Balfour v. Balfour [1] 1. Facts of the case: Mr. Balfour was a British man who lived in Ceylon (Sri Lanka), along with his wife, Mrs. Balfour. In the year 1915, the couple travelled to England for a vacation. During their stay in England, the wife of Mr. Balfour felt seriously ill, and was advised by her doctor to stay in England till her there was significant improvement of her health. However, Mr. Balfour was to return to Ceylon due to business. The couple made an agreement that Mrs. Balfour was to remain behind in England when the husband returned to Ceylon (Sri Lanka) and that Mr. Balfour would pay her £30 a month until he returned to England. The said agreement was followed till their relationship was cordial, however, the relationship eventually turned sour. After his return to Ceylon, Mr. Balfour expressed his intention to separate permanently. The parties subsequently obtained a decree for divorce and an issue arose as to whether the said agreement was enforceable by law. In March 1918, Mrs. Balfour sued him to keep up with the monthly £30 payments as decided by the agreement between the parties. 2. Issues: The main issue that arose out of the dispute in question was; whether said agreement of payment of £30 by Mr. Balfour to Mrs. Balfour was enforceable by law? 3. Ratio: The three judge bench in the present case held that the sad agreement was not a valid contract in the eyes of law. The court held that an essential of a valid contract under law was the intention of the parties to formulate an agreement that was legally binding so as to hold it enforceable. The court further held that it would be unwise to interfere between spouses in their day to day affairs. According to the Lords, the current agreement was purely social and domestic nature and therefore it was presumed that the parties did not intend to be legally bound. Lord Atkin, one of the three judges in the case, held that the law of contract was not made for personal family relationships. Due to the fact that there was no intention to be legally bound by the said agreement between the parties, the said agreement was not a valid contract under contractual law. Lalman Shukla v. Gauri Dutt[2] 1. Facts of the case: The nephew of the Gauri Dutt; the defendant in the present case, had gone missing in the month of January 2013. The defendant sent all his servants in different areas to search for his nephew. The plaintiff; Lalman Shukla, was one of the servants who was sent to find the missing nephew of the defendant. The plaintiff was given money for his fare and other expenses. However, during his absence, the defendant issued a handbill offering a reward of Rs 501 to the person who would successfully trace down the child. The plaintiff, however, remained unaware of the reward, as he had already left to search for the missing child. The plaintiff successfully found the child, and brought him to the defendant. However, after passage of 6 months since the same, the plaintiff filed a suit against the defendant for Rs.499 in lieu of the award announced by him. The case was filed in the lower courts, where it was rejected. The plaintiff then filed an appeal in the Allahabad High Court against the order of the lower court. 2. Issues: The main issues that cropped up in the present case were: (a) whether the current situation amounts to contract under the Indian Contract Act? (b) whether the decision by the lower court was appropriate or not? 3. Ratio: The Hon’ble High Court, in the present case, opined that order of the lower court was in fact sound, and that the present case did not constitute a valid contract under law. The Court held that in order to constitute a contract there must be an acceptance of the offer and there can be no acceptance unless there is knowledge of the offer. The court stated that in the present case, the plaintiff was already under an obligation to search for the missing boy, before the announcement of the reward. Since the plaintiff was already under that obligation, which he had incurred before the reward in question was offered, he was not liable to claim the award. Furthermore, the court also held that the plaintiff was not aware about the offer and had no assent about the act. This clearly indicated that there was no valid contract as recognized under the Indian Contract Act. Therefore, the court dismissed the appeal in the present case and upheld the order of the lower court. 4. Relevant sections: The case made use of section 2(h) and section 10 of the Indian Contract Act, along with other sections. Rafles v. Wichelaus[3] 1. Facts of the case: The plaintiff had offered to sell bales of a certain amount of Surat cotton to the defendant. This Surat cotton was to be brought to Liverpool by a ship from Bombay, India. The ship that was to bring the cotton to England was called the Peerless. However, there were two ships of the same name. The plaintiff and the defendant were both thinking about a different Peerless ship when they agreed to make the sale. One of the ships was due to leave Bombay in October, which was the ship that the defendant had in mind, but the plaintiff thought that the ship that was referred to was referring to was the one that was supposed to leave in December. When the consignment of cotton arrived in Liverpool, the defendant refused to pay, as according to him, the consignment was too late. The plaintiff thus sued the defendant for breach of contract. 2. Issues: The main in the present case was whether the ambiguity regarding the ship decided between the parties for delivering the cotton prevent "meeting of the minds," and could the same be enough to render the contract unenforceable? 3. Ratio: The court held that the contract could not be enforced due to the fact there was “no meeting of minds”. Consequently, as there was no consensus ad idem (as defendant alleged), the two parties did not agree to the same thing and there was no binding contract. After analyzing the agreements from both dies, the Court held that it was impossible to objectively ascertain which ship was meant. Since the identity of the ship was a key contract term, there had been no agreement. Therefore, the Court held that the contract was void, and ruled in favour of the defendants. 4. Relevant sections: The principle laid down in the present case have been enumerated trough section 20 of the Indian Contract Act, whereby where both parties are mistaken about the subject-matter of the contract, then such a mistake is one of fact and may render the contract void. Mohori Bibee v. Dharmodas Ghose[4] 1. Facts of the case: The respondent was a minor and owned an immovable property whose mother had been appointed as his legal guardian by the Calcutta High Court. The respondent wanted to mortgage the immovable property. His property was mortgaged in favour of Brahmo Dutta, the appellant, who was a money-lender. Kedar Nath, the manager of Brahmo Dutta, acted as his attorney. A mortgage deed of close to Rs. 20,000 @ 12% interest p.a. was drawn up between the two parties. The respondent’s legal guardian had informed Brahmo Dutta about the respondent’s minority. At the time of giving loan to the respondent, Kedar Nath had full knowledge about the respondent’s minority. The respondent through his legal guardian then brought a suit against Brahmo Dutta and claimed the revocation of the contract due to the fact that the respondent was a minor and incapable of entering into the contract. At that time, Brahmo Dutta had already died, so, the petition was litigated by his wife, Mohori Bibee. The Trial Court held the contract to be void as it was entered into with a minor. The appellant was not satisfied with the verdict of Trial Court, therefore an appeal was filed in the High Court, which was also rejected. The decision of the High Court was appealed in the Court of the Privy Council by the appellant, Mohori Bibee. 2. Issues: the cases presented three main issues that were discussed by the Privy Council. They were: (a) whether under Sections 10 and 11 of the Indian Contract Act, 1872, the mortgage deed was void?; (b) Whether under Sections 10 and 11 of the Indian Contract Act, 1872, the mortgage deed was voidable?; and (c) Whether the respondent was liable to return the loan amount received by him under the mortgage deed? 3. Ratio: The Privy Council dismissed the appeal, and held that the mortgage contract between the parties was void ab-initio as the respondent was a minor at the time of making the contract. The Court stated that due to the fact that the consent given by a minor cannot be considered as a free consent because a minor is not deemed to understand the provisions of a contract like a prudent or reasonable man, the minor was incompetent to mortgage his property. The court observed that any contract entered into with a minor person is void or void ab-initio, i.e. void from the very beginning. The court also held that the respondent cannot be compelled to return the money advanced to him under the contract, as the contract does not exist and he is not bound by the contract. In the present case, the fact that the minor’s legal guardian had informed the agent of the respondent about the said infirmity, the agent still went ahead and executed the contract on behalf of the principle meant that the party had full knowledge about the said infirmity. The court also observed that any act done by an agent, any legal action taken by the agent, or any knowledge of the agent, is deemed to be that of or done by the principal. Therefore, the court dismissed the appeal. 4. Relevant sections: The sections used in the present case are section 10 and section 11 of the Indian Contract Act. Section 10 of the Indian Contract Act, 1872 encompasses that a contract is valid only if it is entered into by the parties competent to contract. As per Section 11 of the Indian Contract Act, 1872, a minor is not competent to contract.
Chikkam Ammiraju v. Chikkam Seshamma[5] 1. Facts of the case: The appellant was the brother-in-law of the defendant who had executed a mortgage deed for a certain amount in favor the respondent, her husband and their son. However, the appellant failed to repay the said amount loaned to him. Due to the love and affection towards his brother, the respondent’s husband wanted to cancel the mortgage deed and release his brother’s property. However, the same was not accepted by the respondent and her son. Due to this, the husband of the respondent threatened to commit suicide if refused to listen to him and release his brother’s property. Due to the threat of suicide, the respondent executed the release mortgage in favour of the brother. However, at a later date, the respondent and her son claimed the said properties of their own. Therefore, the respondent filed a case in the lower courts demanding that the said contract be canceled as it was executed through coercive means. The lower courts agreed with the respondents, forcing the appellant to file an appeal with the Privy Council. 2. Issues: The main issue in the present case was whether the release-dead was executed by the respondents with their free consent or whether it was obtained from them through the exercise of coercion or undue influence or both. 3. Ratio: The 4 judge Bench in the present case had different ratios regarding the main issue. Chief Justice Wallis and Justice Seshagiri Ayyar opined that the threat to commit suicide would amount to coercion under section 15 of the Indian Contract Act, while the dissenting opinion was that this particular case was an instance of undue influence. The opinion of the C.J. was followed in the present case. According to the concurring opinions, the threat to commit suicide was in fact a part of attempt to commit suicide, and was forbidden under the Indian Penal Code, 1881. The judges opined that suicide and an attempt to commit suicide were acts forbidden by the Penal Code though the former cannot be punished under the code as a dead man cannot be punished. Since the definition of coercion under section 15 clearly provided for acts prohibited by the Indian Penal Code, and also stated that the threat may be to “any other person”, the release deed executed was clearly signed under coercive means. The Privy Council agreed with the lower Courts that the prejudice husband’s own life was sufficient to bring his threat within the definition of "coercion," as it was intended by the person using the threat to bring about the agreement. 4. Relevant sections: The case analyzed the definition of coercion and undue influence under section 15 and section 16 of the Indian Contract Act respectively. Mannu Singh v. Umadat Pande[6] 1. Facts of the case: A suit was filed in the subordinate court of Azamgarh in the Uttar Pradesh for cancelling a gift deed executed by the appellant in favour of the respondent whereby the appellant gave away all his property to the respondent. The main contention of the appellant in the lower court was that the gift deed was not signed with the free consent of the appellant. The appellant was a Chatri by caste, who was quite old, and the respondent was his spiritual advisor and guru. According to the appellant, the only reason why he transferred the property to the respondent was because the respondent guaranteed to secure benefits for the appellant in his next life. Immediately after executing the gift deed, the appellant moved to the lower court to cancel the deed. However, the lower ruled in favor of the respondents. Therefore, the appellant filed an appeal in the High Court of Allahabad against the order of the lower court. Under section 39 of the Specific Relief Act. The appellant contended that deed “was spurious and fictitious and it was not executed with his free will”. 2. Issues: The only in the present case was whether the gift deed was executed with the free consent of the appellant? 3. Ratio: The court in the present case, analyzed the said evidence in hand and overturned the decision of the lower court. According to the Hon’ble High Court, the circumstances of the case clearly indicated a fiduciary relationship between the parties. The court stated that the circumstances of the case indicated that there was some kind of undue influence exerted by the respondent on the appellant due to the fact the respondent was his spiritual guru. The court also opined that at having regard to the fiduciary relations subsisting between the parties, the improvidence of the gifts, the absurdity of the reason alleged for it and the principle recognized by Section 111 of the Evidence Act, the burden rested upon the defendant to show that the transaction was made without undue influence and in good faith and in the absence of such proof the plaintiff was entitled to obtain a cancellation of the deed. 4. Relevant sections: Though the case did not make use of undue influence under section 16 the Indian Contract Act, the case laid down the standard of proof required to prove a case of undue influence on similar lines to subsection 3 of section 16. Life Insurance Corporation of India v. Smt. Asha Goal and Ors.[7] 1. Facts of the case: Naval Kishore Goel, the husband of the respondent was an employee of M/s Digvijay Woollen Mills Limited at Jamnagar as a Labour Officer. He took a life insurance policy with LIC for a sum of Rs.1,00,000. The husband of the respondent passed away on 12th December, 1980 at the age of 46. The cause of death was certified as acute Myocardial Infarction and Cardiac arrest. The respondent, being nominee of her husband, submitted the claim along with other papers requesting for consideration of her claim and for making payment. The Divisional Manager of LIC repudiated any liability under the policy and refused to make any payment on the ground that the deceased had withheld correct information regarding his health at the time of effecting the insurance with LIC. According to LIC, the deceased husband of the respondent that at the time of submitting the proposal for insurance, had stated his usual state of health as good; that he had not consulted a medical practitioner within the last five years for any ailment requiring treatment for more than a week; and had answered the question if remained absent from place of your work on ground of health during the last five years in the negative. According to LIC, the answers give were false. Since the respondent failed to get any relief from the authorities of LIC, she filed the writ petition seeking a writ of mandamus against LIC to pay the ensured sum with interest. The Single bench of the High Court as well as the division bench passed the judgment in favour of the respondent. Therefore, the appellant filed an SLP to the Supreme Court against the decision of the High Court. 2. Issues: The single issue that was adjudged in the present case was whether the claim could be rejected on the grounds of fraud? 3. Ratio: The Supreme Court upheld the decision of the Division bench of the High Court. The Supreme Court analyzed the case of Mithoolal Nayak v. Life Insurance Corporation of India[8], where it was held that a repudiation of a policy under section 45 of the Life Insurance Corporation Act, 1956 must only take place where: (a) the false statement made must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy holder; and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. The Court felt that the present case did not fall within this meaning, and neither under section 17 of the Indian Contract Act. In the present case, the deceased husband had not willingly falsified any information. The Court examined the evidence at hand and came to a conclusion that policy holder was not clearly guilty of a fraudulent suppression of material facts when he made his statements, as mentioned that he was generally in good health, and not visited a physician in past few months before taking up the policy. Therefore, the Court felt that the Corporation could not use the defense of fraud under section 15 of the Indian Contract Act, and passed an order that the sum, as directed by the learned Single Judge of the High Court in favour of the claimant, will be paid by the Corporation expeditiously. 4. Relevant sections: The case analyzed section 17 and section 19 of the Indian Contract Act, along with various other sections of the Life Insurance Corporation Act, 1956. Mithoolal Nayak v. Life Insurance Corporation of India[9] 1. Facts of the case: In 1942, one Mahajan Deolal sent a proposal for the insurance of his life. He was examined by Dr. D.D. Desai who submitted two reports, one with the proposal form and one confidential. The confidential report showed that Mr. Deolal was anaemic, had a dilated heart and his right lung showed indications of an old attack of pneumonia or pleurisy and that he was a total physical wreck. Nothing came out of this proposal and it lapsed. In 1943, Mr. Deolal consulted and was treated by one Dr. Kapadia for anemia, diarrhea and panting on exertion. In 1944, Mr. Deolal made a second proposal for insurance of his life. Against the question in the proposal form whether he had consulted any medical man for any ailment within the last five years, he gave the answer ‘no’. He also did not disclose any of his ailments. After medical examination, the proposal was accepted and a policy for Rs. 25,000/- was issued on March 13, 1945. The policy lapsed for non-payment of premium but was revived in July, 1946. In the November of 1946, Mr. Deolal died. His assignee, the appellant, made a demand for Rs. 26,000/-but the Company repudiated it on the ground that the policy had been obtained by deliberate misstatement and fraudulent suppression of material facts. The appellant then filed a suit to recover the amount. 2. Issues: The Supreme Court analyzed the following main issues that were already discussed in the High Court: (1) whether the policy was vitiated by fraudulent suppression of material facts?; (2) whether the company had issued the policy with knowledge of the fact that Mr. Deolal had lied about the facts relating to the health of the insured?; (3) whether in any event the appellant is entitled to refund of the money he had paid to the respondent company? 3. Ratio: The Supreme Court, with respect to the first question, unequivocally stated that the policy was in fact taken through fraudulent means. The Court stated that the appellant was suffering from a serious type of anemia for which he was treated. The Court stated that Mr. Mahajan Deolal must have known that it was material to disclose this fact to the respondent company. In his answer to the questions put to him he not only failed to disclose what it was material for him to disclose, but he made a false statement to the effect that he had not been treated by any doctor for any such serious ailment as anemia or shortness of breath or asthma. In other words, there was a deliberate suppression fraudulently made by Mahajan Deolal. The court stated that section 17 the Indian Contract Act defined fraud as any act committed by a party to a contract with intent to deceive another party or to induce him to enter into a contract. After further analyzing the section, the court judged by the standard laid down in the same section, and stated that Mr. Mahajan Deolal was clearly guilty of a fraudulent suppression of material facts when he made statements which he knew were deliberately false. With respect to the section question, the court stated that LIC was in fact permitted to cancel the policy due to section 45 of the Life Insurance Corporation Act which stated that repudiation of a policy can take place if :(a) the false statement is made on a material matter or to suppress facts which were material to disclose; (b) the suppression must be fraudulently made by the policy holder; and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose. The Court felt that in the present case, the said requirements were fulfilled, and therefore, LIC was correct in terminating the said policy. On the final issue, the court agreed with the view of the High Court which had held that where the contract is bad on the ground of fraud, the party who has been guilty of fraud or a person who claims under him cannot ask for a refund of the money paid. 4. Relevant sections: The case analyzed section 17 of the Indian Contract Act. Cunday v. Lindsay[10] 1. Facts of the case: The plaintiff, Cunday was a trader and manufacture who received an order for sale of handkerchiefs from a person named Blenkarn. This individual signed in his name in a manner resembling Blenkiron & Co., which was a reputed firm located at 123, Wood Street. The purchaser further mentioned his address to be at 37, Wood Street, Cheapside, which was very close to the address of Blenkiron & Co. The plaintiff sent the goods to the address that was given by the purchaser. Although Blenkarn did not make any payment for the goods, he sold the goods to a third person, the defendants. The plaintiff then filed a suit, alleging that they sold the goods to Blenkarn under the mistaken assumption that they were selling it to Blenkiron & Co. The plaintiffs contended that there was no real consent to the contract of sale as they never intended to sell it to Blenkarn. Therefore, as there was no valid transfer of title, the defendants did not possess any title to the goods, and were liable for conversion. 2. Issues: The case mainly dealt with whether whether there was any contract between the claimant and Blenkarn at the first place, and if not, could the defendants procure a valid title to the good, being a third party to whom the goods were sold? 3. Ratio: In the present case, the court held that as the plaintiff lacked intention to sell the handkerchiefs to Blenkarn, there was no consent of the plaintiff to contract. The court opined that as the plaintiff wished to contract with Blenkiron & Co., the contract between the plainittf and the individual known as Blenkarn was void due to it being marred by mistake of identity of the party. The Court went on to stipulate that as there was no the plaintiff and Blenkarn, the transfer of the title of the good too the defendant was also false. To constitute a valid transfer of title, which the latter could rightfully convey to the defendants, was lacking in the present case. Hence, the defendants, being in possession without a good title of the goods, were held liable for conversion. 5. Relevant sections: Though the case did not make use of the Indian Contract Act, the case laid down the concept of mistake of identity of parties, which has been since included under the ambit of ‘mistake’ section 20 of the Indian Contract Act. Hartog v. Colin & Shields[11] 1. Facts of the case: The defendants, Colin & Shields were hide merchants who had an established business in London. Mr Louis-Levie Hartog was a Belgian furrier, living in Brussels. The defendant engaged in a verbal agreement to sell 30,000 Argentinian hare skins at 10 d per skin (which would have come to £1,250) to Mr Hartog. When the firm the final offer in writing it mistakenly wrote “10,000 skins at 10d per lb.” and the other 20,000 lesser skins similarly per lb. (imperial pound), and not in the standard unit in the industry of per piece. The said mistake made the price of the total goods 5/16th of the price discussed and orally agreed upon. On realizing their mistake, the defendants Colin & Shields pleaded that their offer was by mistake wrongly expressed. They plead that they had still intended to offer the goods per piece, and not per (imperial) pound. They argued that the plaintiff was well aware of this mistake and fraudulently accepted an offer which he well knew that the defendants had never intended to make. Due to these circumstances, they denied that any binding contract was entered into, and refused to execute the same. Therefore, the plaintiff brought a suit against the said actions of the defendant. 2. Issues: The main issue in the present case was whether the contract could be rescinded for the mistake to the price of hare skin by the defendants in the written contract. 3. Ratio: The judge found in the defendants’ favour on the grounds that the plaintiff must have realized the defendants’ error, which, as it concerned a term of the contract, rendered the contract void. The Court stated that the complainant would have known that it was normally sold per piece and not by pound. The court said that there is a duty to correct a mistake that is known to not be the real intention of the person making it. The court stated that “the offer was wrongly expressed, and the defendants by their evidence, and by the correspondence, have satisfied me that the plaintiff could not reasonably have supposed that that offer contained the offerers' real intention. Indeed, I am satisfied to the contrary. That means that there must be judgment for the defendants”. 4. Relevant sections: Though the case did not make use of the Indian Contract Act, the case laid down the concept of the duty to correct a mistake made by one party unintentionally during a contract. The concept of mistake of the quantity of goods as it was in the present case has been included in ‘mistake’ section 20 of the Indian Contract Act. Derry v. Peak[12] 1. Facts of the case: The Plymouth, the Devonport and District Tramways Company issued a prospectus where it was stated that the company was permitted to use steam trams, which would replace their horse-powered trams, and increase the business of the company. In reality, the company did not possess such a right a Board of Trade was left to grant permission to the company to make use of steam trams. Gaining the approval for such a claim from the Board was considered a formality in such circumstances and the claim was put forward in the prospectus with this information in mind. However, the claim of the company for this right was later refused by the Board. The individuals, led by Sir Henry Peek, who had purchased a stake in the business, upon reliance on the statement, brought a claim for deceit against the directors for falsifying and misrepresenting information in the prospectus. 2. Issues: The main issue in the present case was whether the statement made in the prospectus to see whether the statement amounted to misrepresentation under contract law. 3. Ratio: The claim of the shareholders was rejected by the House of Lords. The court held that it was not proven by the shareholders that the director of the company was dishonest in his belief. The court defined fraudulent misrepresentation as a statement known to be false or a statement made recklessly or carelessly as to the truth of the statement. On this basis, the claim of the shareholders against the directors of the company would fall. 4. Relevant sections: This landmark judgment of the United Kingdom has been used in India time and again. In fact, the definition laid down for misrepresentation in this case has been used a guideline to define misrepresentation under the section 18 of the Indian Contract Act. Kamal Kant Paliwal v. Smt. Prakash Devi Paliwal and Ors.[13] 1. Facts of the case: The case revolved around a plot of land situated at Moti Doongri Road Jaipur, which was purchased by defendant from Urban Improvement Board, Jaipur under a sale deed in the name of another individual for and on behalf of the plaintiff. It was stated that the purchase of the plot was Benami and the consideration of the plot was paid by the defendant out of the funds received by the plaintiff from his grand-parents, uncles and other relations from time to time. According to the plaintiff, the defendant suggested to him sometime in the month of that he should execute general power of attorney in favour of his mother and the maternal uncle as to facilitate raising of money from the plot. The plaintiff agreed to do so. The plaintiff signed the document without reading it, thinking it was a general power of attorney. In September, 1972 he was informed that the document he had executed was not a general power of attorney but a trust deed for the protection of property that was bought for him. The plaintiff filed a suit claiming that his consent was obtained by fraud. The plaintiff prayed for declaration of trust as null and void. 2. Issues: The only issue discussed by the Court in the present case was whether there was any fraud practiced on the plaintiff so as to declare the trust deed void. 3. Ratio: The court analyzed the section 10, 11, 12, 13, and 14 of the Indian Contract Act to understand the components of a valid contact. After analyzing the same, the court concluded that section 14 clearly stipulated that a contract marred by fraud, as defined under section 17, could be held as valid, and was voidable at the option of the party who was a victim of such fraud. The Court further stated that the underlying intent to constitute fraud is to deceive another party and to induce him to enter the contract and it must be by the suggestion as a fact which is not true or by the active concealment of a fact by one having knowledge or belief of that fact. Though there was some kind of concealment in the present case, the court stated that the plaintiff was an educated man, who admittedly signed the document and also after it was presented before the Sub-Registrar, Jaipur, attesting its execution. The plaintiff had all the means to know the contents of the document. The fact that the plaintiff failed to take reasonable care and caution meant that the claim of fraud against his own family could not succeed. 4. Relevant sections: The case analyzed section 10, 11, 12, 13, and 14 of the Indian Contract Act, along with section 17. The case laid down an important principle of reasonable care and caution to determine whether a contract could be marred by fraud. Great American Insurance Co. Ltd. v. Modanlal Sonulal[14] 1. Facts of the case: The respondent, who was a minor, was the sole surviving coparcener of a joint Hindu family carrying on joint family business at Devalgaum in the name of Surajmal Sonulal, and that the business of the firm was carried on under the superintendence of Goverdhandas Mohanlaland, who was also the guardian of the minor. The defendants were an insurance company incorporated in New York, United States of America, carrying on business in Bombay. The coparcenary took an insurance against fire with the appellant on certain cotton bales. Subsequently, the bales were burnt in a fire, and the respondent patented to recover loss under the insurance. However, the appellant refused to grant the same on the ground that there was collusion between the agent and the persons who effected the insurance. Therefore, the respondent filed a case in the lower court. The appellants did not plead that the plaintiff was a minor, and that on that ground the insurance policy was void while the case was heard in the lower court. However, the same did up in the oral arguments, but was left unanswered by the Judge of the lower court. The lower court eventually passed an order against the insurance company, and therefore, the company filed an appeal in the High Court. 2. Issues: The main issues discussed in the present case was whether the insurance policy taken for fire by the coparcenary was void on the grounds that the sole-surviving coparcener was a minor? 3. Ratio: The court rejected the claim of the appellants, and stated that the provisions of the law which make a contract by a minor binding were no doubt intended to be for the benefit of the minor, and courts have time and again have struggled hard to avoid holding the contract wholly void to the detriment of the minor. The court analyzed various judgments where it was held that a contract for the benefit of a minor have been held valid and not void. The court further stated that the contract was in fact made by the guardian of the minor, who was acting through his agent. The court felt that the evidence clearly the insurance company was that the business was owned by a minor, and that it was carried on by Goverdhandas, his guardian. The court felt that the present case was one where the contract was not made by a minor, but his guardian, although it was made on behalf of a minor. Therefore, keeping in mind the fact that there was already existing jurisprudence on contracts for the benefit on minors, the court stated that present case did fall within that ambit and was valid in the eyes of law. 4. Relevant sections: The case examined requirements of a valid contract under section 10 of the Indian Contract Act. The case also strengthened the exisitgn jurisprudence on validity of contracts made for the benefit of minors. Choga Lal v. Piyari and Anr.[15] 1. Facts of the case: The case was a reference made by the learned Cantonment Magistrate of Jhansi exercising the powers of a Judge of a Court of Small Causes, under Section 617 of the Code of Civil Procedure. In the present case, a suit was filed to recover rent due for a residence or quarters rented to a prostitute, with knowledge that such residence or quarters would be used by her to carry on her immoral trade and profession. 2. Issues: The question which was submitted for the opinion of the High Court was whether such an agreement was lawful under keeping in mind English law. 3. Ratio: The court stated that it was unnecessary to determine whether the English law was applicable in this country, as an express provision of the Indian Contract Act under which a contract for such a purpose would be illegal already existed. The court stated that Section 23 of that Act provided that the consideration or object of an agreement is lawful, unless, amongst other things, the Court regarded it as immoral or opposed to public policy. If the object of an agreement was immoral or opposed to public policy, the agreement could not be enforced. The court opined that knowingly letting a house to a prostitute with the object of her carrying on therein prostitution was immoral and contrary to public policy, and a landlord who knowingly let quarters to a prostitute to carry on prostitution could recover the rent in a Court of law, and any agreement signed for the same was void in the eyes of law. 4. Relevant sections: The present case analyzed the standard for lawful agreements under section 23 of the Indian Contract Act.
[1] [1919] 2 K.B. 571.
[2] 1913 40 ALJ 489.
[3] (1864) 2 Hurl. & C. 906.
[4](1903) ILR 30 Cal 539
[5] (1918) ILR 41Mad 33.
[6] 1890 SCC OnLine All 2.
[7] (2001) 2 SCC 160.
[8] AIR 1962 SC 814.
[9] AIR 1962 SC 814.
[10] (1879) 3 app case 459 (465).
[11] [1939] 3 All ER 566.
[12] (1889) 14 App Cas 337.
[13] AIR 1976 Raj 79.
[14] (1934) ILR 59 Bom 656.
[15] (1909) ILR 31 All 58.