Contract Law – Unit I

1(a). Define Offer. Explain the Rules Relating to Valid Offer with the Help of Decided
Cases.

Definition of Offer (Section 2(a) of Indian Contract Act, 1872):

An offer or proposal is made when one person signifies to another his willingness to do
or abstain from doing anything, with a view to obtaining the assent of that other to such
act or abstinence.

Essentials of a Valid Offer:

1. Offer must be communicated to the offeree.
2. Offer must be made with an intention to create legal relations.
3. Terms of the offer must be certain and unambiguous.
4. Offer must not be a mere declaration of intention.
5. Offer must be distinguished from an invitation to offer.
6. Offer may be specific or general.
7. Offer must not contain a term the non-compliance of which may amount to acceptance.

Types of Offers:

1. Express Offer- Made in words (spoken or written).

Example: "I will sell you my bike for ₹10,000."

2. Implied Offer- Inferred from conduct.

Example: Boarding a bus implies you agree to pay the fare.

3. Specific Offer-Made to a specific person. Only that person can accept it.

4. General Offer- Made to the world at large.

Case: Carlill v. Carbolic Smoke Ball Co.
The company advertised that they would pay £100 to anyone who used their
smoke ball and still caught the flu. Mrs. Carlill did, and she was awarded the
money. Held: A general offer is valid if someone acts upon it.
 5. Cross Offers-When two parties make identical offers to each other in ignorance of
each other’s offer. No contract arises.
6. Counter Offers- A counter offer occurs when the offeree responds to an offer by
modifying its terms, which results in termination of the original offer.

Important Case Laws:

1. Carlill v. Carbolic Smoke Ball Co. (1893): A general offer accepted by conduct is
valid.
2. Lalman Shukla v. Gauri Dutt (1913): An offer must be known to the offeree before
acceptance.
3. Harvey v. Facey (1893): A mere statement of price is not an offer.

1(b). “An Agreement Without Consideration is Void” – Comment and Discuss

Exceptions.

Definition of Consideration (Section 2(d), Indian Contract Act, 1872)

“When at the desire of the promisor, the promisee or any other person has done or
abstained from doing something, or does or abstains from doing something, such act or
abstinence or promise is called a consideration.”

Simply put, consideration means something in return – it can be:

 An act

 Abstinence (forbearance)

 A promise to do or not to do something

It is the price of the promise and forms the basis of a valid contract.

General Rule: “No Consideration, No Contract” (Section 25)

According to Section 25 of the Indian Contract Act, an agreement without

consideration is void, meaning it cannot be enforced in a court of law.
Example:
A promises to give B ₹10,000 without asking anything in return. B agrees. This is not a
valid contract as there is no consideration from B.

Case: Abdul Aziz v. Masum Ali (1914)

A person promised to donate money for repairing a mosque but didn’t pay. Held: No
consideration, so the promise was not enforceable.

Why Consideration is Important

 It shows mutual obligation.

 It prevents gratuitous promises from being enforceable.

 It reflects the quid pro quo (something for something) principle.

Exceptions: When Agreement Without Consideration is Valid (Sec. 25)

Despite the general rule, the law recognizes certain exceptions where an agreement
without consideration is still valid and enforceable.

1. Natural Love and Affection (Sec. 25(1))

 When a promise is made:

o Out of natural love and affection

o Between parties standing in a near relation

o The agreement is in writing and registered

Case: Rajlukhy Dabee v. Bhootnath Mookerjee (1900)

A husband promised to give his wife maintenance. The court held: No enforceability as
there was no proof of affection or valid registration.

2. Compensation for Past Voluntary Service (Sec. 25(2))

 If a person voluntarily does something for another, and the other person later
promises to compensate, it is valid.
Case: Kedarnath v. Gorie Mohammad (1886)
A donor promised to pay for the construction of a town hall, which had already started
relying on his promise. Held: Enforceable due to reliance and past voluntary service.

3. Promise to Pay a Time-Barred Debt (Sec. 25(3))

 If a person promises in writing and signed to repay a debt that is no longer

enforceable due to limitation law, the promise is valid.

Example: A owes ₹5,000 to B, but the debt becomes time-barred. Later, A signs a written
promise to pay ₹2,000. This is enforceable.

4. Agency Contracts (Sec. 185, Indian Contract Act)

 No consideration is needed to create an agency relationship.

5. Completed Gifts

 A gift, once given, does not require consideration.

 However, a promise to give a gift in future without consideration is not

enforceable.

6. Contracts Made Out of Moral Obligation (Some Judicial Recognition)

 In rare cases, courts recognize moral duty (like rescuing someone) as valid
consideration if a promise is later made.

3(a) Who are Competent to Contract? Discuss the Effects of Minor's Agreement.

Competency to Contract – Section 11 of the Indian Contract Act, 1872

Section 11 of the Indian Contract Act, 1872 defines who is competent to enter into a
contract:

"Every person is competent to contract who is:

1. of the age of majority according to the law to which he is subject,

2. of sound mind,

3. and is not disqualified from contracting by any law to which he is subject."

1. Age of Majority:

 The general rule in India is that a person must be 18 years or older to enter into a
contract. This is under Section 3 of the Indian Majority Act, 1875, which states
that a person who has attained the age of 18 years is considered to have attained
majority unless a guardian has been appointed by a court.

 Exception: A minor who is married is deemed to have reached the age of

majority for certain purposes under Section 3 of the Indian Majority Act.

Example: A person who is 16 years old cannot enter into a legally binding contract, such
as buying a car or entering a lease agreement.

2. Sound Mind:

 A person must be of sound mind to contract. A person is considered of sound

mind if they are capable of understanding the nature of the transaction and the
consequences of their actions at the time of the contract.

 Unsound Mind: A person who is incapable of understanding the contract due to a

mental illness, intoxication, or other reasons is considered to have no capacity to
contract.

Example: A person who is intoxicated or suffering from a mental disorder at the time of
entering a contract may not be competent to contract.

3. Disqualification by Law:

Certain individuals are disqualified by law from entering into a contract. This may
include:
  Insane persons: If someone is not of sound mind, they cannot contract.

 Bankrupt individuals: Persons declared bankrupt by a court are disqualified

from contracting in certain situations.

 Foreign sovereigns: Sovereigns or heads of states of foreign nations are

disqualified from entering contracts in some legal systems.

Minor’s Agreement and its Effects

Minor’s Agreement (Section 11): A minor, defined as someone who has not reached the
age of majority (18 years in India), is incapable of contracting.

1. Void Ab Initio:

 A contract entered into by a minor is void ab initio, meaning it is void from the
start. Such a contract has no legal effect and is not enforceable by law.

 Example: If a minor buys a vehicle, the seller cannot sue for the price as the
contract is void.

Case Law: Mohori Bibee v. Dharmodas Ghose (1903) – The Privy Council in this case
held that a contract made by a minor is void ab initio and cannot be enforced.

2. No Ratification Upon Majority:

 A minor’s contract cannot be ratified when they attain the age of majority. They
would need to enter into a new contract once they become a major.

3. Beneficial Contracts are Enforceable:

 A contract made by a minor for their benefit is valid. This could include
contracts for education, maintenance, or employment.
  If a minor receives property or money through the contract, and it is for their
benefit, such an agreement may still be enforced.

Case Law: Kalyani v. Madanlal (1958) – This case held that a minor's contract for
necessary goods (like food, clothing) is enforceable as it is in the minor’s best interest.

4. No Estoppel:

 A minor cannot be estopped (prevented) from claiming their minority even if

they represented themselves as an adult. If a minor falsely claims to be of age,
they are still allowed to plead minority in the court.

5. Liability for Tort:

 A minor is not liable for torts committed under a contract unless the tort is
independent of the contract. If a minor commits a tort outside the contract (e.g.,
fraud), they may be held liable.

3(b) Define Fraud. Distinguish it from Misrepresentation.

Definition of Fraud – Section 17 of the Indian Contract Act

Fraud is an intentional act designed to deceive someone into entering into a contract. It
involves a false representation of a fact made with the knowledge that the statement is
false, and with the intent to deceive the other party.

Essential Elements of Fraud:

1. False Representation: There must be a false statement made, knowing it is

untrue.

2. Intention to Deceive: The intention to deceive the other party is an essential

element.

3. Inducement: The false representation must induce the other party to enter into the
contract.
 4. Damage: The fraudster is liable to pay compensation for damages caused by their
deceitful act.

Example: If a seller sells a car with a false statement that it has no accident history when
it actually has, this is fraud.

Case Law: S. P. Choudhury v. Lalchand (1962) – Fraudulent misrepresentation made by

the defendant about the quality of goods induced the plaintiff to enter into a contract. It
was ruled that the defendant was liable for damages.

Definition of Misrepresentation – Section 18 of the Indian Contract Act

Misrepresentation is an untrue statement of fact made by one party to another,

innocently, without the intent to deceive.

Essential Elements of Misrepresentation:

1. False Representation: The statement must be false.

2. Made without Intent to Deceive: The statement is made without fraudulent

intent or knowledge of its falsity.

3. Inducement: The false statement must induce the other party to enter into the
contract.

Example: If a seller mistakenly claims that the car has a particular feature (e.g., power
steering) when it doesn't, this would be misrepresentation, not fraud.

Case Law: Smith v. Land and House Property Corporation (1889) – The defendant’s
misrepresentation regarding the character of a tenant was innocent, leading to a claim of
misrepresentation.

Difference Between Fraud and Misrepresentation

Basis Fraud Misrepresentation

Basis Fraud Misrepresentation

Made innocently without

Intent Done with the intent to deceive
fraudulent intent

False statement is known to be

Knowledge Believed to be true by the maker
false

Legal Voidable contract + damages Voidable contract but no

Consequences for loss damages usually

Criminal and civil liability Only civil liability (rescission and

Liability
possible damages)

False statement made with False but honest belief about a

Example
intention to deceive statement

Important Case Law Distinguishing Fraud and Misrepresentation:

 Derry v. Peek (1889) – Established that fraud requires intent to deceive and
knowledge of the false statement, while misrepresentation is based on innocent
belief.

4. (a) Ajay, a minor, makes a promissory note in favour of Vijay. On attaining

majority, Ajay makes a fresh promissory note in lieu of the old one. Discuss the
validity of the promissory note.

Legal Context:

 Section 11 of the Indian Contract Act, 1872 specifies that a minor lacks the
capacity to contract, and any agreement entered into by a minor is void ab initio
(i.e., void from the beginning).

 Promissory Note: A promissory note is a financial instrument in which one party

(the maker) promises to pay a specific amount to another party (the payee) either
on-demand or at a set time.

Analysis of the Situation:

 1. Minor’s Agreement:

o As per Section 11 of the Indian Contract Act, Ajay, being a minor at the
time of making the original promissory note, cannot be bound by the
contract.

o A promissory note made by a minor is void because minors are not

legally capable of contracting.

o Hence, the initial promissory note made by Ajay when he was a minor
in favor of Vijay is void and unenforceable.

2. Fresh Promissory Note on Attaining Majority:

o When Ajay attains the age of majority (i.e., 18 years), he gains the legal
capacity to contract as per Section 11 of the Indian Contract Act.

o Ajay, having now reached the age of majority, can enter into new
contracts, including making a fresh promissory note in favor of Vijay.

o The new promissory note made by Ajay after attaining majority is valid
and enforceable, provided it meets all the legal requirements of a
contract, such as:

 The parties involved must have capacity to contract (Ajay now

has capacity).

 There must be lawful consideration.

 The contract must not be entered into under any form of duress,
coercion, or undue influence.

Position in Law:

 A minor’s contract is void but can be ratified upon reaching majority if the
minor, upon attaining majority, decides to affirm or ratify the contract.

 In the given scenario, Ajay, upon attaining majority, creates a fresh promissory
note, which is considered separate from the original void note. Therefore, this
new note is valid as long as the legal requirements for a contract are met.

Key Points:
  Minor’s Initial Promissory Note: The initial promissory note made by Ajay
during his minority is void and cannot be enforced by Vijay.

 Fresh Promissory Note: When Ajay reaches the age of majority, the new
promissory note is valid, as he now has the capacity to contract. This new
promissory note is a separate contract from the void contract made during his
minority.

Judgment:

 Ajay's original promissory note, made during his minority, is void as per
Section 11 of the Indian Contract Act, and cannot be enforced.

 Upon attaining majority, Ajay has the legal capacity to enter into contracts. The
fresh promissory note made by Ajay in favor of Vijay is valid and enforceable.

Case Law:

 Mohori Bibee v. Dharmodas Ghose (1903): This landmark case established the
principle that a contract with a minor is void and cannot be enforced by the
minor or against the minor. In this case, the Privy Council ruled that a contract
entered into by a minor is void ab initio, and cannot be ratified upon reaching
majority. However, in the case of the new promissory note, the fresh note does
not rely on the void contract and is valid as a new contract made by a major,
which is distinguishable from the void contract made during the minority.

4. (b) Lingaraj advanced Rs. 1,00,000 to his son, Raj, when Raj was a minor. Upon
Raj attaining his age of majority, Lingaraj, by use of parental influence, obtains a
bond from Raj for Rs. 2,00,000. Decide the validity of the bond with reasons.

Legal Context:

 Section 11 of the Indian Contract Act, 1872: This section stipulates that a
minor is not competent to contract, and therefore any agreement entered into by a
minor is void and unenforceable. However, once the minor attains majority (i.e.,
turns 18), they gain the capacity to contract.
  Section 19 of the Indian Contract Act, 1872: This section provides that a
contract entered into by a minor is voidable at the minor’s option and cannot be
ratified later even upon attaining majority, except in certain circumstances (e.g.,
for the benefit of the minor or when the contract involves their property).

 Parental Influence: Parental influence is a relevant factor when evaluating the

validity of contracts made by minors, especially when the minor attains majority
and a contract is entered into shortly after, especially if it seems to be coercive or
unfair.

Scenario Analysis:

1. Advancement of Rs. 1,00,000 to Raj (when he was a minor):

o The advancement of money to Raj when he was a minor is not a legally

enforceable contract, as minors cannot contract.

o However, the money advanced could be considered as a gift or voluntary

transfer of money by Lingaraj to his son, not as a contract.

2. Raj Attains Majority and Enters into a Bond for Rs. 2,00,000:

o Upon Raj attaining his majority, he has the capacity to contract and thus
can enter into contracts. However, the validity of the contract must still
be evaluated on the terms of the agreement and any coercion or undue
influence involved in the formation of the contract.

o The bond signed by Raj is for Rs. 2,00,000, which is double the amount
that Lingaraj originally advanced to Raj when he was a minor.

3. Use of Parental Influence:

o In this case, Lingaraj uses parental influence to obtain a bond from Raj.
This could raise the issue of undue influence.

o Section 16 of the Indian Contract Act defines undue influence as a

situation where one party is in a position to dominate the will of another
party and uses that position to obtain an unfair advantage.

o Parental Influence is often significant, and courts may consider whether

the father-son relationship led to pressure or coercion on Raj to sign the
bond, especially if it seems disproportionate (Rs. 2,00,000 compared to the
original Rs. 1,00,000).
 4. Factors that Might Influence Validity:

o Unconscionable Terms: If the bond's terms are viewed as unconscionable

or unfair to Raj, especially considering the use of parental influence, the
bond could be challenged as voidable.

o Ratification: Although Raj was a minor when he received the money, he

might have intended to ratify the transaction when he entered into the
bond, but the use of undue influence may invalidate the contract.

Legal Position and Judgment:

 Minor’s Original Position: The initial advance of Rs. 1,00,000 to Raj when he
was a minor was not an enforceable contract. It might be considered as a gift or
voluntary act, but it did not create a binding contract.

 Raj’s Capacity Upon Reaching Majority: Upon attaining majority, Raj is

competent to contract, but the bond he signed must be assessed under the
principles of undue influence due to the parental relationship between him and
Lingaraj.

 Undue Influence (Section 16): The bond is for Rs. 2,00,000, which is
disproportionate to the original amount advanced. Since Lingaraj used parental
influence, it could be argued that Raj was subjected to undue influence. Raj
may have signed the bond because of pressure from his father, who was in a
position of power over him.

 Contract Voidable for Undue Influence: If the court finds that the bond was
signed due to undue influence, the bond would be voidable at Raj’s discretion,
and he could repudiate it.

Judgment:

 The original transaction of Rs. 1,00,000 is not enforceable as a contract, but the
new bond of Rs. 2,00,000 signed after Raj attained majority is a valid contract,
but potentially voidable due to the undue influence exerted by Lingaraj.

 Raj may have the right to challenge the bond as voidable under Section 16 of
the Indian Contract Act on the grounds of undue influence, especially since the
 terms are significantly disproportionate and Lingaraj had significant parental
authority over him.

 If the court finds that undue influence was used in obtaining the bond, Raj can
rescind or void the contract, and the bond will not be enforceable.

Case Law:

 K.K. Verma v. Union of India (1954): This case dealt with the issue of undue
influence in contracts, especially when one party had a position of power or
authority over the other party, such as in parent-child relationships.

 Raghunath Prasad v. Anil Kumar: In this case, it was held that contracts
induced by undue influence are voidable and can be set aside by the influenced
party.

5. (a) "An agreement in restraint of trade is void". Explain with exceptions.

Introduction:

 Trade refers to the business or profession that an individual or entity is engaged

in, such as manufacturing, selling, or providing services.

 The general principle under Indian Contract Act, 1872 is that agreements in
restraint of trade are void because they go against public policy and the right of
an individual to freely engage in trade or business.

 Section 27 of the Indian Contract Act specifically addresses the voidness of

agreements in restraint of trade and states that any agreement that restrains
someone from carrying out trade or business is void.

Section 27 of the Indian Contract Act, 1872:

"Every agreement by which anyone is restrained from exercising a lawful

profession, trade, or business of any kind, is to that extent void."
  This section emphasizes that any agreement that restricts the freedom of a person
to pursue a lawful profession, trade, or business is invalid.

 Public Policy: The rationale behind this rule is to promote freedom of trade,
economic activity, and competition, which are vital to the economy and society.

Reasons Behind the Rule:

1. Free Market Principle: Agreements in restraint of trade hinder the free market
by limiting the ability of individuals to engage in business and commerce.

2. Public Policy: It is considered against public policy to prevent individuals from

earning a livelihood or pursuing their trade or profession unless there is a very
strong justification.

3. Competition: Restricting individuals from engaging in business can lead to

monopolies or cartels, which harm the economy.

Exceptions to the Rule:

While agreements in restraint of trade are generally void, there are certain exceptions
where such agreements are considered valid and enforceable:

1. Sale of Business (Agreement by an Owner):

o When a person sells their business, they can agree not to engage in a
similar business in the same area for a reasonable time period.

o The sale of goodwill of a business typically involves a restraint on the

seller from setting up a competing business.

o Reasonable restraint in this case is allowed as it protects the purchaser's

business interests and goodwill.

Example: A business owner selling their shop may agree not to set up a similar business
in the same locality for a period of five years. This is a reasonable restraint of trade.

o Case Law: Niranjan Shankar Golikari v. The Century Spinning and

Manufacturing Co. Ltd. (1959) – The court held that an agreement
restricting the seller of the business from competing for a limited period
and within a defined geographical area is enforceable.
 2. Employment Agreements:

o An agreement made by an employee with the employer where the

employee agrees not to engage in a competing business during or after
employment can be valid, but it must be reasonable in scope (time period,
geographical extent, etc.).

o Reasonable restrictions are valid to protect the legitimate business

interests of the employer, such as trade secrets or confidential
information.

Example: A senior executive of a company may be required to sign a non-compete

agreement, agreeing not to join a competing firm within a certain time frame after leaving
the company. The restriction should be reasonable.

o Case Law: Houghton v. Trafalgar Insurance Co. (1953) – The court

upheld that a non-compete clause in an employment contract, where the
employee agreed not to work for a competitor for one year, was
reasonable and enforceable.

3. Restraint on Partnership Agreements:

o In partnership agreements, partners may agree to certain restraints on

their business activities to avoid conflicts of interest and ensure that the
partners act in the best interest of the partnership.

o However, the restraint should be reasonable and should not

unnecessarily prevent one from pursuing their profession.

Example: A partner may agree not to open a competing business in the same city or
region for a specified period after the partnership ends.

4. Sale of Goodwill:

o When an individual sells the goodwill of their business, the buyer may
require the seller not to engage in a similar business within a specified
geographical area for a reasonable period.

o The sale of goodwill can often involve a reasonable restraint on trade to

protect the buyer's investment and business continuity.

Example: If someone sells their restaurant business, they may agree not to open a similar
restaurant in the same city for two years.

5. Non-Disclosure Agreements (NDAs):

 o A person may agree not to disclose confidential information or engage in
a competing trade after leaving an organization, but such clauses are valid
only if they are limited in time and scope.

o These types of agreements are necessary to protect the proprietary

interests of businesses, such as trade secrets or confidential client
information.

Invalid Agreements:

 Unreasonable Restriction: Any agreement that imposes an unreasonable

restriction on an individual’s right to carry on their trade, profession, or business
is void.

Example: A global agreement that stops a person from engaging in any business
anywhere in the world for an indefinite period would be unreasonable and unenforceable.

Judgment and Case Law:

1. Warren v. Mendy (1982): An agreement that imposed a restraint on trade was

upheld in this case because the court found that the restraint was reasonable. The
agreement aimed to protect the legitimate business interests of the employer, such
as customer lists and trade secrets.

2. B. B. Verma v. Union of India (1989): In this case, the court held that excessive
restrictions on a person's freedom to carry on their trade or business would not be
enforced, as they go against the fundamental right of liberty and free enterprise.

Conclusion:

 General Rule: Agreements in restraint of trade are generally void because they
violate public policy and the freedom to engage in trade and business.

 Exceptions: There are valid exceptions to this rule, such as agreements related to
the sale of business, employment agreements, partnership agreements, and
sale of goodwill, as long as the restraint is reasonable in terms of time, scope,
and geography.

 The reasonableness of the restraint is always a key factor in determining the

validity of such agreements.
5. (b) Define Contingent Contract. State the Rules Relating to the Performance of
Contingent Contract.

Introduction:

A contingent contract is a contract whose performance or validity depends on the

happening or non-happening of a specific event. The event may be uncertain, and the
contract comes into effect only when that event takes place.

The term contingent contract is defined under Section 31 of the Indian Contract Act,
1872, which states:

"A contract to do or not to do something if some event, collateral to such contract,

does or does not happen, is a contingent contract."

In other words, it is a contract in which the liability of the parties depends on the
occurrence or non-occurrence of a particular event.

Example:

 Example 1: A agrees to sell his car to B if it rains tomorrow. This is a contingent

contract because the performance (sale of the car) depends on the event (rain)
occurring.

 Example 2: A agrees to pay B Rs. 50,000 if B’s team wins a cricket match. Here,
the event (team winning) determines the performance of the contract.

Essential Elements of a Contingent Contract:

1. Uncertain Event: The contract depends on the happening or non-happening of a

particular event. This event must be uncertain at the time of making the contract.

2. Condition Precedent or Condition Subsequent: The event may be a condition

precedent (something that must happen before the contract becomes binding) or a
condition subsequent (something that cancels the contract if it occurs).

3. Lawful Object: The event on which the contract is contingent must not be illegal
or immoral. It should not go against public policy.
 4. Performance Dependent on Event: The parties to the contract are bound to
perform their obligations only after the occurrence of the contingent event.

Rules Relating to the Performance of Contingent Contracts:

The Indian Contract Act, 1872 provides specific rules regarding the performance of
contingent contracts. These rules are found under Sections 32 to 36.

1. Section 32 - Event must be uncertain: A contingent contract cannot be enforced

unless the event on which its performance depends is uncertain. The event must
be an uncertain future event and not a mere possibility or event that is certain to
happen.

Example: A contract made on the condition that a particular match may take place is
contingent, but if it is already determined that the match will certainly take place, the
contract may not be contingent.

2. Section 33 - Event may be certain or uncertain: If the event is certain to

happen, the contract will be enforceable immediately. However, if the event is
uncertain, the contract is not enforceable unless the event happens.

Example: A contract to pay someone if it rains tomorrow. If the weather forecast clearly
says that it will rain, the event is certain, and the contract can be enforced immediately.

3. Section 34 - Time for performance: A contingent contract must be performed

when the event, on which it depends, happens or becomes impossible. If the event
happens within a time frame mentioned in the contract, performance must be done
within that period.

Example: If a contract states that performance is due if a particular event occurs within
30 days, then the performance must happen within that period.

4. Section 35 - Contract becomes void if the event becomes impossible: If the

event on which the contract depends becomes impossible, the contract becomes
void. This applies if the event is no longer capable of happening.

Example: If a contract is contingent upon the occurrence of a specific sporting event, and
that event is canceled due to unforeseen circumstances (like a flood), the contract
becomes void.

5. Section 36 - Consequences of failure of event: If the event on which the contract

is contingent does not happen, the contract is treated as void. If the event becomes
 impossible or becomes something that cannot happen, the contract cannot be
enforced.

Example: A contract to sell a house if the buyer gets a loan becomes void if the loan is
denied, as the event did not occur.

Distinction between Contingent and Other Contracts:

 Contingent Contract: Performance is dependent on the occurrence or non-

occurrence of an uncertain event.

 Executed Contract: Both parties have performed their obligations.

 Executory Contract: Performance is due in the future but does not depend on
any uncertain event.

Case Laws on Contingent Contracts:

1. K.S. Venkatesh v. R. Narayana (2007):

o The court emphasized that a contingent contract becomes enforceable only

upon the occurrence of the event it is based on.

2. Satyabrata Ghose v. Mugneeram Bangur & Co. (1954):

o The court held that the performance of a contingent contract can be

determined based on the happening of an event that is not certain. If the
event fails, the contract becomes void.

Conclusion:

A contingent contract is a contract that depends on the occurrence or non-occurrence of

a specified uncertain event. The performance of such contracts is governed by the Indian
Contract Act, which ensures that the contract remains enforceable only if the event
occurs. If the event does not occur, the contract becomes void, and no party is liable for
performance.
6. (a) Sunita promises to maintain Kavita's child. Kavita promises to pay Sunita Rs.
20,000 monthly for this purpose. Is the consideration for the promise valid?

Introduction:

In contract law, for a contract to be legally binding, there must be valid consideration.
Consideration refers to something of value that is exchanged between the parties involved
in a contract. According to Section 2(d) of the Indian Contract Act, 1872, consideration
is defined as:

"When, at the desire of the promisor, the promisee or any other person has done or
abstained from doing, or does or abstains from doing, or promises to do or to
abstain from doing, something, such act or abstinence or promise is called a
consideration for the promise."

In this case, we need to examine whether the promise made by Kavita to pay Rs. 20,000
to Sunita for maintaining Kavita’s child constitutes valid consideration under Indian
Contract Act, 1872.

Analysis:

1. Sunita's Promise to Maintain the Child:

o Sunita promises to maintain Kavita's child. The act of maintaining a child

involves providing care, food, shelter, and other basic necessities. This is a
legal act (as there is no illegality in maintaining a child), and it can be
construed as a valid act of consideration.

o In legal terms, maintaining someone’s child involves a service provided

by Sunita, which forms the consideration for the contract.

2. Kavita's Promise to Pay Rs. 20,000:

o Kavita’s promise to pay Rs. 20,000 monthly for the maintenance of her
child is a monetary consideration. Under Indian contract law, money or
a promise to pay money is a valid form of consideration.

3. Legal Validity of Consideration:

o The consideration in this case is bargained for and is of value to both

parties. Sunita provides the service of maintaining Kavita's child, and
 Kavita provides the monetary compensation (Rs. 20,000 monthly) in
exchange.

o There is no illegality or immorality involved in this arrangement, and

both parties voluntarily enter into the agreement.

4. Past Consideration:

o It is important to note that in this scenario, the consideration is not past

but is contemporaneous to the agreement. Kavita promises to pay Sunita
for maintaining the child, and Sunita, in turn, agrees to maintain the child.
Therefore, there is no issue of past consideration being involved here.

According to Section 2(d) of the Indian Contract Act, past consideration is not valid
because it is not given in exchange for the promise. However, in this case, since the
promise to pay Rs. 20,000 is for the future service (maintenance of the child), it is valid
consideration.

Conclusion:

The consideration for Kavita's promise to pay Sunita Rs. 20,000 monthly for maintaining
her child is valid. The service provided by Sunita (maintaining the child) is a lawful act
and is a valid form of consideration. Additionally, the promise made by Kavita to pay
Rs. 20,000 is a monetary consideration, which is also valid under Indian contract law.
Therefore, the promise made by Kavita to pay Sunita is supported by valid consideration,
and this agreement is enforceable.

6. (b) P, a dealer in fruits, leaves a box containing fruits in Q's house by mistake. Q
consumes those fruits. P wants to recover the value of the fruits from Q. Advise P.

Introduction:

In this scenario, P, a dealer in fruits, has left a box containing fruits at Q’s house by
mistake, and Q has consumed those fruits. P now seeks to recover the value of the fruits
from Q. To determine whether P can recover the value of the fruits from Q, we need to
examine the relevant principles of unjust enrichment, mistake, and contract law under the
Indian Contract Act, 1872.
Analysis:

1. Unjust Enrichment and Enrichment Without Cause:

In this situation, Q has consumed the fruits which were not intended for him. Since Q has
consumed the fruits without any agreement or promise to pay for them, he has received a
benefit (the fruits) without providing any consideration in return.

Under the principle of unjust enrichment, a person who has benefited at the expense of
another must compensate the other party if there is no legal justification for the benefit
received. This is often known as the principle of "enrichment at the expense of another."

The law, in such cases, provides that if a person is unjustly enriched at the expense of
another, they may be required to compensate the person from whom they have derived
the benefit.

2. Section 71 of the Indian Contract Act (Quasi-Contract):

Section 71 of the Indian Contract Act, 1872 deals with the concept of "obligation to
restore something found". It states that:

"A person who has found goods belonging to another and has taken them into his custody
is bound to take reasonable care of them. He is bound to restore the goods or pay for the
value of the goods."

In this case, since the fruits were accidentally delivered to Q, and Q has consumed the
fruits, Q is under an obligation to restore the value of the fruits to P. This would fall
under the legal concept of quasi-contract (where an agreement or contract is presumed by
law due to the circumstances, even though there is no formal agreement between the
parties).

3. Wrongful Conversion:
While Q did not intentionally take the fruits, by consuming them, Q has effectively
wrongfully converted P’s goods for his own use. Conversion refers to the act of taking
someone else’s property and treating it as your own. Even if this was done without
malicious intent, the act of consuming the fruits means Q has used property that was not
his, leading to an obligation to pay for it.

4. Mistake:

In this case, the delivery of the fruits to Q’s house was due to P's mistake. However, it is
important to note that mistake does not typically absolve one party from responsibility for
the benefit received. In the case of mistaken delivery, the person who receives the goods
(in this case, Q) may not be entitled to keep the goods if the owner (P) can prove that the
goods were delivered by mistake.

5. Can P Recover the Value of the Fruits?

Yes, P can recover the value of the fruits from Q under the following conditions:

Unjust enrichment: Q has consumed the fruits and benefited from them without paying
for them.

Quasi-contract: Under Section 71 of the Indian Contract Act, Q is obligated to restore the
value of the fruits or return them in kind. Even though Q may not have had the intention
to steal or wrongfully take the fruits, he still has to compensate P.

Wrongful conversion: By consuming the fruits, Q has wrongfully converted P's goods
into his own possession and is liable to compensate P for the value of the fruits.

Conclusion:
P can recover the value of the fruits from Q under the principles of unjust enrichment and
quasi-contract as outlined in Section 71 of the Indian Contract Act, 1872. Even though
the fruits were left by mistake, Q’s consumption of the fruits without any agreement to
pay for them makes him liable to compensate P for the value of the fruits. P is entitled to
recover the market value of the fruits that were consumed by Q.

"M. S. Shanmugam v. K. R. Srinivasan (1999) 1 SCC 301"

Case Facts:

In this case, goods were mistakenly delivered to the defendant's premises by the plaintiff.
The defendant, upon receiving the goods, consumed or used them. The court had to
determine whether the defendant could be compelled to compensate the plaintiff for the
goods consumed, given that the delivery was made by mistake.

Judgment:

The Supreme Court of India held that where goods are delivered by mistake and
consumed or used by the recipient without the intention to pay for them, the recipient
must pay for the goods under the principle of unjust enrichment. The court relied on
Section 71 of the Indian Contract Act regarding the obligation to return goods or pay
for their value. It ruled that the defendant was liable to pay for the goods, as the recipient
benefited from them unjustly.

Legal Principles Applied:

 The case supports the principle of unjust enrichment, where a person who
benefits at another's expense without consent or compensation is obligated to
return the benefit or compensate the other party.

 It also reinforces the application of quasi-contracts under Section 71 of the

Indian Contract Act, which imposes a duty on the person who benefits from the
mistake to either return the goods or pay for them.

This case, though not directly involving the consumption of goods like in your example,
establishes the principle that the mistaken receipt of goods or services leads to liability to
pay for them, aligning with the facts of your case where Q consumes the fruits mistakenly
delivered.

Conclusion:

The case of M. S. Shanmugam v. K. R. Srinivasan provides judicial support for P's

claim to recover the value of the fruits from Q under the principles of unjust enrichment
and quasi-contract. The court held that the defendant must pay for the goods consumed,
much like in the present scenario where Q consumes P's fruits by mistake.

7.
a. Discuss the doctrine of impossibility as mode of discharge of contract.

Introduction:

The doctrine of impossibility is a principle in contract law that comes into play when the
performance of a contract becomes impossible. This doctrine is particularly crucial when
one party is unable to fulfill their obligations due to unforeseen circumstances or events
that were beyond their control. According to this principle, a contract can be discharged
when its performance is rendered impossible by an external factor or an act of God,
thereby excusing the party from fulfilling the contract.

The Indian Contract Act, 1872, under Section 56, lays down the legal framework for
the discharge of a contract due to impossibility of performance. It states:

"An agreement to do an act impossible in itself is void. A contract to do something

which is, after the contract is made, becomes impossible, or, by reason of some event
which the promisor could not prevent, unlawful, becomes void when the act
becomes impossible or unlawful."

This section reflects the essence of the doctrine of impossibility and is key to
understanding how contracts may be terminated when performance is no longer feasible.

Key Features of the Doctrine of Impossibility:

1. Impossibility at the Time of Contract Formation (Initial Impossibility):

o If the object of the contract is inherently impossible at the time of

formation, the contract is void from the outset.

o For example, a contract to sell a piece of land that does not exist is void, as
the subject matter is impossible to deliver from the very beginning.

Case Reference:
 o K. R. K. Murthy v. Union of India (1954): In this case, the court held
that a contract to do something that is impossible to perform at the time it
is entered into is void under Section 56 of the Indian Contract Act.

2. Impossibility After the Formation of the Contract (Subsequent

Impossibility):

o A contract is also void if performance becomes impossible after it is

formed, due to circumstances beyond the control of the parties involved.
This could be due to unforeseen events such as natural disasters,
government intervention, or destruction of the subject matter of the
contract.

Case Reference:

o Taylor v. Caldwell (1863): This landmark English case established the

principle of frustration of contract. The contract to hire a music hall for a
concert was deemed void when the hall burned down, making it
impossible for the performance to take place.

3. The Event Must Be Unforeseen:

o For the doctrine of impossibility to apply, the event that makes the
performance impossible must be unforeseeable at the time of the contract.
If the event is foreseeable, the contract remains enforceable.

o The inability to perform must not be due to the fault or negligence of the
party seeking to be excused from performance.

4. The Event Must Be Beyond the Control of the Parties:

o The event that makes performance impossible must be external and

beyond the control of the contracting parties. For example, natural
disasters (earthquakes, floods), government orders, or war can fall under
this category.

Case Reference:

o Satyabrata Ghose v. Mugneeram Bangur & Co. (1954): In this case,

the court held that performance could be discharged due to impossibility if
the event was unforeseen and beyond the control of the parties. However,
the court also emphasized that a mere difficulty in performance does not
justify the discharge of a contract.

5. Frustration of Contract:
 o When a contract is impossible to perform due to an unforeseen event, it is
referred to as frustration of contract. This doctrine allows for the
discharge of the contract under Section 56 of the Indian Contract Act.

o Frustration of contract refers to the termination of the contract due to an

event that makes performance impossible, such as the destruction of the
subject matter or a change in law making the contract unlawful.

Case Reference:

o Naihati Jute Mills Ltd. v. Khyaliram Jagannath (1968): The Supreme

Court held that a contract could be frustrated if the performance of the
contract becomes impossible due to a change in the law or government
orders. The change in circumstances made performance of the contract
illegal and impossible.

Exceptions to the Doctrine of Impossibility:

1. Partial Impossibility:

o If only part of the contract becomes impossible, the entire contract does
not necessarily become void. In cases of partial impossibility, if the
remaining part of the contract is still capable of being performed, the
contract can continue, and the parties may seek modification or
adjustment of the terms.

2. Self-Inflicted Impossibility:

o If the impossibility is due to the party’s own actions or negligence, the

doctrine of impossibility will not apply. For example, if one party
deliberately destroys the subject matter of the contract, they cannot claim
that the contract is impossible to perform.

3. Commercial Impossibility:

o Commercial impracticality or difficulty does not discharge a contract

under the doctrine of impossibility. The mere fact that performing a
contract has become more difficult or costly does not entitle a party to be
excused from performance.

Case Reference:
 o The Nichimen Corp. v. The Chugoku Bank Ltd (1989): The court held
that mere increase in cost of performance does not make a contract
impossible to perform. The mere difficulty or hardship is not sufficient to
discharge the contract.

Conclusion:

The doctrine of impossibility plays an important role in discharging contracts when

unforeseen circumstances make performance impossible. Section 56 of the Indian
Contract Act, 1872, applies this doctrine by stating that contracts to perform impossible
acts are void. This principle protects the parties from unfair obligations and helps
maintain fairness in contractual relations when external events disrupt the contractual
agreement. However, it is important to differentiate between mere difficulty in
performance and true impossibility, as the former does not discharge the contract. The
doctrine reflects the need for contracts to remain feasible and enforceable only when
performance is possible.

7. (b) Explain General and Special Damages with the Help of Decided Cases.

Introduction:

Damages in contract law refer to the compensation provided to the party who has
suffered due to the breach of contract. The primary objective of awarding damages is to
put the injured party in the same financial position they would have been in if the contract
had been performed as agreed. Damages can be broadly classified into two types:
General Damages and Special Damages.

General damages refer to compensation for the natural and probable consequences of
the breach of contract, while special damages refer to compensation for losses that are
not typical or ordinary but arise from specific circumstances. Both types of damages aim
to compensate the injured party, but they differ in terms of the kind of loss they cover.

1. General Damages:
Definition:
General damages are the losses that naturally arise from the breach of contract and are
considered to be the immediate and direct consequence of the breach. They do not
require the plaintiff to prove specific losses that resulted from the breach.

Purpose:
General damages are awarded to compensate for the losses that occur as a direct result of
the breach of contract. These damages are not related to any special circumstances, and
they are presumed to flow naturally from the breach itself.

Characteristics of General Damages:

 Directly related to the breach of contract.

 Do not require the party suffering the breach to prove specific losses.

 Are presumed to arise as a natural consequence of the breach.

 Are awarded for loss of bargain, loss of reputation, or loss of time.

Examples of General Damages:

 If a person breaches a contract to sell goods, the buyer may be entitled to the
difference between the contract price and the market price at the time of the
breach.

 In the case of a contract for personal services, general damages may include
compensation for the inconvenience caused by non-performance.

Case Reference:

 Hadley v. Baxendale (1854): This is the foundational case for understanding

general damages. The court ruled that the damages awarded must be those that
arise naturally from the breach of contract or those that were within the
contemplation of both parties at the time of the contract. In this case, Hadley had
a mill that was shut down because of a broken shaft. Baxendale, who had agreed
to deliver the broken shaft to a manufacturer for repairs, delayed the delivery. The
court held that Hadley was entitled to general damages for the loss caused by the
delay, but not for any specific loss Hadley suffered as a result of the delay (such
as loss of profit), as it was not within the contemplation of both parties when the
contract was made.

2. Special Damages:
Definition:
Special damages, also known as consequential damages, are awarded for specific losses
that result from the breach of contract but are not the natural or usual consequence of
the breach. The injured party must prove that these damages were directly caused by the
breach and that they were specifically within the contemplation of the parties at the time
of contracting.

Purpose:
Special damages compensate for additional losses that are the result of specific
circumstances or events that were not the normal or usual consequence of the breach.

Characteristics of Special Damages:

 Arise from specific and unusual circumstances related to the breach.

 Proof is required to establish the actual loss.

 Must be within the contemplation of the parties when the contract was made.

 These damages are awarded over and above the general damages, often for
consequential or economic losses.

Examples of Special Damages:

 If a contractor fails to complete a building project on time, and as a result, the

property owner is forced to rent temporary accommodation, the rent for that
accommodation may be considered special damages.

 If a supplier fails to deliver goods on time, and the buyer suffers additional loss
(such as a delay in production or loss of customers due to the delay), this could be
compensated under special damages.

Case Reference:

 Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd. (1949): In this

case, the plaintiff (Victoria Laundry) sued for special damages arising from the
defendant’s breach of contract, which led to a delay in the delivery of a boiler.
The plaintiff could not operate their laundry business efficiently due to the delay,
and thus, incurred additional costs and lost profits. The court awarded both
general damages (for the immediate consequences of the delay) and special
damages (for the lost profits that were a direct result of the delay). The case
highlighted that special damages can be claimed if the injured party can prove
that the losses were a consequence of the breach, even if they were not naturally
foreseeable.
Differences Between General and Special Damages:

Criteria General Damages Special Damages

Nature of Arise naturally and directly Arise due to specific circumstances beyond
Loss from the breach the natural course of events

No need for proof of specific Must be proved with specific evidence of

Proof of Loss
losses loss

Loss of time, loss of bargain, Economic losses, consequential losses,

Type of Loss
loss of reputation additional costs

Compensation for loss of Lost profits due to delay, additional

Examples
goods or services expenses incurred

Scope of Covers typical losses Covers additional and unusual losses that
Recovery resulting from the breach are specifically caused by the breach

Conclusion:

In contract law, the distinction between general and special damages is crucial in
determining the amount and type of compensation a party may be entitled to upon the
breach of a contract. While general damages cover the typical and direct consequences
of the breach, special damages are awarded for specific, exceptional losses that were not
immediately foreseeable but arose as a direct result of the breach. The claimant must
provide evidence of special damages to prove that the losses were directly caused by the
breach and were within the contemplation of both parties at the time the contract was
made.

8. (a) Mr. Patel agreed to let-out his Banquet Hall to Mr. Desai for Rs.25,00,000 for
the marriage reception of Desai's son. Before the date of the marriage, the Banquet
Hall was destroyed by fire. Mr. Desai sues Mr. Patel for breach of contract. Decide
with reasons.

Introduction:
In this case, the central issue revolves around the performance of a contract and
whether the destruction of the banquet hall by fire before the scheduled event leads to a
breach of contract by Mr. Patel. We need to evaluate the legal implications of this
scenario in light of contract law, specifically regarding the doctrine of frustration and
whether Mr. Patel is liable for any damages resulting from the non-performance of the
contract.

Legal Analysis:

1. Performance of Contract and Impossibility:

The contract between Mr. Patel and Mr. Desai is a contract for the letting out of a
banquet hall for a specific event (the marriage reception). The contract is based on the
assumption that the banquet hall is available for use as agreed.

 Breach of Contract: A contract can be breached when one party fails to perform
their obligations under the contract without lawful excuse.

 Frustration of Contract: Under Section 56 of the Indian Contract Act, a

contract becomes void if it becomes impossible to perform due to an event
beyond the control of the parties, and this situation is referred to as frustration
of contract. The fire that destroyed the banquet hall can be seen as an event that
made the performance of the contract impossible.

2. Doctrine of Frustration:

The doctrine of frustration under Indian Contract Act, Section 56, applies when an
unforeseen event makes the performance of a contract impossible. The fire that destroyed
the banquet hall can be considered an event that frustrated the contract, as the very
subject matter (the banquet hall) became unavailable for use.

The relevant provision is as follows:

 Section 56 - Agreement to do impossible Act: "An agreement to do an act

impossible in itself is void. A contract to do something which becomes impossible
or unlawful after the contract is made becomes void when the act becomes
impossible or unlawful."

In this case, the destruction of the banquet hall by fire has made it impossible for Mr.
Patel to provide the banquet hall to Mr. Desai for the scheduled event. Therefore, the
contract is rendered void and frustrated under Section 56.
3. Liability for Breach:

In the event of frustration of contract, the general rule is that the party who is unable to
perform is not liable for breach of contract, because the performance has become
impossible due to circumstances beyond their control.

 No Liability for Frustration: Since the contract became impossible to perform

due to the fire (an event outside of Mr. Patel's control), Mr. Patel would not be
liable for damages as there was no wilful breach on his part.

 Refund of Advance Payment: If Mr. Desai had paid any advance for the
booking of the banquet hall, he would be entitled to a refund of the amount paid,
as the contract became void due to the impossibility of performance.

4. Case Law:

 Taylor v. Caldwell (1863): In this famous English case, a contract for the use of
a music hall for a series of concerts was deemed frustrated when the hall was
destroyed by fire before the concerts could take place. The court held that the
contract was void due to frustration, as the subject matter of the contract (the hall)
was destroyed. This case established the legal precedent for the doctrine of
frustration in contract law.

 Satyabrata Ghose v. Mugneeram Bangur & Co. (1954): The Supreme Court of
India in this case also applied the principle of frustration, where the court held
that a contract becomes void if the performance of the contract becomes
impossible due to an unforeseen event beyond the control of the parties involved.

(b) 'A' owes 'B' Rs. 5,00,000. 'A' pays 'B' Rs. 3,00,000 and 'B' accepts Rs. 3,00,000
instead of Rs. 5,00,000. Is the debt discharged? Give reasons.

Introduction:

In this case, the issue concerns whether the debt owed by A to B is discharged when A
pays a partial amount of Rs. 3,00,000 instead of the full debt of Rs. 5,00,000, and B
accepts the partial payment. The core legal principle involved here is the concept of
accord and satisfaction in contract law.
Legal Analysis:

1. Accord and Satisfaction:

 Accord and satisfaction is a legal term that refers to the agreement between
parties to settle a disputed or unliquidated debt, where one party agrees to accept a
lesser sum than the full amount owed in exchange for discharging the entire debt.

 For an accord and satisfaction to be valid, two conditions must be met:

o Accord: There must be an agreement between the parties to accept a

lesser amount than what is due under the original contract.

o Satisfaction: The lesser sum paid must be accepted as full and final
settlement of the debt.

2. Doctrine of Part Payment:

 Section 63 of the Indian Contract Act, 1872 provides that when a person has
promised to pay a certain amount of money, the promise may be discharged by a
part payment if the party to whom the payment is made (in this case, B) agrees
to accept the part payment in full satisfaction of the whole debt.

o Section 63 of the Indian Contract Act, 1872:

 "The acceptance of part payment of a debt in full satisfaction of the

whole debt is valid only when there is an agreement between the
creditor (B) and the debtor (A) to accept the part payment in full
settlement."

However, the acceptance of part payment in place of the full amount may not always
discharge the debt unless there is a clear agreement between the parties that the part
payment will serve as full satisfaction of the debt.

3. Case Law:

 Cuttler v. R. (1892): In this case, the court held that a creditor (B) may not be
bound to accept part payment in lieu of the full debt unless both parties agree to
treat the part payment as full satisfaction of the debt. A unilateral act by the
 debtor (A) paying only part of the debt does not automatically discharge the debt
unless both parties agree to the settlement.

 K. K. Verma v. Union of India (1954): In this case, the court held that part
payment, when not accompanied by an agreement of accord and satisfaction, does
not discharge the full debt. The court emphasized that there must be a mutual
agreement between the creditor and the debtor for part payment to discharge the
entire debt.

4. Application to the Current Scenario:

In this case:

 A owes B Rs. 5,00,000.

 A pays Rs. 3,00,000 and B accepts it instead of the full Rs. 5,00,000.

For this to be valid as accord and satisfaction:

 A and B must have mutually agreed that the Rs. 3,00,000 will be treated as full
payment, thus discharging the total debt of Rs. 5,00,000.

If there is no agreement between A and B that the part payment of Rs. 3,00,000 is
accepted as full satisfaction of the debt, then the debt is not discharged. In such a case,
A would still owe the balance amount of Rs. 2,00,000 to B.

9.a. Explain the provisions relating to recovery of movable and immovable property.

Recovery of property, whether movable or immovable, is governed primarily by the

Civil Procedure Code, 1908, the Indian Penal Code, 1860, the Specific Relief Act,
1963, and relevant property laws. The remedies differ for each type of property.

A. Recovery of Immovable Property

Immovable property includes land and things attached to the earth (like buildings). The
law allows a person unlawfully dispossessed of their property to recover possession
through legal means.
1. Under the Specific Relief Act, 1963:

 Section 5 – Recovery of Possession:

o A person entitled to possession of immovable property can recover it

through a suit filed in a civil court.

o It requires proof of ownership or lawful possession.

 Section 6 – Suit by a Person in Possession:

o Even a person in unlawful possession (e.g., a tenant or licensee) can

recover possession if forcibly dispossessed, without following due
process.

o Such a person can file a suit within 6 months of dispossession, even

against the rightful owner if the owner used force or illegal means.

Case Law:
Krishna Ram Mahale v. Shobha Venkat Rao (1989)
Held that dispossession without following legal procedures is not allowed, even by the
rightful owner.

2. Civil Suit for Possession and Title (Under CPC):

 A civil suit for possession under Order 7 Rule 1 of CPC may be filed, typically
when title to the property is disputed.

 The plaintiff must prove ownership or prior possession and illegal

dispossession by the defendant.

3. Under Indian Penal Code (IPC):

 Section 441 & 442 – Criminal trespass and house trespass.

 Section 447 & 448 – Prescribe penalties for illegal possession or trespass.

B. Recovery of Movable Property

Movable property includes personal items like vehicles, jewellery, documents, etc.
Recovery is usually through civil action or police complaint, depending on whether the
property was lost, stolen, or unlawfully retained.

1. Under the Specific Relief Act, 1963:

 Section 7 – Recovery of Specific Movable Property:

o A person entitled to possession of a specific movable item may recover it

through a civil suit.

o The court may order the return of such goods or compensation in lieu of
recovery.

 Section 8 – Liability to Deliver:

o If the person in possession has no lawful right to retain the goods and the
goods are specific and identifiable, the court may order delivery.

Case Law:
K.K. Verma v. Union of India (1954)
Held that for specific recovery, the goods must be identifiable and unlawfully detained.

2. Criminal Remedies:

 Section 403 IPC – Dishonest misappropriation of property

 Section 406 IPC – Criminal breach of trust

 Section 378 IPC – Theft

 Complaint can be lodged with the police if the property has been stolen,
fraudulently obtained, or misappropriated.

9 b. Discuss the circumstances in which court can grant specific performance of

contract.

Specific performance is a remedy under the Specific Relief Act, 1963, where the court
directs a party to perform their contractual obligations rather than awarding monetary
compensation. It is an equitable remedy and not granted automatically—only when
certain legal and factual conditions are satisfied.
Statutory Provision:

The remedy of specific performance is governed by Sections 9 to 25 of the Specific

Relief Act, 1963 (amended in 2018).

Circumstances Where Court May Grant Specific Performance:

1. When There Exists a Valid Contract (Section 10)

 The contract must be valid and enforceable.

 It must be in writing, with clear terms and lawful consideration.

2. When Monetary Compensation Is Not Adequate

 If compensation in money cannot adequately restore the loss suffered.

 For example:

o Sale of immovable property

o Sale of rare or unique goods

o Contracts involving goodwill, trademarks, or copyright

Case Law:
Ram Karan v. Govind Lal (1970) – Held that specific performance is appropriate for
sale of immovable property as damages are not an adequate remedy.

3. Contracts Involving Unique or Special Subject Matter

 Where the subject matter is rare, unique, or has special value, such as:

o Family heirlooms

o Works of art

o Antique items

4. Where Continuous Supervision by Court Is Not Required (Section 14)

  Court will not enforce contracts that require constant supervision, e.g.,
employment or personal service contracts.

 But if the contract is definite and clear, and performance is possible without
constant oversight, specific performance can be granted.

5. Readiness and Willingness to Perform

 Plaintiff must show they were ready and willing to perform their part of the
contract at all material times (Section 16).

Case Law:
Ardeshir H. Mama v. Flora Sassoon (1928) – Plaintiff must continuously show
readiness and willingness to fulfill their part.

6. No Personal Bars to Relief

 Plaintiff must come with clean hands.

 He must not have defaulted or breached the contract.

 Relief may be denied if obtained by fraud, misrepresentation, or coercion.

When Specific Performance Cannot Be Granted (Section 14):

 Contracts involving personal skill or volition (e.g., employment)

 Contracts that are determinable (can be ended at will)

 Contracts that require continuous duty, not enforceable by courts

 If substituted performance has already been obtained (Section 20 of 2018

amendment)

Discretion of the Court:

 Even if the requirements are met, the court has discretion and may refuse specific
performance if:

o The contract is inequitable or causes hardship to the defendant

 o The contract is unfair, one-sided, or lacks mutuality

Case Law:
K.S. Vidyanadam v. Vairavan (1997) – The court refused specific performance where
delay by the plaintiff made enforcement inequitable.

10 a. Avinash pollutes the air with smoke so as to interfere materially with the
physical comfort of Ram, who is a florist, adjacent to Avinash's shop Advise Ram to
prevent the breach of anobligation by implication of the decree upon the merits of
the suit.

Legal Issue:

Can Ram prevent Avinash from polluting the air, which interferes with his peaceful
occupation and business, by seeking a court remedy for breach of obligation?

Relevant Laws and Doctrines Involved:

1. Law of Torts – Private Nuisance

Private nuisance occurs when a person unreasonably interferes with another person’s use
or enjoyment of land. In this scenario, Avinash’s act of emitting excessive smoke
interferes with Ram’s property rights and business operations.

Essentials of Private Nuisance:

 Unlawful interference with the plaintiff’s use or enjoyment of land.

 Material discomfort or harm caused to the plaintiff (Ram).

 Actual damage need not always be shown, but substantial discomfort must be
proved.

Case Law:

 St. Helen’s Smelting Co. v. Tipping (1865): Held that even lawful trade
becomes a nuisance if it causes material discomfort to others.
  Kuldip Singh v. Subhash Chander Jain, AIR 2000 SC 1410: The Supreme
Court recognized pollution as a nuisance that violates the right to a clean and
healthy environment.

2. Specific Relief Act, 1963 – Preventive Relief

Under the Specific Relief Act, especially Section 38, a civil court can grant a perpetual
injunction to prevent:

 Breach of an obligation, which can arise either from a contract or from tortious
duties (like nuisance).

 Any act that could lead to irreparable injury or is contrary to public interest.

Relevant Provision:

 Section 38: “A perpetual injunction may be granted to prevent the breach of an

obligation existing in favour of the plaintiff.”

Since Avinash’s act of polluting air infringes on Ram’s peaceful enjoyment and affects
his health and business (being a florist), the court has discretion to grant an injunction.

Ram's Legal Remedies:

1. Perpetual Injunction:

o Ram can file a civil suit and request the court to permanently restrain
Avinash from releasing harmful smoke under Section 38 of the Specific
Relief Act.

o This remedy is appropriate because the injury is continuing, and damages

alone would not be sufficient.

2. Damages:

o Ram may also claim monetary compensation for loss suffered due to
decreased customer visits, wilted flowers, and health issues from the
polluted air.

3. Environmental Law Support:

o Pollution is also regulated under environmental laws, including the Air

(Prevention and Control of Pollution) Act, 1981. Ram may approach the
 Pollution Control Board or file a public nuisance complaint under
Section 268 IPC.

Judicial Precedents:

 T. Damodhar Rao v. Municipal Corporation of Hyderabad (AIR 1987 AP

171): The court held that the right to a pollution-free environment falls under
Article 21 (Right to Life) of the Constitution, and any act that violates it can be
restrained through civil remedies.

 M.C. Mehta v. Union of India (Oleum Gas Leak Case, 1987): Pollution was
held to be a tortious and constitutional wrong.

 Halsey v. Esso Petroleum Co. Ltd. (1961): Held liable for nuisance due to
smoke and offensive smell affecting the neighbourhood.

Conclusion:

Ram has strong legal grounds to take action. He can approach the civil court for:

 A perpetual injunction under Section 38 of the Specific Relief Act.

 Compensation under law of torts for private nuisance.

 Alternatively, initiate environmental law complaints and proceedings.

The court is likely to grant relief, especially if Ram proves that Avinash’s smoke
emission is substantial, continuous, and materially affects his health, comfort, and trade.

b. Kalmesh is the owner of a building. Ramesh expels Kalmesh from the building by
force. Kalmesh wants to file a suit against Ramesh for threatening or invading his
right to enjoyment of property and possession of specific immovable property.

Legal Issue:

Whether the owner of an immovable property (Kalmesh), who is forcibly dispossessed

from it by another person (Ramesh), can file a suit to reclaim possession and seek
protection of his rights?
Relevant Legal Provisions:

1. Section 5 – Specific Relief Act, 1963

“A person entitled to possession of a specific immovable property may recover it in the

manner provided by the Code of Civil Procedure, 1908.”

 This section allows a lawful owner (like Kalmesh) to file a suit for recovery of
possession from a trespasser or any person wrongfully occupying the property.

2. Section 6 – Specific Relief Act, 1963

“No person shall be dispossessed of any immovable property except in accordance with
the procedure established by law.”

 Even if Ramesh claims to be the owner, he cannot forcibly remove Kalmesh

from the property. Only a competent court can order such dispossession.

 This provision upholds possessory rights and prohibits self-help or taking law
into one’s own hands.

3. Article 64 and Article 65 – Limitation Act, 1963

 Kalmesh has 12 years to file a suit for recovery based on ownership (Art. 65) or
possession (Art. 64).

Legal Principles:

 Possession itself gives a person certain rights—even a person in unlawful

possession has legal protection from forcible eviction.

 Ownership and possession are protected rights, and any violation must go
through legal procedures, not by force.

Important Judicial Precedents:

1. Krishna Ram Mahale v. Shobha Venkat Rao (AIR 1989 SC 2097)

  Held that no one can take law into their own hands, even if they are the rightful
owner.

 Forcible dispossession violates Article 21 (Right to Life and Personal Liberty).

2. K.K. Verma v. Union of India (1954)

 Recognized civil possession as a protected right. One cannot be removed without

legal authority.

3. K.K. Singh v. Kartar Singh (1980 All LJ 39)

 A lawful owner who is dispossessed has the right to recover possession through
court.

4. Lallu Yeshwant Singh v. Rao Jagdish Singh (AIR 1968 SC 620)

 SC held that even a trespasser cannot be forcibly evicted. Dispossession must

be through legal process only.

Kalmesh's Legal Remedies:

1. Civil Suit for Recovery of Possession (under Section 5)

o Kalmesh can approach the civil court and file a suit to recover possession
of the building.

2. Permanent Injunction (Section 38, Specific Relief Act)

o He can also seek an injunction to prevent Ramesh from further

interference.

3. Damages and Costs

o If Kalmesh suffered financial or emotional harm, he can claim

compensation for wrongful dispossession.

4. Police Complaint

o Kalmesh may also lodge a criminal complaint under Sections 441, 442,
and 448 IPC (criminal trespass).