held. In the instant case the admission
had no power to withdraw the candidature
form of the appellant must have been
of the appellant. A somewhat similar
forwarded in December 1971 whereas the
situation arose in Premji Bhai Ganesh Bhai
examination was to take place in
Kshatriya v. Vice Chancellor, Ravishankar
April/May 1972. It is obvious that during
University, Raipur and Ors. where a
this period of four to five months it was
Division Bench of the High Court of
the duty of the University authorities to
Madhya Pradesh observed as follows:
scrutinise the form in order to find out
whether it was in order, Equally it was the From the provisions of Ordinance Nos. 19
duty of the Head of the Department of Law and 48 it is clear that the scrutiny as to the
before submitting the form to the requisite attendance of the candidates is
University to see that the form complied required to be made before the admission
with all the requirements of law. If neither cards are issued. Once the admission cards
the Head of the Department nor the are issued permitting the candidates to take
University authorities took care to their examination, there is no provision in
scrutinise the admission form, then the Ordinance No. 19 or Ordinance No. 48
which, would enable the Vice-Chancellor order suffers from yet another infirmity.
to withdraw the permission. The discretion The annexures filed by the appellant and
having been clearly exercised in favour of the respondent as also the allegations made
the petitioner by permitting him to appear in the counter-affidavit clearly show that
at the examination, it was not open to the there were series of parleys and
Vice-Chancellor to withdraw that correspondence between the District
permission subsequently and to withhold Education Officer and the respondent in
his result. the course of which the respondent was
being persuaded, to the extent of
We find ourselves in complete agreement
compulsion, to withdraw the candidature
with the reasons given by the Madhya
of the appellant because he had not
Pradesh High Court and the view of law
obtained the permission of his superior
taken by the learned Judges. In these
officers. Mr. Nandy appearing for the
circumstances, therefore, once the
respondent has not been able to show any
appellant was allowed to appear at the
provision in the statutes of the University
Examination in May 1973, the respondents
which required that the candidates
had no jurisdiction to cancel his
attending the evening law classes who are
candidature for that examination. This was
in service should first get the prior
not a case where on the undertaking given
permission of their superior officers. We
by a candidate for fulfilment of a specified
have also perused the University Statute
condition a provisional admission was
placed before us by counsel for the
given by the University to appear at the
appellant and we do not find any provision
examination which could be withdrawn at
which could have afforded justification for
any moment on the non-fulfilment of the
the respondent to cancel the candidature of
aforesaid condition. If this was the
the appellant on the ground that he had not
situation then the candidate himself would
obtained the previous permission of his
have contracted out the statute which was
superior officers.
for his benefit and the statute therefore
would not have stood in the way of the Mr. Nandy counsel for the respondent
University authorities in cancelling the placed great reliance on the letter written
candidature of the appellant. by the appellant to the respondent wherein
he undertook to file the requisite
As regards the second point that the order
permission or to abide by any other order
was passed malafides, it is difficult to find
that may be passed by the University
any evidence of malafides in this case. The
authorities. This letter was obviously the requisite permission from his superior
written because the appellant was very officers, therefore he was not allowed to
anxious to appear in Part II Examination & appear at the examination, does not merit
the letter was written in terrorem and in consideration, because the impugned order
complete ignorance of his legal rights. The does not mention this ground at all and it
appellant did not know that there was any was not open to the respondent to have
provision in the University Statute which refused admission to the appellant to LL.B.
required that he should obtain the Part III or for that matter to refuse
permission of his superior officers. But as permission to appear at the examination on
the respondent was bent on prohibiting a ground which was not mentioned in the
him from taking the examination he had no impugned order.
alternative but to write a letter per force. It
Having gone into the circumstances
is well settled that any admission made in
mentioned above, we are of the view that
ignorance of legal rights or under duress
the impugned orders suffers from errors of
cannot bind the maker of the admission. In
law patent on the face of the record, and in
these circumstances we are clearly of the
any event this was not a case which should
opinion that the letter written by the
have been dismissed by the High Court in
appellant does not put him out of court. If
liming.
only the University authorities would have
exercised proper diligence and care by The appeal in accordingly allowed and the

scrutinising the admission form when it order of the University dated June 26,

was sent by the Head of the Department to 1973, is hereby quashed by a writ a

the University as far back as December certiorari. The respondent is directed to

1971 they could have detected the defects declare the result of LL.B. Part II

or infirmities from which the form Examination in which the appel ant had

suffered according to the University appeared on May 19, 1973 and also to give

Statute. The Head of the Department of him an opportunity to appear in the three

Law was also guilty of dereliction of duty subjects in which he had failed in LL.B.

in not scrutinising the admission form of Part I Examination, at the next

the appellant before he forwarded the same examination which may be held by the

to the University. University.

Moreover, the stand taken by the

respondent that as the appellant did not get UNDUE INFLUENCE
 MANU SINGH

UMA DATT

FACTS

MISTAKE

CUNDY

LINDSAY

1877-78 LR 3 APP CAS 459

HOL OF UK

BENCH

BLACKBURN J.,

LORD CAIRNS

FACTS

Lindsay & Co were manufacturers of linen

handkerchiefs, amongst other things. They
received correspondence from a man
named Blenkarn. He had rented a room at
37 Wood Street, Cheapside, but purported
to be 'Blenkiron & Co'. Lindsay & Co
knew of a reputable business of this name
which resided at 123 Wood Street.
Believing the correspondence to be from
this company, Lindsay & Co delivered to who took them, however bonâ fide the
Blenkarn a large order of handkerchiefs. purchase may have been; but if the sale be
Blenkarn then sold the goods – 250 dozen in market overt to a person who has no
linen handkerchiefs – to an innocent third knowledge of the felony or trespass, then
party, Cundy. When Blenkarn failed to the purchaser acquires the property,
pay, Lindsay & Co sued Cundy for the notwithstanding the goods had been taken
goods. from the owner by felony or trespass.”

Mellor J and Lush J agreed.

JUDGMENT

The Divisional Court held that Lindsay COURT OF APPEAL

could not recover the handkerchiefs from
The Court of Appeal, with Mellish LJ,
Cundy. Blackburn J, giving judgment, held
Brett J and Amphlett JA overturned the
the following.
Divisional Court, holding that Lindsay
“The rule of law has been thoroughly could recover the handkerchiefs, since the
established—the cases are numerous, and mistake about the identity of the rogue
I need not cite them—that where a voided the contract from the start. Cundy
contract is voidable on the ground of appealed.
fraud, you may avoid it, so long as the
HOUSE OF LORDS
goods remain in the man's hands who is
guilty of the fraud, or in the hands of The House of Lords held that Lindsay &

anybody who takes them from him with Co had meant to deal only with Blenkiron

notice; but where a person has bonâ fide & Co. There could therefore have been no

acquired an interest in the goods, you agreement or contract between them and

cannot, as against that person, avoid the the rogue. Accordingly, title did not pass

contract. Where the goods have come into to the rogue, and could not have passed to

the hands of a bonâ fide purchaser you Cundy. They were forced to therefore

cannot take them back. The case is very return the goods.

closely analogous to the old common-law Lord Cairns explained the mistake to
rule, in the case of felony or trespass. If identity, and the consequences:
goods are stolen or taken away by
“Now, my Lords, stating the matter shortly
trespass, no title whatever is conferred, in
in that way, I ask the question, how is it
general, upon a purchaser from the person
possible to imagine that in that state of “The distinction in outcome thus drawn
things any contract could have arisen between these two kinds of fraudulent
between the Respondents and Blenkarn, misrepresentation, one as to 'attributes' and
the dishonest man? Of him they knew the other as to 'identity', is unconvincing. It
nothing, and of him they never thought. has been described as a reproach to the
With him they never intended to deal. law. To a considerable extent the
Their minds never, even for an instant of distinction has now been eroded. Cundy v
time rested upon him, and as between him Lindsay was decided over a century ago,
and them there was no consensus of mind and since then there have been significant
which could lead to any agreement or any developments in this area of case law.
contract whatever. As between him and Unfortunately these developments have
them there was merely the one side to a left the law in a state of disarray. The
contract, where, in order to produce a question before the House on this appeal is
contract, two sides would be required. whether this distinction, so far as it
With the firm of Blenkiron & Co. of course remains, should still be regarded as good
there was no contract, for as to them the law
matter was entirely unknown, and
therefore the pretence of a contract was a
failure.” GRIFFITH

V.

DEVELOPMENTS BRYMER

As such, the contract was held void, rather

than voidable. This has introduced a 19 T.L.R. 434 (1903)
distinction from cases such as Phillips v
KING’S BENCH DIVISION
Brooks, where parties dealing face to face
are presumed to contract with each other.
Despite still being good law,
FACTS
commentators, as well as the courts, have
On June 24, 1902, Murray Griffith
been critical of this distinction. In Shogun
(plaintiff) agreed to rent a room from W.E.
Finance Ltd v Hudson Lord Nicholls,
Brymer (defendant) in order to view the
dissenting, stated it to be an "eroded"
king’s coronation procession, which was
principle of law.
scheduled for June 26. Griffith paid
Brymer 100 pounds. Approximately one was a mis-supposition on the state of the
hour prior to the parties’ agreement, facts which went to the whole root of the
unbeknownst to the parties at the time, it matter. The contract was therefore void,
was determined that the king would and the plaintiff was entitled to recover his
undergo surgery and that the coronation 100 pounds.
procession would therefore be cancelled.
The court holds that the contract is void
Griffith sued Brymer to recover his
because
payment.
(1) both parties thought, at the time they
At 11 a.m. on June 24, 1902, the plaintiff
entered the contract, that the parade would
entered into a verbal agreement with
take place, and
Messrs. Pope, Roach, and Co., the
defendant’s agents, to take the room for (2) this mistaken belief goes “to the whole

the purpose of viewing the procession on root of the matter.”

June 26, and handed over his cheque for

100 pounds. It was admitted that the
INGRAM V LITTLE
decision to operate on the King, which
rendered the procession impossible, had [1961] 1 QB 31
been reached at about 10 a.m. that
morning. But neither party was aware of
BENCH
this fact when the agreement was entered
into and the cheque given; and it was PEARCE LJ, DEVLIN LJ
contended for the plaintiff that as both
parties were under a misconception with
regard to the existing state of facts about FACTS
which they were contracting, the plaintiff The Plaintiffs were joint owners of a car.
was entitled to the return of his money A fraudster attempted to purchase the car
by cheque, which they initially refused. He
pretended to be a reputable businessman
HELD
and the Plaintiffs then accepted payment
Mr. Justice Wright held that the agreement by cheque. The cheque dishonoured the
was made on the supposition by both next day. By then, the fraudster had sold
parties that nothing had happened which the car to the defendants who were the
made the performance impossible. This bona fide purchasers of the car. The
Plaintiffs sought to recover the car or the NANSA NAGAR
value of the car from the defendants.

ISSUES
(1886) ILR 10 BOM 152
The issue here was whether the defendants
could claim possessory title over the
vehicle based on a contract made by SIR SARGENT, KT., CJ &

mistaken identity. BIRDWOOD, J

HELD

The Plaintiffs claim was successful. The FACTS

court applied the general principle of the The Respondent had advanced money to
process of forming a binding contract to the Appellant who was a married woman
the current facts. Where an offeror makes in order to enable her to obtain a divorce
an offer to the promisee, the offeror is from her husband. He promised to marry
making such an offer only with the person her as soon as she was divorced. He then
identified and no one else. The fraudster sued to recover the advances he had made.
pretended to be a well known business
JUDGEMENT
man and that was the only reason why the
Plaintiffs accepted payment by cheque, as The object of the agreement with the wife
initially they had refused. The contract for to divorce her husband and marry the
sale was therefore only made with the Respondent was immoral and, therefore,
wealthy businessman and not the fraudster the agreement was void. Hence the
in his personal capacity. Thus, the fact that Respondent could not recover the money
the fraudster used someone else’s identity he had advanced.
to make the contract prevented a contract
from being formed. It also prevented the
SM. SUMITRA DEVI AGARWALLA
possessory title from being passed to the
fraudster and then on to the defendant. VS

SM. SULEKHA KUNDU AND ANR.

BAI VIJILI AIR 1976 CAL 196

V (1976) 1 COMPLJ 333 CAL

 defendant No. 1, a total sum of Rs. 16,000
on diverse dates between November 7,
BENCH
1973 and February 19, 1974 out of the sum
M DUTT, SHARMA of Rs. 20,000 agreed to be paid by the

FACTS plaintiff under the contract, so as to enable

the defendants to complete the renovation
This appeal is at the instance of the
of the suit premises. It is alleged that the
plaintiff and it is directed against the order
defendants failed and neglected to deliver
dated October 1, 1975 of the learned
possession of the suit premises to the
Judge, 8th Bench, City Civil Court,
plaintiff even though the plaintiff offered
Calcutta, dismissing the plaintiff's
to pay the balance sum of Rs. 4,000. On
application for recording a compromise in
the aforesaid allegations, the plaintiff has
adjustment of the suit under Order 23,
claimed a decree for specific performance
Rule 3 of the Code of Civil Procedure. The
of the contract of lease by letting out the
suit was instituted by the plaintiff for
suit premises to her at a monthly rental of
specific performance of a contract of lease
Rs. 400.
dated November 2, 1973, for khas
possession of the suit premises and for a The plaintiff also filed an application for

permanent injunction restraining the temporary injunction under Order 39,

defendants from letting out the suit Rules 1 and 2 of the Code of Civil

premises to any person other than the Procedure praying for restraining the

plaintiff. The suit premises is the first floor defendants from letting out or parting with
of premises No. 310, Rabindra Sarani, the possession of the suit premises to any

Calcutta. It is not, disputed that the person other than the plaintiff till the

defendant No. 1 Sm. Sulekha Kundu is the disposal of the suit. Before the application

owner of the said premises. The defendant for temporary injunction was disposed of,

No. 2 Kestodas Kundu is the husband's on January 14, 1975, the plaintiff filed the

elder brother of Sulekha Kundu. The application under Order 23, Rule 3 inter

plaintiff's cape is that on November 2, alia alleging therein that on October 13,

1973, she entered into a contract of lease 1974, due to the intervention of common

of the suit premises with the defendants on friends, the parties settled the disputes

certain terms and conditions. Pursuant to between them in the presence of their

the said agreement, the plaintiff advanced respective lawyers. The terms of

to the defendant No. 2 as the agent of the settlement were recorded in writing in the
form of a letter addressed by the defendant and threat without the knowledge of the
No. 1 Sulekha Kundu to the plaintiff. The contents thereof and without any
original, and duplicate letters bearing the independent legal advice. It is contended
signatures of the defendant were detained that the said purported agreement is void
by Shri Sunil Krishna Dutta, Advocate, and not legally enforceable. Further, it is
representing the defendants in the matter. contended that the terms of the said
It is alleged that a true copy of the said alleged agreement are not lawful. It is also
letter was handed over to the plaintiff her case that Sunil Krishna "Dutta,
through her husband Krishna Kumar Advocate was never engaged by her and
Agarwal (hereinafter referred to as she had no occasion to give any instruction
Agarwal). A copy of the said letter to him. The said Sunil Krishna Dutta was
incorporating the terms of settlement acting on behalf of and represented the
agreed to by the parties has been annexed defendant No. 2 Kestodas Kundu. She has
to the application. It is alleged that the enumerated the circumstances under which
defendants deliberately and with an she was compelled to sign the said letter in
ulterior motive have backed out from the duplicate containing the terms and
said terms and are not willing to perform conditions of the purported settlement.
their part of the agreement, though the
JUDGEMENT
plaintiff at all material times was and is
still ready and willing to abide by the The learned Judge after considering the

same. Accordingly, it has been prayed by evidence and the facts and circumstances

the plaintiff that the terms and conditions of the case has held that the said agreement

referred to in the letter dated October 13, is in the nature of an executory contract

1974 should be recorded and the suit and not a concluded one and, as such, does

should be decreed on the said terms. not come within the purview of Order 23,
Rule 3; that the consideration for the
The defendant No. 1 Sulekha Kundu and
agreement was unlawful and opposed to
the defendant No. 2 Kestodas Kundu both
public policy and, consequently, the
opposed the said application under Order
agreement was hit by Section 23 of the
23, Rule 3 by petitions of objection. They
Contract Act and that, the agreement was
have denied the allegations made by the
not read over and explained to Sulekha
plaintiff in the said application. It has been
Kundu before she put her signature
averred by Sulekha Kundu that she was
thereon. It has been held by him that the
made to sign the said letter under duress
plaintiff has failed to satisfy the Court that
the suit has been wholly or partly adjusted Mr. Dutt has placed before us a number of
by a lawful agreement or compromise. decisions of different High Courts in
Upon the aforesaid findings, he has support of his contention. The first of such
dismissed the application under Order 23, decisions on which reliance has been
Rule 3. Hence, this appeal, placed by him is a Bench Decision of the
Allahabad High Court consisting of
The first question that arises is whether the
Sulaiman and Kendall JJ. in Quadri Jahen
documents, Exts. 1 and 1 (a) embodying
Begum v. Fazal Ahmad, ILR 50 All 748 =
the purported terms of settlement have
(AIR 1928 All 494). In that case, it has
been executed by the defendant No. 1
been observed as follows;
Sulekha Kundu under threat and coercion.
It has, however, been strenuously urged by "In our opinion the word "lawful" in Order
Mr. B.C. Dutt, learned Advocate appearing XXIII, Rule 3, does not merely mean
on behalf of the plaintiff-appellant that an binding or enforceable. A contract which
enquiry as to whether an agreement in is brought about either by undue influence,
adjustment of the suit is vitiated by fraud, misrepresentation or fraud is, under
undue influence or coercion does not come Sections 19 and 19-A of the Indian
within the purview of the provision of Contract Act, merely avoidable and not
Order 23, Rule 3. In order to consider this absolutely illegal or unlawful. Section 23
contention, we may refer to the provision of the Act indicates when the consideration
of Order 23, Rule 3 which provides as or object of an agreement is unlawful.
follows: These are cases where it is forbidden by
law or is of such a nature that, if permitted,
"Where it is proved to the satisfaction of
it would defeat the provisions of any law,
the Court that a suit has been adjusted
or is fraudulent, or involves or implies
wholly or in part by any lawful agreement
injury to any person or property, or where
or compromise, or where the defendant
the court regards it as immoral or opposed
satisfies the plaintiff in respect of the
to public policy. We think that the word
whole or any part of the subject-matter of
"lawful" in Order XXIII, Rule 3, refers to
the suit, the Court shall order such
agreements which in their very terms or
agreement, compromise or satisfaction to
nature are not "unlawful", and may
be recorded, and shall pass a decree in
therefore include agreements which are
accordance therewith so far as it relates to
avoidable at the option of one of the
the suit."
parties thereto because they have been
brought about by undue influence, agreement has been obtained by the other
coercion or fraud." party by some illegal means, namely, by
fraud, undue influence or coercion, would
It has been further observed that it is
the Court be able to hold that there is an
possible to take the view that,
agreement? With respect, we are unable to
independently of Order XXIII, Rule 3, the
understand the principle of law laid down
Court has inherent jurisdiction under
in those two decisions. It has been already
Section 151 of the Cede to refuse to record
observed that if the consent of one party is
a compromise which has been brought
obtained by fraud, undue influence or
about by undue influence.
coercion, it cannot be said that he has
It is clear from Order 23, Rule 3 that agreed to the term to which his consent has
before the Court considers whether, or not been so obtained and consequently the
an agreement is lawful, it must be satisfied Court has to come to the finding that there
that there has been an agreement between is no agreement. If it is required under
the parties. An agreement is brought into Order 23, Rule 3 that the Court has to be
existence where one party makes an offer satisfied as to whether an agreement has in
and another accepts the same. It is the fact been reached as held by the Allahabad
consensus of minds of two persons in High Court in the above two decisions, we
regard to certain matter. Of these two are of the opinion that an enquiry by the
persons if one has not agreed to the term Court for such satisfaction will include
proposed by the other, there is no also an enquiry into the allegation of a
agreement between them. When the party that his consent to the terms of the
consent of one to the term is obtained by agreement has been procured by fraud,
the other by some illegal means, namely, undue influence or coercion. It is true that
by fraud, coercion or undue influence, it is fraud, undue influence or coercion makes a
difficult to hold that the person whose contract a avoidable one and not void. But
consent has been so obtained has agreed to as soon as a party complains about the
the term. practice upon him of fraud, undue

Is it that the satisfaction of the Court is influence or coercion by another party, he

confined only to the proof of the signatures avoids the contract. If the party complains

of the parties on the document containing to Court that his signature to a document

the terms? Even in spite of the fact that the containing the terms has been obtained by

signature of a party or his consent to the the other party at the point of a revolver,
would the Court refuse to make an enquiry
into the same on the ground that the agreement is the withdrawal and non-
agreement is only avoidable and not void? prosecution of a criminal case, the
With due respect, we are unable to agreement is opposed to public policy and
subscribe to such a bold proposition and, is void.
in our opinion, to consider whether or not
For the reasons aforesaid, we affirm the
an agreement has been reached between
order of the learned Judge dismissing the
the parties, the Court will of necessity
plaintiff's application under Order 23, Rule
embark upon an enquiry as to the
3 of the Code of Civil Procedure and
allegation of a party that his consent to the
dismiss the appeal with costs. No separate
"agreement or his signature on the
order need be passed in the connected
document containing the terms, has been
Rule, which shall be deemed to have been
obtained by fraud, undue influence or
disposed of without any order as to costs,
coercion. It is true that the party
Sharma, J.
complaining has his remedy by way of suit
He can obtain a declaration that the con- PEARCE

tract is vitiated by fraud, undue influence V

or coercion and, as such, is not binding
BROOKS
upon him. In our opinion, to drive such a
party to a separate suit will be against (1865) LR 1 Ex 213
justice, equity and good conscience.

It has been held by the learned Judge that

BENCH
the agreement is hit by Section 23 of the
POLLOCK CB, PIGOTT,
Contract Act as one of the terms is
BRAMWELL, MARTIN BB
opposed to public policy. In our opinion,
there are cogent reasons for the said FACTS
finding of the learned Judge.
The defendant was a prostitute who hired a
Under Section 23 of the Indian Contract carriage from the plaintiff, who was a
Act, every agreement of which the object coachbuilder, on hire purchase terms to be
or consideration is unlawful is void, it paid for in instalments. She wanted the
provides inter alia that the consideration or carriage to attract customers. The
object of an agreement is unlawful when it defendant did not pay the second
is opposed to public policy It is now well instalment on the carriage and returned it
settled that where the consideration of an in a damaged condition, in breach of the
agreement. At first instance the jury found
on the evidence that the coachbuilder knew
NORDENFELT
that she was a prostitute at the time the
contract was made. The coachbuilder sued V

for non-payment and for the damage. NORDENFELT

ISSUES 1894 AC 535

It was argued that, as the coachbuilder

knew the defendant was a prostitute, he
BENCH
expected to be paid out of the profits of
prostitution. He, therefore, knew of the LORD MACNAGHTEN, LORD
immoral purpose to which the carriage was WATSON LORD HERSCHELL,
to be put and should not be allowed to LORD ASHBOURNE LORD MORRIS
recover on the contract.
FACTS
JUDGEMENT
Thorsten Nordenfelt, a manufacturer
The court found for the defendant. It was specialising in armaments, had sold his
immaterial that the immoral purpose was business to Hiram Stevens Maxim. They
not part of the contract or whether the had agreed that Nordenfelt ‘would not
claimant was to be paid out of the make guns or ammunition anywhere in the
proceeds. Bramwell B distinguished world, and would not compete with
between a contract to supply a prostitute Maxim in any way for a period of 25
with a carriage to be used to attract years’.
customers and a contract to supply her a
pair of shoes, as shoes were one of the
JUDGMENT
necessities of life. It was part of the
principle ex turpi causa non oritur actio The House of Lords held that the restraint
that anyone who supplies something for was reasonable in the interests of the
the performance an illegal act with parties. They placed emphasis on the
knowledge that it was to be used for that £200,000 that Thomas Nordenfeldt had
purpose cannot sue for the price of it. An received as full value for his sale.Restraint
immoral purpose was the same thing as an of trade clauses were prima facie void at
illegal purpose. Therefore, the plaintiff common law, but they may be deemed
could not recover. valid if three conditions are met:
- the terms seek to protect a legitimate Lord Watson said: ‘I think it is now
interest generally conceded that it is to the
advantage of the public to allow a trader
- the terms are reasonable in scope from
who has established a lucrative business to
the viewpoint of the parties involved
dispose of it to a successor by whom it
- the terms are reasonable in scope from may efficiently be carried on. That object
the viewpoint of public policy. could not be accomplished if, upon the

The question on severability was whether score of public policy, the law reserved to

the reasonable restriction could be the seller an absolute and indefeasible right

enforced when it was in the same contract to start a rival business the day after he

as an unreasonable and unenforceable sold. Accordingly it has been determined

restriction. The court used the test of judicially, that in cases where the

whether striking out (with a blue pencil) purchaser, for his own protection, obtains

words containing unreasonable provisions an obligation restraining the seller from

would leave behind a contractual competing with him, within bounds which

obligation that still made sense. If it did, having regard to the nature of the business

then the amended contract would be are reasonable and are limited in respect of

enforced by the court. space, the obligation is not obnoxious to

public policy, and is therefore capable of
In this case, the unreasonable restraint was
being enforced.’
severable, and the court enforced the
amended agreement that Nordenfelt "for Lord MacNaughten discussed the doctrine
the next 25 years, would not make guns or of restraint of trade: ‘In the age of Queen

ammunition anywhere in the world , thus Elizabeth all restraints of trade, whatever

permitting him to trade in those very items they were, general or partial, were thought

in direct competition with Maxim, to be contrary to public policy, and

illustrating the limited practical utility of therefore void.’ and ‘The true view at the

the rule under its strike-out only stricture. present time I think, is this: The public

At common law a restraint of trade is have an interest in every person’s carrying

prima facie contrary to public policy and on his trade freely: so has the individual.

void, unless it can be shown that the All interference with individual liberty of

restraint is, in the circumstances of the action in trading, and all restraints of trade

particular case, reasonable. of themselves, if there is nothing more, are

contrary to public policy, and therefore
void. That is the general rule. But there are BENCH
exceptions: restraints of trade and
SIR LAWRENCE JENKIM, K.C.I.E.
interference with individual liberty of
CHIEF JUSTICE AND JUSTICE
action may be justified by the special
BATCHELOR
circumstances of a particular case. It is a
sufficient justification, and indeed it is the
only justification, if the restriction is FACTS
reasonable – reasonable, that is, in
In March 1903, certain Ice Manufacturing
reference to the interests of the parties
Companies in Bombay entered into an
concerned and reasonable in reference to
agreement relating to the manufacture and
the interests of the public, so framed and
sale by them of ice. The agreement fixed,
so guarded as to afford adequate protection
inter alia, the minimum price at which ice
to the party in whose favour it is imposed,
was to be sold by the parties the proportion
while at the same time it is in no way
of the manufacture which earlier was to
injurious to the public.’
bear, and the proportion of the profits
RATIO which, each was to receive. It farther

he purchaser of the goodwill of a business created a monthly obligation to pay into

sought to enforce a covenant in restraint of and a corresponding right to receive from,

trade given by the seller. a general common fund the different if

any, between the profits actually received
by the parties and those to which they
were, under the agreement, entitled. On a
suit being instituted for breach of the
agreement, in which damages, sustained
S.B.FRASER AND COMPANY prior to and pending the hearing of the

V suit, were claimed.

BOMBAY ICE MANUFACTURING JUDGEMENT

COMPANY Held the fact that an agreement, if carried

out, would limited competition and keep
np prices, did not necessarily bring it
(1905) ILR 29 BOM107
within the terms of section 27 of the Indian
Contract Act (I X of 1872) : to succeed in
the defence under that section it was The defendants put in a written statement
necessary to establish that the agreement denying their liability on the grounds
was one whereby a person was restrained therein appearing, and ultimately the
from exercising a lawful profession, trade, parties came on fur hearing’ before
or busiaoas of any kind. Meld, further, that Russell, J., when the following issues were
whether or not a High Court in India raised:
would award damages, in respect of a
continuing cause of action, up to the date
of its decree, subsequent successive 1. Whether the agreement in A. and B to

accruals of an obligation to contribute to a plaint was ever an agreement binding on

fund could not be treated as falling within the plaintiffs and the defendants?

that description, and could not be awarded 2. Whether the defendants were not
in a suit where they had accrued due induced to sign the said A and B to plaint
subsequently to its institution. An order by the representations of the plaintiffs or
directing a Company to furnish an account their agents respecting as alleged in
would not extend beyond, or include paragraphs
contributions which accrued later than, the
3. Whether the said representations or any
date when the business of such Company
of them were true in fact ?
was transferred to a limited Company.
APPEAL from Russell J. 4. Whether, if last two issues are decided
in defendants’ favour, the defendants are
On the 15th of March 1902, the Bombay
bound by the agreement?
Ice Manufacturing Company, Limited,
Messrs. J. and J. Moir, Messrs. S. B. 5. Whether the agreement in A and B is a
Fraser and Company, and Chubildas valid agreement in law and binding on
Lulloobhoy entered into an agreement defendants?
relating to the manufacturer and sale by
6. If not, whether the plaintiffs are entitled
them of ice, which contained, inter alia, the
to maintain this suit on the said
following provisions.
agreement?
That the defendants S. B. Fraser and
7. Whether the plaintiffs have performed
Company be decreed to pay the plaintiffs^
their part of the agreement as alleged?
costs of this suit.
8. Whether the plaintiffs are in any event
entitled to specific performance of the said
FACTS
agreement?
In this case the parties to the contract
I therefore am of opinion that so far as
carried on business as braziers in a certain
contributions are concerned relief must.
part of Calcutta. As the mode of the
The restricted to those that accrued before
business of the plaintiff was found by the
suit, and I further hold that no claim can be
defendants to be detrimental to their
made in respect of the sale of frosted ice.
business interest, an agreement was
The plaintiffs cannot recover the whole of
entered into between the plaintiff and the
each instalment, but only damages for the
defendants whereby the plaintiff agreed to
non-payment. In the view I take it is
stop his business in that quarter and the
unnecessary to discuss the transfer by
defendant promised in consideration of his
Frasers to the limited Company and the
doing so to pay the plaintiff all the sums
development by the P, & O. Company of
which he had then distributed as advance
their ice business, as both are subsequent
to the workers. In terms of the agreement
to the suit.
the plaintiff ceased carrying on the
From the course which the case took business in that quarter, but the defendants
before Russell,, no evidence of these failed to perform their part of the contract,
damages, so that unless the parties can namely, to pay to the plaintiff all the sums
come to some agreement an enquiry must which the plaintiff had advanced to their
be directed. workmen.

The plaintiff therefore sued to recover

from the defendants Rs. 900 being the
amount advanced by him to their
MADHUB workmen. It was held by the High Court

V that the agreement was void under section

27 of the Indian contract act even though
RAJCOOMAR
the restriction put on the plaintiff’s
14 BLR 76 business was limited to a particular
location. The plaintiff’s suit failed on the
ground that when the agreement on the
BENCH
part of the plaintiff was void, there was no
consideration for the agreement on the part Exception 1- One who sells the goodwill of
of the defendants to pay the money and the a business may agree with the buyer to
whole contract was to be treated as one refrain from carrying on a similar
which could not be enforced. business, within specified local limits, so
long as the buyer, or any person deriving
title to the goodwill from him, carries on a
like business therein: Provided that such

JUDGEMENT limits appear to the Court reasonable,

regard being had to the nature of the
The plaintiff sued the defendants, for that
business.
the plaintiff having opened a shop in
Kansareepara, in Simla, in the town of As what constitutes restraint of trade is

Calcutta, for the sale of copper utensils, summarized in Halsbury’s Laws of

the defendants proposed to the plaintiff to England , where it is opined that it is a

cease carrying on the said business in the general principle of the Common Law that

said locality, on the ground of its being a man is entitled to exercise any lawful

detrimental to their business, and offered trade or calling as and when he wills and

and agreed in consideration of his doing so the law has always regarded jealously any

to pay to the plaintiff all sums which he interference with trade, even at the risk of

had then disbursed as advances to interference with freedom of contract, as it

workmen, whereupon the plaintiff did is public policy to oppose all restraints

agree and consent to cease carrying on the upon liberty of individual action which are
said business, and did accordingly cease; injurious to the interests of the State. In

and that the defendants have neglected and deciding whether a contractual term

refused to perform their part of the amounts to a restraint of trade, the Court

contract, to wit, to reimburse the plaintiff looks not at the form of the term but its

in all same that he had advanced to effect. It was held that the doctrine can

workmen, whereby the plaintiff has therefore apply to indirect restrictions,

sustained damages to the amount stated, such as a financial incentive not to

namely, Rs.900. compete with the employer. Agreements in

restraint of trade are extremely common
Section 27- "Every agreement by which
and it would be intolerable hindrance to
any one is restrained from exercising a
business if they were not allowed.
lawful profession, trade or business of any
kind, is to that extent void."
 S. B. FRASER AND COMPANY which damages, sustained prior to and
pending the hearing of the suit, were
V
claimed, Eeld) the fact that an agreement,
BOMBAY ICE MANUFACTURING if carried out, would limifc competition
COMPANY LIMITED and keep np prices, did not necessarily
bring it within the terms of section 27 of
the Indian Contract Act (I X of 1872) : to
BENCH
succeed in the defence nnder that soetion it
SIR LAWRENCE JENKIN, K.C.I.E., was necessai'y to establish that the
CHIEF JUSTICE AND MR. JUSTICE agreeuient was one wbereby a person was
BACHELOR restrained from exercising a lawful
i)rofession, trade, or busiaoas of any kind.
FACTS
Meld, further, th at whether or n ot a High
Agreement—Restraint of Trade— Sections
Court in India eoiild award damages, in
23 and 8,- Indian Contract Act {IX of
respect of a continuing cause of action, up
1873)-—Continuous cause of action—
to the date of its decree, subsequent
Damages—Transfer of business to a
successive accruals of an obligation to
limited Company—effect. In March 1903,
contribute to a fund could not be treated as
certain Ice Manufacturing Companies in
falling within that description, and could
Bombay entered into an agreement relating
not be awarded in a suit where they had
to tlie manufacture and salo by them o f
accrued due subsequently to its institution.
ice. The agreement fixed, inter alia, the
An order directing a Company to furnish
minimiim price at which ice was to bo sold
an account wiU not extend beyond, or
hy the parfciesj the proportion of the
include contributions which accrued later
manufacture which eacli was to bear, and
than, the date wten the business of such
tlie propartion of the profits which, each
Company was transferred to a limited
was to receive. It farther created a monthly
Company.
obligation to pay liitoj and a correponding
right to receive from, a general common
fund the differanoej if any, hob ween the GUNTHING
profits actually raoexved by the parties and
V
those to which they were, under the
agreement, entitled. On a suit being LYNN

instifcnted for breach o£ the agreement, in (1831) 2 B7 AD 232

 contained in an agreement must be clear so
that the parties can be sure of the terms
FACTS
upon they are contracting. As a result of
The buyer of a horse, who was the plaintiff this, the only part of the transaction that
in this case, promised the seller that they was sufficient for the court was the
would pay $5 more for the horse, or buy purchase of the horse for the price of $63
another horse from the seller if the horse and that was the vast majority of the legal
was lucky. The horse was not in the agreement between the parties.
condition that the plaintiff believed and a
29. Agreements void for uncertainty.—
dispute arose between the parties as to
Agreements, the meaning of which is not
whether the seller was owed the
certain, or capable of being made certain,
conditional payment mentioned by the
are void. —Agreements, the meaning of
buyer.
which is not certain, or capable of being
ISSUE made certain, are void." Illustrations

The court had a number of issues to (a) A agrees to sell B “a hundred tons of
decide. The most prominent issue was oil”. There is nothing whatever to show
whether the offer from the buyer, to pay what kind of oil was intended. The
more for the horse if it was lucky, could be agreement is void for uncertainty. (a) A
considered to be a valid offer for the agrees to sell B “a hundred tons of oil”.
purposes of the sale. This would give an There is nothing whatever to show what
indication as to whether the seller could kind of oil was intended. The agreement is
rely on the payment that had been void for uncertainty."
mentioned. Specifically, the court was
(b) A agrees to sell B one hundred tons of
required to understand whether the terms
oil of a specified description, known as an
‘lucky’ and ‘buy another horse’ could be
article of commerce. There is no
defined and considered legally binding on
uncertainty here to make the agreement
the parties.
void. (b) A agrees to sell B one hundred
JUDGEMENT tons of oil of a specified description,

The court held that the condition to pay $5 known as an article of commerce. There is

extra for the horse if it was lucky, was no uncertainty here to make the agreement

deemed to be too vague to create a binding void."

contract between the parties. The words

(c) A, who is a dealer in coconut-oil only, which of the two prices was to be given.
agrees to sell to B “one hundred tons of The agreement is void. (f) A agrees to sell
oil”. The nature of A’s trade affords an to B “my white horse for rupees five
indication of the meaning of the words, hundred or rupees one thousand”. There
and A has entered into a contract for the is nothing to show which of the two prices
sale of one hundred tons of coconut-oil. was to be given. The agreement is void."
(c) A, who is a dealer in coconut-oil only,
agrees to sell to B “one hundred tons of
oil”. The nature of A’s trade affords an DISCHARGE BY PERFORMANCE

indication of the meaning of the words, STARTUP

and A has entered into a contract for the
V.
sale of one hundred tons of coconut-oil."
MCDONALD
(d) A agrees to sell B “all the grain in my
granary at Ramnagar”. There is no
uncertainty here to make the agreement
(1843) 6 MANN & G 593
void. (d) A agrees to sell B “all the grain
in my granary at Ramnagar”. There is no
uncertainty here to make the agreement (Section 38—tender)
void."

(e) A agrees to sell to B “one thousand

FACTS:
maunds of rice at a price to be fixed by
C”. As the price is capable of being made
certain, there is no uncertainty here to Startup (S) contracted with McDonald (M)
make the agreement void. (e) A agrees to to supply specified quantity of linseed oil
sell to B “one thousand maunds of rice at within the last fourteen days of the month
a price to be fixed by C”. As the price is of March. S tendered on the last of the
capable of being made certain, there is no fourteen days at 9’o clock at night. M
uncertainty here to make the agreement refused to accept owing to the lateness of
void." hour.
(f) A agrees to sell to B “my white horse
for rupees five hundred or rupees one
ISSUES:
thousand”. There is nothing to show
 In contracts of sale of goods, if parties
don’t stipulate the place and time for the
1) Whether S supplying the goods at such
performance of the contract, then
period of time amounted to valid tender?
according to law, “party who is to receive
is bound to attend at a reasonable place,

2) Whether M by denying to take delivery and wait till a reasonable time, for the

breached the contract? purpose of receiving what the other party

is bound to deliver”. If the party bound to
deliver doesn’t come at the reasonable
HELD: place till the reasonable hour, other party
isn’t bound to wait any further and if
former comes after latter has departed, he
1) The promisee must have a reasonable
by his own conduct has rendered tender to
opportunity of ascertaining that the thing
be made impossible.
offered by promisor is thing which latter is
bound to deliver. (S.38-2)

REPORT THIS AD
Though the time of delivery was
unreasonable due to lateness of the usual
business hours, yet there was full and
Since in present case, M was present at the
sufficient time for M to weigh, examine
warehouse and was in a position to
and receive into their possession the
reasonably ascertain the quality, quantity
delivered oil before midnight (in
of the product delivered, hence, there was
dissenting opinion, however, C.J. points
a valid tender even when made at
out there ought to be reasonable time as
unreasonable time for it was made within
well as opportunity. Absence of all
the time stipulated under the contract and
workers from the warehouse or any other
thus rendered literal possibility of
reason thereof due to the lateness of the
performance within the letter of contract.
hour could be pleaded as factor negating
the tender for it will not provide
reasonable opportunity to examine the DOMINION OF INDIA
product).
VS
 GAYA PERSHAD of April, 1946. In each case it was
mentioned in the railway receipt that the
AIR 1957 ALL 193
wagon was to be carried by C. O. G.
Special. We understand from learned

ALLAHABAD HIGH COURT counsel for the appellant that the correct
term used is C. O. G. which letters connote
BENCH
trains known as Coaching Specials. These
AGARWALA, V BHARGAVA trains are parcel trains which run faster
than goods trains like parcel express. The
FACTS
goods consigned on the 21st of March
These four appeals arise out of four
1946 were delivered at Lucknow to the
different suits which were numbered as
plaintiff-respondent on the 30th of March,
Suits Nos. 64/5 of 1947, 72/10 of 1947,
1946 when it was found that the oranges
73/11 of 1947 and 74/12 of 1947 in the
had considerably deteriorated. The amount
trial Court. In all the four suits the
of deterioration was estimated by the
plaintiffs and the defendants were the
Station Superintendent, Lucknow at 75%
same. The suits all related to a claim made
which was noted down in the delivery
by the plaintiff-respondent against the
book. The other three consignments were
defendants-appellants who are the two
offered for delivery at Lucknow to the
railway administrations at present known
plaintiff-respondent on 3rd May, 1946
as the Central Railway and the Northern
when the plaintiff refused to take delivery
Railway and which, at the time of the suits
on the ground that the goods had
were known as the G. I. P. Railway and the
deteriorated completely and become unfit
E. I. Railway; The claim was in respect of
for consumption.
damages to baskets of oranges which were
A note was made by the plaintiff-
sent from the railway station Katol on the
respondent In the delivery book that the
Central Railway to Lucknow on the
contents of these wagons were extremely
Northern Railway. The consignors of the
rotten and unfit for human consumption so
four consignments were different but the
that he was refusing to take delivery.
consignee in each case was the plaintiff-
Thereafter the plaintiff-respondent gave
respondent. The first consignment in
notice to the two railway administrations
question was booked from Katol on the
concerned and then instituted these four
21st of March, 1946 and the other three
suits for recovery of damages incurred by
consignments were booked 011 the 22nd
the plaintiff by reason of the late delivery point, which learned counsel took up, was
of the goods. that the amount of damages awarded by
the lower Court had not been properly
Various defences were raised to the suits.
assessed. No other points besides these
All the four suits were tried together and
three were canvassed before us on behalf
decided by one single judgment. The Court
of the appellants.
rejected the pleas in defence and decreed
the suit for damages. The first point raised an important question
of law. In that question it had to be
Four different appeals have been filed in
determined whether the consignee had a
this Court but since all the suits were
right to bring a suit for damage to the
decided by one judgment and common
goods in respect of which he was entitled
questions are involved, we are also
to take delivery from the railway
deciding these four appeals by one single
administration even though he was not the
judgment.
owner of these goods. It was found by us
When these appeals came up for hearing that in considering this question it was
before us, learned counsel for the necessary to reconsider a Division Bench
appellants urged three points before us. decision of this Court. Consequently we
The first point urged was that the plaintiff- framed a question and referred it for
respondent, who was only the consignee opinion to a Full Bench. The decision of
and not the owner of the goods of these the Full Bench on that point was given on
four consignments, had no right to bring the 23rd of March, 1955 (Reported as (S)
suits for damages to or loss of the goods. AIR 1956 All 338). That decision of the
The second point urged was that it was Full Bench is against the appellants and in
incumbent upon the plaintiff-respondent to favour of the plaintiff-respondent. The
establish that the damage to the goods was decision was that the consignee in these
the result of misconduct on the part of the cases had a right to bring the suits for
railway administrations or their servants in damage to the goods even though he was
view of the risk notes which had been not the owner of these goods. That point is
executed by the consignors at the time thus disposed of by the decision of the Full
when the goods were booked and since the Bench.
plaintiff-respondent failed to establish any
The main contention on the second point
such misconduct, he was not entitled to a
on behalf of the appellants was that though
decree in any of these suits. The third
the position of the railway as carrier of the
goods was that of a bailee by virtue of the administration concerned. This plea of the
provisions of the Indian Railways Act, in plaintiff-respondent was not accepted by
this particular case the appellants were the lower Court, nor has it been pressed
specially protected by the risk notes in again before us. The position, that has
Form B which had been executed by the been taken up on behalf of the plaintiff-
consignors when these four consignments respondent before us, is that in this case
were booked. Under these risk notes the the facts admitted and proved showed that
consignors had, in consideration of lower the goods were not carried by the railway
charge, agreed and undertook to hold the administrations in accordance, with the
railway administration harmless and free contracts entered into as evidenced by the
from all responsibility for any loss, parcel way bills and since the goods were
destruction or deterioration of, or damage not carried in accordance with the contract
to the said consignments from any cause and there was a breach of the contract on
whatever except upon proof that such loss, the part of the railway administrations, the
destruction, deterioration or damage arose railway administrations were not entitled
from the misconduct on the part of the rail to claim the protection of the risk notes. It
way administration or its servants. There appears from a joint statement given by
were also some provisos to this clause but learned counsel for the parties in the lower
they, need not be quoted as they are not court that the wagons in respect of all the
applicable and relevant to the case before four consignments were despatched from
us. On behalf of the appellants stand was Katol railway station, where the goods
taken on this condition in the risk notes were consigned, by C. O. G. Specials. In
and it was urged that, unless the plaintiff- all cases the goods were carried up to
respondent had proved that the damage to Jhansi by C. O. G. Specials. The first
the goods was the result of misconduct on consignment, which was in Wagon No.
the part of the railway administration or 8126, was sent from Jhansi by being
their servants, the plaintiff-respondent attached to a goods train which left Jhansi
could not claim damages from the on the 26th of March, 1946 at 4.00 a.m. It
appellants. In the lower Court, this point arrived at Juhi near Kanpur Central Station
was sought to be met on behalf of the on the 26th of March, 1946 at 4.40 p.m.
respondent on the ground that the risk and from there it was despatched by
notes had been obtained from the another goods train on the 27th of March
consignors by misrepresentation of facts at 12.00 a.m. The wagon arrived at
by the servants of the railway Lucknow on the 28th of March, 1946, at
11.50 a.m. when it was placed in the goods carrying 11 bogies. Further questioned, the
yard. Thereafter it was placed at the parcel witness went on to say that the train was
delivery siding on the 29th of March, 1946 actually carrying 10 passenger bogies, one
at 5.00 p.m. So far as the other three military motor van and one military stores
consignments are concerned, they were wagon. The train ordinarily carried 8
carried by C. O. G. Special from Jhansi up passenger bogies but there were 10
to Juhi where they arrived on the 27th of passenger bogies in the train that day. He
April, 1946 at 7.15 a.m. From Juhi, has also stated that this excess in the
however, the wagons were attached to a number of bogies in the train came about
goods train which left Juhi on the 1st of since two extra passenger bogies had come
May, 1946 at 11-20 p.m. The wagons then in the train from Bombay. This does show
arrived at Lucknow on the 2nd of May, that the train was carrying an overload that
1946 at 6.30 a.m. and were placed for day so that this Wagon No. 8126 could not
delivery at the parcel delivery siding on be attached to that train. The witness has
the 3rd of May, 1946, on which date also stated that in order to avoid heavy
delivery was refused by the plaintiff- detention, this Wagon No. 8126 was then
respondent. This movement of the wagons attached to the goods train No. D-5. It has
containing the goods shows that part of the been urged by the learned counsel for the
way the goods were carried by the type of appellants that this step which was taken at
train which was agreed upon between the Jhansi was a prudent act of a bailee
consignors and the railway administration, inasmuch as the wagon was attached to the
but for part of the way the wagons were goods train to avoid further detention as
carried by goods train which was contrary far as possible in view of the fact that the
to that contract. The reason in the case of wagon contained perishable goods. Having
Wagon No. 8126 given on behalf of the heard learned counsel on this point, we are
railway administration is that though that not satisfied that this step, which was taken
wagon could be attached to a passenger on behalf of the railway administration,
(No. 603 Down) which was to leave Jhansi was really a prudent act. The facts
at 3.00 a.m. on the 26th of March, 1946, disclosed by the railway administration
this could not be done as that train was themselves show that the result of the
already carrying an overload. According to attachment of that wagon to the goods
the evidence of defence witness S. D. train at Jhansi was that the wagon went to
Awasthi, that train usually had a load of 10 Juhi where there had to be a detention of
bogies whereas on that day it was actually about 17 hours. Even when it was sent
from Juhi by another goods train to of wagons ordinarily sent by goods train,
Lucknow, there was a further delay in could have been avoided. No such prudent
delivery of the goods, the wagon having step was taken either. Another aspect that
come by a goods train, which according to has to be kept in view is that the failure to
rules, had to be sent to the goods yard. It attach the wagon to No. 603 Down
actually reached the goods yard at 11.50 passenger train was also the result of the
a.m. on the 28th of March, 1946 and actions of the railway administration itself.
thereafter there was a delay of about 30 The two extra coaches, that had been
hours before it could be placed at the attached from Bombay, were attached by
delivery siding. There were thus two long the same railway administration which
delays at Juhi and Lucknow which were accepted the hooking of these goods at
clearly very material delays in view of the Katol. It is true, as urged by learned
nature of the goods that were being counsel, that during those days there was
carried. The delays occurred because the pressure of traffic on the railways and
goods were sent from Jhansi onwards by a there was at the same time shortage of
goods train and not by the type of train rolling stock and engines but if the railway
which had been agreed upon between the administrations anticipated that the goods
consignor and the railway administration. booked by C.O.G. Special from Katol
If the wagon had not been sent by goods could not be carried by passenger train and
train from Jhansi on the 26th of March, had to be carried by goods train, they
1946, but had been sent by the passenger should not have contracted to carry the
train No. 603 Down on the 27th or 28th of goods by C.O.G. Special. Having,
March, 1946 even then it could have been contracted with the consignors to carry the
available for delivery at Lucknow earlier goods by C. O. G. Special, the equivalent
than the time when it became available on of which is a passenger train, it was the
being attached to the goods train. Further, duty of the railway administration to take
it appears that when that wagon was steps that the goods were carried in the
attached to the goods train at Jhansi, no expeditious manner contracted between the
steps were taken to ensure that the railway parties and not by a slower train. For all
servants, who had to deal with the wagon these reasons, we are unable to hold that
at later stages, came to know that there had the alteration of the type of train from the
been a contract to carry that wagon by C. C. O. G. Special to goods train was a
O. G. Special. If any such step had been prudent act on behalf of the railway
taken, the delays, which occur in the case administration. The result of this alteration
by the railway administration was that the Chatham Rly. Co.'s Managing Committee,
goods were no longer being carried in 1915-2 KB 370 (A). In that case also an
accordance with the terms of the contract owner's risk note had been executed by the
between the parties. Once the carriage of consignor under which the consignor had
the goods was no longer in accordance elected to book the goods at a reduced rate
with the terms of the contract, and a breach agreeing to relieve the Managing
of the contract in that respect had been Committee and all other companies or
committed by the railway administration, persons over whose lines the merchandise
the railway administration could no longer may pass, or in whose possession the same
seek the protection of the risk note in Form may be during any portion of the transit,
B as that risk note was executed by the from all liability for loss, damage,
consignor on the clear understanding that misdelivery, delay, or detention, except
the goods would be carried by C. O. G. upon proof that such loss, damage,
Special and not by goods train. In the case misdelivery, delay, or detention arose from
of perishable goods like oranges, the term wilful misconduct on the part of the
of contract that the goods are to be carried Managing Committee's servants. It was
by a special type of train which is faster held that the owner's risk clause could only
than the ordinary goods train, is clearly of be effective in cases in which the railway
the essence of the contract. The arrival of afforded the consignor an alternative rate
the goods was delayed in consequence of below the general rate. The rate was
the change of type in train and not because alternative to a general rate "for the
it was not possible for the railway carriage of fruit by passenger train or by
administration to carry the goods other similar service" which of course the
throughout by C. O. G. Special. Midland goods train (by which the goods
were actually carried for part of the way)
The railway administration need not have
was not. To make the owner's risk
contracted to do so, but when they did
operative the contract had to be one for
contract to do so, the risk note, which was
carriage by passenger or equivalent train.
executed by the consignor, could protect
It was held that it was during any portion
the railway administration only so long as
of such transit only that the sender agreed
they carried out the transit of the goods in
to relieve the company from liability. It
accordance with the terms of the contract.
was only during the performance by the
This view of ours is fully supported by a
railway company of such transit that the
decision in Gunyon v. South Eastern &
sender could be called upon to show that
his loss had arisen from the wilful resulting from delay on that part of the
misconduct of the company's servants. But transit could be claimed without proof of
when in London the cherries were shipped misconduct. In our case also, the delay
on a goods train, that contract was no occurred materially in the transit between
longer being performed and the goods Jhansi and Lucknow when the goods were
were no longer being carried at owner's not being carried in accordance with the
risk. The Midland Railway Company terms of the contract under which they had
shipped the goods upon a train to which to be carried by C. O. G. Special. They
neither the contract nor the rate of payment were being carried by goods train which
applied and consequently the ordinary was slower than C. O. G. Special and to
incidents of carriage by carrier at once which the rates applicable must be lower.
became applicable. The mere fact that they This principle was applied in India by the
were being carried over the line of rails of Bombay High Court in B. B. & C. I.
the Midland Railway Company did not Railway v. Mahamadbhai Rahimbhai and
constitute the performance or an attempted Anr., AIR 1929 Bom 355 (B). In that case
performance of that special contract. The also the goods were being carried under a
company never carried and never intended risk note which was in Form H under
to carry at owner's risk; for they must have which the railway administration was
known that the only valid owner's risk rate protected unless there was wilful neglect
for fruit in force was oae for carriage by on. their part. It was held that the carriage
passenger train. It will be noticed that the of goods, which were of a perishable
above case was similar in facts to the cases nature, by passenger or parcel train was the
before us. In both cases owner's risk forms essence of the contract and when that
had been executed under which the railway contract was broken by carrying the goods
administrations were exempted from by goods train the protection of the risk
liability for damage, etc., except upon note was no longer available to the railway
proof of misconduct on the part of the administration. In these circumstances,
railway administrations or their servants. since we are unable to hold that the
In the case of Gunyon v. South Eastern railway administration was justified in
and Chatham Railway Companies' sending the Wagon No. 8126 from Jhansi
Managing Committee (A) the goods were by goods train and in committing breach of
to be carried by passenger train and were contract, the railway administration is not
instead carried by goods train for part of entitled to the protection of the risk note in
the way. It was held that the damage Form B. The facts with regard to the other
three consignments are very similar. In far as the goods of the other three
these cases also the goods were sent from consignments are concerned, there is
Juhi by goods train. There was evidence on behalf of the respondent that
considerable delay at Juhi where the there was complete deterioration and the
wagons were dealt with like wagons being goods had become unfit for consumption.
sent at ordinary rate by goods train. Again There is no evidence to the contrary on
at Lucknow, there was delay in placing the behalf of the appellants to show that the
wagons for delivery, because, having been goods were still in good condition and fit
treated as wagons coming by goods train, for consumption. The deterioration was
they first went to the goods yard and were due to delay in delivery as no alternative
later placed at the delivery siding, in these cause for deterioration has been alleged or
circumstances, no question arises of the proved on behalf of the appellants. The
plaintiff-respondent being required to second point urged on behalf of the
prove that the damage to the goods booked appellants must also, therefore, be decided
was due to any misconduct on the part of against them.
the railway administrations or their
So far as the question of the amount of
servants and consequently we need not go
damages is concerned, learned counsel has
into the question whether there was any
only pressed it before us with regard to the
such misconduct in this case or not.
amount of damages in one suit, No. 64/5
Learned counsel for the appellants also
of 1947 out of which First Appeal No. 89
urged before us that there was no evidence
of 1948 has arisen. It was in that case that
that the deterioration in the goods was the
the amount of loss was estimated at 75%.
result of delay in delivery occasioned by
Learned counsel's argument was that the
the carrying of the goods by goods train
value of the damage to the goods accepted
instead of C. O. G. Specials. The nature of
by the lower Court as Rs. 3,447-5-0 has
the goods itself indicates that detention of
not been properly proved by the plaintiff-
the goods before delivery was likely to
respondent whose evidence on this point
affect the quality of the goods. The longer
was unsatisfactory. We, however, find that
they were delayed, the more deterioration
the value of the damage was assessed by
was bound to occur. In the case of goods
an officer of the railway administration at
sent on the 21st of March, 1946, there was
Lucknow who has also been produced in
an assessment by the Station
this case as a witness on behalf of the
Superintendent, Lucknow, himself that the
appellants. No attempt was made to show
deterioration was to the extent of 75%. So
in his evidence that his assessment was Appeal from the judgment and decree,
wrong or had been arrived at on some dated June 3, 1966 of the Calcutta High
misrepresentation made by the plaintiff- Court in Appeal No. 251 of 1965. M.C.
respondent. There is, therefore, no reason Chagla and S.N. Mukherjee, for the
for rejecting the figure of assessment of appellant. S. V. Gupte, M.G. Poddar and
damage made by him. In the other three D.N. Mukherjee, for the respondent.
cases, the rate per basket for the goods
The Judgment of the Court was delivered
damaged was fixed by the lower Court on
by Bachawat,I. By an indenture of lease,
the basis of the statement of Mr. G. Dan,
dated February 17, 1954 the respondent
who was the Assistant Fruit Marketing and
leased to the appellant a plot of land at
Utilisation Officer and who had been in
premises No. 22, Jatindra Mohan Avenue,
Government service. We see no reason to
Calcutta, for a term of 10 years
differ from the views taken by the learned
commencing from February 1, 1954.
Judge of the lower Court that his evidence
Clause 3(c) of the deed provided for a
is reliable.
renewal of the lease and was in the
Consequently we find that there is no force following terms :--
in these appeals and they are dismissed
"3 (c). The lessor will on the written
with cost
request of the lessees made two calendar
months before the expiry of the term
hereby created and if there shall not at the
CALTEX
time of such request be any existing breach
V or non observance of any of the covenants

BHAGWAN DEVI MORODIA on the part of the lessees hereinabove

contained grant to it one renewal of 10
969 AIR 405, 1969 SCR (2) 238
years from the expiry of the said term at
SUPREME COURT OF INDIA the same rent and containing the like
convenants and provisos as are herein
BENCH
contained except that as regards the clause
BACHAWAT, R.S.
for renewal for further period the rent shall
be as may be agreed between the lessor
and the lessees."
FACTS
On December 1, 1963, the time fixed for execution of the order of eviction passed
applying for the renewal of the lease by the Controller and for other reliefs. In
expired. On December 13, the appellant paragraphs 13 and 14 of the plaint the
made a written request for the renewal. On appellant alleged that the delay in giving
December 23, 1963 the respondent's notice of renewal should be excused in
solicitors replied stating that the request view of the following special
being out of time was ineffective and circumstances: (a) the delay was due to
asking the appellant to, vacate the land on oversight; (b) the respondent had not
the expiry of the lease. The appellant had altered her position for the worse or to her
erected structures on the land for the detriment within the space of 12 days; (c)
purpose of running a petrol delivery station neither party had treated the matter of time
and was a Thika tenant within the meaning as being as the essence of the transaction;
of the Calcutta Thika Tenancy Act, 1949. (d) the appellant had constructed a service
In February 1964 the respondent filed an station for petroleum products of immense
application before the Controller asking utility to the public of the locality; (e) the
for eviction of the appellant under ss. 3(vi) appellant was in possession of the land.
and 5 of the Calcutta Thika ,,Tenancy Act. The respondent contended that the
The Controller allowed the application. An application for renewal being made out of
appeal from this order was dismissed by time was ineffective and that there was no
the appellate Authority. A revision petition ground for excusing the delay. S.P. Mitra,
against the order was dismissed by the J. accepted the respondent's contention and
High Court. While dismissing the revision dismissed the suit. An appeal under clause
petition, the High Court stayed the 15 of the Letters Patent was dismissed by a
execution of the order of eviction for a Divisional Bench of the High Court. Both
month and observed that the authorities the courts concurrently held that the letter,
under the Calcutta Thika Tenancy Act had dated December 13, 1963 was not a proper
no power to decide whether the appellant exercise of the option by the ,appellant
was entitled to a renewal of the lease. under the lease, dated February 17, 1954
Thereafter the appellant filed the present and that there were no special
suit on the Original Side of the Calcutta circumstances for excusing the delay in
High Court asking for a declaration that it ,giving the notice. The appellant has filed
was entitled to a renewal of the lease, the present appeal after obtaining a
specific performance of the covenant for certificate from the High Court under Art.
renewal, an injunction restraining 133 ( 1 ) (a) and (b) of the Constitution.
The appellant neglected to make the indication of a contrary intention appeared
application for renewal of the lease within from the nature of the contract or the
the stipulated time. Mr. Chagla has surrounding circumstances. In his well
submitted that the time is not of the considered judgment Viscount Haldane
essence of the contract having regard to carefully refrained from saying that time
sec. 55 of the Indian Contract Act, 1877 as was not to be regarded as of the essence in
interpreted in the case of Jamshed all contracts relating to land.
Khodaram Irani v. Durjorji Dhunjibhai(1).
Section 55 of the Indian Contract Act
provides that "when a party to a contract At common law stipulations as to time in a

promises to do a certain thing at or before contract giving an option for renewal of a

a specified time, or certain things at or lease of land were considered to be of the

before specified time, and fails to do any essence of the contract even if they were

such thing at or before the specified time, not expressed to be so and were construed

the contract, or so much of it as has not as conditions precedent. Equity followed

been performed, becomes voidable at the the common law rule in respect of such

option of the promisee, if the intention of contracts and did not regard the stipulation

the (1) L.R. 43 I.A. 26. as to time as not of the essence of the
bargain. As stated in Halsbury's Laws of
parties was that time should be of the
England, 3rd ed., vol. 3, art. 281, p. 165
essence of the contract." In Jemshed's
"An option for the renewal of a lease, or
case(1) Viscount Haldane observed that
for the purchase or re-purchase of
the section did not lay down any principle
property, must in all cases be exercised
as regards contracts to sell land in India
strictly within the time limited for the
different from those which obtained under
purpose, otherwise it will lapse." This
the law of England. It is well known that
passage was quoted with approval by
in the exercise of its jurisdiction to decree
Danckwerts L.J. in Hare v. Nicoll(2). A
specific performance of contracts the
similar statement of law is to be found in
Court of Chancery adopted the rule,
Foa's General Law of Landlord and
especially in the case of contracts for the
Tenant, 8th Art. 453, p. 310, and in Hill
sale of land, that stipulations .as to time
and Redman's Law of Landlord and
were not to be regarded as of the essence
Tenant, 14th ed., p. 54. The reason is that a
of the contract unless they were made so
renewal of a lease is a privilege and if the
by express terms or unless a clear
tenant wishes to claim the privilege he
must do so strictly within the time limited and being prevented by means, I have
for the purpose. With regard to equitable alluded to, will give relief ... I decide this
relief against the failure of the tenant to case upon the principles on which, Lord
give notice of renewal within the stipulated Thurlow decided (Bayley v. The
time. the law is accurately stated in Corporation of Leominster 1792, 1 Ves.
Halsbury's Laws of England, 3rd ed.,vol. 476), and I hope now, it will be known,
23, p. 626, Art. 1329, footnote (u) that it is expected, these covenants shall be
thus :--"Relief will not be given in equity literally performed where it can be done;
against failure to give notice in time, save and that Equity will interpose, and go
under special circumstances. The decided beyond the stipulations of the covenant at
cases show that in such cases relief is not law, only where a literal performance has
given in equity save upon the ground of been prevented by the means,-I have
unavoidable accident, fraud, surprise, mentioned, and no injury is done to the
ignorance not wilful or inequitable conduct lessor?' We are of the opinion that the
on the part of the lessor precluding him stipulation as to time in clause 3 (c) of the
from refusing to give the renewal. The indenture of lease dated February 17, 1954
limits of the equitable interference in such should be regarded as of the essence of the
cases were clearly stated by the Master of contract." The appellant not 'having
the Rolls (Sir R.P.Arden) in Eaton v. exercised the option of renewal within the
Lyon.(3) He observed :- "At law a time limited by the 'clause is not entitled to
covenant must be strictly and literally a renewal.
performed; in equity it must be really and
substantially.
The appellant claims relief against the
consequences of its default on the grounds
performed according to the true intent and enumerated in paragraphs 13 and 14 of the
meaning of the parties so far as plaint. Grounds (b) and (e) cannot be
circumstances will admit; but if regarded as special circumstances. As. to
unavoidable accident, if by fraud, by ground (d), it is. not shown that the service
surprise or ignorance not wilful, parties station is of immense public utility. The
may have been prevented from executing it fact that the appellant constructed a service
literally, a Court of Equity, will interfere; station is an irrelevant consideration.
and upon compensation bei ng made, the Ground (c) is not established and it is not
party having done everything in his power, 'shown that the time is not of the essence
of the bargain. As to ground (a) there is stipulated time. Equity will not relieve the
some evidence to show that the delay in tenant from the consequences of his own
giving the notice of renewal was due to neglect which could well be avoided with
oversight. But it is not shown that the reasonable diligence.
delay was due to any unavoidable
The appeal is dismissed with costs.
accident, excusable ignorance, fraud or
surprise. The delay arose from mere
neglect on the part of the appellant and
could have been avoided by reasonable
IMPOSSIBILITY EXISTING AT THE
diligence. As observed 'by the Master of
TIME OF CONTRACT
the Rolls in Reid & Anr. v. Grave &
Others(1): "The rule is now well
established, that no accident will entitle a
party to renew unless it be unavoidable. I
am of opinion, that nothing but accident, COUTURIER
which, could not have been avoided by V
reasonable diligence, will entitle the
HASTIE
plaintiff to a renewal in this Court."

We may add that where no time is fixed

for the purpose, an application for renewal [1856] INT.COM.L.R. 06/26
for the lease may be made within a
reasonable time before the expiry of the
term (see Foa's General Law of Landlord BENCH

& Tenant, 8th ed., article 455, pp. 311-12, MR. BARON ALDERSON, MR.
Ram Lal (1) 9 L.J. Ch, 245, 248. JUSTICE WIGHTMAN, MR.

Dubey v. Secretary of State for India (1), JUSTICE CRESWELL, MR. JUSTICE

Maharani Hemanta Kumari Devi v. ERLE, MR. JUSTICE

Safatulla Biswas & Ors.(2). In the present

case, the lease fixes a time within which
FACTS
the application for renewal is to be made.
The time so fixed is of the essence of the The Plaintiffs were merchants at Smyrna;
bargain. The tenant loses his right unless the Defendants were cornfactors in
he makes the application within the London; and this action was brought to
recover from them the price of a cargo of "Bought of Hastie and Hutchinson, a
Indian corn, which had been shipped at cargo of about 1180 (say eleven hundred
Salonica, on board a vessel chartered by and eighty) quarters of Salonica Indian
the Plaintiffs for a voyage to England, and corn,
had been sold in London by the
of fair average quality when shipped per
Defendants in Error, upon a del credere
the Kezia Page, Captain Page, from
commission. The purchaser, under the
Salonica; bill of lading dated twenty-
circumstances hereafter stated, had
second February, at 27s. (say twenty-
repudiated the contract. In January 1848,
seven shillings) per quarter, free on board,
the Plaintiffs chartered a vessel at
and including freight and insurance, to a
Salonica, to bring a cargo of 1180 quarters
safe port in the United Kingdom, the
of corn to England. On the 8th of February
vessel calling at Cork or Falmouth for
a policy of insurance was effected on
orders; measure to be calculated as
"corn, warranted free from average, unless
customary; payment at two months from
general, or the ship be stranded." On the
this date, or in cash, less discount, at the
22nd of that month, the master signed a
rate of five per cent per annum for the
bill of lading, making the corn deliverable
unexpired time, upon handing shipping
to the Plaintiffs, or their assigns, "he or
documents."
they paying freight, as per charterparty,
with primage and average accustomed." In the early part of the homeward voyage,

On the 23d February the ship sailed on the the cargo became so heated that the vessel

homeward voyage. On the 1st May 1848, was obliged to put into, Tunis, where, after

Messrs. Bernouilli, the London agents of a survey and other proceedings, regularly

the Plaintiffs, and the persons to whom the and bona fide taken, the cargo was, on the

bill of lading had been indorsed, employed 22d April, unloaded and sold. It did not

the Defendants to sell the cargo, and sent appear that either party knew of these

them the bill of lading, the charterparty, circumstances: at the time of the sale. The

and the policy of insurance, asking and contract having been made on the 15th of

receiving thereon an advance of £600. May, Mr. Callander, on the 23d of May,
wrote to Hastie and Hutchinson: "I
On the 15th May the Defendants sold the
repudiate the contract of the cargo of
cargo to A. B. Callander, who signed a
Indian corn, per the Kezia Page, on the
bought note, in the following terms:
ground that the cargo did not exist at the
date of the contract, it appearing that the
news of the condemnation and sale of this this contract was made, the Plaintiffs could
cargo, at Tunis, on the 22d April, was not recover in the action. He therefore
published at Lloyd's, and other papers, on directed a verdict for the Defendants. The
the 12th instant, being three to four days case was afterwards argued in the Court of
prior to its being offered for sale to, me." Exchequer before the Lord Chief Baron,
Mr. Baron Parke, and Mr. Baron Alderson,
The Plaintiffs afterwards brought this
when the learned Judges differed in
action. The declaration was in the usual
opinion, and a rule was drawn up directing
form. The Defendants pleaded several
that the verdict found for the Defendants
pleas, of which the first four are not now
should be set aside on all the pleas except
material to be considered. The fifth plea
the sixth, and that on that plea judgment
was that before the sale to Callander, and
should be entered for the Plaintiffs, non
whilst the vessel was on the voyage, the
obstante veredicto. That the Defendants
Plaintiffs sold and delivered the corn to
should be at liberty to treat the decision of
other persons, and that since such sale the
the Court as the ruling at Nisi Prius, and to
Plaintiffs never had any property in the
put it on the record and bring a. bill of
corn or any right to sell or dispose thereof,
exceptions (8 Exch. 40). This was done,
and that Callander on that account
and the Lord Chief Baron sealed the bill of
repudiated the sale, and refused to perform
exceptions, adding, however, a
his contract, or to pay the price of the corn.
memorandum to the effect that he did so as
Sixthly, that before the Defendants were
the ruling of the Court, but that his own
employed by the Plaintiffs, the corn had
opinion was in opposition to such ruling.
become heated and greatly damaged in the
vessel, and had been unloaded by reason The case was argued on the bill of
thereof, and sold and disposed of by the exceptions in the Exchequer Chamber,
captain of the said vessel on account of the before Justices Coleridge, Maule,
Plaintiffs at Tunis, and that Callander, for Creswell, Wightman, Williams, Talfourd,
that reason, repudiated the sale, etc. and Crompton, who were unanimously of
opinion that the judgment of the Court of
The cause was tried before Mr. Baron
Exchequer ought to be reversed (9 Exch.
Martin, when his Lordship ruled, that the
102). The present writ of error was then
contract imported that at the time of the
brought.
sale, the corn was in existence as such, and
capable of delivery, and that as it had been
sold and delivered by the captain before
The purchaser bought in fact the shipping they are shipped "to arrive," which saves
documents, the rights and interests of the the vendee from all risk till they are safely
vendor. A brought to port. The intention of the
parties is understood to be declared by
contract of such a kind is valid, Paine v.
different terms of expression, and the
Meller. The language of the contract
judgment of the Exchequer Chamber here
implies all this. The representation that the
really violates that intention.
corn was shipped free on board at
Salonica, means that the cargo, was the As Lord Chief Baron Richards said, in
Hitchcock v. Giddings (4 Price, 135), " If a
property of, and at the risk of the shipper.
man will make a purchase of a chance, he
The Court of Exchequer proceeded on the
must abide by the consequences." Here,
words of this contract and gave the correct
however, the chance was only that of the
meaning to them. Mr. Baron Parke said,
arrival of the cargo, and that chance was
"There is an express engagement that the
covered by the policy, for the cargo, itself,
cargo was of average quality when
as stated in the contract, had been actually
shipped, so that it is clear that the
shipped. Had the cargo been damaged at
purchaser was to run the risk of all
the time of this contract, the loss thereby
subsequent deterioration by sea damage
arising must have been borne by the
or otherwise, for which he was to be
purchaser. Suppose the corn had been
indemnified by having the cargo fully
landed at Tunis, and had remained in the
insured; for the 27s. per quarter were to
warehouse there, it would have ceased to
cover not merely the price, but all
be a cargo in the strict and literal meaning
expenses of shipment, freight, and
of the word, but the purchaser would still
insurance." In a contract for the sale of
have been bound by his contract.
goods afloat, there are two periods which
are important to be regarded, the time of There was a total loss, and the Plaintiff
sale and the time of arrival. If at the time recovered on the policy, it is difficult to
of the sale there is anything on which the understand how such an opinion could be
contract can attach it is valid, and the entertained. A technical objection arising
vendee bound. on the form of the policy would not affect
this question. The contract here was, that
The goods are either shipped, as here, "free
the cargo was shipped "free on board." To
on board," when it is clear that they are
that extent the vendor was bound, but he
thenceforward at the risk of the vendee, or
was not bound by any farther and implied
warranty. The Lord Chancellor: My wrong; and I am also of that opinion
Lords, this case has been very fully and myself now, having been one of the Judges
ably argued on the part of the Plaintiffs in before whom the case came to be heard in
Error, but I understand from an intimation the Court of Exchequer.
which I have received, that all the learned
The Lord Chancellor: My Lords, that
Judges who are present, including the
being so, I have no hesitation in advising
learned Judge who was of a different
your Lordships, and at once moving that
opinion in the Court of Exchequer, before
the judgment of the Court below should be
the case came to the Exchequer Chamber,
affirmed. It is hardly necessary, and it has
are of opinion that the judgment of the
not ordinarily been usual for your
Court of Exchequer Chamber sought to be
Lordships to go much into the merits of a
reversed by this writ of error was a correct
judgment which is thus unanimously
judgment, and they come to that opinion
affirmed by the Judges who are called in to
without the necessity of hearing the
consider it, and to assist the House in
counsel for the Defendants in Error.
forming its judgment. But I may state
If I am correct in this belief, I will not shortly that the whole question turns upon
trouble the learned counsel for the the construction of the contract, which was
Defendants in Error to address your entered into, between the parties. I do not
Lordships, because I confess, though I mean to deny that many plausible and
should endeavour to, keep my mind ingenious arguments have been pressed by
suspended till the case had been fully both the learned counsel who have
argued, that my strong impression in the addressed your Lordships, showing that
course of the argument has been, that the there might have been a meaning attached
judgment of the Court of Exchequer to that contract different from that which
Chamber is right. I the words themselves impart. If this had
depended not merely upon the construction
should therefore simply propose to ask the
of the contract but upon evidence, which,
learned Judges, whether they agree in
if I recollect rightly, was rejected at the
thinking that that judgment was right. Mr.
trial, of what mercantile usage had been, I
Baron Alderson said: My Lords, Her
should not have been prepared to say that a
Majesty's Judges are unanimously of
long continued mercantile usage
opinion that the judgment of the
interpreting such contracts might not have
Exchequer Chamber was right, and that the
been sufficient to warrant, or even to
judgment of the Court of Exchequer was
compel your Lordships to adopt a different BENCH
construction. But in the absence of any
BLACKBURN J
such evidence, looking to the contract
itself alone, it appears to me clearly that FACTS

what the parties contemplated, those who Caldwell & Bishop owned Surrey Gardens
bought and those who sold, was that there & Music Hall, and agreed to rent it out to
was an existing something to be sold and Taylor & Lewis for £100 a day. Taylor had
bought, and if sold and bought, then the planned to use the music hall for four
benefit of insurance should go with it. I do concerts and day and evening fetes on
not feel pressed by the latter argument, Monday 17 June, Monday 15 July,
which has been brought forward very ably Monday 5 August, and Monday 19 August
by Mr. Wilde, derived from the subject of 1861. They were going to provide a variety
insurance. I think the full benefit of the of extravagant entertainments including a
insurance was meant to go as well to losses singing performance by Sims Reeves, a
and damage that occurred previously to the thirty-five to forty-piece military and
15th of May, as to losses and damage that quadrille band, al fresco entertainments,
occurred subsequently, always assuming minstrels, fireworks and full illuminations,
that something passed by the a ballet or divertissement, a wizard and

contract of the 15th of May. If the contract Grecian statues, tight rope performances,

of the 15th of May had been an operating rifle galleries, air gun shooting, Chinese

contract, and there had been a valid sale of and Parisian games, boats on the lake, and

a cargo at that time existing, I think the aquatic sports.

purchaser would have had the benefit of According to the contract the parties had
insurance in respect of all damage signed, the defendants were to provide
previously occurring. most of the British performers. Taylor &
Lewis agreed to pay one hundred pounds
sterling in the evening of the day of each
TAYLOR
concert by a crossed cheque, and also to
V find and provide, at their own cost, all the
necessary artistes for the concerts,
CALDWELL
including Mr. Sims Reeves. Then, on 11
[1863] EWHC QB J1 June 1861, a week before the first concert
was to be given, the music hall burned to
the ground. The plaintiffs sued the music code of France and the Roman law for the
hall owners for breach of contract for proposition that when the existence of a
failing to rent out the music hall to them. particular thing is essential to a contract,
There was no clause within the contract and the thing is destroyed by no fault of
itself which allocated the risk to the the party selling it, the parties are freed
underlying facilities, except for the phrase from obligation to deliver the thing. He
"God's will permitting" at the end of the further analogized to a situation in which a
contract. contract requiring personal performance is
made, and the party to perform dies, the
JUDGMENT
party's executors are not held liable under
Judge Blackburn began his opinion by English common law. Blackburn J thus
stating that the agreement between the held that both parties were excused from
parties was a contract, despite their use of their obligations under their contract.
the term "lease". Under the common law
IMPORTANCE
of property in England at the time, under a
lease the lessee would obtain legal Until this case, parties in a contract were
possession of the premises during the lease held to be absolutely bound and a failure to
period, while the contract at issue in this perform was not excused by radically
case specified that legal possession would changed circumstances. Instead, the
remain with the defendants. contract was breached and gave rise to a
claim for damages. This ruling, though
Blackburn J reasoned that the rule of
quite narrow, opened the door for the
absolute liability only applied to positive,
modern doctrine of contract avoidance by
definite contracts, not to those in which
impracticability.
there was an express or implied condition
underlying the contract.

Blackburn J further reasoned that the KRELL

continued existence of the Music Hall in
V
Surrey Gardens was an implied condition
essential for the fulfilment of the contract. HENRY

The destruction of the music hall was the [1903] 2 KB 740

fault of neither party, and rendered the
performance of the contract by either party
impossible. Blackburn J cited the civil BENCH
 VAUGHAN WILLIAMS LJ, ROMER viz., 50l., to complete the 75l. agreed
LJ AND STIRLING LJ upon.

FACTS The defendant received the following reply

from the plaintiff's solicitor:
The defendant, CS Henry, agreed by
contract on 20 June 1902, to rent a flat at I am in receipt of your letter of to-day's
56A Pall Mall from the plaintiff, Paul date inclosing cheque for 25l. deposit on
Krell, for the purpose of watching the your agreeing to take Mr. Krell's
coronation procession of Edward VII chambers on the third floor at 56A, Pall
scheduled for 26 and 27 June. The Mall for the two days, the 26th and 27th
housekeeper of the premises had informed June, and I confirm the agreement that
Henry that he would have an excellent you are to have the entire use of these
view of the procession from the room. rooms during the days (but not the nights),
the balance, 50l., to be paid to me on
Desiring to secure the rental of Krell's flat
Tuesday next the 24th instant.
for the purpose of observing the coronation
procession, Henry wrote the following The parties agreed on a price of £75, but
letter to Krell's solicitor: nowhere in their written correspondence
mentioned the coronation ceremony
I am in receipt of yours of the 18th instant,
explicitly. Henry paid a deposit of £25 to
inclosing form of agreement for the suite
Krell for the use of the flat, but when the
of chambers on the third floor at 56A, Pall
procession did not take place on the days
Mall, which I have agreed to take for the
originally set, on the grounds of the King’s
two days, the 26th and 27th instant, for the
illness, Henry refused to pay the remaining
sum of 75l. For reasons given you I cannot
£50. Krell brought suit against Henry to
enter into the agreement, but as arranged
recover the remaining balance of £50, and
over the telephone I enclose herewith
Henry countersued to recover his deposit
cheque for 25l. as deposit, and will thank
in the amount of £25.
you to confirm to me that I shall have the
entire use of these rooms during the days JUDGMENT
(not the nights) of the 26th and 27th
Darling held in the initial case that there
instant. You may rely that every care will
was an implied condition in the contract,
be taken of the premises and their contents.
using Taylor v. Caldwell and The
On the 24th inst. I will pay the balance,
Moorcock, and gave judgment for the
defendant on both the claim and the
counterclaim. The Court of Appeal He then determined that given the
dismissed the plaintiff's appeal. affidavits of the parties, Krell had granted
Henry a licence to use the rooms for a
Lord Justice Vaughan Williams framed the
particular purpose: watching the
legal question in this case as whether there
coronation. He analogized the situation to
was an implied condition to the contract:
one in which a man hired a taxicab to take
whether or not while the contract was
him to a race. If the race did not occur on
made, the two parties knew that the reason
the particular day the passenger had
behind the contract was for Henry to watch
thought, he would not be discharged from
the coronation procession.
paying the driver. However, unlike the
The principle that an implied condition situation in the case, the cab did not have
that ceases to exist voids the contract any special qualification, as the room did,
stems from the case of Taylor v Caldwell, its view of the street. Furthermore, the
which, in turn, was borrowed from Roman cancellation of the coronation could not
law. The principle was extended, in later reasonably have been anticipated by the
cases, to situations in which an underlying parties at the time the contract was made.
condition that was essential to the
Romer LJ said,
performance of the contract, rather than
simply being a necessary condition, ceases With some doubt I have also come to the
to exist. conclusion that this case is governed by
the principle on which Taylor v Caldwell
Vaughan Williams LJ held that such a
was decided, and accordingly that the
condition (here, the timely occurrence of
appeal must be dismissed. The doubt I
the coronation proceeding) need not be
have felt was whether the parties to the
explicitly mentioned in the contract itself
contract now before us could be said,
but rather may be inferred from the
under the circumstances, not to have had
extrinsic circumstances surrounding the
at all in their contemplation the risk that
contract. Thus, the parol evidence rule was
for some reason or other the coronation
inapplicable here.
processions might not take place on the
Firstly, he examined the substance of the days fixed, or, if the processions took
contract, and then determined whether the place, might not pass so as to be capable
contract was founded on the assumption of of being viewed from the rooms mentioned
the existence of a particular state of affairs. in the contract; and whether, under this
contract, that risk was not undertaken by
the defendant. But on the question of fact 1954 AIR 44, 1954 SCR 310
as to what was in the contemplation of the
parties at the time, I do not think it right to
differ from the conclusion arrived at by SUPREME COURT OF INDIA

Vaughan Williams L.J., and (as I gather)

also arrived at by my brother Stirling. This
being so, I concur in the conclusions
arrived at by Vaughan Williams L.J. in his BENCH
judgment, and I do not desire to add
MUKHERJEA, B.K.
anything to what he has said so fully and
completely.
FACTS
Stirling LJ concurred.
The facts giving rise to this appeal are, for
the most part, uncontroverted and the
dispute between the parties centres round
the short point as to whether a contract for
sale of land to which this litigation relates,
was discharged and came to an end by
reason of certain supervening
circumstances which affected the
performance of a material part of it.

JUDGEMENT

To appreciate the merits of controversy, it

DOCTRINE OF FRUSTRATION
will be necessary to give a brief narrative
of the material facts. The defendant
company, which is the main respondent in
this appeal, is the owner of a large tract of
SATYABRATA GHOSE land situated, in the vicinity of the
Dhakuria Lakes within Greater Calcutta.
VS
The company started a scheme for
MUGNEERAM BANGUR
development of this land for residential
purposes which was described as Lake
Colony Scheme No. I and in furtherance of him or his nominee 5 K. more or less in
the scheme the entire area was divided into plot No. 76 on 20 and 30 ft. Road in
a large number of plots for the sale of Premises No. Lake Colony Scheme No. 1,
which offers were invited from intending Southern Block at the average rate of Rs.
purchasers. The company's plan of work 1,000 (Rupees one thousand only) per
seemed to be, to enter into agree- ments Cotta. The conveyance must be completed
with different purchasers for sale of these within one month from the date of
plots of land and accept from them only a completion of roads on payment of the
small portion of the con- sideration money balance of the consideration money, time
by way of earnest at the time of the being deemed as the Essence of the
agreement. The company undertook to Contract. In case of default this agreement
construct the roads and, drains necessary will be considered as cancelled with
for making the lands suitable for building forfeiture of earnest money. Mokarari
and residential purposes and as soon as Mourashi Terms of payment:One third to
they were completed. the purchaser would be paid at the time of registration and the
be called upon to complete the conveyance balance within six years bearing Rs. 6 per
by payment of the balance of the cent. interest per annum".
consideration money. Bejoy Krishna Roy,
On 30th November, 1941, the plaintiff
who was defendant in the suit and figures
appellant was made a nominee by the
as a pro forma respondent in this appeal,
purchaser for purposes of the contract and
was one of such purchasers who entered
although he brought the present suit in the
into a contract with the company for
character of a nominee, it has been held by
purchase of a plot of land covered by the
the trial judge as well as by the lower
scheme. His contract is dated the 5th of
appellate court, that he was really an
August, 1940, and he paid Rs. 101 as
assignee of Bejoy Krishna Roy in respect
earnest money. In the receipt granted by
to the latter's rights under the contract.
the vendor for this earnest money, the
Some -time before this date, there was an
terms of the agreement are thus set out --
order passed by the Collector, 24-
"Received with thanks from Babu Bejoy Parganas, on 12th of November, 1941
Krishna Roy of 28 Tollygunge Circular under section 79 of the Defence of India
Road, Tollygunge, the sum of Rs. 101 Rules, on the strength of which a portion
(Rupees one hundred and one only) as of the land covered by the scheme was
earnest money having agreed to sell to requisitioned for military purposes.
Another part of the land was requisitioned circumstances might permit, after the
by the Government on 20th of December termination of the war.
1941. while a third order of requisition,
The letter ended by saying that in the event
which related to the balance of the land
of the addressee not accepting either of the
comprised in the scheme, was passed
two alternatives, the agreement would be
sometime later. In November, 1943, the
deemed to be cancelled and the earnest
company addressed a letter to Bejoy
money would stand forfeited. This letter
Krishna Roy informing him of the
was handed over by Bejoy Krishna to his
requisitioning of the lands by the
nominee, the plaintiff, and there was some
Government and stating inter alia that a
correspondence after that, between the
considerable portion of the land-
plaintiff on the one hand and the company
appertaining to the scheme was taken
on the other through their respective
possession of by the Government and there
lawyers into the details of which it is not
was no knowing how long the Government
necessary to enter. It is enough to state that
would retain possession of the same. The
the plaintiff refused to accept either of the
constructs of the proposed roads and
two alternatives offered by the company
drains, therefore, could not be taken up
and stated categorically that the latter was
during the continuance of the war and
bound by the terms of the agreement from
possibly for many years after its
which it could not, in law, resile. On 18th
termination. In these circumstances, the
of January, 1946, the suit, out of which
company decided to treat the agreement
this appeal arises, was commenced by the
for sale with the addressee as cancelled
plaintiff against the defendant company, to
and give him the option of taking back the
which Bejoy Krishna Roy was made a
earnest money within one month from the
party defendant and the prayers in the
receipt of the letter. There was offer made
plaint were for a two-fold declaration,
in the alternative that in case the purchaser
namely, -
refused to treat the contract as cancelled,
he could, if he liked, complete the (1) that the contract dated the 5th of

conveyance within one month from the August 1940, between the first and the

receipt of the letter by paying the balance second defendant, or rather his nominee,

of the consideration money and take the the plaintiff, was still subsisting; and

land in the condition in which it existed at (2) that the plaintiff was entitled to get a
that time, the company undertaking to conveyance executed and registered by the
construct the roads and the drains, as
defendant on payment of the consideration Gupta and Lahiri JJ. The only question
money mentioned in the agreement and in canvassed before the High Court was,
the manner and under the conditions whether the contract of sale was frustrated
specified therein. by reason of the requisition orders issued
by the Government? The learned Judges
The suit was resisted by the defendant
answered this question in the affirmative in
company who raised a large number of
favour of the defendant and on that ground
defences in answer to the plaintiff's claim,
alone dismissed the plaintiff's suit. The
most of which are not relevant for our
plaintiff has now come before us on the
present purpose. The principal contentions
strength of a certificate granted by the
raised on behalf of the defendant were that
High Court under article 133(I)(c) of the
a suit of this description was not
Constitution of India. The learned
maintainable under section 42 of the
Attorney General, who appeared in support
Specific Relief Act and that the plaintiff
of the appeal, has put forward a three-fold
had no locus standi to institute the suit.
contention on behalf of his client. He has
The most material plea was that the
contended in the first place that the
contract of sale stood discharged by
doctrine of English law relating to
frustration as it became impossible by
frustration of contract, upon which the
reason of the supervening events to
learned Judges of the High Court based
perform a material part of it. Bejoy
their Decision has no application to India
Krishna Roy did not file any written
in view of the statutory provision
statement and he was examined by the
contained in section 56 of the Indian
plaintiff as a witness on his behalf.
Contract Act. it is argued in the second
The trial judge by his judgment dated 10th place, that even if the English law Applies,
October, 1.947, overruled all the pleas it can have no application to contracts for
taken by the defendant and decreed the sale of land and that is in fact the opinion
plaintiff's suit. An appeal taken by the expressed by the English judges
defendant to the Court of the District themselves. His third and the last argument
Judge of 24-Parganas was dismissed on the is that on the admitted faacts and
25th February 1949, and the judgment of circumstances of this case there was no
the trial court was affirmed. The defendant frustrating event which could be said to
company thereupon preferred a second have taken away the basis of the contract
appeal to the High Court which was heard or tendered its performance impossible in
by a Division Bench consisting 'of Das any sense of the word.
The first argument advanced by the England. It speaks of something which is
learned AttorneyGeneral raises a impossible inherently or by its very nature,
somewhat debatable point regarding the and no one can obviously be directed to an
true scope and effect of section 56 of the act. The second paragraph enunciates the
Indian Contract Act and to what extent, if law relating to discharge of contract by
any, it incorporates the English rule of reason of supervening impossibility or
frustration of contracts. illegality of the act agreed to be done. The
wording of this paragraph is quite general,
Section 56 occurs in Chapter IV of the
and though the illustrations attached to it
Indian Contract Act which relates to
are not at all happy, they cannotderogate
performance of contracts and it purports
from the general words used in the
to deal with one circumstances under
enactment. This much is clear that the
which performance of a, contract is
word "impossible" has not been used here
excused or dispensed with on the ground
in the sense of physical or literal
of the contract being-void. The section
impossibility. The performance of an act
stands as follows: "An agreement to do an
may not be literally impossible but it may
act impossible in itself is void. A contract
be impracticbale and useless from the
to do an act which after the contract is
point of view of the object and purpose
made, becomes impossible, or, by reason
which the parties had in view and if an
of some event which the promiser could
untoward event or change of
not prevent, unlawful, becomes void when
circumstances totally upset the very
the act becomes impossible or unlawful.
foundation upon which the parties rested
Where one person has promised to do their bargain, it can very well be said that
something which he knew, or, with the promisor found it impossible to do the
reasonable diligence, might have known, act which he promised to do. Although
and which the promisee did not know to be various theories have been propounded by
impossible or unlawful, such promisor the Judges and jurists in England regarding
must make compensation to such promisee the juridical basis of the doctrine of
for any loss which such promise sustains frustration, yet the essential idea upon
through the non-performance of the which the doctrine is based is that of
promise". impossibility of performance of the

The first_paragraph of the section lays contract: in fact impossibility and

down the law in the same way as in frustration are often used as
interchangeable expressions. The changed
circumstances, it is said, make the Ali J., in speaking about frustration,
performance of the contract impossible observed in his judgment as follows:
and the parties are absolved from the
"It seems necessary for us to emphasise
further performance of it as they did not
that so far as the courts in this country are
promise to perform an impossibility The
concerned, they must loot primarily to the
parties shall be excused, as Lord Loreburn
law as embodied in sections 32 and 56 of
says(1), "if substantially the whole
the Indian Contract Act, 1872."
contract becomes impossible of
performance or in other words We hold, therefore, that the doctrine of

impracticable by some cause for which frustration is really an aspect or part of the

neither was responsible,." law of discharge of contract by reason of

supervening impossibility or illegality of
the act agreed to be done and hence comes
In Joseph Constantine Steamship Line within the purview of section 56 of the
Limited v. Imperial Smelting Corporation Indian Contract Act. It would be incorrect
Ltd., Viscount Maugham obseryed that the to say that section 56 of the Contract Act
"doctrine of frustration is only a special applies only to cases of physical
case of the discharge of contract by an impossibility and that where this section is
impossibility of performance arising after not applicable, recourse can be had to the
the contract was made." Lord Porter principles of English law on the subject of
agreed with this view and rested the frustration. It must be held also that to the
doctrine on the same basis. The question extent that the Indian Contract Act deals
was considered and discussed by a with a particular subject, it is exhaustive
Division Bench of the Nagpur High Court upon the same and it is not permissible to
in Kesari Chand v. Governor- General in import the principles of English law
Council and it was held that the doctrine of dehors these statutory provisions. The
frustration comes into play when a contract decisions of the English courts possess
becomes impossi- ble of performance, only a persuasive value and may be helpful
after it is made, on account of circum- in showing how the courts in England have
stances beyond the control of the parties. decided cases under circumstances similar
The doctrine is a special case of to those which have come before our
impossibility and as such comes under courts.
section 56 of the Indian Contract Act.
It seems necessary however to clear up excused her and that the contract was in its
some misconception which is likely to nature not absolute but conditional upon
arise because of the complexities of the her being well enough to perform.
English law on the subject. The law of Bramwell B. pointed out in course of his
frustration in England developed, as is judgment that in holding that the illness of
well known, under the guise of reading the defendant incapaciated her from
implied terms into contracts. The court performing the agreement the court was
implies a term or exception and treats that not really engrafting a new term upon an
as part of the contract. In the case of express contract. It was not that the
Taylor v. Caldwell, Blackburn J. first obligation was absolute in the original
formulated the doctrine in its modern agreement and a new condition was
form. The court there was dealing with a subsequently added to it; the whole
case where a music hall in which one of question was whether the original contract
the contracting parties had agreed to give was absolute or conditional and having
concerts on certain specified days was regard to the terms of the bargain, it must
accidentally burnt by fire. It was held that be held to be conditional.
such a contract must be regarded "as
The English law passed through various
subject to an implied condition that the
stages of development since then and the
parties shall be excused, in case, before
principles enunciated in the various
breach, performance becomes impossible
decided authorities cannot be said to be in
from perishing of the thing without default
any way uniform. In many of the
of. the contractor." Again in Robinson v.
pronouncements of the highest courts in
Davison there was a contract between the
England the doctrine of frustration was
plaintiff and the defendant's wife (as the
held "to be a device by which the rules as
agent of her husband) that she should play
to absolute contracts are reconciled with a
the piano at a concert to be given by the
special exception which justice demands".
plaintiff, on a specified day. On the day in
The court, it is said, cannot claim to
question she was unable to perform
exercise a dispensing power or to modify
through illness. The contract did not
or alter contracts. But when an unexpected
contain any term as to what was to be done
event or change of circumstance occurs,
in case of her being too ill to perform. In
the possibility of which the parties did not
an action against the defendant for breach
circumstance occurs, the possibility
of contract, it was held that the wife's
contract is taken to be not what the parties
illness and the consequent incapacity
actual intended, but what they as fair and In the recent case of British Movietonews
reasonable men would presumably have Ltd. v. London and District Cinemas Ltd.
intended and agreed upon, if having such (1), Denning L. J. in the Court of Appeal
possibility in view they had made express took the view expressed by Lord Wright as
provsion as to their rights and stated above as meaning that "the court
really exercises a qualifying power-a
"In ascertaining the meaning of the
power to qualify the absolute., literal or
contract and its application to the actual
wide terms of the contract in order to do
occurrences, the court has to decide, not
what is just and reasonable in the new
what the parties actually intended but what
situation".
as reasonable men they should have
intended. The court personifies for this The learned Judge went on to say, "when
purpose the reasonable man.", where he we can excuse an unforeseen injustice by
made the following observations: saying to the sufferer 'it is your own folly,
you ought not to have passed that form of
"Though it has been constantly said by
words. You ought to have put in a clause
high authority, including Lord Sumner,
to protect yourself'. We no longer credit a
that the explanation of the rule is to be
party with the foresight of a Prophet or his
found in the theory that it depends on an
lawyer with the draftsmanship of a
implied con- dition of the contract, that is
Chalmers. We realise that they have their
really no explanation. It only pushes back
limitations and make allowances accor-
the problem a single stage. It leaves the
dingly. It is better thus. The old maxim
question what is the reason for implying a
reminds us that he who clings to the letter
term. Nor can I reconcile that theory with
clings to the dry and barren shell and
the view that the result does not depend on
misses the truth and substance of the
what the parties might, or would, as hard
matter. We have of late paid heed to this
bargainers, have agreed. The doctrine is
warning, and we must pay like heed now."
invented by the court in order to
supplement the defects of the actual This decision of the Court of Appeal was
contract...... To my mind the theory of the reversed by the House of Lords and
implied condition is not really consistent Viscount Simon in course of his judgment
with the true theory of frustration. It has expressed disapproval of the way in which
never been acted on by the court as a the law was stated by Denning L.J. It was
ground of decision but is merely stated as a held that there was no change in the law as
theoretical explanation." a result of which the courts could exercise
a wider power in this regard than they used and whether or not there as a condition in
to do previously. "The principle remains the contract itself, express or implied,
the same", thus observed his Lordship. which operated, according to the
"Particular applications of it may greatly agreement of the Parties themselves to
vary and theoretical lawyers may debate release them from their obligations; this
whether the rule should be regarded as would be a question of construction pure
arising from implied term or because the and simple and the ordinary rules of
basis of the contract no longer exists. In construction would have to be applied to
any view, it is a question of construction as find out what the real intention of the
Lord Wright pointed out in Constantine's parties was. According to the Indian
case and as has been repeatedly asserted Contract Act, a promise may be express or
by other masters of law." These implied. In cases, therefore, where the
differences in the way of formulating legal court gathers as a matter of construction
theories really do not concern us so long as that the contract itself contained impliedly
we have a statutory provision in the Indian or expressly a term, according to which it
Contract Act. In deciding cases in India the would stand discharged on the happening
only doctrine that we have to go by is that of certain circumstances the dissolution on
of supervening impossibility or illegality of the contract would take place under the
as laid down in section 56 of the Contract terms of the contract itself and such cases
Act taking the word "Impossible" in its would be outside the purview of section 56
practical and not literal sense. It must be altogether. Although in English law these
borne in mind, however, that section 56 cases are treated as cases of frustration, in
lays down a rule of positive law and does India they would be dealt with under
not leave the matter to be determined section 32 of the Indian Contract Act
according to the intention of the parties. which deals with contingent contracts or
similar other provisions contained in the
In the latest decision of the House of Lords
Act. In the large majority of cases however
referred to above, the Lord Chancellor puts
the doctrine of frustration is applied not on
the whole doctrine upon the principle of
the ground that the parties themselves
construction. But the question of
agreed to an implied term which operated
construction may manifest itself in two
to release them from the performance of
totally different ways. In one class of cases
the contract. The relief is given by the
the question may simply be, as to what the
court on the ground of subsequent
parties themselves had actually intended
impossibility when it finds that the whole
purpose or basis of a contract was It must be pointed out here that if the
frustrated by the intrusion or occurrence of parties do con- template the possibility of
an unexpected event or change of an intervening circumstance which might
circumstances which was beyond what affect the performance of the contract, but
was contemplated by the parties at the time expressly stipulate that the contract would
when they entered into the agreement. stand despite such circumstances, there can
Here there is no question of finding out an be no case of frustration because the basis
implied term agreed to by the parties em- of the contract being to demand
bodying a provision for discharge, because performance despite the happening of a
the parties did not think about the matter at particular event, it cannot disappear when
all nor could possibly have any intention that event happens.
regarding it. When such an event or
This being the legal position, a contention
change of circumstance occurs which is so
in the extreme form that the doctrine of
fundamental as to be re- garded by law as
frustration as recognised in English law
striking at the root of the contract as a
does no come at all within the purview of
whole, it is the court which can pronounce
section 56 of the Indian Contract Act
the contract to be frustrated and at an end.
cannot be accepted.. The second
The court undoubtedly has to examine the
contention raised by the Attorney General
contract and the circumstances under
can be disposed of in few words. It is true
which it was made. The belief, knowledge
that in England the judicial opinion
and intention of the parties are evidence,
generally expressed is, that the doctrine of
but evidence only on which the court has
frustration does not operate in the case of
to form its own conclusion whether the
contracts for sale of land. But the reason
changed circumstances destroyed
underlying this view is that under the
altogether the basis of the adventure and
English law as soon as there is a concluded
its underlying object. This may be called a
contract by A to sell land to B at certain
rule of construction by English Judges but
price, B becomes in equity, the owner of
it is certainly not a, principle of giving
the land, subject to his obligation to pay
effect to the intention of the parties which
the purchase money'. On the other hand, A
underlies all rules of construction. This is
in spite of his having the legal estate holds
really a rule of positive law and as such
the same in trust for the purchaser and
comes within the purview of section 56 of
whatever rights he still retains in the land
the Indian Contract Act.
are referable to his right to recover and
receive the purchase money. The rule of rescission of a contract on the ground of
frustration can only put an end to purely repudiation or breach, or on the choice or
contractual obligations, but it cannot election of either party.
destroy an estate in land which has already
of what has actually happened on the
accrued in favour of a contracting party.
possibility of performing the contract.
According to the Indian law, which is
What happens generally in such cases and
embodied in section 54 of the Transfer of
has happened here is that one party claims
Property Act, a contract for sale of land
that the contract has been frustrated while
does not of itself create any interest in the
the other party denies it. The issue has got
property which is the subject-matter of the
to be decided by the court "ex post facto,
contract. The obligations of the parties to a
on the actual circumstances of the case".
contract for sale of land are, therefore, the
We will now proceed to examine the
same as in other ordinary contracts and
nature and terms of the contract before us
consequently there is no conceivable
and the circumstances under which it was
reason why the doctrine of frustration
entered into to determine whether or not
should not be applicable to contracts for
the disturbing element, which is allowed to
sale of land in India. This contention of the
have happened here, has substantially
Attorney General must, therefore, fail.
prevented the performance of the contract
We now come to the last and most as a whole.
important point in this case which raises
It may be stated at the outset that the.
the question as to whether, as a result of
contract before us cannot be looked upon
the requisition orders, under which the
as an ordinary contract for sale and
lands comprised in the development
purchase of a piece of land; it is an integral
scheme of the defendant company were
part of a development scheme started by
requisitioned by Government, the contract
the defendant company and is one of the
of sale between the defendant company
many contracts that have been entered into
and the plaintiff's predecessor stood
by a large number of persons with the
dissolved by frustration or in other words
company. The object of the company was
became impossible of performance.
undoubtedly to develop a fairly extensive
It is well settled and not disputed before us area which was still undeveloped and
that if and when there is frustration the make it usable for residential purposes by
dissolution of the contract occurs making roads and constructing drains
automatically. It does not depend, as does through it. The purchaser. on the other
hand, wanted the land in regard to which and that is probably the reason why no
he entered into the contract to be definite time limit was mentioned in the
developed and make ready for building contract within which the roads and drains
purposes before he could be called upon to are to be completed. This was left entirely
complete the purchase. The most material to the convenience of the company and as
thing which deserves notice is, that there is at matter of fact the purchaser did not feel
absolutely no time limit within which. the concerned about it. It is against this
roads and drains are to be made. The background that we are to consider to what
learned District Judge of Alipore, who extent the passing of the requisition orders
heard the appeal, from the trial court's affected the performance of the contract in
judgment found it as a fact, on the the present case.
evidence in the record, that there was not
an understanding between the parties on
this point. As a matter of fact, the first The company, it must be admitted, bad not

requisition order was passed nearly 15 commenced the development work when

months after the contract was made and the requisition order was passed in

apparently no work was done by the November, 1941. There was no question,

defendant company in the meantime. therefore, of any work or service being

interrupted for an indefinite period of time.
nection is that the war was already on,
Undoubtedly the commencement of the
when the parties entered into the contract.
work was delayed but was the delay going
Requisition orders for taking temporary
to be so great and of such a character that
possession of lands for war purposes were
it would totally upset the basis of the
normal events during this period. Apart
bargain and comercial object which the
from requisition orders there were other
parties had in view? The requisition
difficulties in doing construction work at
orders, it must be remembered, were' by
that time because of the scarcity of
their very nature, of a temporary character
materials and the various restrictions
and the requisitioning authorities could, in
which the Government had imposed in
law, occupy the position of a licensee in
respect of them. That there were certain
regard to the requisitioned property. The
risks and difficulties involved in carrying
order might continue during the whole
on operations like these, could not but be
period of the war and even for some time
in the contemplation of the parties at the
after that or it could have been withdrawn
time when they entered into the contract,
before the war terminated. If there was a
definite time limit agreed to by the parties a period of time not much exceeding 2 or 3
within which the construction work was to years as the time for performance of the
be finished, it could be said with perfect contract; the purchaser also had the same
propriety that delay for an indefinite period period of time in contemplation. The
would make the performance of the learned Judge records his finding on the
contract impossible within the specified point in the following words:
time and this would seriously affect the
"My conclusion on a consideration of the
object and purpose of the venture. But
surrounding circumstances of the contract
when there is no time limit whatsoever in
is that the parties contemplated that the
the contract, nor even an understanding
roads and drains would be constructed and
bet- ween the parties on that point and
the conveyance would be completed in the
when during the war the parties could
not distant future."
naturally anticipate restrictions of various
kinds which would make the carrying on
of these operations more tardy and difficult This finding is inconclusive and goes
than in times of peace, we do not think that contrary to what has been held by the
the order of requisition affected the District Judge who was undoubtedly the
fundamental basis upon which the last court of facts. In our opinion, having
agreement rested or struck at the roots of regard to the nature and terms of the
the adventure. contract, the actual existence of war

The learned Judges of the High Court in conditions at the time when it was entered

deciding the case against the plaintiff into, the extent of the work involved in the

relied entirely on the time factor. It is true development scheme and last though not

that the parties could not contemplate an the least the total absence of any definite

absolutely unlimited period of time to period of time agreed to by the parties

fulfil their contract. They might certainly within which the work was to be

have in mind a period of time which was completed, it cannot be said that the

reasonable having regard to the nature and requisition order vitally affected the

magnitude of the work to be done as well contract or made its performance

as the conditions of war prevailing at that impossible.

time. Das Gupta, J., who delivered the Mr. Gupta, who appeared for the
judgment of the High Court, says first of respondent company. put forward an
all that the company had in contemplation alternative argument that even if the
performance of the contract was not made Act. In our opinion, the events which have
impossible. it certainly became illegal as a happened here cannot be said to have
result of the requisition order and con- made the performance of the contract
sequently the contract became void under impossible and the contract has not been
section 56 of the Indian Contract Act as frustrated at all. The result is that the
soon as the requisition order was made. In appeal is allowed, the judgment and decree
support of his contention the learned of the High Court of Calcutta are set aside
counsel placed reliance upon certain and those of the courts below restored. The
provisions of the Defence of India Rules plaintiff will have his costs in all the
and also upon illustration (d) to section 56 courts.
of the Contract Act. All that the Defence
Regulations show is that the violation of a
requisition order could be punished as a Appeal allowed.

criminal offence. But no matter in

whichever way the requisition order could
FROST
be enforced, in substance it did nothing
else but impose a prohibition on the use of V
the land during the period that it remained
KNIGHT
in force. The effect of such prohibition on
the performance of the contract, we have
discussed above, and we do not think that
the mere fact that the requisition order was
capable of being enforced by a criminal
sanction made any difference in this
respect. In any view this question was not
raised in any of the courts below and has
not been indicated even in the respondent's
statement of the case. We do not think that
it would be proper to allow this question to
be raised for the first time before us, as it
requires consideration of the different
provisions of the Defence of India Act and
also of the implication of illustration (d)
appended to section 56 of the Contract
 thirty guineas, provided he proceeds,
continues and does his duty as second
mate in the said ship from hence to the
port of Liverpool. Kingston, July 31st,
1793.”

Cutter died after seven weeks. It was a ten-

week voyage. The ship left on 2 August,
Cutter died on 20 September and the ship
arrived on 9 October. The ship captain
refused to pay any wages at all. Mrs Cutter
sued to recover the wages for the part of
the journey that the husband had survived.

It was apparent that the usual wages of a

second mate of a ship on such a voyage
was four pounds per month: but when
CUTTER
seamen are shipped by the run from
V Jamaica to England, a gross sum was

POWELL usually given. The usual length of a

voyage from Jamaica to Liverpool was
(1795) 6 TR 320; 101 ER 573
about eight weeks.
BENCH
SUBMISSIONS
LORD KENYON CJ, ASHHURST J,
The arguments for the plaintiff, Mrs
GROSE J, LAWRENCE J
Cutter, went as follows.
FACTS
“The plaintiff is entitled to recover a
Cutter agreed he would sail with Powell proportionable part of the wages on a
from Kingston, Jamaica to Liverpool, quantum meruit for work and labour done
England. The contractual note read as by the intestate during that part of the
follows. voyage that he lived and served the
defendant; as in the ordinary case of a
“Ten days after the ship Governor Parry,
contract of hiring for a year, if the servant
myself master, arrives at Liverpool, I
die during the year, his representatives are
promise to pay to Mr. T. Cutter the sum of
entitled to a proportionable part of his
wages. If any defence can be set up against So if a mariner be impressed, he does not
the present claim, it must arise either from forfeit his wages; for in Wiggins v
some known general rule of law respecting Ingleton Lord Holt held that a seaman,
marine service, or from the particular who was impressed before the ship
terms of the contract between these parties. returned to the port of delivery, might
But there is no such rule applicable to recover wages pro tanto. Neither is there
marine service in general as will prevent any thing in the terms of this contract to
the plaintiff's recovering, neither will it be prevent the plaintiff's recovering on a
found, on consideration, that there is any quantum meruit. The note is a security,
thing in the terms of this contract to defeat and not an agreement; it is in the form of a
the present claim. It is indeed a general promissory note, and was given by the
rule that freight is the mother of wages; master of the ship to the intestate to secure
and therefore if the voyage be not the payment of a gross sum of money, on
performed, and the owners receive no condition that the intestate should be able
freight, the sailors lose their wages; though to, and should actually, perform a given
that has some exceptions where the voyage duty. The condition was inserted to
is lost by the fault of the owners, as if the prevent the desertion of the intestate, and
ship be seized for a debt of the owners, or to ensure his good conduct during the
on account of having contraband goods on voyage. And in cases of this kind, the
board; in either of which cases the sailors contract is to be construed liberally.
are entitled to their wages though the
In Edwards v Child, where the mariners
voyage be not performed. Vin. Abr.
had given bonds to the East India
“Mariners,” 235. But here the rule itself
Company not to demand their wages
does not apply, the voyage having been
unless the ship returned to the port of
performed, and the owners having earned
London, it was held that as the ship had
their freight. There is also another general
sailed to India and had there delivered her
rule, that if a sailor desert, he shall lose his
outward bound cargo, the mariners were
wages: but that is founded upon public
entitled to their wages on the outward
policy, and was introduced as a mean of
bound voyage, though the ship was taken
preserving the ship. But that rule cannot
on her return to England. This note cannot
apply to this case; for there the sailor
be construed literally, for then the intestate
forfeits his wages by his own wrongful act,
would not have been entitled to any thing
whereas here the canon was prevented
though he had lived and continued on
completing his contract by the act of God.
board during the whole voyage, if he had between the parties, they cannot resort to
been disabled by sickness from performing an implied one. It is only because the
his duty. But even if this is to be parties have not expressed what their
considered as a contract between the agreement was that the law implies what
parties, and the words of it are to be they would have agreed to do had they
construed strictly, still the plaintiff is entered into a precise treaty: but when
entitled to recover on a quantum meruit, once they have expressed what their
because that contract does not apply to this agreement was, the law will not imply any
case. The note was given for a specific agreement at all. In this case the intestate
sum to be paid in a given event; but that and the defendant reduced their agreement
event has not happened, and the action is into writing, by the terms of which they
not brought on the note. The parties must now be bound: this is an entire and
provided for one particular case: but there indivisible contract; the defendant engaged
was no express contract for the case that to pay a certain sum of money, provided
has happened; and therefore the plaintiff the intestate continued to perform his duty
may resort to an undertaking which the during the whole voyage; that proviso is a
law implies, on a quantum meruit for work condition precedent to the intestate or his
and labour done by the intestate. For representative claiming the money from
though, as the condition in the note, which the defendant, and that condition not
may be taken to be a condition precedent, having been performed, the plaintiff
was not complied with, the plaintiff cannot cannot now recover any thing. If the
recover the sum which was to have been parties had entered into no agreement and
paid if the condition had been performed the intestate had chosen to trust to the
by the intestate, there is no reason why the wages that he would have earned and
representative of the seaman, who might have recovered on a quantum
performed certain services for the meruit, he would only have been entitled
defendant, should not recover something to 8l.; instead of which he expressly
for the work and labour of the intestate in a stipulated that he should receive thirty
case to which the express contract does not guineas if he continued to perform his duty
apply.” for the whole voyage. He preferred taking
the chance of earning a large sum in the
Arguments on behalf of the defendant.
event of his continuing on board during the
“Nothing can be more clearly established whole voyage to receiving a certain, but
than that where there is an express contract smaller, rate of wages for the time he
should actually serve on board; and having Lord Kenyon Ch.J
made that election, his representative must
But that must be taken with some
be bound by it.
qualification; for where an action was
In the common case of service, if a servant brought for rent after the house was burned
who is hired for a year die in the middle of down, and the tenant applied to the Court
it, his executor may recover part of his of Chancery for an injunction, Lord C.
wages in proportion to the time of service: Northington said that if the tenant would
[3] but if the servant agreed to receive a give up his lease, he should not be bound
larger sum than the ordinary rate of wages to pay the rent.
on the express condition of his serving the
With regard to the case cited from 2 Lord
whole year, his executor would not be
Raym.; the case of a mariner impressed is
entitled to any part of such wages in the
an excepted case, and the reason of that
event of the servant dying before the
decision was founded on principles of
expiration of the year. The title to marine
public policy.”
wages by no means depends on the owners
being entitled to freight; for if the sailors JUDGMENT

desert, or do not perform their duty, they The Court of King's Bench held that Cutter
are not entitled to wages though the owner was not entitled to wages because he had
earn the freight. Nor is it conclusive not completed the journey. Part
against the defendant that the intestate was performance was no performance at all.
prevented fulfilling his contract by the act Lord Kenyon CJ led with his judgment. I
of God; for the same reason would apply should be extremely sorry that in the
to the loss of a ship, which may equally decision of this case we should determine
happen by the act of God, and without any against what had been the received opinion
default in the sailors; and yet in that case in the mercantile world on contracts of this
the sailors lose their wages. But there are kind, because it is of great importance that
other cases that bear equally hard upon the laws by which the contracts of so
contracting parties; and in which an numerous and so useful a body of men as
innocent person must suffer if the terms of the sailors are supposed to be guided
his contract require it; e.g. the tenant of a should not be overturned. Whether these
house who covenants to pay rent and who kind of notes are much in use among the
is bound to continue paying the rent, seamen, we are not sufficiently informed;
though the house be burned down. and the instances now stated to us from
Liverpool are too recent to form anything this particular contract my opinion is
like usage. But it seems to me at present formed at present; at the same time I must
that the decision of this case may proceed say that if we were assured that these notes
on the particular words of this contract and are in universal use, and that the
the precise facts here stated, without commercial world have received and acted
touching marine contracts in general. That upon them in a different sense, I should
where the parties have come to an express give up my own opinion.”
contract none can be implied has prevailed
Ashhurst J concurred, emphasising that the
so long as to be reduced to an axiom in the
contract was entire and that completion
law. Here the defendant expressly
was a condition precedent to the obligation
promised to pay the intestate thirty
to pay.
guineas, provided he proceeded, continued
and did his duty as second mate in the ship “We cannot collect that there is any

from Jamaica to Liverpool; and the custom prevailing among merchants on

accompanying circumstances disclosed in these contracts; and therefore we have

the case are that the common rate of wages nothing to guide us but the terms of the

is four pounds per month, when the party contract itself. This is a written contract,

is paid in proportion to the time he serves: and it speaks for itself. And as it is entire,

and that this voyage is generally performed and as the defendant's promise depends on

in two months. Therefore if there had been a condition precedent to be performed by

no contract between these parties, all that the other party, the condition must be

the intestate could have recovered on a performed before the other party is

quantum meruit for the voyage would have entitled to receive any thing under it. It

been eight pounds; whereas here the has been argued however that the plaintiff

defendant contracted to pay thirty guineas may now recover on a quantum meruit:

provided the mate continued to do his duty but she has no right to desert the

as mate during the whole voyage, in which agreement; for wherever there is an

case the latter would have received nearly express contract the parties must be

four times as much as if he were paid for guided by it; and one party cannot

the number of months he served. He relinquish or abide by it as it may suit his

stipulated to receive the larger sum if the advantage. Here the intestate was by the

whole duty were performed, and nothing terms of his contract to perform a given

unless the whole of that duty were duty before he could call upon the

performed: it was a kind of insurance. On defendant to pay him anything; it was a

condition precedent, without performing what has been laid out for him. In the case
which the defendant is not liable. And that of Chandler v Greaves, where the jury
seems to me to conclude the question: the gave a verdict for the whole wages to the
intestate did not perform the contract on plaintiff who was put on shore on account
his part; he was not indeed to blame for of a broken leg, the Court refused to grant
not doing it; but still as this was a a new trial, though I do not know the
condition precedent, and as he did not precise grounds on which the Court
perform it, his representative is not proceeded. However in this case the
entitled to recover.” agreement is conclusive; the defendant
only engaged to pay the intestate on
Grose J concurred.
condition of his continuing to do his duty
“In this case the plaintiff must either on board during the whole voyage; and
recover on the particular stipulation the latter was to be entitled either to thirty
between the parties, or on some general guineas or to nothing, for such was the
known rule of law, the latter of which has contract between the parties. And when we
not been much relied on. I have looked recollect how large a price was to be
into the laws of Oleron; and I have seen a given in the event of the mate continuing
late case on this subject in the Court of on board during the whole voyage instead
Common Pleas, Chandler v Greaves. I of the small sum which is usually given per
have also inquired into the practice of the month, it may fairly be considered that the
merchants in the city, and have been parties themselves understood that if the
informed that these contracts are not whole duty were performed, the mate was
considered as divisible, and that the to receive the whole sum, and that he was
seaman must perform the voyage, not to receive anything unless he did
otherwise he is not entitled to his wages; continue on board during the whole
though I must add that the result of my voyage. That seems to me to be the
inquiries has not been perfectly situation in which the mate chose to put
satisfactory, and therefore I do not rely himself; and as the condition was not
upon it. The laws of Oleron are extremely complied with, his representative cannot
favourable to the seamen; so much so that now recover any thing. I believe however
if a sailor, who has agreed for a voyage, that in point of fact these notes are in
be taken ill and put on shore before the common use, and perhaps it may be
voyage is completed, he is nevertheless prudent not to determine this case until we
entitled to his whole wages after deducting
have inquired whether or not there has do not continue in the service during the
been any decision upon them.” whole year. So, if the plaintiff in this case
could have proved any usage that persons
Lawrence J concurred.
in the situation of this mate are entitled to
“If we are to determine this case wages in proportion to the time they
according to the terms of the instrument served, the plaintiff might have recovered
alone the plaintiff is not entitled to according to that usage. But if this is to
recover, because it is an entire contract. depend altogether on the terms of the
In Salk, there is a strong case to that contract itself, she cannot recover any
effect; there debt was brought upon a thing. As to the case of the impressed man,
writing, by which the defendant's testator perhaps it is an excepted case; and I
had appointed the plaintiff's testator to believe that in such cases the King's
receive his rents and promised to pay him officers usually put another person on
100l. per annum for his service; the board to supply the place of the impressed
plaintiff shewed that the defendant's man during the voyage, so that the service
testator died three quarters of a year after, is still performed for the benefit of the
during which time he served him, and he owner of the ship.”
demanded 75l. for three quarters; after
judgment for the plaintiff in the Common
Pleas, the defendant brought a writ of DOMINION OF INDIA
error, and it was argued that without a full
VS.
year's service nothing could be due, for
that it was in nature of a condition ALL INDIA REPORTER LIMITED

precedent; that it being one consideration

and one debt it could not be divided; and
IN THE HIGH COURT OF NAGPUR
this Court were of that opinion; and
reversed the judgment. With regard to the
common case of an hired servant, to which
AIR 1952 NAG 32
this has been compared; such a servant,
though hired in a general way, is
considered to be hired with reference to BENCH
the general understanding upon the
HON’BLE JUSTICE R.
subject, that the servant shall be entitled to
KAUSHALENDRA RAO
his wages for the time he serves though he
BACKGROUND trial court accepted the respondent’s
contention and held the applicant liable to
According to section 73 of the Indian
compensate the respondent for the entire
Contract Act (1872), when a contract has
set. The applicant filed a revision
been broken, the party who suffers by such
application from this judgment.
breach is entitled to receive, from the party
who has broken the contract, compensation
for any loss or damage caused to him
ISSUE
thereby, which naturally arose in the usual
course of things from such breach, or Whether the applicant is liable for the loss

which the parties knew, when they made of three volumes or the entire set?

the contract, to be likely to result from the ARGUMENTS ADVANCED

breach of it. This section defines the
Contentions by the applicant
liability of a party who breaches the terms
of a contract. The question in this case was The applicant is not liable to compensate
whether the party can recover special the respondent for the entire set as the fact
damages from the other party under this that the loss of the three volumes renders
section. the set useless was not brought to the
attention of the applicant and there is no
FACTS
proof as the same.
The respondent lost three volumes of
Contentions By The Respondent
Indian Digest in transit through railways.
The volumes were booked by the The lost three volumes were part of a set
respondent at Nagpur for being carried and and their loss renders the entire set useless.
delivered at Delhi railway Station. The Hence, the applicant is liable to
consigned was addressed to the respondent compensate the respondent for the entire
by himself. The respondent brought a suit set.
against the applicant for compensation for
JUDGMENT
the loss of the three volumes. The
According to section 73 of the Indian
respondent contended that the lost volumes
Contract Act (1872), when a contract has
were the part of a series and their loss
been broken, the party who suffers by such
rendered the remaining books unusable.
breach is entitled to receive, from the party
Hence, they sought the price of the entire
who has broken the contract, compensation
set of eight volumes as compensation. The
for any loss or damage caused to him
thereby, which naturally arose in the usual contained parts of the machinery without
course of things from such breach, or which the mill could not be erected, was
which the parties knew, when they made missing. The plaintiffs were obliged to
the contract, to be likely to result from the replace those parts from England. So, there
breach of it. The same was applied in this was a delay of twelve months. The
case to hold the applicant liable only for plaintiffs claimed by way of compensation
the value of the three lost volumes. not only the value of the lost case, but also
the loss incurred by the stoppage of their
In the instant case, the consignment
works during the time the rest of the
consisted of three volumes and any loss
machinery remained useless owing to the
arising during the usual course of things
absence of the lost parts. Here, Bovill C.J
can only include the value of those three
held that since the defendant had no
volumes. The respondent had failed to
knowledge of the significance of the lost
mention that the three volumes were the
parts, awarding damages for the delay in
part of a set and that the loss of those
construction of the mill would be
volumes would render the set useless. The
speculative.
applicant had also not undertaken to
compensate the respondent for the value of
the entire set if the consignment was lost.
The respondent was awarded interest from
Since, the respondent had himself
1-9-1948 to 1-5-1949. The court relied on
furnished the value of the three lost
the cases Arjunsa Raghusa v. Mohanlal
volumes as Rs.42/- the Hon’ble court
Harakchand [ILR (1938) Nag 308] and
found it unnecessary to determine the cost
Brij Nath v. Lakshmi Narain [8 Luck. 35]
of the missing volumes.
where it was held that interest could be
given either by way of damages or under
some statute or under some contract but
In the case of British Columbia Saw-Mill
damages could not be awarded upon
Co. v. Nettleship [(1868) L R 3 C P 499],
damages. Hence, the claim for the interest
the plaintiffs delivered to the defendant for
prior to the suit was disallowed.
carriage to Vancouver Island several cases
of machinery intended for a saw-mill. The
defendant knew generally that the cases
CASE COMMENTARY
contained machinery. Upon the arrival of
the vessel, one of the cases which In this case, the application of section 73
of the Indian Contract Act (1872) was in
question. The Hon’ble Court while The claimants, Mr Hadley and another,
deciding what amounts to loss arising in were millers and mealmen and worked
the usual course due to breach of contract, together in a partnership as proprietors of
held that such loss would only include the the City Steam-Mills in Gloucester. They
loss which was contemplated in the cleaned grain, ground it into meal and
contract and of which both the parties were processed it into flour, sharps, and bran. A
aware and nothing beyond that. Special crankshaft of a steam engine at the mill
damages can be recovered only when the had broken and Hadley arranged to have a
special purpose of the contract is known to new one made by W. Joyce & Co. in
the other party. Otherwise, the loss Greenwich. Before the new crankshaft
incurred could only be confined to the could be made, W. Joyce & Co. required
terms of the contract. that the broken crankshaft be sent to them
in order to ensure that the new crankshaft
would fit together properly with the other
parts of the steam engine.

Hadley contracted with defendants

BREACH OF CONTRACT Baxendale and Ors, who were operating

together as common carriers under the
name Pickford & Co., to deliver the
HADLEY crankshaft to engineers for repair by a
certain date at a cost of £2 sterling and 4
V
shillings.
BAXENDALE

[1854] EWHC J70

Baxendale failed to deliver on the date in
question, causing Hadley to lose business.

EXCHEQUER COURT Hadley sued for the profits he lost due to

Baxendale's late delivery, and the jury
PARKE B, ALDERSON B,
awarded Hadley damages of £25.
PLATT B, MARTIN B Baxendale appealed, contending that he
did not know that Hadley would suffer any
FACTS
particular damage by reason of the late them has broken, the damages which the
delivery. other party ought to receive in respect of
such breach of contract should be such as
The question raised by the appeal in this
may fairly and reasonably be considered
case was whether a defendant in a breach
either arising naturally, i.e., according to
of contract case could be held liable for
the usual course of things, from such
damages that the defendant was not aware
breach of contract itself, or such as may
would be incurred from a breach of the
reasonably be supposed to have been in the
contract Judgment
contemplation of both parties, at the time
BARON ALDERSON they made the contract, as the probable

The Court of Exchequer, led by Baron Sir result of the breach of it. Now, if the

Edward Hall Alderson, declined to allow special circumstances under which the

Hadley to recover lost profits, in this case, contract was actually made were

holding that Baxendale could only be held communicated by the plaintiffs to the

liable for losses that were generally defendants, and thus known to both

foreseeable, or if Hadley had mentioned parties, the damages resulting from the

his special circumstances in advance. The breach of such a contract, which they

mere fact that a party is sending something would reasonably contemplate, would be

to be repaired does not indicate that the the amount of injury which would

party would lose profits if it is not ordinarily follow from a breach of contract

delivered on time. The court suggested under these special circumstances so

various other circumstances under which known and communicated. But, on the

Hadley could have entered into this other hand, if these special circumstances

contract that would not have presented were wholly unknown to the party

such dire circumstances, and noted that breaking the contract, he, at the most,

where special circumstances exist, could only be supposed to have had in his

provisions can be made in the contract contemplation the amount of injury which

voluntarily entered into by the parties to would arise generally, and in the great

impose extra damages for a breach. multitude of cases not affected by any

Alderson B said the following. special circumstances, from such a breach

of contract. For, had the special
Now we think the proper rule in such a
circumstances been known, the parties
case as the present is this: Where two
might have specially provided for the
parties have made a contract which one of
breach of contract by special terms as to
the damages in that case, and of this his breach, it answers with what purports
advantage it would be very unjust to to be a single test, that of foreseeability.
deprive them. Now the above principles The simplicity and comprehensiveness of
are those by which we think the jury ought this test are largely a matter of illusion. In
to be guided in estimating the damages the first place, it is openly branded as
arising out of any breach of contract. inappropriate in certain situations where
the line is drawn much more closely in
But it is obvious that, in the great
favor of the defaulting promisor than the
multitude of cases of millers sending off
test of foreseeability as normally
broken shafts to third persons by a carrier
understood would draw it. There are,
under ordinary circumstances, such
therefore, exceptions to the test, to say
consequences would not, in all probability,
nothing of authorities which reject it
have occurred, and these special
altogether as too burdensome to the
circumstances were here never
defaulter. In the second place, it is clear
communicated by the plaintiffs to the
that the test of foreseeability is less a
defendants. It follows, therefore, that the
definite test itself than a cover for a
loss of profits here cannot reasonably be
developing set of tests. As in the case of all
considered such a consequence of the
"reasonable man" standards there is an
breach of contract as could have been
element of circularity about the test of
fairly and reasonably contemplated by
foreseeability. "For what items of damage
both the parties when they made this
should the court hold the defaulting
contract.
promisor? Those which he should as a
SIGNIFICANCE reasonable man have foreseen. But what

Lon L. Fuller and WR Perdue evaluated should he have foreseen as a reasonable

the idea of reducing contractual man? Those items of damage for which the

remoteness to a foreseeability triumph in court feels he ought to pay." The test of

this way: foreseeability is therefore subject to

manipulation by the simple device of
In its second aspect Hadley v Baxendale
defining the characteristics of the
may be regarded as giving a grossly
hypothetical man who is doing the
simplified answer to the question which its
foreseeing. By a gradual process of
first aspect presents. To the question, how
judicial inclusion and exclusion this "man"
far shall we go in charging to the
acquires a complex personality; we begin
defaulting promisor the consequences of
to know just what "he" can "foresee" in
this and that situation, and we end, not they made the contract, as the probable
with one test but with a whole set of tests. result of the breach of it.
This has obviously happened in the law of
negligence, and it is happening, although
less obviously, to the reasonable man IMMORAL CONTRACTS
postulated by Hadley v. Baxendale.

As early as 1894, the U.S. Supreme Court

UPFILL
recognized the influence of Hadley upon
V
American law:
WRIGHT
The Hadley holding was later incorporated
into Section 351 of the Restatement (1911) 1 KB 506
(Second) of Contracts. A 1994 law review
article noted that as of that year, Hadley
had been cited with approval by the state FACTS
supreme courts of 43 U.S. states; three There Upfill let a flat to the Miss wright, a
state supreme courts had adopted the spinster. Upfill knew that Miss Wright was
Hadley holding without citing Hadley the mistress of a certain man and that the
itself; and intermediate appellate courts in man would be giving her money to pay the
the four other states had also favorably rent. The defendant said that she was a
cited Hadley. prostitute and that she took the flat for the
Where two parties have made a contract purpose of receiving gentlemen there. The
which one of them has broken, the plaintiff's agent, who let the flat, said that
damages which the other party ought to he did not know that the defendant was a
receive in respect of such breach of prostitute until later, but that at the time of
contract should be such as may fairly and letting he knew that she was the kept
reasonably be considered either arising mistress of a solicitor. Upfill sued Miss
naturally, i.e., according to the usual Wright for arrears of rent.
course of things, from such breach of JUDGEMENT
contract itself, or such as may reasonably
It was held that as the landlord knew that
be supposed to have been in the
the flat was to be used for an immortal
contemplation of both parties, at the time
purpose the lease was tainted with
immorality and the landlord could not
recover. The plaintiff's claim was
dismissed.

Darling J. said:
TRUSTS, WILLS, PROBATE
The flat was let to the defendant for the AGAINST PUBLIC POLICY
purpose of enabling her to receive the
visits of the man whose mistress she was
and to EGERTON

commit fornication with him there. I do V

not think that it makes any difference
BROWNLOW
whether the defendant is a common
[1853] 4 HLC 484
prostitute or whether she is merely the
mistress of one man, if the house is let to
her for the purpose of committing the sin
BENCH
of fornication there.
LORD TRURO, PARKE B
That fornication is sinful and immoral is
clear. The Litany speaks of 'fornication FACTS
and all other deadly sin', and the Litany is John WilIiam Earl of Bridgewater devised
contained in the Book of Common Prayer his freehold estates to trustees, in trust to
which is in use in the Church of England convey them to the use of Lord Alford, his
under the authority of an Act of great-nephew, for ninety-nine years, if he
Parliament.' On these facts, showing a should so long live ; remainder to trustees
prostitute receiving visits from a man who and their heirs doing the life of Lord
is keeping her as his mistress, the decision Alford, in trust to preserve contingent
would be the remainders ; remainder to the use of the
same even after Stable J.'s decision. But heirs male of the body of Lord Alford,
there are various kinds of extra-marital with diverse remainders over: provided
cohabitation. Some, Stable J.'s judgment that, if Lord Alford should die not having
shows, are not immoral. Stable J. referred acquired the title of Duke or Marquis of
to the action of the legislature. This, Bridgewater, the estate directed to be
however, is not a universal test. It is trite limited to the heirs male of his body
law that some things may be legal, yet should cease, and the estates should
immoral. thereupon go over and be enjoyed
according to the subsequent uses and against public policy or not. It is the
limitations directed by his will. Lord province of the statesman, and not the
Alford died leaving a son, but without lawyer, to discuss, and of the Legislature
having acquired the title. to determine, what is best for the public
good, and to provide for it by proper
The House considered a challenge to the
enactments. It is the province of the judge
terms of a trust on the basis that it
to expound the law only; the written from
offended public policy. The House
the statutes: the unwritten or common law
therefore considered the nature and
from the decisions of our predecessors and
importance of public policy.
of our existing courts, from the text writers
JUDGEMENT of acknowledged authority, and upon

Public policy ‘has been confounded with principles to be clearly deduced from them

what may be called political policy; such by sound reason and just inference; not to

as whether it is politically wise to have a speculate upon what is best, in his opinion,

sinking fund or a paper circulation, or the for the advantage of the community. Some

degree and nature of interference with of these decisions may have no doubt been

foreign States; with all which, as applied to founded upon the prevailing and just

the present subject, it has nothing whatever opinions of the public good; for instance,

to do.’ For these reasons, in our view, the the illegality of covenants in restraint of

defendants’ point on public policy is marriage or trade. They have become part

wholly unfounded.’ (Lord Truro) of the established law, and we are

therefore bound by them, but we are not
Parke B: ‘Public policy is a vague and
thereby authorised to establish as law
unsatisfactory term, and calculated to lead
everything which we may think for the
to uncertainty and error, when applied to
public good, and prohibit everything
the decision of legal rights; it is capable of
which we think otherwise.’
being understood in different senses; it
may, and does, in its ordinary sense, mean
‘political expedience,’ or that which is best
for the common good of the community;
and in that sense there may be every
variety of opinion, according to education,
habits, talents, and dispositions of each
REMEDIES
person, who is to decide whether an act is
 The appellant-plaintiff accompanied the
respondent-defendant to Rajkot on promise
to find out a job for her. Relying on him,
PREMA she came to Rajkot on 23-3-1981 and
stayed with the respondent-defendant in
V
Ashok Hotel for three days. The
AHMED
respondent-defendant being a Muslim,
although married, stated to the appellant-
plaintiff that his wife was unable to
AIR 1987 GUJ 106, (1987) 1 GLR 462
conceive and bear a child and, therefore,
he had to adopt the child of his sister-in-

BENCH law. But the respondent-defendant was

very much desirous of having his own
R MANKAD, R MEHTA
child and, therefore, the defendant who
FACTS could have another wife under his personal
law, proposed and promised to marry her
his appeal by the original-plaintiff is
and give her the status of wife. On such
against the judgment and decree
promise by the respondent-defendant and
dismissing her suit for damages of Rs. One
in expectation of married life, the
lac based on the ground of breach of
appellant-plaintiff was induced to
promise of marriage.
surrender herself to the respondent-
The case of the appellant is that she is defendant. The respondent-defendant also
Goanese Brahmin coming from poor changed the name of the appellant-plaintiff
family. In 1978, she had started working as from Prema Koregaonkar to Parvin
a part time typist in a typing institution Ahmad. The respondent-defendant took
Good luck Typing Centre in Santacruz her to a building 'Rafik Manzil' from
(East) Bombay which was run by the Ashok Hotel in Rajkot and thereafter, live
respondent-defendant. The defendant was with the appellant-plaintiff as husband and
also working as a Stenotypist in Indian Oil wife. However, when the appellant-
Corporation at Bombay. The respondent- plaintiff insisted on marriage, the
defendant developed friendly relations respondent-defendant started harassing has
with the appellant-plaintiff. In 1980, the and the appellant-plaintiff was put into a
defendant was transferred from Bombay to very awkward position. She was not even
Rajkot office of Indian Oil Corporation.
able to go to her relations. She had, defendant and ultimately she was asked to
therefore, sought help of the Social leave the house of the respondent-
Security Branch of Rajkot police. defendant and as a result she contacted the
Ultimately, she was deserted by the Social Security Branch of Rajkot police. It
respondent at Rajkot a far away place from was denied that the respondent-defendant
her relations. She submitted that she had had any illicit relations with the appellant-
lost everything in her life and all chances plaintiff. It was submitted that as per the
of happiness in life and of finding out a writing before the Social Security Branch
suitable life partner in her caste or society of Rajkot police, the respondent-defendant
and that the respondent has ruined her by was only liable to pay the maintenance for
committing, breach of promise to marry the period from 9-1-1982 till April, 1982
her and she claimed compensation for the and, therefore, 'Novatio' was pleaded. It
same amounting to Rs. One lac with was also submitted that the suit was filed
interest at 18% from the date of the suit. with a view to extort money from the
respondent-defendant.
JUDGEMENT
The learned trial Judge, after recording the
The respondent-defendant denied all the
evidence and considering the matter,
material averments of the appellant-
dismissed the suit holding that the plaintiff
plaintiff. He denied that they had stayed
had failed to prove that the defendant had
together for three days in Ashok Hotel at
given a promise and played fraud and
Rajkot. He denied that his wife was unable
misrepresentation regarding marriage. The
to conceive or that he wanted to have a
trial Court also held that the defendant had
child of his own. He denied that the
failed to prove that the plaintiff was
appellant-plaintiff had surrendered herself
staying with the family of the defendant as
in the respondent-defendant and that they
his friend and also failed to prove that she
had lived together in 'Rafik Manzil' and at
was not of a good moral character and,
various other places in Rajkot as husband
therefore, she had to leave the house of the
and wife. It is submitted that the appellant
defendant, that the defendant also failed to
had come to Rajkot and was residing in the
prove that false allegations were made by
family of the respondent-defendant as it
the plaintiff to harass and blemish the
friend and during the Course of the time, it
defendant.
was found that she was not of good moral
character and she could not be kept with The learned counsel for the appellant
the cultured family of the respondent- submitted that the judgment of the trial
Court is clearly contrary to the evidence on has stated that he has extended his leave
record and even contrary to its own for a week and he would be coming to
findings. The learned counsel for the Rajkot by next Sunday and at present he
appellant has referred to para 5 of the did not have money and would pay the rent
Judgment wherein the learned trial Judge after coming there. This letter is proved by
has observed as follows : - the evidence of the plaintiff and there is no
cross-examination on this point by the
"The defendant has denied every thing in
defendant. Even in his examination-in-
his written statement. But in his evidence,
chief, he has not even said a word of
he has admitted his photographs with the
denial. In that view of the matter, there is
plaintiff. He also admitted that they have
no reason to doubt that the defendant had
resided together as husband and wife and
written this letter to the plaintiff.
existence of illicit relation. But according
to him, it all were without any promise on The certified copy of the writing before
his part. It cannot be said true that she was Social Security Officer. In that application,
staying with him as friend and she had stated that the respondent was
subsequently, she was turned out to bad after her since last 3 years and pressing for
character and, therefore, she was made marriage. However, she had been delaying
shelterless. They were in love with each the proposal and when she accepted the
other and, therefore, they were staying as proposal and agreed for marriage, the
friend of the defendant with him. There is respondent played some drama and called
no question of harassment or to blemish his wife from Bombay.
the defendant. It is admitted on the part of
Ramniklal is the neighbor and landlord of
the defendant that they were staying as
house 'Mehta Nivas' who has deposed that
husband and wife in Ashok Hotel, in
the appellant and the respondent lived as
Sadhna Guest House, in the house of
husband and wife in the house for about
Mohmadbhai and in Mehta house at
two months.
Rajkot."
The Photographer who has proved tile
A telegram of the defendant from Bombay
photograph Exs. 22 and 23 and also
to the plaintiff that he was coming. A letter
proved the negatives Exs. 36 and 37. He
dated 22-6-1981 from Bombay purported
has also produced the bill for the same. He
to have been signed by the defendant and
has stated that the respondent had come for
addressed 'My darling' and produced by
the photograph.
the appellant. In that letter, the respondent
Shivlal is the Accountant of Sadhana Hotel "I know the plaintiff. I had not promised to
who has proved the entry of 2-5-1981 of marry her. There is no sexual intercourse
two persons, and the witness has stated with her by me without her consent."
that Ahmad was accompanied by one lady
This is all he had said in his examination-
and both of them were staying alone and
in-chief. He has not denied on oath several
he had not enquired about their relations.
circumstances and the evidence of promise
That part has come out in the cross-
of marriage led. by the appellant-plaintiff.
examination of the witness.
As far as the promise of marriage is
The Manager of Ashok Hotel who has concerned, only the parties would have
proved the hotel entry which is in the name personal knowledge. The appellant-
of Ahmad M. Indian Oil Corporation from plaintiff has stated on oath that the
Bombay with family and total member of respondent-defendant had given the
persons being two. In the cross- promise of marriage and the respondent-
examination the witness has stated that if defendant has denied it. There is word
the Hotel Management comes to know that against word. However, there are several
the man and woman do not have the important circumstances which lend
relations of husband and wife, they would credence and support to the word of the
not give accommodation to such persons. appellant plaintiff, and the respondent has
He had not thought that plaintiff and utterly failed to explain these
defendant were not husband and wife. circumstances appearing against him and
to show any circumstance in support of his
say. He has not examined any witness in
The appellant-plaintiff has also relied on his defence. He has not examined even his
the falsity of the written statement and the close friends with whom he had lived with
two line examination-in-chief of the the appellant-plaintiff. A letter addressed
respondent-with a view to corroborate her to the appellant-plaintiff as 'My darling' is
case of promise to marry and breach of a strong circumstance to show that what
such promise of marriage. The respondent- the appellant-plaintiff says is true. There is
defendant in his evidence has stated in all no cross-examination of the appellant
only two lines in his examination-in-chief regarding this letter. There is no attempt by
which read as follows : - the respondent to explain and deny this
letter in his examination-in-chief.
At that time, there was no reason to give a himself. She had submitted herself on the
false name unless the appellant-plaintiff promise of marriage. However, it appears
and the respondent-defendant had been that so far as the respondent-defendant is
living as a husband and wife and the concerned, he had exploited her by the
appellant plaintiff was living under that false promise of marriage. If there is
name. This circumstance very strongly anything bad in either of them, it is in !the
corroborates the say of the appellant that character of the respondent-defendant
there was the promise to marry and, rather than that of the appellant-plaintiff. It
therefore, they were living as husband and appears that this false excuse of bad
wife and describing themselves as such. character of the appellant as against the
Even the independent witness like landlord "cultured" family of the respondent has
and neighbour Ex. 34 who has seen the been merely given to get away from the
two living together for three months in his promise of marriage.
house has also stated that they were living
The learned counsel for the respondent
as husband and wife. In the cross-
Mrs. Chinubhai has strongly submitted
examination, the respondent has admitted
that there was no promise to marry and it
that he stayed with her as she insisted to
was a voluntary and free relationship
stay in the hotel and they had stayed
between the two; the respondent was
together for two days. He has also
already married and the close intimacy
admitted that he stayed with her at Rajkot
between a man and woman does not
for about 5 to 6 days. Regarding the
necessarily mean promise of marriage. If
photographs, the respondent had to say in
there was merely word against word, such
the cross-examination that they had gone
argument may have some force. But
to the photographer because of her
having regard to the circumstances
insistence. The averment in the written
mentioned above, the word of the
statement that the respondent became.
appellant-plaintiff seems to be more
aware of the bad character of the appellant
probable, natural and acceptable as against
and, therefore, he thought that it was
the word of the respondent-defendant
unbecoming of the cultured family of the
which is less probable and absolutely
respondent-defendant. However, nothing
unacceptable. Mrs. Chinubhai submitted
whatsoever has been shown as to what was
that so far as so-called promise to marry is
that bad character except that she had
concerned, there is no evidence except
submitted herself fully to him. If that was
bare word of the appellant-plaintiff who is
the bad character, that equally applied to
highly interested in making false religion. In such circumstances, it would
allegations and it is clearly an attempt to be natural that she would not inform any of
extort money and her evidence cannot be the relatives or friends. It is not shown that
taken at its face value. If it was a matter of she had any friend or relative in Rajkot.
her word only, this contention would have Where they were living were the friends of
some merit. But her word is supported by the respondent and not of the appellant.
many circumstances. She has submitted Really speaking, this argument should
that the photographs do not prove any apply to the respondent who has examined
promise of marriage nor does the letter. no witness on his behalf. He has not
examined his own wife who had visited
The photographs and the letter merely
the place twice. He has not examined any
show that the two were having some
friend with whom they were living. In the
intimate relations and nothing more and
cross-examination of the appellant, it was
certainly no promise of marriage.
suggested to her by the respondent-
It is not possible to accept this contention defendant that she was not ready to marry
also because one has to look to the entire with the respondent before he takes
conduct for all the time. It is clear that divorce from his wife. She has denied this
there was not only a promise, but a suggestion. But this suggestion clearly
continuing understanding between the two implies that the respondent wanted to
that they would get married and only the marry the appellant-plaintiff without
timing of the marriage was to be agreed getting divorce from his first wife.
and fixed and ultimately when she insisted
In view of the above discussion, the
for the marriage, the respondent-defendant
finding of the lower Court that there was
went back on his promise and committed
no promise of marriage cannot be
breach of the promise. Mrs. Chinubhai has
sustained has to be reversed. The learned
also submitted that if really she had a
trial Judge has observed that :
promise of marriage, she would have
certainly talked to some friend or relative. "considering the whole evidence and its
However, she has not examined anyone. It cumulative effect, I am of a view that
is to be noted that she is a Brahmin girl parties were in love since long with each
from Goa and the appellant-plaintiff and other and she surrendered (to) the
the respondent-defendant are in Rajkot. defendant for that reason only and not of
The respondent is already married and the so-called promise as stated by her."
Muslim, belonging to totally a different
"no doubt they remained as husband and The next question that arises is whether the
wife, but only for that reason, in the appellant-plaintiff is entitled to any
instant case, it cannot be said that she damages or compensation and if yes, how
surrendered herself due to the promise." much. On this question, we had requested
the learned Advocate Mr. M. D. Pandya to
"Their, love affairs ended into bodily
render his assistance as amicus curiae and
happiness. Mere residing as husband and
we have heard him also.
wife for some period cannot establish that
she only surrendered herself to the The learned counsel for the respondent-
defendant as she was promised by the defendant has submitted that award of
defendant to marry her. Circumstance compensation in such a case would be
shows that they were in love since long but against the public policy and morality. If a
when they got opportunity to live together, woman lives in illicit cohabitation with a
both have taken it. Before surrendering man and thereafter comes out with a case
herself, she could have insisted to perform of damages, such claim would not be
the marriage first. That she had not done. countenanced by any Court of Law and
Therefore, I am of a view that the facts justice and, therefore, the Court should
regarding promise to marry her is refuse any compensation. She has relied on
subsequently got up fact for the institution the decision in the case of Gherulal Parakh
of this suit." v. Mahadeodas Maiya, AIR 1959 SC 781
wherein the Supreme Court has observed
Such conclusion of "no promise to marry"
as follows:-
cannot be sustained and is contrary to
evidence. Therefore, there is no escape
from the conclusion that the respondent-
"The primary duty of a Court of Law is to
defendant had promised to marry the
enforce a promise which the parties have
plaintiff. On that finding, there is no
made and to uphold the sanctity of
further dispute that if there is such
contracts which form the basis of society,
promise, the respondent has committed
but in certain cases, the Court may relieve
breach thereof. Even otherwise, there is
them of their duty on a rule founded on
clear evidence to show that the respondent-
public policy; the doctrine of public policy
defendant has not been willing to keep and
is extended not only to harmful cases but
fulfil his promise.
also to harmful tendencies."
Relying on the aforesaid decision, the irregular sexual relations outside the bond
learned counsel for the respondent has of matrimony, even where they may
submitted that if the Court were to award constitute no offence of infringement of
damages in the present case, it would be the Penal law."
harmful and it would encourage harmful
None of these cases would be applicable in
tendencies and it would be against public
the present case. It is true that there was
policies. In support of this contention, the
cohabitation between the parties and it was
learned Counsel for the respondent has
illicit cohabitation without matrimony.
also relied upon a judgment in the case of
However, the damages are not claimed on
Istak Kamu Musalman v. Ranchod Zipru
the basis of illicit cohabitation or for any
Bhate, AIR 1947 Bom 198 wherein it was
immoral consideration. It is only a side
held that if the consideration is immoral,
effect or a by-product and the cause of
transaction is void.
action is not based on such cohabitation.
In the case of Manicka Gounder v.
The case is based on the promise of
Muniammal, AIR 1968 Mad 392 which is
marriage and breach of such promise. If
strongly relied upon by the respondent, it
the appellant-plaintiff proves that case, a
is observed as under : -
clear actionable wrong is proved for which
"Where due consideration relates strictly to claim for damages or compensation is
past cohabitation, which is illicit, in the maintainable. Merely because the parties
sense that it is outside matrimony, but had also illicit cohabitation would not
which otherwise does not constitute any make the legal and valid cause of action
offence, it would be conceivably held, on illegal and immoral. It is a well settle law
the circumstances, that the promise to pay that breach of promise to marry is
is supported by good consideration. But actionable and damages and compensation
even so, though this consideration is not for such breach can be awarded.
forbidden by any law, nevertheless it falls
The case of Maung Sein Kyi v. Maung
under the interdict that it may be 'immoral
Sein Kyi, AIR 1916 Lower Burma 45 is a
or opposed to public policy'. For the
case of breach of promise of marriage and
Courts must, by every means in their
damages in such case and it was held as
power, promote matrimony, and the
follows : -
incurring of lawful sexual relationship
alone and ought not to give sanction or "Under S. 74 of the Contract Act, it is

approval, even in an implied form, to open to the Court to award such

compensation not exceeding the amount so this rule, however, the action for breach of
named as appears to it to be reasonable. promise of marriage is an exception; in
The defendant urges that Rs. 2000/- is an that case injury to the feelings of the
excessive amount to award against a disappointed party may be taken into
person in his position of a clerk on Rs.75 a account in the assessment of damages."
month. As he is insolvent it appears to me
This is the well settled common law in
improbable that the plaintiff would realize
England which applies in India also. Thus,
any considerable sum from the defendant
the breach of promise of marriage is not
himself but as pointed out, his step father
only actionable and there is no bar of
holds a well paid Government
public policy operating against the same
appointment and the defendant's position
but even exemplary damages apart from
does not alone justify a reduction of the
the normal damages would be awarded.
damages. He has treated the plaintiff in a
shameful and hard-hearted manner and if,
as was stated in this Court and not denied, In the case of Jarvis v. Swans Tours Ltd.,
he has since married another girl, he has (1973) 1 QB 233, the Court of Appeal held
put it out of his power to make even tardy that the plaintiff is entitled to
amends to the plaintiff by offering her the compensation for his disappointment and
status of a chief wife. On the other hand, distress at the loss of the entertainment and
Rs. 2000/- is a handsome sum to a girl in facilities for enjoyment which he had been
the plaintiffs position and is, I consider, a promised in the defendant's brochure and
reasonable compensation under the his damages should be increased to 125. In
circumstances." that case, the charges for the fortnight

In Anson's Law Contract, it is observed as holiday were 63.45 and it was proved that

follows under the head 'Compensatory he did not get the promised facilities,

Nature of Damages' in Chapter 17 of entertainment and enjoyment and had

'Remedies for Breach of Contract', inconvenience and loss of benefit. It was

"damages for breach of contract are given found that in the first week, he got a

by way of compensation for suffered, and holiday which was inferior and for the

not by way of punishment for wrong second week, a holiday he got was very

inflicted. Hence the 'vindictive' or largely inferior to what he had been led to

"exemplary' damages of the law of tort expect. The Court at the first instance took

have no place in the law of contract. To the difference in value between what he
paid for and what he got and it was The next question that arises is about the
thought that the plaintiff had got half of quantum of damages to be awarded. In a
what he had paid for and so the trial Court case of this nature, there is no ready
gave him half the amount which he had measure of damages unlike commercial
paid namely 131.72. The Court of Appeal contracts. There could be several relevant
enhanced the damaged to 125 and circumstances to be taken into account.
negatived the argument that on a breach of Such as social and financial position of the
contract, damages cannot be given for parties (even though inability to pay
mental distress and that damages cannot be damages may not result into denial or
given for disappointment of mind dimination of damages if otherwise the
occasioned by breach of contract. Lord plaintiff is entitled to larger quantum of
Denning observed as follows : - damages). The respondent-defendant is
working as a Stenographer in a well
"I think that those limitations are out of
reputed public sector corporation like
date. In a proper case damages for mental
Indian Oil Corporation. If the promise had
distress can be recovered in contract, just
been fulfilled, the appellant-plaintiff would
as damages for shock can be recovered in
have shared his life as a family member
tort. One such case is a contract for a
and would have enjoyed all the facilities of
holiday, or any other contract to provide
the family life including the earnings of
entertainment and enjoyment. If the
the husband. In the event of desertion by
contracting party breaks his contract,
the husband, she would be entitled to
damages can be given for the
maintenance commensurate with the social
disappointment, the distress the upset and
and economic status of the husband and
frustration caused by the breach. I know
wife. In the present case, it would not have
that, it is difficult to assess in terms of
been less than Rs. 500/- per month. It
money, but it is no more difficult than the
would probably be somewhere between
assessment which the Courts have to make
Rs. 750/- and Rs. 1000/-per month.
every day in personal injury cases for loss
Another measure, is suggested, to compare
of amenities."
with the case where a wife loses her
What is said to be applicable in a case of husband in a fatal motor accident and to
breach of promise of a happy holiday come to annual loss and apply a multiplier
would must strongly and appropriately of 15 to arrive at a lump sum figure. Even
apply in the case of breach of promise of if a conservative amount of Rs. 500/- per
marriage and happy family life. month is taken as a datum figure in this
case, that would be Rs. 6000/- per year. If 22. We put on record our appreciation of
a multiplier of 10 is applied, it would be Mr. M. D. Pandya for having assisted the
Rs. 60,000/-. Such amount would give a Court as amicus curiae at the request of the
reasonable maintenance per month for Court. His assistance was disinterested and
lifetime. That would also take care of all useful and was sought on the question
the aspects of damages including whether damages could be awarded in a
compensatory, aggravated or exemplary case like the present one and what would
damages. be the measure for such damages.

In a case decided 70 years ago, reported in

AIR 1916 Lower Burma 45 (supra) an
amount of Rs. 2000/- was awarded against
a person in a position of Clerk earning Rs.
75/- per month. Having regard to the
comparative money value of Rs. 2000/- in
1916 and Rs. 60,000/- in 1986, it appears,
that the damages can reasonably be
assessed in the present case at Rs.
60,000/-. The appellant plaintiff will also
be entitled to interest at the rate of 6% per
annum from the date of the suit till
realisation. The appellant-plaintiff would
also be entitled to costs of both the Courts.

In the result, the appeal succeeds. The

judgment and decree of the trial Court are
quashed and set aside and the suit of the
appellant-plaintiff is decreed and it is
directed that the respondent-defendant do
pay to the appellant-plaintiff a sum of Rs.
60,000/- with 6% interest per annum from
the date of the suit till realisation and also
the costs of both the Courts.