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English Contract Problems in Indian Code and Case Law

Published online by Cambridge University Press:  16 January 2009

R. N. Gooderson
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Extract

There is nothing indigenous about the Indian Contract Act of 1872 (hereinafter referred to as “the Act”), which is a comprehensive though not necessarily exhaustive code of the subject. According to the eighteenth-century charters, which established courts of justice for the three Presidency towns of Calcutta, Madras and Bombay, the law there applicable was the English common and statute law then in force, so far as it was appropriate to Indian circumstances. Elsewhere it was the practice to have recourse to justice, equity and good conscience. Appeal to these three precepts was also to be made in the Presidency towns themselves in case no specific rule existed. This was the state of the law of contract in 1866, as briefly described by the Indian Law Commissioners in their report. This commission, which prepared the first draft of the Act, had been appointed in England in 1864, with Lord Romilly M.R. as chairman. The other members were W. M. James q.c., the Chancery leader shortly to become James L.J., Sir Edward Ryan, formerly Chief Justice of Bengal, who at this time often sat as a member of the Judicial Committee of the Privy Council in Indian appeals, Robert Lowe, as Lord Sherbrooke then was, a politician, later Chancellor of the Exchequer and Home Secretary, J. M. Macleod, a member of the Indian Civil Service, and John Henderson, barrister. The commission sat in London, and produced a draft report in 1866. This had still not become law by 1870, largely because of the opposition of Sir Henry Maine, then Law Member of the Governor-General's Council, to the proposals as to specific performance.

Type
Research Article
Information
The Cambridge Law Journal , Volume 16 , Issue 1 , April 1958 , pp. 67 - 84
Copyright
Copyright © Cambridge Law Journal and Contributors 1958

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References

1 See n. 7 (infra).

2 Bengal Regulation III of 1793, s. 21.

3 Second Report of July 28, 1866, p. 7.

4 Draft s. 81: “The ownership of goods may be acquired by buying them from any person who is in possession of them, provided that the buyer acts in good faith, and under circumstances which are not such as to raise a reasonable presumption that the person in possession has no right to sell them.”

5 Provisions not adopted in New York, though in force in some other states. Thev invariably received acrimonious criticism from Sir Frederick Pollock.

6 Professor Satyanarayana Murty of Cuttack in A.I.R. 1951 Journal 40, 42.

7 Irrawaddy Flotilla Co. v. Bugwandas, 18 I.A. 121.

8 Concluding para, of report. p. 10.

9 Rankin, , Background to Indian Law (1946) 38Google Scholar, citing Sir Richard Couch in Dada v. Babaji (1865) 2 Bom.H.C. 38. interpreting Lord Kingsdown's judgment in Varden v. Luckpathy (1862) 9 Moo.I.A. 303.

10 Waghcla Rajsanji v. Sheikh Masludin, 14 I.A. 89, 96.

11 Chapter V, ss. 68–73, bearing the rubric: “Of certain relations resembling those created by contract.”

12 Stokes, Whitley, The Anglo-Indian Codes (1887) Vol. 1, p. 533.Google Scholar

13 (1909) 33 Mad. 15. A bench is a court of two judges, a full bench of at least three.

14 (1886) 34 Ch.D. 234, 249, 254.

15 (1915) 38 Mad. 235, 244. (It will already be apparent to the reader that the names of Indian litigants do not flow trippingly off an English tongue. He may take comfort from the practice common even in an Indian court of citing a precedent by reference to the volume and page of the report, rather than to the names of the parties.)

16 (1903) 26 Mad. 686, 723.

17 Re Tharp (1852) 2 Sm. & Giff. 578.

18 34 Ch.D. at p. 254 (supra).

19 Scth Chitor Mal v. Shib Lal (1892) 14 All. 273.

20 Ibid. at pp. 311, 313.

21 See rejection of Gibbons v. Proctor (infra) nn. 37, 38.

22 (1799) T.R. 186.

23 Dharni Dhar v. Chandra Shekhar, A.I.R. 1951 All. 774, 777. (Previously rule applied in Allahabad: Parbhoo Dayal v. Dwarka Prasad, A.I.R. 1932 All. 334 (bench); in Patna: Bishambardeo Waryam Singh v. Hitnarayan Singh. A.I.R. 1936 Pat. 49 (bench); and in Madras: Yegnarayana v. Yagannadha Rao. A.I.R. 1932 Mad. 1; though rejected in Nagpur: Khushalrao v. Bapurao. A.I.R. 1942 Nag. 52, and in Venkata Rao v. Venkayya, A.I.R. 1943 Mad. 38.)

24 In notes of unreported cases (N.U.C.). This experiment was discontinued on the ground that insufficient detail could be given (A.I.R. 1956 Journal 1), a wise decision as a little headnote learning is a dangerous thing.

25 Indian Sale of Goods Act, 1930, repealing ss. 76–123 of the original Act, and Indian Partnership Act, 1932, repealing ss. 239–266.

26 Household Fire Insurance v. Grant, 4 Ex.D. 216.

27 Held ineffective in Wenkheim v. Arndt, 1 J.R. 73 (N.Z.), and by Benjamin, , Sale, 8th ed. (1950), 83Google Scholar; Pollock, , Contracts, 13th ed. (1950), 28.Google ScholarHeld effective by Bramwell L.J. (diss.) in 4 Ex.D. 216, 235–236 (supra), and by Salmond, and Williams, , Contracts, 2nd ed. (1945), 86Google Scholar; and Gloag, , Contracts, 2nd ed. (1929), 38Google Scholar, who cites Dunmore v. Alexander (1830) 9 Sh. & D. 190, but this gives no help, as the majority of the court seem to treat Lady D.'s letter as an offer not an acceptance. Gloag relies upon a laconic and ambiguous remark at the beginning of Lord Balgray's judgment, and rejects the later and lucid part as irrelevant. Yet Lord Gillies, in concurring, expressly repeats the so-called irrelevant part.

28 Professor S. Murty, A.I.R. 1951 Journal 40, 42.

29 (1876) 2 Ch.D. 463.

30 Indian Contract Act, 9th ed., 25.

31 (1873) 29 L.T. 271. per Honyman J. at p. 274, per Brett J. at p. 278.

32 Law of Contract, 4th ed., 39; Winfield (1939) 55 L.Q.R. 499, 516.

33 A.I.R. 1936 Cal. 87 (bench). According to the American Restatement, para. 68. an acceptance inoperative when despatched is operative when received if received in time.

34 Bv Sir Maurice Gwyer in Pollock, and Mulla, , Indian Contract Act, 7th ed., 50.Google Scholar

35 (1822) Wheat. 225.

36 Anson. Law of Contract, 20th ed. (1952) 41; Winfield, op. cit., 516.

37 (1892) 64 L.T. 594.

38 (1913) 11 All.L.J. 489, 492, citing Pollock, op. cit., 8th ed., 15, 22. and Ashley on Contracts, 16, 23–24. Other parts of the Commonwealth followed this example: the Court of Appeal of South Africa two years later in Bloom v. American Swiss Watch Co. (1915) App.D. 100, and subsequently the High Court of Australia: R. v. Clarke (1927) 40 C.L.R. 227.

39 (1880) 5 Ex.D. 293, 306, sub nom. Alderson v. Maddison.

40 (1883) 8 App.Cas. 467. The case was actually decided on the ground that there was no memorandum or part performance to satisfy the Statute of Frauds. (It may be noted that on the recommendation of the Commissioners, p. 7 of their report, the Statute of Frauds, in so far as it applied in India, was abrogated by the 1872 Act, and “ceased from troubling honest men”: Pollock, , Law of Fraud in British India, 127.Google Scholar) Some of their Lordships' remarks may be explained as a mere finding that there was insufficient evidence of a unilateral contract, and not as a failure to appreciate the existence of such a category of contracts, but Lord Blackburn's remark that it was impossible to say the jury had found a contract (p. 487) is very strong. Lord O'Hagan (484) may be referring to the absence of cogent evidence, but Lord Selborne (472) is clearly unfamiliar with the type of consideration in question: he stresses that the housekeeper was not bound to go on serving, and seems to think he has thereby made a point against her, when in fact it is typical of unilateral contracts that the promisee is not bound to complete the act.

41 14 Cal. 64 (bench).

42 It is not clear from the report that work had begun on the town hall, but some such act is a prerequisite of liability of the promisor.

43 13 T.L.R. 430.

44 29 T.L.R. 325.

45 Op. cit., 3rd ed. (1952), 83, n. 4. (There is no reference whatever to the two cases in the 4th ed.)

46 Perumal Mudaliar v. Sendanatha Mudaliar, A.I.R. 1918 Mad. 311 (bench).

47 Errington v. E. [1952] 1 K.B. 290. 295. per Denning L.J.: District Board, Ramnad v. Mohd. Ibrahim, A.I.R. 1933 Mad. 524 (bench). See also American Restatement, para. 45.

48 The better view is that this rule sti'l prevails: Krishna Lal Sadhu v. Pramila Bala Dasi (1928) 55 Cal. 1315. 1326, per Rankin C.J.: Veeramma v. Appayya. A.I.R. 1957 A.P. 965; Babu Ram v. Dhan Singh, A.I.R. 1957 Punj. 169 (bench). See also Pollock, and Mulla, , op. cit., 8th ed., 20–21.Google Scholar

49 Op. cit., p. 365.

50 (1881) 4 Mad. 137 (bench). A similar case is Samuel v. Ananthanatha (1883) 6 Mad. 351 (bench).

51 [1915] A.C. 847. 855.

52 (1848) 12 Q.B. 310. I know of no authority applying this rule in India.

53 Lords Atkinson, Sumner and Parmoor.

54 Lord Haldane. and in the C.A. Kennedy L.J.: (1914) 83 L.J.K.B. 923. 930. Contra Lord Sumner.

55 (1905) P.R. No. 49. p. 171 (Punjab Chief Court). Approved in Fernandes v. Gonsalves (1924) 48 Bom. 673, 687, per Taraporewala J. of the Bombay High Court.

56 It may be noted that in India married women are under no contractual disability: Commissioners' Report, p. 7.

57 (1861) 1 B. & S. 393. 396.

58 (1909) P.R. No. 3, p. 5.

59 See nn. 72, 77 (infra).

59a s. 230 (3) of the Act— in Chatturbhuj v. Moreshwar, A.I.R. 1954 S.C. 236, 243. the Supreme Court held that this subsection applied, although the principal, the Government, was not liable, for failure to comply with Art. 299 (1) of the Constitution, prescribing formalities for contracts with the Government. In England an agent of full age is liable personally if the infant principal is not liable: Queensland Investment v. O'Connell & Palmer (1896) 12 T.L.R. 502.

60 See Raj Rani v. Prem Adib, A.I.R. 1949 Bom. 215, 219 (discussed infra n. 77) per Desai J.—even had the father of the film star sued, he could have recovered only the damages he (the father) had suffered. See also Khimji Kuverji v. Lalji Karamsey (1941) Bom. 211, 215, per Beaumont C.J.—if the father of a prospective bridegroom sues the bride's father for breach of a marriage agreement, he will recover only his personal damages.

61 (1910) 37 I.A. 152.

62 See Pollock and Mulla, op. cit., 22, n. (i). For a passionate plea for the extensive use of the trust concept to permit widespread suits by third party beneficiaries, see Lort-Williams J. in Kshirodebihari v. Mangobinda Panda (1933) 61 Cal. 841. but this view is not generally accepted, see inter alia the cases cited in n. 48 (supra).

63 (1602) 5 Co.Rep. 117a.

64 (1884) 9 App.Cas. 605.

65 Report, p. 8.

66 Kaliprasad Tewari v. Raja Sabib Prahlad Sen (1869) 12 Moo.App. at p. 314 (P.C.).

67 Report, p. 7.

68 Ibid. See also draft s. 10, exception 1.

69 (1615) Hob. 105.

70 37 & 38 Vict. c. 62.

71 S. 68 is the first section in Chapter V, which is headed: “Of certain relations resembling those created by contract.”

72 30 I.A. 114.

73 English law is the same on the specific point: Thurstan v. Nottingham P.B.B.S. (1901) 1 Ch. 1 (C.A.).

74 The Apprentices Act. Act XIX of 1850.

75 s. 21 (b). Specific Relief Act, 1877.

76 Bruce v. Warwick (1815) 6 Taunton 118. For the effect of the Act of 1874. see n. 83 (infra).

77 Raj Rani v. Prem Adib, A.I.R. 1949 Bom. 215.

78 Ibid. pp. 220, 223. See n. 88 (infra).

79 [1912] 2 K.B. 419, 422.

80 (1732) 2 Stra. 937.

81 (1869) 20 L.T. 404.

82 (1878) 3 C.P.D. 439. Surely the absence of any such plea must have been due to counsel's having considered it untenable in law, rather than to his having cvnically regarded the proposed match with his fair client as obviously a mésalliance.

83 Semble this common law rule has survived the 1874 Act, even in the case of the three classes of contract declared “absolutely void” therein, i.e., contracts for the repayment of money lent, for goods supplied or to be supplied, and accounts stated: Cheshire, and Fifoot, , op. cit., 343Google Scholar; Simpson. Infants, 4th ed. (1926), 7. 32–33. Contra Chitty, Contracts 21st ed. (1955) 602, in the case of the three specified classes. The point has recently been discussed at length. Treitel supporting Chitty in (1957) 73 L.Q.R. 194. 201–202, (1958) 74 L.Q.R. 104–105; Atiyah, Contra in (1958) 74Google ScholarL.Q.R. 97. 99–101.

84 Fernandes v. Gonsalves (1924) 48 Bom. 673. 678.

85 Ibid.; Khimji Kuverji v. Lalji Karamsey (1941) Bom. 211 (bench).

86 Raghava Chariar v. Srinivasa (1916) 40 Mad. 308, 327. per Srinivasa Ayvangar J.

87 (1924) 48 Bom. 673. 676 (supra), per Taraporewala J.: “Whether their Lordships would have applied the same principle to a contract of marriage is to my mind very doubtful.”

88 Bond—Hanmant Lakhshman v. Jayarao Narsinha (1888) 13 Bom. 50 (bench); promissory note—Madhab Kocri v. Baikuntha, A.I.R. 1919 Pat. 561 (bench); mortgage—Raghava Chariar v. Srinicasa (supra) (full bench); sale—Narain Das v. Mst. Dhania (1915) 37 All. 154 (bench).

89 Pramala Basi Das v. Jogeshar Mandal (1918) 3 Pat.L.J. 518.

90 N. W. Ry. v. McMichael (1850) 5 Ex. 114, 119.

91 n. 78 (supra).

92 (1935) 16 Lah. 1.

93 (1935) 59 Bom. 656 (bench).

94 [1894] 2 Q.B. 482.

95 Ibid. at p. 493.

96 [1947] 1 K.B. 104.

97 A.I.R. 1957 Mad. 164 (bench).

98 By E. J. Cohn in (1947) 10 Mod.L.R. 40.

99 (1757) 1 Burr. 373, 376.

1 (1911) 27 T.L.R. 582 (Pickford J.); (1913) 29 T.L.R. 239 (C.A.).

2 (1894) 19 Bom. 697.

3 At p. 46—the Swiss Code of Obligations, Art. 494 (3); the Franco-Italian draft Code of Obligations, Art. 710 (2).

4 It is perhaps significant that in an article on the Coutts case in (1947) 63 L.Q.R. 355. R. Else Mitchell treats the whole question to be decided as whether the surety's liability is co-extensive with that of the principal debtor (356). Where, as in India, there is a specific statutory provision expressly answering that question in the affirmative, this will not easily be circumvented, except as indicated above by treating the security as one of indemnity in appropriate cases.