5

Fr ee C on se nt

DEF INI TIO N OF FRE E CO NSE NT [S.

14]
According to Section 10 free con sen t is an esse
ntia l requirement of
trac t. Section 14 defines "fre e con sen t".
a con.
s. 14. •fre e con sen t" def ine d.-C ons ent is said to be
free when ..
caused by: It IS n
0
(1) coercion, as defi ned in Section 15, or t
(2) und ue influence, as defi ned in Section
16, or
(3) fraud, as defi ned in Section 17, or
(4) misrepresentation, as defi ned in Sec
tion 18, or
(5) mistake, sub ject to the provisions of
Sections 20, 21 and 22.
Consent is said to be so caused whe n it
wou ld not have been given but for
the existence of such coercion, und ue
influ enc e, frau d, misrepresentation or
mistake.

Vitiating factors and their effe ct

Wh ere con sen t to an agre eme nt is cau sed
by coe rcio n, und ue influence,
frau d or mis repr esen tati on, the agr eem ent
is a con trac t voidable at the
opt ion of the par ty who se con sen t was so
cau sed . 1 If, for example, a per-
son is ind uce d to sign an agr eem ent by frau
d, he may , on discovering the
trut h, eith er uph old the con trac t or reje ct
it. If he con firm s it, the contract
bec ome s bin din g on bot h the par ties . It is
a con trac t whi ch is enforceable at
the opt ion of onl y one of the par ties , nam
ely, the par ty who se consent was
not free. Giv ing the mea nin g of a void able
con trac t, Sec tion 2(i) says that
"'an agr eem ent whi ch is enfo rcea ble by law
at the opt ion of one or more of
the par ties ther eto, but not at the opt ion of
the oth er or oth ers, is a voidable
con trac t. 2

l. Ss. 19 and 19-A. For an exam ple of

Raghavji Rupa rel
com puls ory cons ent unde r a statu te see Mang~!!
v State of Maharashtra, AIR 1966 SC 128:
Prasad v Shya m Narayan Prasad, AIR 2006 (1965) 2 SCR 894, 906 · ~';:ken
Sikk 25, in a deed of exchange, the ~ta_n oral
by_one of the exec utan ts was that only the
business was inclu ded and not RCC build:~~id
evidence also supp orted such a stan d. The to
cour t said that RCC build ing could not
have been included on the basis of the recit
al in the deed alon e. t ro aP
2. See Nok hia v State of H.P., AIR 1985
HP 88, whe re it was obse rved that_ ~o~se
acquisition ca?n ot be desc ribed as a real n factors
cons ent. In the abse nce of these ~inat;;;!,e
the cont ract bmds and no one can get rid d and
of it by unila teral actio n. Thu s a s1te a

[176]
 Coercion 177

. . [S
[S· 151
sent 15 caused' by mtstake, the ag. reement is void . s. 20 - 221
. t eniorcea bl e at t e option of either part. y. (S , l( g)J
re connent is
h
I
~ 1eag1.ee.1 no
·d
~ vol COERCION
· ,
c. 'tion [S. tS] h' h' coercion is voidable at
V~•ma reement the consent to w IC Is caused by . "Coercion" I·s d fi d
nt was so cau sed e . ne
Ao _g of the party whose conse .
the 0puon
. section 15. • "d fi d "C . ,,. h threatening
111 11coere1one ne ·- oerc,on IS t e committing, or
0) or the
15 t forbid den by the Indian Penal Code (XLV of 186 '
s.comm• ·,t, any ac . d . to the preiudice of
, de taining , or threa ten ing to etam, any property, '
to . t t· f rson to enter into an
unlaw, uson whatever, wi·th th e in en 10n o causing any pe
1
anY per . . f 1860), is
reement.
n. t is im ma terial wh eth er the Indian Penal Code (XLVo
ag E /anatio -I
the coerc. .ion is employed.
. xnpot in force in the place where . '
orrs ''

tions
Illustra
an agreement by an
an Eng lish ship on the high seas, causes 8 to enter into
A on board Code (XLV of 1860).
ation under the Indian Penal
act a~ounting to criminal intimid
contract at Calcutta.
Aafterwards sues Bfor breach of the law of England, and

I
coe rcion, althoug h his act is not an offence by
Ahas em plo yed in force at the time
tion 506 of the Ind ian Pen al Code (XLV of 1860), was not
although Sec
s done. '
when or place where the act wa
.
Techniques of causing coercion pressure
coercion when it is obtained by
Consent is said to be caused by
techniques:
exerted by either of the following
g or threa tening to comm it any act forbidden by the Indian
(1) committin
Penal Code; or .
unlaw fully de taining or threatening to detain any property
(2)

Acts forbidden by !PC eat~

tha t coerc ion as thus defined implies a committing or thr
_It is clear given
com mit som e act wh ich is contrary to law. The section has
e~mg to rza v Bibi
to few decisio ns. Th e Privy Council observed in Askari Mi
rise

the purpose of establishing

ance of all the requirements for
accept~d by the allottee by perform can celled by the allotting authority, Kai
/ash Chandra
s not allowed to be 1 Raj LR 174
a n~r ing-home was vel opm ent & Investment Corpn, (1991) ·
Ind ust ria l De
Katia v Raiasth an Sta te
pta v Prema De vi, (1997) l BLJR 695, a comp~omise
]~hpur Bench. Sheo Ratan Prasad Gu
the suit by relying on
nt signed by the par ties and their counsels the court decided ~s there was proof
~greeme sent unle
the ground of J;ck of free con
not allowed to be questioned on
ltf0 th3 r. AIR 200 7 Raj 49. The right ofdmeh· ar can
o v Alam Noo ' ·1Y an with free
b .t fact available. Hasina Ban t it is don e volunt ari
e rel tnquis· hed by the wife conditionally provided tha She cou
I· · b·
ld not c aim it on emg
sent · Facts disclosed that she had relinqu ishe d her clai m.
con
d' · · orce) Act, 1986 ·
on Div
tvorced under the Muslim Women (Protection of Rights
1 F C Consent rs, ts
Chapter S re ndcr this particular branch of S ,J
" s broug I,t u ,, A I ·11 ecr
. r,•. 1:,ori·' that case b f rare occurrence . c ear 1 Ustrat· l()n ls
]a, "'s ust eo I b h . ion
f h Contract A,t rn . t of pisto ' or y t reatening to \\-%Id
o t e . d at the pott1 ' h cause h
be consent obtaine. . r by t}1reatening .to burn a mans ouse or sla h· llrt
intimidation o . h'
. . questwn m t 1s connection Was bs, •nghi ,
.
or by A .ntngu1ng
valuable picture. n.1 Ch 'kham Amiraju v Cht'kham Seshamma:4 erore th,s
H' h Court in 1
Madras ig . 'd H' ndu induced his wife and son to
f u1c1 e a 1
By t~reat o s f his brother in respect of certam · exec
properties WhichUte a
release m favour O
they
claimed as their own. . .
. . "that the threat of smc1de amounted to c
_It ~as held by aa:J~~:t:elease deed was, therefore, v~idable". Theo~:ion
w1thm Sec~•~n 151 d t whether suicide is an act forbidden by the I d~er.
of opm1on re ate o ..
ence d A t mpt to commit smc1de ts. pums • h bl
a e under the C d
n tan
Penal Co e. n at e £ · ·d s Th · . 0 e
but there 1s. no pu n1'shment provided . or sute1h e. e hma1onty cons1'st· ,
tng
of WALLIS CJ and SESHAGIRI J behev~d that t e _man w o commits suicide
goes unpums· hed, not because the act 1s not . forbidden, but because there1s.
left to be punished. OLDFIEL D Jdissented on the ground that unles
no body
an act is made punishable it cannot. be ~a1'd to be _ror l b'dd
1 en. s
"When a criminal prosecution is mst1tuted agamst a person and such per-
son fearing the result of the prosecution enters into an agreement in favour
of the complainant in consideration of his abandoning the prosecution, it
cannot be held simply upon these facts that the consent of such person was
caused by coercion."6 "To threaten a criminal prosecution is not per se an
act forbidden by the Indian Penal Code. Such an act could only be one
forbidden by the Indian Penal Code if it amounted to a threat to file a false
charge." This was pointed out by the Privy Council in Askari Mirza v Bibi
]ai Kishori:7
_A minor, having borrowed on two mortgage deeds, agreed to a compro-
mise decree alt~ough the mortgages were void. Subsequently he pleaded
that .he entered mto the compromise because he was threatened with pros-
e~ution fo.r falsely ~isrepresenting his age and that this amounted to coe~-
c1on. Their
. Lordships observed·• "The 1aw as contame • dm · Secti'on 15 .1s .
th
Imud~h _w~der an anything to be found in the English authorities aDd inf
n 1a it 1s not correct to h
. . .. b of o
a threat to brmg a · ·sayI t hat a contract 1s v1t1ated merely fYpro .
cnmma c arge. Of course, if the charge o cheating
11
3. (1912) 16 IC 344.
4. ILR (1918) 41 Mad 33 I
5. S. 3~~' _Indian 36
Penal C~de.'
6. Mas1tdt v Ayisha, 1880 p .
7. (1912) 16 IC 344. Man pun, Rec No 135, p. 398. I;
6 AP
78 h d f a ragada Krish M IR 200
. ' t e e endant (cashier) misa ~a urthy v Savani Transport (P) Ltd, A . note
m pa~ment, not allowed to get rfJ~opr_iat~d money, admitted it and made a proouss~~~irn of
coercion: Gangadeep Pratisthan (P) ~h~ liability to repay by saying that he was th5e ;~ 1958,
no coercion found behind a t V Mechano (2005) 11 sec 273· AIR 200 I~
consent decree. , .
 Coercion 179
IS· 1SI .
. a true One ' there 1s anl cn<l to the plaintiW
. s case f
· , or a t hrea t to hrin
•g
w:ts • • ,c would not )Can act forh1dd cn by the 111 1· p C' d ,,
·ha c1,a 1o
1
c. 1an cna I o e. 8
slll \ c cot11·t below recorJc<l no finding as to the truth
As f1 case was referred back for re-trial. or faIs1ty
. of t he
1
•iYC, t1C
,.\1;11~ was that t11e pI·' ,llnt1'ff was disposs
'
· .essed of pr.om1scs · forci'bl y
\
~ \c pea
rt-r r,1Cu
1
\ . .,t that he would be arrested and deta111cd under the
} , Mam · tenance
1.111tt: ernal Sccurity_Act. T ,e court said that such threats would fall
within
oflnt _ ·hief of Section 15. 9
thC 011Sl
·on of property
vete'1 t, '
An illustration of de~entton of property is provided by an early case. The
. ·ff had pledged his plate with the defendant for £20. When he went
P\aint1 em it the pledgee msiste
. . d th · · nal £10
at an additio interest was also
d
to re e · 'ff 'd h'
owed, The plamu pat ~ ts to re d~e~ h'is Pl~te and then sued to recover it
bac k. The court allowed
d f
tt. He was m immediate need of his article and the
defendant extracte rom h'1m an extra amount by refusing to deliver it.10
Refusal by a Gover~men~ department to release the payment of a contractor
less he gave up his claim for extra rates amounted to coercion under the
un
n of property.11 A company entered into a contract with
category of detentio .
a Government company (GAIL), for purchase of gas. The buyer company
constructed the pipeline for carriage of gas and was also responsible for
its maintenance. Even then GAIL demanded from the company transpor-
tation charges. The demand was also found to be against the price struc-
ture fixed by the Government. It was held that GAIL was acting dehors
the Government pricing order and, being an agency of the Government, it
should not have done so. It should not have acted in a commercial and arbi-
trary manner. GAIL had incurred no cost in transportation.12
Comparison with English Law
The following comparison has been attempted by the Madras High
Court:13
"What the Indian Law calls 'coercion' is called in English Law 'Duress
or Menace'. Duress is said to consist in actual or threatened violence or
8. Compulsory sales prescribed by an Act, for example, that the grower will sell all his product
only to a particular mill, there is no coercion in it. For a subsequent decision see Salar Jung
Sugar Mills v State of Mysore, (1972) 1 SCC 23: AIR 1972 SC 87.
9. Kishan Lal Kalra v NDMC, AIR
2001 Del 402: (2001) 92 DLT 67.
lO. Astley v Reynolds, (1731) 2 STR 915: 93 ER 939.
ll. Irrigation Deptt v Progressive Engg Co, (1997) 4 ALO 489 (AP); U.P. Coop Cane
Unions
Federations v West U.P. Sugar Mills Assn, (2004) 5 SCC 430: AIR 2004 SC 3697, fixation
of
sugar prices in the exercise of statutory power, no coercion.
12
· !ssar Steel Ltd v Union of India, (2006) 1 GLH 609: (2006) 1 Guj LR 436, thus ~he demand
as of coercive nature and was, therefore, set aside. State of Kera/av
sec 195: AIR 2007 SC 1537 a claim of damages under supplementalM.A. Matha,, (2?07) 10
work, contention that
the supplemental agreemen
t ;as the result of coercion, award of damages without considering
13 the
I(
fact 0 f coercion
· was
held to be not proper.
· aruppayee Ammal v Karuppiah Pillai, (1987) 2 MLJ 138.
180 Chapter 5 Free Consent
fS,
11
t
imprisonment of the contracti_ng pa'.y ht wi~e'la ren~ chii<l
other art or by anyo ne ,H.:ttng w~t1 i.s . now e g~ an o~ , by L
°[
his a(j tJJ
P y ·on as defin ed in Sectwn 15 1s much wider and •nclu Va~
tage. But coerc1
unlawful detention of prop erty also. Furt her, coercion
· b (Ies tL
may . e corntn i 111
by any person not necessarily a party to the co~tract. Agam
, it need tte~
be directed a~ainst the contracting party, o~ his _parent, wife
or ch~O\
It may be directed against any person, ~ven if h~ ts a s~rang~r.
.hL
While?,
Eng l1s duress must be such as will cause 1mmed1ate violen 111
aw,
also unnerve a person of ordinary firmness of mm •d h ce a d
' t ese requisites n
. In d'1an Law. "
not necessary m are
UNDUE INFLUENCE
Definition [S. 16]
s. 16• •"Undue influence" defined. -(1) A contract is said to be induced b
•undue influence" where the relations subsis_ting betwe_en the
parties are sue~
that one of the parties is in a position to dominate the will of
the other and uses
that position to obtain an unfair advantage over the other.
(2) In particular and without prejudice to the generality of the
foregoing prin-
ciple, a person is deemed to be in a position to dominate the
will of another-
(a) where he holds a real or apparent authority over the other
or where he
stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose ment
al capacity is tem-
porarily or permanently affected by reason of age, illness, or
mental or
bodily distress.
(3) Where a person who is in a position to dominate the will of
another, enters
into a contract with him, and the transaction appears, on the
face of it or on evi-
dence adduced, to be unconscionable, the burden of proving
that such contract
was not induced by undue influence shall lie upon the perso
n in a position to
dominate the will of the other.
Nothing in this sub-section shall affect the provision of Secti
on 111 of the
Indian Evidence Act, 1872 {1 of 1872).

Illustrations
Co) A, having advanced money to his son, B, during his minority, upon
B's coming of age
obtains, by misuse of parental influence, a bond from B for a
greater amount than the
sum due in respect of the advance. A employs undue influence.
(b) ~, a man enfeebled by disease or age, is induced, by B's
influence over him as his med·
,cal attendant, to agree to pay 8 an unreasonable sum for his
professional services. 8
employs undue influence.
(c) A, ~eing in debt to B, the moneylender of his village, contra
cts a fresh loan on terms
~hich appear to be unconscionable. It lies on 8 to prove that
induced by undue influence. the contract was not
(d) A applies to a ba~ker for a loan at a time when there
is stringency in the money market.
The banker declines to make the loan except at an unusually
high rate of inter~st. A
accepts the loan on these terms. This is a transaction in the ordina
ry course of business,
and the contract is not induced by undue influence.
 Undueinflucnce 181
[S· t6l
inate will of other
. tO dotn
J\bihtY . the parties to an agreement are so related to each other that
5001et1t11e~s1 able to dominate the will of the other. The person who occu•
Of rhem erior positwn
• •
may prevai·1 upon t he other to obtain his consent
0oe
pies the sup ,ent to which he, but for the influence so exerted would not
ro an agree1;ed. The relationship between the parties so as to e~able one of
d 1jnate the WI·11 Of t he ot her is· a sma
n3ve consen · qua non for
undue influence
ro on .. l d . (
rhe 111 10 • to play. 14 A spmtua a viser guru), for example in a case before
ro corne
llahabad H1g · h Court, 15 111
• d
uce d the Plamt1
. 'ff'. h'1s devotee,
' to gift to him
the A I of his property to secure benefits to his soul in the next world.
the who \sent is said to be obtained by undue influence. "Would any rea-
Such aI cornan " the court sa1·d, "'m full possession· of his senses and not under
sonab el •nfl~ence of some kind or the other do such a thing?"
unusua I ,

conse nt under pressure

rnediclaim insurance policy, the insured was forced and pressurised
1
n \ent to exclusion of cover for cardiac ailments. It was held that the
to connt being not lawful, it had no binding effect.16
conse
Subtle species of fraud
"Undue influence is said to be a subtle species of fraud whereby mastery is
obtained over the mind of the victim, by insidious approaches and seductive
artifices. Sometimes the result is brought about by fear, coercion, importu-
nity or other domination, calculated to prevent expression of the victim's
true mind. It is a constraint undermining free agency, overcoming the pow-
ers of resistance, bringing about a submission of the other." 17 The following
statement bears out the distinction between coercion and undue influence:
"The law draws a distinction between duress and undue influence.
Duress (coercion) in the execution of a contract or deed occurs when
there is a physical compulsion of the person, which must be very rare, or
when there is a threat to the person's life or limb, or threat of a physical
beating or of imprisonment. It may also take into account threats of a
wrongful imprisonment or prosecution of the person and possibly of the
person's near relative.
In contrast to duress, undue influence may exist without violence or
threats of violence against the victim. It depends upon the existence of a
relationship between two parties which, while it continues, causes one to
place a confidence in the other which produces a natural influence over
the one which that other abuses to his own advantage." 18

!~·: ~llachi ~ Pakeeran, (2009) 12 SCC 95: (2009) 4 SCC (Civ) 640.
A;nnu Singh v
16 Umadat Pande, ILR (1888-90) 12 All 523.
17. Mashoy Kumar Patil v New India Assurance Co, AIR ~007 Del 136.
18 S hboob Khan v Hakim Abdul Rahim AIR 1964 Ra1 250.
· axon V Saxon, (1976) 4 WWR 300, 305, 306 (BC SC).

b
182 Chapter 5 Free Consent
[S, l
6]
. .ch involve domination
Rclauons whi . h ne party is able to dominate th .
1
When can it be ~a ?n talrc;ses where there is active trust an~ ; 111 of th
other? The answ~r is, 1 h rties are not on equal footing.19 lh 0n6den e
between the parties or th e p~nfluence is acquired and abused ''·he Princi11c1e
• s to every case w ere 1
applie " 11 · ' n er "e
. d nd betraye d. It applies to a variety of relat·100 . e co"c ,,,,,
dence 1s repose a . ed by one person over another."20 "..,.1n \Vhicb
. .
dommat1on may be exerc1 s . .nfl
ating 1 uence of one O •he tela
. h' h' h may deveIop a domin . Ver ,
t1on~ 1p~ w ic . us. There is no precisely de.fined law s~tting lirni another
are !nfimt~ly.Vrl~on of a court to relieve agamst undue mfluence. ~h~o .the
eqmtable 1u~1s i~tot of neat and tidy rules. The courts of equity have ts ts a
world d~c~m;f learning enabling relief to be g~anted where the law ieve1.
oped a O Y . unimpeachable unless 1t can be held to h as to
treat the transaction as . h b'l'
d b d ·nfluence. It is the unimp eac a 11ty at law ofaved'been
procure y un uaect11·on which is the startin g-point from which tha tsad.
vantageous trans . . h d e
advances to con Sl.der whether the transacuon 1s t e pro uct merely of cou rt
. d b h one's
own fo11y or of the. U ndue influen
. . . . ce.exercise f y anot. er. A court. in. the
exercis• e of thi's eqmtable 1urisd1ct1on 1s.a courth o conscience. Definni·o .
poor instrument when used to .detcrm_me w et her a transaction . nts a
_is or is not
unconscionable: this is a quesuon which depends upon the particular fact
of the case."21 For example, in Willia ms v Bay/ey:11 s
A son forged his father 's signature on several promissory notes and
paid them into his bankin g account. Wh_en the truth came to light, the
manager of the bank threatened prosecution of the son and 16 transporta-
tion" if a satisfactory solution were not found. To avert this threat, the
father agreed to give an equ itable mortgage to the bank on his property
in return for the promissory notes. Subsequentl y the father sought to have
this agreement cancelled on the ground rhat he was influenced by the
threat.
The House of Lords held the agreement to be voidable. Lord CHELMSFORD
expressed the opinion that the negotiation proceeded upon an understanding
that the agreement to give security for the promissory notes would relieve
the son from the consequences of his criminal act; and the fears of the father
were stimulated and operated on to an extent to deprive him of free agency,
and to extort an agreement from him for the benefit of the bankers. There

19. !he ordinary _trade buyers and sellers are on equal footing and not
11!. Sec Devk1 Nandan v Gokli Bai, (1886) 90 PLR 325 (P&H). related in fuiuciarycapac·
20. Sir SAMUEL ROMILLYin Huguenin v Basely, (1807) 14 Yes 273: 9
RR 283; Krisl,namoOrl~
v_Sivak~mar, (2009) 3 CTC 446, an election candidate cannot be regarde
d as being in 3 po!'"
tton to mfluence the will of voter, nor in that process they are making
any agreement- Anf
such agreement,_if at aH, would be contrary to law and public policy.
21. Lord SCARMA Nm National Westminster Bank P&C v Morgan , (1985)
22 · (! 866 2 WLR 588 (Hl)- .
) LR I HL 200. It has been observed by the Supreme Court that S. 16 is
law of undue mfluence. Subhas Chandra Das Mush .b G l,asecf 00 ~
SC 878: (1967) 1 SCR 331. 1 p asad Das M11shib , AIJ1. 19
v anga T
 UndueinAuenct 183
[S 161
· u~litY between th e p.1rties and one of them took unfair adva ntage
,i\s jr,e_q . tion of the other and used un<lue influence to force an ag reement
i I s1ru,1
fr ,e .
o{rottl htrtl··cular , however, and without prejudice to the generality of the
art1 d . b .
_In_. Ple, rhe Act lays . ?wn, m su .-section (2~ of Section 16 that a person is
prindP ro be in a pos1t1on to dommate the will of another in the following
Jee111ed
Id I h .
' ases.-h e he ho s a rea or apparent aut ortty over the other or where he
(a) w erds in fiduciary relation to the other; or '
stan .h
where he makes a contract wit a person whose mental capacity is
(b) porarily or.permanently affected by reason of age ' illness , or men-
rem
tal or bodily distress.

apparent authority
Real or . . . .
A rson in authority 1s defimtely able to dommate the will of the person
pehom the authority is held. The authority may be real or apparent.
over w · ld . 1 d I t ·
Persons in authority wou 1~c u fefi an .ncome_ ax Officer m relation to an
see· a magistrate or po1tee o cerhm re 1at1on to an accused person and
. " .
asses , . "
the like. The expression a~parent _aut ority wou1d mclude cases in which
real authonty, but 1s able to approach the other with a show
apers on has no .
or colour of authority.

Fiduciary relation
Fiduciary relations are of several kinds. Indeed every relationship of trust
and confidence is a fiduciary relation. And confidence is at the base of innu-
23

merable transactions of mankind. This category is, therefore, a very wide

one. It includes the relationship of solicitor and client, trustee and cestui
24
27
que trust, 25 spiritual adviser and his devotee, doctor and patient, woman
26
29
and her confidential managing agent, parent or guardian and child, and
28

23. See Subhas Chandra Das Mushib v Ganga Prasad Das Mushib, AIR 1967 SC 878: (1967) 1
SCR 331.
24. Pushong v Mania Halwani, 1868 BLR AC 95, where a poor woman agreed to give one-half of
the property which she might recover with the assistance of her Mookhtaar. See, for example,
Moody v Cox, (1917) 2 Ch 71, where a solicitor sold a trust property to one of his clients who
subsequently sought rescission on the ground that the property was considerably overvalued.
The Court of Appeal held that when undue influence is alleged against a solicitor he has to
prove that he disclosed all the material facts and that the transaction was of advantage to the
client.
2S. Raghunath v Var;ivandas, (1906) 30 Born 578.
26 · Mannu Singh v Umadat Pande, ILR (1888-90) 12 All 523.
27• Mitchell v Homfray (1881) LR 8 QBD 587 (CA).
28 · Wa;;d Khan v Raia Ewaz Ali Khan, (1890-91) 18 IA 144; Subbamma v Mohd Abdul Hafiz,
AIR 1950 Hyd 55.
29 Lakshmi Doss v Roop Lau/, JLR (1906-08) 30 Mad 169; Suguna v Vinod G. Nehemiah,
·
(l008) 2 CTC 433, for twenty long years the daughter was taking care of her aged father, the
latter settled his property upon her. The court felt that burden of proving that no influence
184 Chapter S Free Consent [S, 16
30 The relationship of trust and confidence l
Creditor and debtor, h person in whom confidence is held Present
very good opportuni·ty to t betwee e
n persons so re Iate d ts,
. to
therefo e}(Ploit .
s~
to his own use. A contra . ctd by abusing thecon fid ence. Th e dut re, v01dab1 . It
if the consent was obtan~e posed was explained by the Court yofo! the "e e
fidence 1s re
son in whom con . . r sold certain property to one of his cl·l\pPealt'f,in
A so 11c1to
~oody v Cox.
31 . tent
Ile ed that the property was considerably ove s. lhe
chent subsequently ad dg follows: "Generally when you haven. drvalued
SCRUTTON LJ procee e as .. d. .,,a ea I ,
recd expressed it in wntmg, an it has not been ob ~gaJ
contract a_nd cor y f facts innocent or fraudulent, the contra ta1ned
b any misstatement o ' k f
Y h
and the fact t at one party or the other nows acts about whichct hstands,
. fi bl h e sa
nothin g, wh'1ch made the contract unpro •ta e1one · to t e other Part . Ys
d Y, 1s 0f
no lega l consequenCe · But there are certam re ations . an
d certain co
ntracts
m wh'1ch a h'1gher duty is imposed upon the parties
. an they must not
tell the truth, but they must tell the whole truth so far as it. is. material, only and
they must not only not misreprese~t by w~rds, the! must not misrepresent
by silence if they know of somethmg that 1s matenal. Some of those ca
depend on the relationship between the parties, and, generally speaking ;es
cases where the relation is such that there is confidence rep~sed by one p~r;
and influence exercised by the other. In that class of relation of parties you
may get the duty, first of all, that the party who has influence must make
a full disclosure of everything that he knows material to the contract, and,
secondly, that the party who has the influence must not make a contract
with the party over whom he has influence unless he can satisfy the court
that the contract is an advantageous one to the other party."
Mental distress
The last category of persons whose will is vulnerable to all sorts of influ-
ences is that of "persons in mental distress". A person is said to be in distress
when his mental capacity is temporarily or permanently affected. It may be
due to ext_reme _old age or mental or bodily illness or any other cause. Such
a person is ea stly persuaded to give consent to a contract which may be
unfavourable to him. Accordingly, if a contract is made with him by taking
advantage of his distress, it is voidable on the ground of undue influence. In
fo:
a case, example, before the Madras High Court, a poor Hindu widow~
who was m great need of money to establish her right to maintenance, w~2
pehr_su~ lby a_moneylender to agree to pay 100 per cent rate of interest:
T is is ded
a c ear mstance of d . fl erson in
.
distress, and the court red undueh m. uence being exerted upon a P
uce t e mterest to 24 per cent.
was exerted on the father's . d d
therefore the settlement w m,~n blwas upon her. The presumption could not be broned an
30 . . I
Dza a Ram v Sarga, AIR as taL e to be .d det
31. (1917) 2 CH 71. 1927 ah 536. set as1 e.
32. Rannee Annapurni Na h.
c zar v Sw · h
amznat a Chettiar, ILR (1909-11) 34 Ma d 7.·
 Undue influence 185
[.s. t61 d'
do f money, no ,stress
,,,,r ,1ee ,1t need of money on the part of the bcJrr . f
vrg~ urge f l d' ower lS not O
,ere . t evidence o menta 1stress. Thus where a '
Ot1t 11 ffic1et1 . h • . ' person was
9 s\\ . rosecut1on at t e instance of his father and b d
•seIf, · 1na1P f df d
it- . crt'" 1s a sum o money to c en himself it Was horrowe
(J
Id h
on
h
f~c1t1i,
bit'1nt
rern . ld , e t at e
mental distress as wou
eior · 5uc11
not
f enable
. a moneylender to d .
om mate
1n
«aS . 33 s11nt ' . ·tai·ly where a person, eanng the result of the p .
, , rosecut1on
. \\1111, . t him enters mto an agreement m favour of the co •
btS a a111s ' . mp1amant
e .,dit\S
p •deratto
11 g . n of his abandonmg the prosecution it cannot be h Id •
, e s1m-
1·o,ons1on nes 1 e facts that the consent of such person was caused by undue
plY up 34
. fluence,
~ mpulsion, no d'tstress
Statutory co .
Ct made under statutory compulsion cannot be regarded as one
Acontra
undue influence. In a case before the Supreme Court a cane
de under
ma h d the freedom to offer canes to the factory of his area or not
'
but if
ower a f b d d
gr ade an offer, the actory was oun un er an Act to accept. The
111 court
he . d out that in such a case the consent, though compulsory, is not caused
Pointedue influence, fraud, m1srepresen
. . . k
tat1on or m1sta e. The compulsion of
by un. not coercion. "As a resu lt of economic . compu Is1ons
· and changes in the
\aw1s d f . .
l'tical outlook, the free om o contract 1s now bemg confined gradually to
poirower and narrower 1· · H ·
0
1m1ts. ere 1s a case where one party to contract of
:1: is compelled to enter into it on rigidly prescribed terms and conditions
:nd has no freedom of bargaining. But, in the eyes of the law, the agree-
ment is freely made." 35 Where the parties voluntarily executed a power pur-
chase agreement pursuant to an order passed by the Electricity Regulatory
Commission, avoidance of the agreement on the ground of duress, coercion
or undue influence was held to be not sustainable. 36

Burden of proof
In an action to avoid a contract on the ,g~ound of undue influence the
plaintiff has to prove two main points. He must show, in the first place, that
the other party was in a position to dominate his will, and, secondly, that he
actually used his influence to obtain the plaintiff's consent to the contract:
The law says that: (1) not only must the defendant have a dominant position,
~) he must use it. 37 It is not enough, for a person to avoid the contract,
!!· Rag~u~ath Prasad Sahu v Sarju Prasad Sahu, (1924) 19 LW 470: AIR 1924 PC 60.
35· Mas1zd, v Ayisha, 1880 Punj Rec No. 135, p. 398 .
. ~n~hra Sugars Ltd v State of A.P., AIR 1968 SC 599: (1968) 1 SCR 705; U.P. Coop Cane
co:o:s Federa_ti?ns v West U.P. Sugar Mills Assn, (2004)_5 SCC 430: AIR 200~ SC 3697,
. P lsory prtcing for sale is not undue influence, nor does at affect the character of the trans-
36 action as a sale.
37: ~~: ~uminium Ltd v Gabriel India Ltd, (2011) 1 SCC 167: (2011) 98 AIC 228 · .
th· ese requirements must coexist for the reversal of the rule as to burden of proot uo der
P;:;;ction and S. 111 of the Evidence Act, 1872. Sundari Devi v Naray~n ~ras~d, AIR 2011
, for proving coercion (S. 15) and undue influence, the defendant m his evidence stated
186 Chapter 5 Free Consent
fS. lGJ
to show that the oth er party is
his father wh o could ?a~e influence
must go further and show that his d him
fath er actu ally did mfluence hirn.18 • He
Presumption of undue influence
But in certain cases presumption
of undue influence is raised. The
of the presumption is that once it eff
is s_ho~n.tha~ the defendant was
tion to dominate the will of the pla in a P;s~~
mt1ff 1t will be presumed that he
have used his position to obtain rn
an unfair advantage. It will be st
the defendant to show that the pla then ~
intiff freely consented. For exarnp
39
Lancashire Loans v BIack:40 le ?r
, 1n
The defendant was a married gir
l of full age. She gave a security
the loan which her mother took froµ f
was from the solicitor of the compan
1 a company. The only advice she
h~~
y.
ScR UT TO N LJ held that
"in the case of the benefit of con
tage obtained from a person coming tractual advan-
within certain defined relations, suc
the relation of parent and young chi h as
ld, solicitor and client, religious sup
erior
that signatures were taken on blan
k papers_ and the agreement crea
ported by pleadings. Under S. 102 ted, but th!s was not sup-
of the Evidence Act, 1872, onus
facts alleged, but he could not do was upon him to prove the
so, the agreement was enforceable.
38. Aniadennessa Bibi v Rahim
Buksh, ILR (1915) 42 Cal 286. All
as in the case of fraud. Subhas Cha the particulars must be given
ndra Das Mushib v Ganga Prasad
SC 878: (1967) 1 SCR 331; Alec Das Mushib, AIR 1967
Lobb (Garages) Ltd v Total Oil Gre
WLR 87 (Ch D). Every person occ at Britain Ltd, (1983) 1
upying a position of influence doe
Thus where finance was provided s not necessarily abuse it.
twice over to a garage subject to
but with a genuine concern to help certain protective clauses
its business, no undue influence
of the agreement was struck down was found though a part
as unreasonable restraint of trad
Bibi, (1976) 2 SCC 142: AIR 1976 e. Afsar Sheikh v Soleman
SC 163, the fact of undue influen
the particulars pleaded by the plai ce must be made out of
ntiff and not from the written stat
father executed a sale deed in favo ement. Where an ailing
ur of his two sons who were cari
living apart questioned validity, the ng for him and the third
court held that though the burden
favoured, the transaction did not was on those who were
disclose any element of influence
Champa Devi, (1986) 34 BLJR 90, or fraud. Sukhdeo Rai v
gift deed in favour of grandson
by the donor only a few days befo upheld though executed
re his death. The court followed
LAWS OF ENLAND, Vol 17 the remark in HALSBURY'S
(3rd Edn) 678, to the effect that:
~nfluence in the case of gift to a son "There is no presumption of undue
, grandson or son-in-law, althoug
illness and a few days before his dea h made during the donor's
th." Shrimati v Sudhakar R. Bha
(19?7) 4 Born CR 237, the mere fact tkar, AIR 1998 Born 122:
that the person in whose favour
registered deed was the tenant of a property was gifted by
the owner was held to be not suff
of proof on the donee. Kartick Pra icient to shift the burden
sad Gorai v Neami Prasad Gorai
was no consideration and the sale AIR 1998 Cal 278, there
deed seemed to be fake, hence pr~
burden of proof on to the benefic sumption and shifting of
iary of the sale deed. Savithramm
~I.R 1996 Kant 99, a~legat!o~ a v H. Gurappa Reddy,
of undue influence, level of proof
•t IS rated on a par with cnm required is extremely high,
inal trial. Dalbir Singh v Vir Sing
of land, agreement between an ada h, AIR 200
tia and his customer, the former cou 1 P&H 216, sale
an~ , therefor e, bett er proof
of fairn ess was exp ected. NTPC ld influence the l~tter
Builders~ C?ntractors , (200~) ~ Ltd v Reshmi Construct1011s,
SCC 663: AIR 2004 SC 1330: (200
of th e ~arties 18 relevan t for arnvin 4) 1 KLT 1065, ~o ncluc;
g at
undue influence. The case involved a conclusion with resp ect to allegations of coercion an
39· full and final settlement.
Krishna Mo~an ~ul v Pratima Ma e
ity,
person standmg m fidu ciary relation (2004) 9 SCC 468 : AIR 2003 SC 4351, burden on th
40. (1934) 1 KB 380 (CA). ship.
 Undue influence 187
s. t6 l
f ,. y the related member of that class, it is enough t h
·or, o . h h . . o prove t e
in fe ri f ch 3 relat10n to t row on t e recipient of the a d vantage t he
at1 d o su d d •
isrence ving indepen ent a vice to the donor and in oth
e" of pro . ,, H . L d h. h er respects
bordeO h t ransactton. is or s ip t en pointed out th a t a marr1e . d
. · g t e . . d d f .
·1.1st1fy1n_s no t necessanly in epen ent o the influence of her moth S h
I O 1 . h h . f er. uc
wotlla Id be dealt wit on t eir own acts, and not on any gen era I pre-
shou h h
cases .on. On the facts of t e case t e court found that she was under th e
41
sutllP0 of her mother.
infl~en_r ly where a parda lady of 70 years, having three daughters was
111
S11 ~ \ ; have gifted her entire land to the defendant, who was the t;nant
suppose! d it was held that from the position of his possession of the land
of thatst an have ·
' dommated t h e woman and b urden lay upon him to show the
he. rnu tances of the g1· f t. H e b e1ng . not a ble to d o so, the gift deed was set
c1rcums
.d 42
as•The e. presumption 1s · raise· d at Ieast 1n· t he roi: II · cases:
owmg

t. Unconscionable bargains, inequality of bargaining power or

economic duress
Unconscionableness
Where one of the parties to a contract is in a position to dominate the will
of the other and the contract is apparently unconscionable, that is, unfair,
the law presumes that consent must have been obtained by undue influence.
The burden is shifted to the stronger party to prove that he did nothing to
overbear the will of the other. An instructive illustration is the decision of
the Privy Council in Wajid Khan v Raja Ewaz Ali Khan: 43
An old and illiterate woman, incapable of any business, conferred on
her confidential managing agent, without any valuable consideration, an
important pecuniary benefit under the guise of a trust.
Their Lordships said that "all the facts of the case go to show that there
was active undue influence. The onus is on the grantee to show conclusively
~hat the transaction is honest, bona fide, well-understood, the subject of
tndependent advice and free from undue influence".
•
Some instances o f unconscionableness
_The presumption of undue influence was raised where a poor Hi ndu
Widow, having no means for maintenance, borrowed, in order to eSt ablish
~
· or a survey f
Clj 80 ° a Iarge number of such cases see Che Som B',nte y·p
906 9
' v
Maha P Ltd (1989) 2
•
42. Chand~'- - 1 t, High Court, Singapore. . 8 NOC 969
(1-f P), tgh v Ram Kaur, (1987) 2 PLR 70; Surjit Singh v Bimla De11•• AIR lOO his house
01
and p ' illiterate lady was taken by her collateral, in whom she had confidence, toh .
ut under "dh . ) h 'd that in that state er sagna•
tures we k oona" (somekind of smoke treatment, 1 e saa . on realising
that Pa re ta en on two papers that were represented to her as pensi~n paperi,
43
· (1890- ~~r)slwerc gift deeds, she promptly took action, gift deeds set aside.
8 IA 144.
188 Chapter S Free Consent
[s.
161
her right to maintenance, a sum of money at 100
~er cent .rate of inter
where a person, without having the means of subs
istence, tn order to .:st;41
an appeal against a judgment, borrowed Rs 3700 on
a b?nd Prornis~ efer
R 25 000 within a year from recovery of the possession
pay s , of an g to
where a youth of 18 years of age, spen dt hn.ft an d d k
a run ard, borestate;41
Rs 900 on a bond bearing compound interest at 2 per cent per rnrowed
w'th monthly rests the court saying t hat "t he mstr
. .
ument itself bear ensetn
l
bl d r
its face the impress of unconsciona e ea mg, t h
,
e rate of Inter
. s
being so exorbitant"·46 where a person of the age est charUpon
of some 28 years th ged
' of profligat h b'
of a wealthy man, but e a its an d great ly m. nee d of rnon
' e soh·n
father having refused to supply him, executed a
bond to secure a s~' 18
Rs500 with 37 ½percent interest with six-month
ly rests, the bond furnhof
providing that the sum would not be repaya ble wit. h' h
m t ree years and rt er
if it was repaid the interest would run for thr~e years
.47 In all these case::~n
court gave relief by scaling down t?e ~ate of mterest
t~ ~ha t appeared to b:
reasonable in the circumstances. Gift m favour of a
religious organisation b
a person weak in mind and suffering in health has
been held to be one whici
carries the apparent impress of undue influence. 48

Unconscionableness in money/ending transactions

Unconscionable bargains have been witnessed mos
tly in moneylending
transactions and in gifts. But the principle is not conf
ined to such transac-
tions only. In a case before the Bombay High Cou 49
rt, a poor farmer, being
unable to pay back a loan, executed a sale deed in
favour of the creditor of
his property three times the value of the sum due, the
court granted relief by
setting aside the sale and allowing the farmer to pay
back the lender within
a fixed period.

Position of dominance necessary for presumption to

arise
. It should, however, be borne in mind that the
presumption of undue
mfluence on the ground of unconscionableness of the
bargain is raised only
when one of the parties is in a position to dominate
the will of the other.
As be~ween parties on equal footing the mere unco
nscionableness of the
bargain does not create the presumption of undue
th at the bargain is a hard one influence. The mere fa~t
is no ground in itself for granting relief. This

44
· Ranne~ Annapurni Nachiar v Swaminatha Chett
45. C~unn, Kuar v Rup Singh, ILR (1888-90) 11 All iar, ILR (1909-11) 34 Mad 7.
!;·. ~trlpk~ hRam v Sami-ud-din Ahmad Khan,
a. .'s an Das Madan Lal,
v
57
ILR (1901~03) 25 All 284 STANLEY CJ at P· 285,
(1907) 29 All 303 ,
48. Ph1!1P Lukka v Franciscan Assn, AIR 1987 Ker.2
49. Bhtmbha v Yeshwantrao ILR (1900) 04 R
2005 Born 13 '
7, a 1oan transa . 25 Born 126;· Union odar, Al
of India v M. V. Dam gh rhe
medium of the Sh . . D ction for pure hase of .
vessels was 6na 11se
· d throu
economic duress ~~::~:e
0
;v~1 sea going
opment F~n~ Committee. It could not be said that
t e monopolistic status of the Fund Comm t
h re was
e
ittee.
 Undueinfluence 189
16]
[S· . d out by the Privy Council in Raghunath Prasad ahu v Sar1u s •
o111te 50
\Vas pJ sah"·
prttsa defendant and his father were equal owners of a vast joint family
CASE PIL01
rhe er which they had quarrelled. Consequently the father had
Proper
tY
d riminal procee d'mgs agam
ov . st the
son. The defendant in order
. ite c
josntt d himself, mortgage
d h'ts properties
. to the . . '
plamt1ff and borrowed
1
co def~ ; 111 about ten thous~nd rupees on 24 per cent compound interest.
frotll ars this rate of mterest had magnified the sum covered by the
Joe!even yemore than eleven fold , viz., . Rs 1,12,885. The
defendant con~
111ort~g~at the lender had, by exacting high rate of interest taken uncon~
te~d\b~e advantage of his mental distress and, therefore, there should be
scion tion of undue influence.
presumP
. Lordships, however, held that there could be no such presumption
Thet~ umstances of the case. Referring to sub-section (3) of Section 16
. the c1rc . f d . fl
in . h ovides for presumption o un ue m uence, Lord SHAW observed as'
whic ~r"By this sub-section three matters are dealt with. In the first place
follows. .
1 tions between the parties to each ot her must be such that one is in a'
the~~:n to
dominate the will of the other. Once that position is substanti-
d the second stage has been reac hed, viz.,
posttt · the issue
· whether the contract
::s been induced by undu~ in~uence. Upon the determination of this issue
third point emerges, which is that of the onus probandi. The burden of
;roving that the contract was not induced by the undue influence is to lie
upon the person who was in a position to dominate the will of the other.
Error is almost sure to arise if the order of these propositions be changed.
The unconscionableness of the bargain is not the first thing to be considered.
The first thing to be considered is the relations of these parties. Were they
such as to put one in a position to dominate the will of the other?"
The borrower failed to prove that the lender was in a position to dom-
inate his will. The only relation between the parties that was proved was
simply that they were lender and borrower. The first requirement of Section
16 was, therefore, not fulfilled and, therefore, the borrower got no relief.51

Unconscionable gifts
Where a person was suffering from a number of ailments which con-
fined him to a nursing-home and from there he made a deed gifting all his

?
SO. 0 24 ) 19 LW 470: AIR 1924 PC 60. See also Maria Eudaria Apolonia Gonsalves v Shripad
Vishnu .Kamat Tarcar, AIR 1998 Born 46, agreement for sale of property, immaterial that it
~as Written in Portuguese, seller's son knew that language, no particulars of undue intluence
S1. ~;eged, agreement enforceable, the price was found by experts to be reasonable and fair.
T~~lso Rani Sundar Kaer v Rai Sham Krishen, ILR (1906-07) 34 IA 9: (1907) 34 Cal 150.
ir Lo rd ships distinguished the case from Dhanipal Das v Raja Maheshw~r Bakhsh S~t1gh,
09 5 6
IL~ -0 ) 33 IA 118: ILR (1906) 28 All 570 and Raja Maheshwar Baksh Singh v Shad, Lal,
(l 908-09) 36 IA 76: (1909) 31 All 386 on the ground that in these cases the borrower
"'easbpllaced under the Court of Wards and ~as therefore, under a peculiar disability. This
na ed th I d ,
e en er to dominate his will.
\90 Chapter S Free Consent
[S, 16]
properties to one of his sons to the
_exclusion of others, ~~e ~uprerne
held that the presumption of undu C0ur
e influence was prfoper.h G1~ts of
are often made un der in· fl this kindt
uence. Ina n other case be ore t e Privy Co .
An old Malay widow, wholly illi unc1l:s3
terate, was the owner of considera
rent-producing landed property. She ble
gift~d all her property to her nephe\V
who was helping her, leaving for
her an income only of about 30
The deed of gift was prepared wi dollars
th the help of a lawyer.
On these facts the Lord CHANCELL .
OR obser~ed: "In t~e present case
Lordships do not doubt that the _la their
wyer a~ted in good faith, but he
have received a good deal of his inf seems to
ormation from the respondent (ne
he was not made aware of the ma phew)•
terial fact that the property wh
being given away constituted practi ich wa'
cally the whole estate of t_he don
he certainly does not seem to hav or, an:
e brought home to her mmd the
quences to herself of what she wa conse-
s doing, or the fact that sh~ cou
prudently and equally effectively, ld more
have benefited the donee without
risk to herself by retaining the pro undue
perty in her own possession dur
life and bestowing it upon him ing her
by her will. In their Lordships'
facts proved by the respondent are vie w the
not sufficient to rebut the presum
undue influence which is raised by pti on of
the relationship proved to have
existence between the parties; and bee n in
they regard it as most important
point of view of the public policy to from the
maintain the rule of law which has
laid down and to insist that a gift been
made under circumstances which
to the presumption must be set asi gave rise
de unless the donee is able to sat
court of the facts sufficient to rebut isfy the
the presumption." 54
In another case of benefits witho
ut consideration and which was
before the Privy Council, 55 a wo also
man, who was described as a sub
wife and who at the bidding of her missive
husband, gave security of her stri
~personal property), which compri dhan
sed some land, to secure the gro
1~d~btedness of her husband, Lo wing
rd GODDARD expressed the opi
"tt 1s unnecessary to enter int nio n that
o a discussion as to the burden
such a case as this as the evidence of pro of in
here abundantly justifies a presum
that she was acting under the influe ptio n
nce of her husband for whose ben
mortgage was being executed". Hi efit the
s Lordship continued: "It would
certainly
52. Lakshmi.Amma ~ Talengala
narayana, (1970) 3 SCC 159: AIR
CASE PILOT c:se of gi:t of entire property by 1970 SC 1367. In another
an old lady to the exclusion of her
~ e ~ge O te donor is definitely one sons the court said that
of the most important facts to
~ t _e tota •ty of the circumstances be taken into account
aniyaram.bath ~akshmikutty Amma surrounding the transaction M
Kar unnakara KuruP"
53
.;~c;; v
f;r tah Bmte Mohd Tah~r Sk Alli
fraud becH 147, 99. yeal r lea~e s1g~
, 1984 KLT 83 (SN). ·
e, AIR 1929 PC 3; Hamela Jan
·
v g Sher Singh,. Al~
ed by a
54 R ause nomma consideration, heldlady who was old, illiterate and sick, also victun o
· amu Mahabir v Ghu h s voidable
of 70 years 1· . . hr h~o amu, AIR 2006 All 273·
, ivmg wit is nephew h d : 2006 AIHC 3035 (All) vendor, Id man
nephew to the exc lusion of th h ~ 0 omma • d . o the
bona 1:des and te. him , transferred his who tY to
. le proper ro"e
genuineness ofe w
O e number of his daughters burden
1• on the nephew to P
55. Tungab ai Bhratar Purush cons'd · · h
h I e~~tion '
mt e tran tion, burden not disc · d
ottam S am1 1 Kumbhojkav v sac harge pC g,
Yeshvant Dinkar Jog, AIR 194 5
[S, 16] Undue influence 191

csum t • .
ot be true to say that there is a pr th p 100 !n eve_ry case where a wife
and w'I ·
fers a benefit on her husb erat1on · E_q ua11 Y it· is
11
d out cons1d h h not
con sary in or er to establish the pres um pt' 10 t at t e parties sh
0 ou ld sta nd
eces f . ip t h h
· 1 sh
n
1·n some
partICu ar categor·1y o rel
be more eas1 y establishe
ation
d an d ° indeacd ot erb. The presum . pti 0
n

no doubt can · ee may . e. assumed .m such

between parent and infant h'1ld 11c1 and clihenft, or
cases as tradns·actions · . . c , so • tor h' h
. . al a .v1ser and pemtent, but 1t wtll arise in an y case m w 1c . t~ e ac d
ts
spmtu . nc e £ • I b
es are such that influe can air y e tnierre .,.,
show that the circumstanc
bl oo d, ma rr ia ge or ad op tion not sine qua non
Relationship of r-
ss ar y to es tab lis ~ the pr esumption is not that the pa
Thus, what is nece na ge or adoption, but that their
rela-
ed by blo od , m ar
ties should be re!~t ch oth er is, such that one is in a
superior
s1 tto n to wa rd s ea
tions are, or po 56
ere they are so related, the pr
esumption
th e oth e~ . Ev en wh
position ov~r
en ce ma y as we ll be fairly and wisely exercised.
may not anse for_ the mflu Su pre me Co urt in Subhas Chandra Da
s
ou t by the
This has been pomted Das Mushib: 57
Mushib v Ganga Prasad dson
CASE PILOT

ra l pr op er ty wa s gif ted by a person to his only gran

Some agricultu tal exclusion of his sons. Altho
ugh
his tw o so ns to the to
through one of s taking active interest in his
property.
s of gr ea t ag e, he wa
the donor wa at the other
ter th e gi ft he die d and still four years after th
Four years af
lid ity of the gi ft on the ground of undue influence.
sons questioned the va
e pr inc ipl es lai d do wn by the Privy Council in
The court approved th ad Sa hu 58 and also noted the fact that
v Sa rju Pr as
Raghunath Prasad Sahu ba se d on the English common law as no
ted
ra ct Ac t is
Section 16 of the Cont ur t in Ladli Prasad Jaiswa/ v Ka
rna/
th e Su pr em e Co
in the judgment of 59 and held that on the facts of the
case no presumption
Distillery Co Lt d he cir cumstance that a grandfath
er made
e co ul d ari se . "T
of undue influenc s to his only grandson (on
account of
rti on of his pr op ertie
a gift of a po
few ye ars be for e his de ath is not on the face
) a
natural love and affection
_elderly c~uple,
anc e Co v Bridge r, (1985) 2 AJI ER 281 (CA). _An
See, foe example, Avon Fin f t~eir_ son
56. hou se, sig ned certain documents at the biddm~ _o
me nt s _oHice,
wiJJing to purchase a retire ance company's solicitors and execut~d ~t the sohc1ror his par-
.fin mittmg a fra ud on
· which were prepared by the · nature an d d'd 1 so by com 'd . •j 1 10 •
· an age nt to pro cur e sig be set ~si e. 5imi ar Y'.
the son actmg as unanimously held that the
charge should t1on
ents, the Court of Appeal (1986) 1 WLR 119, the Court of Appeaerl set aside the tra_nsac
d B II und mis re res ent ation from
K· h 1] L e ' . d by the lend-
tngswort rus~ t v exe cuted by a wif ~ upo n h~r pr: ~~ ~h o was aurh!ise
of a mortgage which was y had been provided the oan
her husband whose compan
ed. I (2003) 7 sec 683: AIR
do cum ent s exe cut ip has been
ing company to get the ; ~- Ra ng asa :iy 1! ::~ ::~ :e ~r relationsh
1 SC R 331 j 152, gift deed in
57. AIR 1967 SC 878: (1967). und ue mf l~ence YD . AIR 20 06 Ra
O
pti on of n Jiving
2003 SC 3120, presum
nn a Ku ma r, v u~;ao h ev:he adoptive father had bee
held to be not permissible
. Mu nce transa n set
ctio
n ~rt ~ ~ft Undue influe '
0
influe nce d by a wo ma
favour of adopted son died within a year a ter t
e gr ·
since 35 years. The donor
aside.
24 PC 60.
58. (1924) 19 LW 470: AIR 19
) 1 SCR 270.
S9, AIR 1963 SC 1279: (1964
192 Chapter S Free Consent
[S, 161
· bl
of it an unconscio na e transa, ctio
. · " Wh ere on the other hand
n, . . · ' • d
made a very 11egligible provision for ' a Per
his thi rd w1f~ an the dau_ghters bf,:o,
by her, and donated the whole of his pro
perty of y to onel of h1_s grandso:e
the Supreme Court held that, in the abs
ence o any _exp anat1on from th'
side of the donor for the discrimination
, the presumption of undue influe e
arose. 60 nee
Inequality of bargaining power
.
The presumption of undue influence ma
y also anse from the fact th
there is such an inequality of bargaining
can cause economic duress to the other.
power ~~tween the parties that
Th~ dec1s1~n of the Court of Appeal
o;:
in Lloyds Bank v Bundy6 1 is a remarkabl
e 1llustrat1on of the concept of ine.
quality of bargaining power.

60 Lakshmi Amma v Talengalanarayana, (1970) 3 SCC 159: AIR

· Devi v Rama Dogra, AIR 1984 HP 11, 1970 SC 1367. See also Tak .
where the donor was an _illiterate lady
her husband and the donee was her lega separated fro:
l advisor, held, presumption of undue
Celine D'Souza v Renie Fernandez, AIR influence. Marci
1998 Ker 280, the person executing
property in favour of the defendants settlement of
was ill and totally dependent on them
The defendants had no other claim to for existence.
or interest in the property. Held, the
vitiated by undue influence. Kennedy document was
Alemas v Executive Engineer, (1998)
the doctrine of inequality of bargaini 2 Bom CR 320,
ng power does not apply where the
patty to the contract. A tender for one Government is a
-year supply system was approved for
plies with right to extend up to 12 mon 3 months' sup-
ths. No extension was granted afte
No illegality on the part of the Governm r first extension.
ent. The court distinguished the case
Inland Water Transport Corpn v Bro from Central
jo Nath Ganguly, (1986) 3 SCC 156
1571; Shrilekha Vidyarthi v State of : AIR 1986 SC
U.P., (1991) 1 SCC 212: AIR 1991
Consumer Education and Research Cen SC 537 and LIC,
tre, (1995) 5 SCC 482: AIR 1995 SC
was observed that the State could not 1811 where it
be allowed to enforce a contract whi
into with a citizen where there did not ch has been entered
exist equality of bargaining power.
Haldar v Sumitra Naskar, AIR 2007 NO Nirmal Chandra
C 1978 (Cal), donor 60 years old,
treatment at the house of two of the defe she was under
ndants, though the husband was pres
was not attested by him. Attestation ent, the gift deed
was by one of the beneficiaries. The
that the gift deed was executed without burden of proving
fraud or coercion not discharged.
61. (1975) 1 QB 326. See also Midland
Bank Pie v Massey, (1995) 1 All ER 929
woman borr~wer for the benefit of ano (CA), where the
ther had the independent advice of her
ba~k w_as enttt~ed to treat the solicitors solicitors. T~
as respectable solicitors who would take
obligation to give Ms Massey indepen seriously theu
dent advice. It was not for the bank to
out exactly what. advice had been give chec k up and 6nd
936 n. Banco Exterior International v Man
ER (CA)! wife mortgaging her joint prop n, (1995) 1 All
erty with her husband for the husband'
The_cou~t said that the bank was not s loaD•
required to conduct a meticulous exam
ad~ ~ given by the solicitor. Once the ban ination of the
k knows that the wife had received
:lacitor, the bank wa~ entitled to thin advice frolll a
k that the solicitor's advice would be
y competent profes~ional person wou such as a reason;~
ld give. TSB Bank pie v Camfield, (199
(ICA), tShhe hhusbdand m1s~epresented to indu 5) 1 WLR 4 's
oans. e a no advice Th h 1 ce his wife to charge her property for
h' h h the husbandto
; l~ ;S~-~~~~~)d t:tt
1
· e w O e transaction

independe~t advic h Id ?}6 (HL),

•
was set aside and not merely t he extent
est ate would be burdened. Barclays
Bank Pie v O'Brien, (~bout
wife standing surety for the husband
994)

Mortgages pie v p;;t ~99~o~~bie because 's ~eb t;; B,C.

of undue influence or misrepresentatio
ing holiday home h, d OO: (1993 ) 3 WLR 802 (HL), wife nd /; buY-
.
investment in shar,ess e agree .f to give h . told loan neede bond oil
b bus
see that she had ind' 1osd w1 edal~oweder property m mortgage, money spent Y k acare co
to avoid, for the finance company did
an influential pol iti: :t ent a vice. D.N not ta s~C 653,
_. Jeevaraj v State of Karnataka, (201 2
person cannot by itself be taken to mea 6) h abilitY
n that he will have t e
 3
[S . 16] Undu e influence 19
owed
A contractor hborr sum of mo f a bank H l not p
. tim . e. T e bankerap ressed for ney rom ' for · se e co.u d ay
back m . r. er might m payment or
st e d t h at h 1s ra th the fa m jJ y 's on ly res~~rlt~,af-1lheoususeg-
ge visited the ofatrtglage d b . 1 ent1
The bandk of6.cer 1er an
o ta m ed hi s sign atu res upo n.
r st W
d s. The contracto . coulhd not pay and e an erf
th b k
rea yma e paper e mortgage h. h ig
soug, ht to enforce th w 1c m .ht ave meant throwing out o
·1 f rom It• s only residenc e, Accordm gl Mr Bundy relied upon th e
t he ram1hY f tgag e. Y
r. · r o the m or
unratr c aracte
to set aside th _D EN N IN G MR
tried to
He was allowed o ~ tg ~ fe . L or d
e which runs th:: th.e vaned situations in which
locate the principl ~g b a .
account of unequ mg pow· er. He said
: "English
relief is allowed on e who without~ dargam dent d into a con-
law gives relief to
on ' ry unfa •m epen , a vioce, ente' rs
hich are ve transrers. pr ider-
tract uphon. hte.rms w . equate whir, orh. b gam . perry ror. a co. ns
sly mad mg p ower JS grievously
.
at1on .wd1cb 1s gros his own need ' s end IS. ar ·
as on o f Or es1res or by his own ignorance or
impa1t• e y re . e ' b m
. firm1ty, coupl ed with undue influenc or pressure rought to bear on hi
m t o f the other."
by or for the benefi ility of th
.
f ather, caused by his destre
.
lner ab e
The ban k exploitedh the vu th at he ch ar ge d h.1s house to h.JS rum for
.
• sue an exte nt ·d · n for
to heIp h1s son, to . m, wh1.ch was a highly 1·nad equate cons1 erat10
tonu
a very sho rt mora
the mortgage.
dis tin g uis hed from persuation tion.
Inf/.uenc e
ished for this pu rpose from persua
be distingu rt62 in a case in
:'In~u~nc~" has to t to work by the Bombay High Cou
his d1 stmct1o n w as pu pa rties was that the defendant was
T e
hi ch the on ly rela tionship between th ises. The owner was an illiterate
w laintiff's prem two
a tenant o f a p a rt o f the p al property for over
cultur
t she h ad been managing her agri d pe rsuaded her to gift to
widow, bu s m ot he r an
t treated her as hi uted by her, was re
gis-
decades. The tenan ed , as du ly ex ec
perty. The gift de nant was in a positio
n
him her entire pro t be sa id th at th e te
lt that it could no sult of undue influe
nce.
tered. The court fe w as no t the re
ill. The gift deed has to be contradi
stin-
to dominate her w th e ey es o f th e la w
uence.
63 "Influence in e same thing as infl
The court said: rs ua ti on is no t th
party to
ation. Every pe persuade the other
guished with persu ct co nv in ce an d
d out of
ts and condu ch an act fr~elf an
One may by his ac er p ar ty do es su
a p ar ti cu la r ac t and if the oth di sa dv an ta ge or peril, it cannot be
do e or
be to his prejudic
own volition ' may ed by th e o t
her. "64
. was influe nc ssibility of influence
said that such act dd ment authority. Po nces
.
n
I
evesuoprroundm• g ct·rcumsta ·
. t of th e ho usm g Ia · J nd rn CR 237.
dg m en ) 4 Bo
to mfluence the ju • aterta a 22. (1997
ia te d with sufficient m
must be su bs ta nt 1998 Born l · sang?~da
mati v Su dh ak ar R. Bhatkar, AIR aw a M adiw al appa Vulaviv v Bawas hvmg
62 · Shri . other
~ng, 'd w's husband's br ises with the
63. At p. 125. ished the ca se from Sh ,vg
th15 case a ~~: recovere d the prem
64, The court distingu IR 1938 Born 304. In
til, A r out.
Govindgoura Pa JJed an d
th
the man rew he
qu ar re
with her. They
Chapter 5 Free Consent
rS, 16]
Economic duress by forcing rencgutt· · ~t.ton ~
f term s
.
f L ·ds in their dec:1s1on tn Univ erse Tanksht/Js
.
The House o ot . ·k s' Federation',5 allowed the shippin Ihe v
International Tra~:f:~m~:: :Orkers' Federation 80,000
pany to recover bac US Dollarsg:(:.lli-
t and which agreement the shipping corn
tch
were paid unde~ an agre;~:e:orkers did not permit
the ship to leave :~ny
had ~o execute It :~~:ented to economic duress upon
out signature. t
conduct was so catas ro phic as to amo unt to coer
the shipowners
cion of the shipo~ e
1~-
will which vitiated their consent to those agreements d ner's
an payments rnade
by ~~o mb ay High Court66 followed this ~ase so as
t_o hold that where a
supplier of raw materials to the ONGC, which was
an import substitution
gave a bank guarantee to the ON ~C, which was
to be ~nforced only whe~
the customs duty paid by the supplier was refunded to
him, and he was sub-
sequently asked to drop this condition and make the
guarantee_ enforceable
absolutely and that the condition would ~e orally
observed, ~t amounted
to economic duress and fraud. The court cited Lord
DIPL OCK m Pao On v
Lao Yiu Long67 as saying that the rationale behind
the developing law of
economic duress was that the apparent consent of the
part y aggrieved was
induced by pressure exercised upon him by the othe
r part y which the law
does not regard as legitimate with the consequence
that his consent was
treated as revocable unless approbated expressly or by
implication after the
illegitimate pressure had ceased to operate on mind. 68
His Lordship took
specific precaution to distinguish the concept of econ
omic duress from mere
help of an influential Watandar Patil, who started living
with her in immorality. He drove
her out after obtaining from her the gift of her property.
The court observed that the gih
was presumably obtained through undue influence.
The court also distinguished Miti Bewa
,. Dllitari Nayal, AIR 1982 Ori 174, where the sale
deed was executed by an illiterate lady
tbiokiog that it was a power of attorney in favour of
her son-in-law who was living with her
~ mana~ng_ her p~operty. The burden was on
the latter to prove that there was no undue
. influence. Similarly m Takri Devi v Rama Dogra,
AIR 1984 HP 11, an illiterate lady, living
separately from her husband, donated her apple orcha
rd to her lover and the same was held
to be the result of undue influence. Annarpurna
Barik Dei v Inda Bewa AIR 1995 Ori 273,
deed e~ut ed by illiterate ~oman, burden is on the other
party to prove' that terms were fair
aDd equitable, that she had mdependent advice and that
the document was explained to and
g
65 9 3 1
· s)
~~;:i,
:c
understood by her.
366 = ( 1982 ) 2
WLR 803 (HL). For further study see M H Ogilvie,
Lt;: ;_ality of Bargaining Power and Threatened B'rea Economic
ch of Contract, (1980) 26
66. Dai-Ichi Karkaria (P) Ltd o ·t d
in B & s c
0
v ' an Natural Gas Commission AIR
1992 Born 309. fo 11owed
it was obse; :: ~ : :: /~~ ~esigns Ltd v Vic_tor Green
Publications Ltd, 1989 ICR 41 9 ~h_e~~
had been influenced aga ins; :,urp~r of th1 s case it
t
economic interest he wo ld wi . ~o pay money unde
67. 1980 AC 614: (1 979) 3 .;LR :3ent1t ed to claim
was sufficient to say that if the daim~is
r the threat of unlawful damage to
5 that mone y back.
68. For example · N h ·
' In ort Ocean Shi ·
705: (1979 ) 3 WLR 419 th h' 11
Pftng Co Ltd v Hyundai Construction Co Ltd, 1.979l Qv
paym ent was increased' b e ~ ip 6UJlders refuse d to ced
1 honour the contract unless the 5t1PU and
thereafter_cl aimed refun d\ut t1::/; nt. They made the final payment witho~t
sure on mind had cease d to e . prote;r ~es-
h ondu ct was held as amounting to ratification, Th
x1st w en final b"ll p
1 s
were under consideration.
 Undueinfluence 195
[S, 16]
ercial pressu re which in some degre. e aIways e~1.sts .
,0111tn ~,omm ercia l transactio n is•· whenever one
tY to a n a strong er barga in · ·· h
press ure b its If d mg pos1t1 on t a.n
paf er arty. Commercial • C Y. c oes not amount to econom1c
rhe oth P view • f ti p
In t11e o (t 1e nvy ounciJ ' tw0 elements were necessary to
duress, • the will of
constitute duress, ,.e. . ) p~~ssure amounting to compulsion of
practical
the victim, an~ (~) thef illlegd1t1macy of the pressure exerted. For all
oses the v1ct11n otht 1e b.uress must have no other c 01ce. h .
purP h the
In anot er case on e. su Ject, a national road carrier backed out of h
69

compelled the other si'de to renegotiate . t e

contract alread
y entered Thmtod and
t
...., 5 of the contract.
d e e1endants were heavi'ly dep endent on t e reta1-1h
rer111 • r.
e at the time to find an alternat'1ve earne
, hal·n's contract an were unabl
but later on refused to pay at th e new rate.
They
agreed to the new"Whterms
The court Observ~d: ere a party to a contract was forced by the other
and had
party to re:negot1ate the terms of the contract to his disadvantage
conse nt to
no alternative but to_ ~ccept the new terms offered, his apparent
the new terms was vitiated by economic duress."
v Rees:7o
The court cited the dictum of Lord DENN ING in D.&C. Builders
"No person can insist on a settlement procured by intimidation."
for car-
The party had to surrender to the demand of increased charges
rdingly,
riage because they had to meet their commitment to customs. Acco
es and the
there was no consideration for the promise to pay increased charg
same was held to be not enforceable.
letion
Where a government department refused to extend time for comp
type of
of the ongoing works unless the contractor agreed to do the same
economic
further work at the old rates, the court said that it amounted to
duress. 71
Exploitation of needy
is A.
This approach has been used in some other72 cases also. One of them
Schroeder Music Publishing Co v Macaulay:
pub-
There was an agreement between a young songwriter and a music
5 years
lishing company. The arrangement was to remain in force for
d the
and was to be automatically extended for another five years shoul
.nate the
boy's royalty reach the figure of£ 5000. The company could termi
nght and
agreement at any time by a month's notice. The boy had no such
he wanted to get out of it.
contract
The House of Lords ordered his liberation from the bond. The
the result
was on the terms of company's standard terms and was, therefore,
of the company's dictation.
1989 QB 833: (1989) 3 WLR
69. Atlas Express Ltd v Ka/co (Importers and Distributors) Ltd,
389.
;o. (19.66) 2 QB 617 (CA).
t. Irrigation Deptt v Progressive Engg Co, (1997) 4 ALD
489 (AP).
72 1974) 1 WLR 1308.
·(
96
Chapter S Free Consent [S. 16]

A similar relief was allowed in a case where a ~ongwriter 's copyright \\t
bl ish his songs through as
Purchased on terms that he was not ·tohpu . 73
any Oth
· t his songs · "I n d eterlll ·er
company but the company had the rtg t to reJeC .
· • · · ·· f the parties ' the courts will ]Ookin.
mg the respective bargammg posrttons O .
d
a number of factors, such as age, poverty, illiteracy ao . emotional state,,,,!t
5 5
With these should be contrasted Natio~a! We !mtn !~r B~nk P&c v
Morgan.75 A self-employed businessman's 1omt h~me with his wife Was
mortgaged to a building society who w~re threatem~g foreclosure. A hank
provided him money with which he paid off the socie~y and a new charge
on the house was created in favour of the bank for all his present and futu
. h h re
liabilities. When his wife was called up?n to ~ig~. t. e papers, s e Was told
that it covered only the loan and not business habihties. The House . of Lorsd
were not able to relieve her from the consequences o f her signature. 1'he
charge had conferred reasonably equal benefit on both parties. The relatio _
ship of banker and customer is not automatically characterised as one ~
which the doctrine of undue influence attaches.

Technique of judicial intervention in unfair bargains

These developments show that undue influence or duress has become
76
a technique of judicial intervention in unfair bargains. The traditional
approach of confining duress to threats to the person and to goods is about to
undergo expansion to include other threats, particularly those forms of eco-
nomic coercion which force a person to enter or vary a contract against his
77
t?
~ill. Forci_ng a ?erson accept less money than is due to him by exploiting
his economic stringency 1s an example of this kind. 78 The principle has been

73. Clifford Dav M_anagement Ltd v W.E.A. Records Ltd, (1975) 1 WLR 61 (CA). An illiterate
donor transferrmg all her property to her lawyer, held, unconscionable. Takri Devi v Rama
Dogra, AIR 1984 HP 11.
74
• Nicholas Rafferty, Recent Developments in the Law of Contract, (1978) 24 McGill LJ
236,271.
5
; 6•~!? 85 2
) k WLR 588 (HL); noted, The Limits of Undue Influence (1985) 48 Mod LR 579.
· "tnaya appa Suryabhanappa D hen k ar v D u1tc ·b '
193 'd . f . a and Hariram Murarka AIR 1986 Bom
77. For ~::~:ilm~::::r :r1:r:utstorey comm~rcial complex unnaturally low. '
(1976) 39 Mod LR 369 .r~u~~ ?n ~he .sub1ect se~, Waddam, Unconscionability in Contract,
L
Long? (1980) 5 Can Bus 1~~~ie, wiss At/antique Revisited: How Long, O'Lords H?w
L Rev 237,341. J 'Dalzell, Duress by Economic Pressure, (1942) 20 N Carolina
78 • D~&C. Builders v Rees (1966) QB .
2 617
Liberty, (1943) 43 Col~m LR 603 d (CA); ~lewellyn, Bargaining, Duress and Economic
Duress by Threatened Bre h f Can What Prtce Contract, (1931) 40 Yale LJ 704. Beatson,
1976 ) 92 LQR 496. Sutton, Duress by Threatene~
Breach of Contract, (1974~c20oMc~~~~~Jt, (
554 · Adams, Contract Law at Sea, (1979) 42 Mo
LR 557: (1979) 95 LQR 475 . Co
PROMISES: A THEORY OF Co ' ore, (1980) Camb LJ 40· Charles Fried CONTRACTS AS
h . NTRACTUAL Oa , , rs
ave a growing conviction that s d LIGATIONS, where it is observed: "Many lawre d
and unskilful bargains is ne ome eg~ee of paternalistic protection of unsophisticate
led t 0 th d cessary to avoid I h h' bas
. e evelopment of do t · f resu ts t at shock the conscience and t is
;ct1o~s that violate the basicc;:i:e~ ~ u~~onscionability and a host of ad hoc statutory~;;
o:Jam Principle and its Limits f~~:2~ 9;e~dom of contract"; Melvin Avon EisenbergF LL
REEDOM OF CONTRACT, wh~re it is b ar~ LR 741; P.S. Atiyah, THE RISE AND :Jes
0
serve that society should not tolerate the res
 Undue influen ce 197
[S, 16]
of th . . . .
ces as a pa rt ice.
lie d to grant of licen
e di sp arity in th ptnc J~le. of distributive just
a larg appli•
; 11p~his case th ere was ity . Th e ap p1ic e rg ;m m g P?wer of the
th or give his
r and the gra ntin g au ons im po se~n ~ ah no chot~e but to
1
d co nd iti th ~y. In such cases
ca0 ~sent to th e terms an expe ct ed to s. y t edau teon
' ost of the tim
e applic an ts ar e 1gn on ot d Imes. 79
111
ees and others from unreasonable terms
Rescuing employ scionable" f d. .
ea ni ng of th e w or d "uncon rom a 1ct1on-
Picking up the m d
C rtdh ash?ot~ .that It means so
. m ethi ng that show s no
S .h
aryso the upre~e ouan w 1ch 1s irreconcilable with what ts. ng t or reha-
regard for cons cience 1use m . t e
b t h
e co ur t w as a se rv ic e contract .s1A ca
e10re t
sonable. The matterd h p 1oyer (a Government undert ak'mg to remove
)
w ere t e em
contract empob h , .
tic e or pa y in lieu. The employee, who
e mf ohn~hs 1no ed by handing him ov
er a
an employehe yl~d ~e ts c a us e, w as re m ov
o t e to be
contested t e, va I ity Th e Su pr em e C ourt regarded the claus
ck et . any term
three months pay pa ra ct ua lly vo id . The court added that
as co nt
constitutionally ~s wel
l
le as to sh oc k th e co nscience of the court
unreasonab void under Section 23.
which is so unfatr and y an d th er ef or e al so
blic polic n
would be opposed to pu on a re al co ns en t. It was rather an impositio
based up so
The contract was not 82 te rm w as un co ns tit utional because it was
. The uct,
upon a needy person d be m ad e a ta rg et irrespective of his cond
er coul
absolute that any offic
a party
good or bad.
is ex pa nd in g po w er of the court to relieve
Commenting upon th n co nt ra ct , a learned writer says
that "free-
hi s ow
from the consequences
of
m isl ea di ng gu id e w he n so many contracts
out to be a ct as private legisla-
dom of contract turns Th e no tio n of co nt ra
omic sense. drawn up one-sidedly.
are not free in the econ le gi sla tio n is al w ay s
tive when t
tion appears less attrac in te rm s w hi ch ar e not there, or read ou
ed to read leness. Whatever is no
t
Judges are empower e to im po se re as on ab
They ar able,
terms which are there. rti es ha ve ag re ed to something unreason
reasonable is not law.
If the pa leased."
83

te d as if th ey ha ve not agreed at all and re

they should be trea y of nature or as the pr
ice of
the lotter
ng point s for the trading process as
of unequal
civilisation .
starti
na , (20 05 ) 4 IC C 47 (P&H). See further,3Lo
s:r;•
rd
·
Common
ate ofHarya (1997) 11 LQR
79. Mahavir Singh v St ctations of Honest Men, 88
law: Fulfilling the Re ason
ENGLISH
able
DI
Ex
CT
pe
IO NA RY , Vo l. II (3rd Ed~
th
!~ ·1986) 3 sec 156, 206.
bargains· CHITTY ON
80. SHORTER OXFORD Transport Corpn v Bro1o Na Gacognscy'.1o(nabl e · nsidered;
co
r · on th e subject of unb wa of imposition are ATEMENT
81. Central Inland Wate h , II mg ST
82 • Th e court consulted t e 10 ow CO NT RA CT ;RE
c~n_tract;A~HES~ON
ra 4 (25th Edn), where ° y, l II for Unconsciona
ble Contract
CONTRACTS, Vol I, Pa n) 38~ for de tim tion noted the
RY (5th Ed 107, Sec. 28 ' ; 8_29 (1982); the court
BLAcIC's LAW DICTIONA w In stitut e, ir impact
erican La \ and unfairness and the d public
OP THE LAw by the Am UN JU ST Co ~T R~ C: an
THE LAW OF rness
Terms; John R. Peden, s of di stributive ! J~S ich . between un.fai M d
em erg ing do ctrine to re at1 ons ip ed m DT C v az oor
influence of the 0 21 1· as Re affirm
ct at pp. 21 - , 217·
upon the Iaw of contrathe judgment of MADON J a~ P· bl~ms
policy under S. 23 see R 19 91 SC n~ ~I~ Ex pectation, Current Legal Pronalzsm
SCC 600: AI n, Pater
Congress, 1991 Supp (1) y of Contract to Reaso S Anthony T. Kronma
83 • J.H. Baker From Sa nc tit h J of a pa ren t. ee
1979. The Jaw' plays in this respect t e ro e
198 Ch
apter S Free Consent
rs. '61
Natural justice .
.·
I1as also been subJected to the require
The process of contr:1ct,_ng f ised price by a low bidd rn~nt, nf
natural justice. The accc~tanc\~e ~r:i:est bidder was held by th:r Withr,ut
g·iving any such opportumty to g . h • SuprellJ
Court to I,ca dcma. 1of· i1atural 1·ustice rendenng t e auct10n to be void ~4 e
.

2. Contracts with pardanashin women

A contract w1'th a pardanashin woman is presumed tohhavehbeen ind Uced
l,y un d ue m· fJuence. She can avoid the contract un 1ess t e ot er Party
,, 85 Th • h can
·r was her "inteHigent and vo1untary act . ere ts, owever
sI10w tllat l " d h. , no
statutory or judicial definition of the term par anas m woman". In th
op1m· ·on of the Bombay High Court 86 a woman does not become Pard e
d f . ,, an.
ashin simply because "she lives in some egree o sec1us10n . The conce
probably means a woman who is t~tally "seclud_ed from o_rdinary soci~;
intercourse". The following observat10n of the Pnvy Council explains the
concept to a certain extent. 87 "It is abundantly clear that Mrs Hodges Was
not a pardanashin. The term quasi-pardanashin seems to have been invented
for this occasion. Their Lordships take it to me_an ~ wo_man, who. not being
of the pardanashin class, is yet so close to them m kmsh1p and habits, and so
secluded from ordinary social intercourse, that a like amount of incapacity
for business should be ascribed to her, and the same amount of protection
which the law gives to pardanashins must be extended to her. The contention
is a novel one, and their Lordships are not favourably impressed by it. As
to a certain well-known and easily ascertained class of women, well-known
rules of law are established with the wisdom of which we are not now con•
cerned; outside that class it must depend in each case on the character and
position of the individual woman whether those who dealt with her are or
are not bound to take special precautions that her action shall be intelligent
and voluntary, and to prove that it was so in case of dispute."
In a case before the Bombay High Court: 88
It was found that a lady appeared before the Registrar for registration
of certain documents, that she stood as a witness in the box in a suit, that
and the Law of Contracts, (1988) 32 Yale Law Journal 763. A person who would give away
too much of his own liberty must be protected from himself, no matter how rational his
decision or compelling the circumstances. Hame/a v Jang Sher Singh AIR 2002 P&H 147,
plaintiff, illiterate, old and sick lady, was taking guidance from the defendant consulting him
off and on, the court said that he must be taken to be in a position to influence her. She was
told that she was signing a one-year lease but the same was in fact for 99 years, considerat!on
was Rs2500 per year and even that was not paid to her. The court rescued her by cancelhng
the document.
84. Ram & Shyam Co v State of Haryana, (1985) 3 SCC 267: AIR 1985 SC 1147.
85· Bellachi v Pakeeran,
(~009) 12 sec 95: (2009) 4 sec (Civ) 640, burden of proving genuin~-
ness of the documen~ is on th_e other party. But in the case of registered instruments there 15
equ~lly the ?resumption that 1t was executed in accordance with the Jaw.
86. Sha,k lsma,I v Amir Bibi, (1902) 4 Born LR 146 148
87
· Ho1ges v D_elhi & London Bank Ltd, (1899-1900)
88. Sha1k lsma,I v Amir Bibi, (1902) 4 Born LR 146.
27 lA 168 175-76
' .
{S, 16] Undue influence 199

she put in tenants and fixed andshrecovercd rents from them in respect of
her house. The court held that
e could not be treated as a pardan ashin
la dy.
Once it is shown tha t a contract is made Wt'th a pardanash.,n woman the
• fl li'es on the ot her par. ty to s'h ow
law presumdes un· dflue m uence. The burden
ex lained
that no un ue
10
uence was used, that the contract was full yf hp •
to her and that she freely consented The a/ follo ·
s,·nwihn! state] n:1ent ho t e Pnv yf
Council in Kalibakhsh Singh v Ra;, Cop g exp ams t e extent o
" h fi st pardanashin lady, and the law
this onus: Int e r pl~ce, the lady was a
ion. It demands that the burden
throws aroun~ her a special cloak of protect
e who attack, but those who
of proof shall m such a case rest, not with thos
so far as to show affirmatively
found upon _the deed, and the proof must go
executed by, but was explained
and conclusively that the deed was not only
In such cases it must also, of
to, and was reall~ understood by, the grantor.
signed under duress, but arose
course, be estabhs~ed that the deed was not
ntor."
from the free and mdependent will of the gra
In this case:
widow (who was a par-
Abo~t two mont~s before her death, a Hindu
perties to the son of her
danash,n woman) gifted half of her landed pro
r) of her estate.
paramour, who was also the manager (mukhta
that she had no independ-
This, it was contended, combined with the fact
was the result of the influence
ent advice, was sufficient to show that the gift
ips, however, held that there
the mukhtar had over the lady. Their Lordsh
advice necessary in every case.
is no rule of law which makes independent
the absence of it, is a fact to be
"The possession of independent advice, or
d on a review of the whole of
taken into consideration and will be weighe
ther the grantor thoroughly
the circumstances relevant to the issue of whe
own free will carried out the
comprehended, and deliberately and of her 90
tion. If she did, the issue is solved and the transaction is upheld. "
transac e
by the Privy Council in mor
The extent of burden was further explained 1
v Shumsoonisa Begum.9 A
concrete terms in Moonshe Buzloor Raheem
d to her new husband certain
widow remarried and endorsed and delivere
to recover them back from him
valuable Government papers. In an action
t she had given over the papers
she proved that she lived in seclusion and tha
ed that he had given her full con-
to him for collection of interest. He contend
mere fact of endorsement and
sideration for the notes. It was held that the
icient to lift the presumption of
the allegation of consideration were not suff
saction was 3. bona fide s~le ~nd
undue influence. He should prove that the tran
which he received from his wife.
that he gave full consideration for the paper
·
89. (1913-14) 41 IA 23, 28-29.Gopal Singh, (1913-14) 41 IA 23, 31. See also LIC v Nandaram
90. Kali Balt.hsh Singh v Ram
· AIR 1963 SC 1203·.
Dassi, AIR 1970 Cal. 200. Kuer v Jangbaha dur Ra,, .
91. 1867 MIA 551 (PC) See further Kharbuja
(1963) 1 SCR 456.
200 CJlaprcr S free Consent

Rc~cission IS. 19-A]

.
Rcsdssion of co11rm c.t fo,· undu e i11f111cn<:c is allowed under tli e pr,,v·1 1 1
~ ' '11
of Scc.·tion 19-A.
S.19-A. Powertosetasldecontractlnducedbyunduelnffuence•- 11y'f f1
is " r1
consent to an agreement Is caused by undu e Influence, the agree ment a'f Jf)
tract voidable at the option of the party whos e conse nt was so caused.
Any such contract may be set aside either absolutely or, If the party Who
entitled to avoid It has received any benefit thereunder, upon such terms
W,}~

conditions as to the Court may seem Just.

an~
11/ustratlons
of prosecuting A'i
(a) A's son has forged B's name to a promissory note. 8, under threat
bond the Co
son obtains bond from A for the amount of the forged note. If Bsues on this ' urt
may set the bond aside.
by undue inRue~
(b) A, a moneylender advances Rs 100 to B, an agriculturist and,
. The Court m~
Induces B to execute a bond for Rs 200 with Interest at 6 per cent per month
set the bond aside, ordering B to repay Rs 100 with such interest as may seem
just.

[For comments see notes on Sections 19 to 19-A under the heading

"Limits of Rescission", infra.]
MISREPRESENTATION [S. 18]
Definition
void-
A contr act the consent to which is induced by misrepresentation is
mis-
able at the option of the deceived party . Misrepresentation means
n is defined in
statement of a fact material to the ~ontract. Misre prese ntatio
Section 18:
and
S. 18. Misrepresentation" defined. - "Misrepresentation" means
0

includes-
(1) the positive assertion, in a manner not warranted by the
information of
be true;
the person making it, of that which is not true, though he believes it to
(2) any breach of duty which, without an intent to deceive, gains
an advan-
ding
tage to the person committing it, or any one claiming under him, by mislea
him;
another to his prejudice, or to the prejudice of any one claiming under
a mistake
(3) causing, however innocently, a party to an agreement, to make
as to the substance of the thing which is the subject of the agreement.
The section includes the following types of misrepresentation:

1. Unwarranted statements
information
When a person positively asserts that a fact is true when his
this is misrep-
does not warra nt it to be so, thoug h he believes it to be true '
•
resentat1on. 92 In a Bombay case93 for example:

92. See illustrations (a) and (c) to s. 19.

93 . Oceanic Steam Navigation Co v Soonde rdas Dharamsey, ILR (1890) 14 Born 241.