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1 - 10 of 22 (0.22 seconds)Section 23 in The Indian Contract Act, 1872 [Entire Act]
Section 406 in The Indian Penal Code, 1860 [Entire Act]
The Code of Civil Procedure, 1908
Misrilal Jalamchand And Anr. vs Sobhachand Jalamchand And Ors. on 15 September, 1955
In Misrilal Jalamchand v. Sobhachand, AIR 1956 Born 569, Shah J. (as he then was) has expressed the view that when the Court is required to satisfy itself as to the existence of an agreement and is further required to satisfy itself that there is a lawful agreement adjusting the suit the Court must on an application
to record compromise consider, especially where a plea of undue influence is raised, whether the agreement is not vitiated on any such ground as illegality, fraud, misrepresentation etc. His Lordship overruled the contention that the trial Judge while recording a compromise should not have recorded any finding on the question whether or not there was any undue pressure or undue influence as set up by a party in his application.
Laraiti Devi vs Sia Ram on 22 March, 1957
9. It is clear from Order 23, Rule 3 that before the Court considers whether, or not an agreement is lawful, it must be satisfied that there has been an agreement between the parties. An agreement is brought into existence where one party makes an offer and another accepts the same. It is the consensus of minds of two persons in regard to certain matter. Of these two persons if one has not agreed to the term proposed by the other, there is no agreement between them. When the consent of one to the term is obtained by the other by some illegal means, namely, by fraud, coercion or undue influence, it is difficult to hold that the person whose consent has been so obtained has agreed to the term. In two decisions in Mst. Shujarat v. Moharnmad Raza, and Laraiti Devi v. Sia Ram, , the Allahabad High Court has laid down that the Court should be satisfied that the agreement pleaded by any party has in fact been reached. At the same time it has also been laid down that it is not open to a party to avoid the compromise admittedly entered into by it, in proceedings under Order 23, Rule 3 by alleging fraud and that, if the compromise was in fact arrived at, the additional question whether it was avoidable at the instance of one of the parties on grounds similar to fraud or misrepresentation is
foreign to the proceedings under Order 23, Rule 3 and cannot be considered in those proceedings. It is not easy to follow how a Court can come to a finding that the agreement has been reached between the parties without considering the allegation of fraud, coercion or undue influence made by one of them. Is it that the satisfaction of the Court is confined only to the proof of the signatures of the parties on the document containing the terms? Even in spite of the fact that the signature of a party or his consent to the agreement has been obtained by the other party by some illegal means, namely, by fraud, undue influence or coercion, would the Court be able to hold that there is an agreement? With respect, we are unable to understand the principle of law laid down in those two decisions. It has been already observed that if the consent of one party is obtained by fraud, undue influence or coercion, it cannot be said that he has agreed to the term to which his consent has been so obtained and consequently the Court has to come to the finding that there is no agreement. If it is required under Order 23, Rule 3 that the Court has to be satisfied as to whether an agreement has in fact been reached as held by the Allahabad High Court in the above two decisions, we are of the opinion that an enquiry by the Court for such satisfaction will include also an enquiry into the allegation of a party that his consent to the terms of the agreement has been procured by fraud, undue influence or coercion. It is true that fraud, undue influence or coercion makes a contract a avoidable one and not void. But as soon as a party complains about the practice upon him of fraud, undue influence or coercion by another party, he avoids the contract. If the party complains to Court that his signature to a document containing the terms has been obtained by the other party at the point of a revolver, would the Court refuse to make an enquiry into the same on the ground that the agreement is only avoidable and not void? With due respect, we are unable to subscribe to such a bold proposition and, in our opinion, to consider whether or not an agreement has been reached between the parties, the Court will of necessity embark upon an enquiry as to the allegation of a party that his consent to the "agreement or his signature on the document containing the terms, has been obtained by fraud, undue influence or coercion. It is true that the party complaining has his remedy by way of suit
He can obtain a declaration that the con-tract is vitiated by fraud, undue influence or coercion and, as such, is not binding upon him. In our opinion, to drive such a party to a separate suit will be against justice, equity and good conscience.
Hem Chandra Roy Chaudhury vs Suradhani Debya Chaudhurani on 23 May, 1940
It cannot, therefore, be said that "in every sense the act was her own act" In Hem Chandra v. Suradhani Debya, AIR 1940 PC 134, an old
pardanashin lady having considerable capacity for business executed & mortgage deed which was read over to her, though it was not explained. She understood its effect except that she did not understand that she was making herself personally liable to repay the money borrowed. It was held by the Privy Council that if for want of explanation the lady did not understand an important feature of the transaction, it could not be held that her mind and free consent went with her act in executing the deed and therefore the mortgage did not bind her at all. This decision fully supports the view we have taken on the facts of the present case.
Musst. Farid-Un-Nisa vs Munshi Mukhtar Ahmed on 6 July, 1925
"In their Lordships' opinion there is no rule of law of the absolute kind here indicated. The possession of independent advice, or the absence of it, is a fact to be taken into consideration and well weighed on a review of the whole circumstances relevant to the issue of whether the grantor thoroughly comprehended, and deliberately and of her own free will carried out, the transaction. If she did, the issue is solved and the transaction is upheld; but if upon a review of the facts--which include the nature of the thing done and the training and habit of mind of the grantor, as well as the proximate circumstances affecting the execution-- if the conclusion is reached that the obtaining of independent advice would not really have made any difference in the result, then the deed ought to stand." A similar view has been expressed in a later decision of the Privy Council in Farid-Un-Nisa v. Mukhtar Ahmad, 52 Ind App 342 = (AIR 1925 PC 204). In the case before us, Sulekha Kundu was not explained the terms of the agreement and she was not aware of the same. In our opinion, on a review of the facts, the execution of the agreement which includes terms not free from doubt, and in any event, an agreement to lease, the duration of which is not easily comprehensible, required legal advice even for a man of business, far less an illiterate pardanashin woman.