Case comments on Angoori Devi v. Dalbir Singh and Chandra Shekhar Nath Ganjhu v. Indian oil corporation limited

Angoori Devi v. Dalbir Singh and another

Brief facts

Through his uncle, Dalbir wanted the declaration of effect of the sale deed to be declared as illegal, null and void. Further, Dalbir also wanted the mortgage deed to be declared illegal, null and void as subsequently the executed sale deed, the property was mortgaged by the Haryana Gramin Bank.

Dalbir is under the custody of his uncle. 28 kanals 16 marlas of land are under the possession of the applicant. By using misrepresentation and fraud, the land has been transferred to the applicants according to the defendants. The sale deed is not valid. Randhir, who is the uncle, came with his son-in-law and took Dalbir for a medical check-up.

A person who is of sub-par mind cannot perform complex tasks on his own like the signing of sale deeds. One of the conditions of a valid contract is that it has to be signed with free consent. Competency is key to signing of a contract and for lawful consideration. If not freely expressed then the contract can be declared void.

There is a requirement for witnesses when an important document like a sale deed has to be signed. It has to be signed voluntarily. Dalbir did not give his free consent as he was under the influence of people and this led to his inability to form his own decisions as well as to act in a rational manner. A suit for recovery of money was also filed against Dalbir.

After the sale deed had been executed then the tractor loan was obtained. The applicants went to the bank to get a loan on the property which was bought by Dalbir. Dalbir is a person of ‘idiocy’ and there was no consideration whatsoever. In case a party is not capable of entering into a contract then that contract is declared void.

In the current case, the unsoundness of the mind is the reason. In the case of Mohori Bibi v. Dharmodas Ghose, the court declared that a person who is a lunatic cannot be competent to contract and that the contract entered into is void. There was an imbalance of mind. In a similar case of Kamola Ram v. Kaura Khan, it was held that if a person of unsound mind enters into a contract, then that contract is declared as void contract as per Section 12 of the Indian Contract Act, 1872. Claims against a lunatic are not permissible in court.

Laws

Section 11- Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject

Section 12- A person is said to be of sound mind for the purpose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgement as to its effect upon his interests. A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind.

Analysis

The decision of the court is correct and justified. If someone is of unsound mind then he or she cannot enter a contract legally. That is what the law states. The soundness of mind has been clearly defined by the act and the same is the case with the competency of contract. The mental state of the person has to be taken into consideration.

Contracts which are entered into by a person of unsound mind are void ab initio which means that they are void from the beginning. If a person is sound for some occasions and unsound in some other situations then if the person has contracted when in a sound state of mind then that contract is valid and legal. A lunatic and a person showing signs of idiocy cannot be considered as competent and hence cannot be parties to the contract.

Chandra Shekhar Nath Ganjhu v. Indian oil corporation limited

Brief facts

According to the undisputed facts of the case, a public advertisement was taken out by the defendants (The Indian Oil Corporation Limited) for an agreement on petrol and diesel. There were certain criteria, the claimants were interrogated on and then the declaration of the result was done. The plaintiff was adjudged as the best contender.

There was a dispute over the title of the land on which the petrol pump was to be established. The brother and sister of the petitioner were also claiming dealerships on the same land. The Indian Oil Corporation is not in a position to decide the right, title and interest of the possessions, and therefore the previous result was annulled and the plaintiff was called for a fresh interview.

The applicant in this case instead of attending the fresh interview wrote a writ petition claiming the dealership of the Indian Oil Corporation on the ground that the defendant cannot cancel the result, already declared as the brother and sister have already waived their right in favour of the complainant, and there was no question of any dispute upon the land.

It was submitted by applicants that there is no genuine right conferred in the accuser to get the dealership of the Indian Oil Corporation. The contract is between the oil corporation and the dealer. There is no legal right vested in the accuser to get a contract especially when the land upon which a petrol pump was to be installed, for which ownership was already being claimed.

The Indian Oil Corporation’s only option at this point is to call the appellant again for an interview and to cancel the previously declared result. The clarifying position of the other parties is also required. In this case, the plaintiff is searching for a contract for the dealership from the respondents and nothing else. There was a dispute over the dealership of the land. Also, a dispute over the right, title and interest of immovable property persisted.

The previously declared result was cancelled by the corporation and another letter was issued for the same. The applicant did not clarify his position and did not attend the interview. The oil corporation has not committed any mistakes by issuing a call for a new interview to be taken. There are multiple claimants for the piece of land.

No amount of sufficient interest is thereby the applicant for the dealership contract and the court is in no position to force the respondent to enter into a contract. Force or coercion is not permitted according to the Indian Contract Act, 1872. In the current case, Section 10 of the act has been read with Section 13 of the act. The element of ‘free consent’ has been emphasised.

Laws used

Section 10- All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force and not hereby expressly repealed by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.

Section 13-Two or more persons are said to consent when they agree upon the same thing in the same sense.

Section 14- “Free consent” defined:

Consent is said to be free when it is not caused by—

(1) coercion, as defined in section 15, or

(2) undue influence, as defined in section 16, or

(3) fraud, as defined in section 17, or

(4) misrepresentation, as defined in section 18, or

(5) mistake, subject to the provisions of sections 20, 21 and 22. Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation or mistake

Analysis

The decision of the court is correct and justified. There are clear provisions laid down for agreements that can be turned to contracts. Consent is an integral part of a contract. It is one of the basic necessities for a contract to be valid. Consent has to be free and not imposed. Free consent means that both parties are entering into that specific contract in a voluntary manner and not in an imposed manner.

No amount of force, coercion or undue influence can be a part of a valid and enforceable contract. If any of them are present then that contract cannot be considered as legally valid. Misrepresentation and mistakes also fall under the definition of free consent.

Looking at the trends of the past judgements, a majority of the cases have been decided in favour of the parties which have had free consent given and not in favour of those parties which have not given their free consent. The importance of giving free consent during a contract has been emphasised and a lot of light has been thrown on it by the courts.

This article has been submitted by Kartik Tripathi, a Student at School of Law, Christ (Deemed to be University), Bangalore.