Carlill v. Carbolic Smoke Ball Co.

Facts
Facts
Carlill The Carbolic Smoke Ball Co produced the 'Carbolic Smoke Ball' designed to prevent
users contracting influenza or similar illnesses. The company's advertised (in part) that:

100 pounds reward will be paid by the Carbolic Smoke Ball Company to any person who
contracts the increasing epidemic influenza, colds, or any disease caused by taking cold, after
having used the ball three times daily for two weeks according to the printed directions supplied
with each ball. 1,000 pounds is deposited with the Alliance Bank, Regent Street, showing our
sincerity in the matter.

After seeing this advertisement Mrs Carlill bought one of the balls and used it as directed. She
subsequently caught the flu and claimed the reward. The company refused to pay. Mrs Carlill
sued for the reward.

Legal Issue
1. Can one make a contract with the whole world?
2. How does one interpret vague terms?
3. Was the ad a "mere puff"?
4. Does performance of the conditions advertised in the paper constitute acceptance of an offer?
5. Was there any consideration?

Judgment
At the trial stage the defendants denied that there was any contract between them and the
plaintiff; and alternatively, that, if there were any, it was void as a wagering agreement. The trial
court gave judgment in favour of the plaintiff and the defendants appealed.

The appellate court observed as following on the issues raised and gave the judgment in favour
of Mrs. Carlill:
1. Can one make a contract with the whole world?
It is quite possible to make an offer to the world.

2. How does one interpret vague terms?

Whilst there may be some ambiguity in the wording this was capable of being resolved by
applying a reasonable time limit or confining it to only those who caught flu whilst still using the
balls.

3. Was the ad a "mere puff"?

The determination of a serious offer will be determined from the words and actions. The
statement referring to the deposit of 1,000 demonstrated intent and therefore it was not a mere
sales puff.

4. Does performance of the conditions advertised in the paper constitute acceptance of an offer?
There was a unilateral contract comprising the offer (by advertisement) of the Carbolic Smoke
Ball company) and the acceptance (by performance of conditions stated in the offer) by
MrsCarlill. In unilateral contracts there is no requirement that the offeree communicates an
intention to accept, since acceptance is through full performance. Although as a general rule
communication of acceptance is required, the offeror may dispense with the need for notification
and had done so in this case. Here, it was implicit that the offeree (MrsCarlill) did not need to
communicate an intention to accept; rather acceptance occurred through performance of the
requested acts (using the smoke ball)

5. Was there any consideration?

There was consideration; the inconvenience suffered by MrsCarlill in using the smokeball as
directed was sufficient consideration. In addition, the Carbolic Smoke Ball received a benefit in
having people use the smoke ball.

MohoribibivsDharmodasGhose (1903)
Brief facts of the case :
DharmodasGhose (a minor) executed a mortgage of his house in favour of BrahmoDutt to secure
the repayment of Rs.20000 at 12% interest. He signed a declaration that he was a major at that
time. The agent who was acting on behalf of BrahmoDutt in this transaction knew that
DharmodasGhose was only a minor at that time but he did not disclose this fact to his master.
Plaintiff sued on the ground that minor agreement is void and mortgage must be cancelled.

Questions of law :
1. Can a minor validly execute a mortgage deed?
2. What is the effect of the minor's misrepresentation of his age?
3. If the deed of mortgage was cancelled can the Court order the minor to refund the amount to
the lender?

JUDGEMENT:
The Privy Council rejected the defence of estoppel of the defendant stating that the defendant's
agent knew the real age of the minor at the time of execution of the document and held that there
was no estoppel. It was held that the question whether a contract is void or voidable presupposes
the existence of contract within the meaning of the Act, and cannot arise in the case of an infant
(Section 10 & Section 11 of Contract Act). In this case court held that the mortgage was entered
into with a minor and hence void. Request for repayment of the amount advanced to the minor as
part of consideration also turned down.
The court although took note of the s. 41 of the Specific Relief Act which says On adjudging
the cancellation of the instrument the Court may require the party to whom such relief is granted
to make any compensation to the other which justice may require and s. 38 which provides in
similar terms for a case of rescission of a contract; but observed under the circumstances of this
case justice did not require them to order the return by the respondent of money advanced to him
with full knowledge of his infancy.
Khan Gul v. Lakha Singh (1928) - A minor fraudulently concealed his age and contracted to
sell a plot of land to another. The minor received the consideration of Rs. 17, 500/- and then
refused to fulfil his part of the bargain. The other party prayed for possession or refund of
consideration. The question rose whether a minor who entered a contract through false
representation retain the benefits from the contract while refusing to perform his part. Since a
minors contract is void, specific performance was not granted. However, the court ordered
refund of the consideration.
The questions raised in this case were: (1) Whether a minor, who, by falsely representing
himself to be a major, has induced person to enter into a contract, is estopped from pleading his
minority to avoid the contract. (2) Whether a party who, when a minor, has entered into a
contract by means of a false representation of his age, whether he be defendant or plaintiff, in a
subsequent litigation, refuse to perform the contract and at the same time retain the benefit he
may have derived therefrom.
Regarding the first question court has held that where an infant has induced a person to
contract with him by means of false representation that he was of full age, he is not estopped (i.e.
prevented) from pleading his infancy in avoidance of the contract.
Regarding the second question the court observed that an infant though not liable under
the contract, may in equity, be required to return the benefit he has received by making a false
representation as to his age. It makes no difference whether in such litigation he is plaintiff or the
defendant.
In this case the court order the minor to refund Rs. 17,500 which he had taken as advance
payment, thus the scope of the doctrine of equitable restitution was extended to cover cash also.

The Law Commission of India in its Ninth Report expressed its agreement with case of Khan
Gul. Further, the new Specific Relief Act, 1963 incorporated the principle of restitution under
Section 33.

Section 33 of the Specific Relief Act, 1963 greatly reduces the potential for ambiguities and
uncertainty in the matter. Section 33(1) seeks to restore the parties to their original position to the
extent possible. If a void or voidable contract is cancelled at the instance of a party to the
contract, the court may require such party to restore the benefits received under the contract and
to such compensation as justice may require.
This discretion can also be exercised where the plaintiff is a minor. Thus, under Section 33(1), a
minor who is a plaintiff can be compelled to return all the advantages and benefits received
under the void contract as under the older law.

However, the court will not compel any restitution by a minor (even if he is a plaintiff) if:

a) the other party was aware of the fact of infancy and thus, was not deceived;

b) the other party was unscrupulous in his dealings with the minor;

c) the other party was overzealous to enter into the agreement that the minors misrepresentation
did not influence him;

d) the other party provided no material for the court to conclude that justice required return of the
money paid to the minor in the instant case.

Section 33(2) attempts to put the parties in the pre-contract position. Even if the defendant is a
minor and successfully resists a suit on grounds of his incompetence and resultant void
agreement, he can be compelled to account for the advantage, the money or anything else
received by him which benefits him personally, such as education or training, or results in a
benefit of a permanent nature to his estate. It is implied in Section 33(2) (b) that the English law
as laid down in Leslie v Sheill is not applicable in India as it if for it extends the doctrine of
restitution to money matters.

BhagwandasGoverdhandasKedia v. M/s. GirdharilalParshottamdas& Co. (1966) The

plaintiffs filed a suit at Ahmedamad against the defendants for compensation on the plea that the
defendants had failed to supply cotton seed cake which they had agreed to supply under an oral
contract negotiated between the parties by conversation on long distance telephone. Dispute
arose as to where was contract formed- at Khamgaon where acceptance was given by defendants
or at Ahmedabad where acceptance was received by plaintiffs.
On the issue of jurisdiction raised by the appellants, the trial court found that the
Ahmedabad Court had jurisdiction to try the suit. The High Court rejected the appellants
revision petition whereupon by special leave, he came to the Apex Court.

CONTENTION(S):
Defendants contended that according to the section 2, 3 and 4 of ICA, the place where the offer
is accepted is the place where the contract is made and therefore Ahmedabad trial court did not
have the jurisdiction to try the suit.

The apex court observed as under:

The language of section 4 of the Indian Contract Act covers acceptance by telephone,
wireless etc. The communication of a proposal is complete when it comes to the knowledge of
the person to whom it is made but a different rule is made about acceptance. Communication of
an acceptance is complete in two ways -(1) against the proposer when it is put in the course of
transmission to him so as to be out of the power of the acceptor; and (2) as against the acceptor
when it comes to the knowledge of the proposer.
In this case the word of acceptance was spoken at Khamgaon and the moment the
acceptor spoke his acceptance he put it in course of transmission to the proposer beyond his
recall. He could not revoke his acceptance thereafter. It may be that the gap of time was so short
that one can say that the speech was heard instantaneously, but if we are to put new inventions
into the frame of our statutory law we are bound to say that the acceptor by speaking into
the telephone put his acceptance in the course of transmission to the proposer, however quick the
transmission.
The court denied the applicability of the English Common law here (which is capable of
being moulded by judicial dicta) and restricted itself to the language of the statute. It is
contended that the communication of an acceptance is complete as against the acceptor when it
comes to the knowledge of the proposer but that clause governs cases of acceptance lost through
the fault of the acceptor. In this case both sides admit that the acceptance was clearly heard at
Ahmedabad.
The court opined that the language of s. 4 of the Indian Contract Act covers the case of
communication over the telephone. The Contract Act does not provide separately for post,
telegraph, telephone or wireless. Some of these were unknown in 1872 and no attempt has been
made to modify the law. It may be presumed that the language has been considered adequate to
cover cases of these new inventions. The communication of an acceptance is complete as against
the proposer, when it is put in a course of transmission to him, so as to be out of the power of the
acceptor. Thus, the court held that the contract was complete at Khamgaon.

Union of India v. MaddalaThathaiah (1966) This was an appeal filed by the Railways
against the order of the High Court. In this case the Railways invited tenders for the supply of
jaggery to the railway grain shops and awarded the tender to MaddalaThathaiah. The Railways
cancelled and closed the contract without completion of full supply taking the plea that the
Railways reserved the right to cancel the contract at any stage during the tenure of the contract
without calling up the outstandings on the unexpired portion of the contract as already mentioned
in the contract. The High Court held that the clause reserving the right in the appellant to cancel
the contract was void. In response appeal was filed in SC challenging the HC order.
The appeal was dismissed and the court observed that any such terms in a contract
which destroys the contract itself according to earlier terms is void as in that case there
would be nothing in the alleged contract which would have been binding on the appellant.

Abdul Aziz v. Masum Ali In this case the appeal arise out of a suit brought by the plaintiffs
against heirs of Muslim Abdul Karim who promised made a subscription for repairing and
reconstructing a mosque. But the cheque was returned by Bank as it was out of date and in the
meanwhile Muslim Abdul Karim died. The plaintiffs demanded the subscription from his heirs.
In this case court has held that the subscription of Muslim Abdul Karim was a mere gratuitous
promise on his part and thus dismissed the claim.

Raghunath Prasad v. Sarju Prasad The case was for recovery of the amount of principal and
interest due by the appellant to the respondents (the plaintiffs) under a mortgage. The question in
this case was whether the contract was induced by undue influence (Section 16 of the Indian
Contract Act).
The court observed that to make a case for undue influence three matter are to be dealt
with. In the first place the relations between the parties to each other must be such that one is in a
position to dominate the will of the other. Once that position is substantiated the second stage has
been reached namely the issue whether the contract has been induced by undue influence.
Upon the determination of this issue a third point emerges, which is that of the onus probandi. If
the transaction appears to be unconscionable, then the burden of proving that the contract was
not induced by undue influence is to lie upon the person who was in a position to dominate the
will of the other. And the orders stated above must be followed to avoid any error.
In this case the court has held that only relation between the parties that was proved was
simply that they were lender and borrower. In these circumstances, even though the bargain had
been unconscionable (and it has the appearance of being so), a remedy under the Indian Contract
Act does not come into view until the initial fact to dominate the will has been established.

SatyabrataGhose vs. MugneeramBangur& Co. (doctrine of frustration of contract).

The dispute in the present matter pertained to the question as to whether a contract for sale of
land was discharged and came to an end by reason of certain supervening circumstances which
affected the performance of a material part of it. The court while adjudicating the above issue
was also sought to distinguish the law relating to frustration of contract as applicable in England
and in India.
Material facts of the case
The defendant company scheme for development of on a large tract of land owned by it for
residential and in furtherance of the scheme the entire area was divided into a large number of
plots for the sale of which offers were invited from intending purchasers. A major portion of the
land-appertaining to the scheme was requisitioned by the Government due to war and the
company decided to treat the agreement for sale as cancelled giving the option of taking back the
earnest money, or deposit the balance of the consideration money and take possession after
requisite construction by the company on termination of the war. The plaintiff refused to accept
either of the two alternatives offered by the company and stated categorically that the latter was
bound by the terms of the agreement from which it could not, in law, resile.
High Court gave decision in favour of the defendants and the appeal was filed by the plaintiff
against it. The learned Attorney General, who appeared in support of the appeal, has put forward
following three-fold contention on behalf of his client.
1. That the doctrine of English law relating to frustration of contract, upon which the
learned Judges of the High Court based their Decision has no application to India in view
of the statutory provision contained in section 56 of the Indian Contract Act.
2. That even if the English law Applies, it can have no application to contracts for sale of
land and that is in fact the opinion expressed by the English ,judges themselves.
3. That on the admitted facts and circumstances of this case there was no frustrating event
which could be said to have taken away the basis of the contract or tendered its
performance impossible in any sense of the word.

The apex court observed as following on the above contentions:

1. A contention in the extreme form that the doctrine of frustration as recognised in English
law does not come at all within the purview of section 56 of the Indian Contract Act
cannot be accepted.
2. It is true that in England the judicial opinion generally expressed is, that the doctrine of
frustration does not operate in the case of contracts but the reason underlying this view is
that under the English law as soon as there is a concluded contract for sell of land interest
of the buyer in the property is created. According to the Indian law a contract for sale of
land does not of itself create any interest in the property which is the subject-matter of the
contract. The obligations of the parties to a contract for sale of land are, therefore, the
same as in other ordinary contracts and consequently there is no conceivable reason why
the doctrine of frustration should not be applicable to contracts for sale of land in India.
This contention of the Attorney General must, therefore, fail.
3. Having regard to the nature and terms of the contract, the actual existence of war
conditions at the time when it was entered into, the extent of the work involved in the
development scheme and last though not the least the total absence of any definite period
of time agreed to by the parties within which the work was to be completed, it cannot be
said that the requisition order vitally affected the contract or made its performance
impossible.

Thus, the apex court held that the events which have happened in this case cannot be said to have
made the performance of the contract impossible and the contract has not been frustrated at all
and set aside the order of the High Court and restored those of the courts below it i.e. in favour of
the plaintiff.
The apex court also observed that the doctrine of frustration is really an aspect or part of the law
of discharge of contract by reason of supervening impossibility or illegality of the act agreed to
be done and hence comes within the purview of S. 56 of the Indian Contract Act. The view that
s. 56 applies only to cases of physical impossibility and that where this section is not applicable
recourse can be had to the principles of English law on the subject of frustration is not correct.
English cases can have only a persuasive value, and are only helpful in showing how English
courts decided cases under similar circumstances. Section 56 of the Indian Contract Act lays
down a rule of positive law and does not leave the matter to be determined according to the
intention of the parties. In cases, therefore, where the court gathers as a matter of construction
that the contract itself contained impliedly or expressly a term, according to which it would stand
discharged on the happening of certain circumstances, the
dissolution of the contract would take place under the terms of the contract itself and such cases
would be outside the purview of S. 56 altogether. Although in English law these cases are treated
as cases of frustration, in India they would be dealt with under s. 32 of the Indian Contract Act
which deals with contingent contracts or similar other provisions contained in the Act.

Hadley v. Baxendale
Plaintiffs operated a mill, and a component of their steam engine broke causing them to shut
down the mill. Plaintiffs then contracted with Defendants, common carriers, to take the
component to W. Joyce & Co. to have a new part created. When delivery was delayed due to
Defendants neglect, causing Plaintiffs mill to remain closed longer than expected, Plaintiffs
sued to recover damages. The Defendant argued that he was unaware that the mill would have to
be closed during the delay and therefore the loss of profit was too remote.

Issues:
Under what circumstances a breaching party should be held liable for consequential damages?

Held:
The Court of Exchequer declined to allow Hadley to recover lost profits in this case, holding that
Baxendale could only be held liable for losses that were generally foreseeable, or if Hadley had
mentioned his special circumstances in advance. The mere fact that a party is sending something
to be repaired does not indicate that the party would lose profits if it is not delivered on time. The
court suggested various other circumstances under which Hadley could have entered into this
contract that would not have presented such dire circumstances, and noted that where special
circumstances exist, provisions can be made in the contract voluntarily entered into by the parties
to impose extra damages for a breach.

The court further observed that it is obvious, in the great multitude of cases of millers sending off
broken shafts to third persons by a carrier under ordinary circumstances, such consequences
would not, in all probability, have occurred, and these special circumstances were here never
communicated by the plaintiffs to the defendants. It follows, therefore, that the loss of profits
here cannot reasonably be considered such a consequence of the breach of contract as could have
been fairly and reasonably contemplated by both the parties when they made this contract.

The court laid down the rule such a case as the present is this as follows:
Where two parties have made a contract which one of them has broken, the damages which the
other party ought to receive in respect of such breach of contract should be such as may fairly
and reasonably be considered either arising naturally, i.e., according to the usual course of
things, from such breach of contract itself, or such as may reasonably be supposed to have been
in the contemplation of both parties, at the time they made the contract, as the probable result of
the breach of it. Now, if the special circumstances under which the contract was actually made
were communicated by the plaintiffs to the defendants, and thus known to both parties, the
damages resulting from the breach of such a contract, which they would reasonably contemplate,
would be the amount of injury which would ordinarily follow from a breach of contract under
these special circumstances so known and communicated. But, on the other hand, if these special
circumstances were wholly unknown to the party breaking the contract, he, at the most, could
only be supposed to have had in his contemplation the amount of injury which would arise
generally, and in the great multitude of cases not affected by any special circumstances, from
such a breach of contract. For, had the special circumstances been known, the parties might have
specially provided for the breach of contract by special terms as to the damages in that case, and
of this advantage it would be very unjust to deprive them.
(Thus it led to reducing contractual remoteness to foreseeability)

The damages available for breach of contract include:

1. Those which may fairly and reasonably be considered arising naturally from the breach of
contract or
2. Such damages as may reasonably be supposed to have been in the contemplation of both the
parties at the time the contract was made.

If any special circumstances exists which were actually communicated to the Defendant, the
Claimant may recover any damages which would ordinarily follow from a breach of contract
under the special circumstances communicated.

State of West Bengal v. M/S. B. K. Mondal and Sons

FACTS:
In addition to the construction work as stipulated under the contract, plaintiff did some more
construction work as requested by an officer of State of West Bengal. Government though
started using the constructed warehouse, yet on account of the work not being recorded in form
of contract as provided under Article 299 of Constitution, denied any liability to pay for it.

ISSUES:
Whether there was any contract between the State of W.B. and plaintiff?
Whether the rule of Promissory Estoppel can be evoked?
Whether plaintiff can claim under S.70 of Indian Contract Act (ICA)?

HELD:
The trial Judge found that although there was no valid contract, the claim was justified under
s.70 of the
Contract and decreed the suit. The Court of appeal affirmed that decree. The State appealed by
special leave. The apex court held that the courts below were right in holding that s.70 of the
Contract Act applied to the case and the appeal must fail.

Three conditions must be satisfied before S.70 could be invoked:

First, person should lawfully do something for another person or deliver something to him;
Second, in doing so, he must not intend to act gratuitously;
Third, other person for whom something is done or to whom something is delivered must
voluntarily enjoy the benefit thereof. Such other person must have the option not to accept the
thing and to return it. It is only when he voluntary accepts the thing or enjoys the work done, that
the liability u/s 70 arises. The person must not be incompetent to exercise his volition u/s 11.

S.70 does not deal with rights and liberties arising from contracts rather from relations which
resemble those created by contracts. Therefore, person offering benefit to another could not
compel for specific performance thereof nor could ask for any damages for breach for there was
never a contract between the persons. But if the other person voluntarily enjoys the benefit there
from, former may claim either compensation or restoration u/s 70; though such a claim for
compensation is in no way to be treated as borne contractually.

Further, lawfully u/s 70 must be read in accordance with S.23 of ICA. In alternative it
indicates that after something is done or delivered by one person to other who enjoys the benefit
there from, a lawful relation is borne which u/s 70 gives rise to a claim for compensation.

After the plaintiff constructed the warehouse it was open to the State of W.B. to have the benefit
of it or to demolish it and instruct the plaintiff to take the materials used therein. The
government, by voluntarily enjoying the benefit accruing from the constructed warehouses,
became liable u/s 70. However, it is urged by the defendant that allowing this cause of action
would amount to enforcing a contract in infringement of mandatory provisions of A.299 of the
constitution, rendering it invalid. But, the contention is not well founded for the plaintiff did not
allege any contract at all while claiming u/s 70. The cause of action u/s 70 is independent of any
contract. A.299 may forbid a government to take work under a contract rendered invalid on
account of its not being in compliance with its terms, but does not make it unlawful for the
government to take the benefit of work done for it under no contract at all.

Held, further, that in construing a specific statutory provision such as s. 70 of the Contract Act it
would be unreasonable to seek assistance from English decisions on statutory provisions
contained in English law. The State Government, as much as an ordinary citizen, must be
subject to s. 70 of the Contract Act and it was wrong to suggest that its position was like that of a
minor and, therefore, it was outside the scope of s. 70 of the Act.

The question in the instant case was whether the three requisites of s. 70 of the Contract Act had
been satisfied. There was no dispute that the Government had taken benefit of the work it
urgently needed the work and put it to its use immediately. It was also clear that the respondent
did not intend to do the work gratuitously. Section 70 of the Contract Act applies where its
requisites exist, if it is necessary to imply a contract or contemplate a quasi-contract for applying
the section that must be done and neither s. 175(3) of the Government of India Act nor any other
impediment can stand in the way.

In KanhaiyaLal Agarwal vs. Union of India (2002 SC), the appellant made an offer of
concessional rate if tender offered by him was finalised within a short period. This offer was
made at the time of submitting the tender. The respondent also made a similar offer but after
opening the tender. It was held that the acceptance of tender offered by the appellant which was
made at the time of submission of tender itself, was not illegal or arbitrary.

Haridwar Singh v. BagunSumbrui (1973) - In this case the Bihar Forest department held an
auction for settlement of right to exploit a bamboo coup. Though the reserve price fixed in the
tender was higher than the bids received, the appellants bid was accepted being the highest.
When the matter for finalization of contract was pending the appellant expressed his willingness
to take the settlement at the reserve price. In the meantime, another bidder filed a petition to take
the settlements of the coup for a price higher than the reserved price. Finally the settlement of the
coup with the appellant was cancelled and settled with another bidder quoting higher price than
reserved price. The appellant sued the defendant stating that there was a concluded contract
when the bid of the appellant was accepted subject to confirmation by the Government. The
court in this case has held that the appellant himself revoked the offer made by him earlier by
proposing a higher bid subsequently.

KedarnathBhattacharji v. GorieMahomed (1886) In this case to erect a Town Hall at

Howrah subscriptions were called for the purpose to obtain necessary funds by public. On receipt
of sufficient subscriptions a contract was entered into with a contractor for the building the Town
Hall. But as the subscription list increased, the plan increased too, and the original cost swelled
up. The defendant was subscriber to this fund having signed name in the subscription book. The
defendant not having paid his subscription was sued. In this case court has held that in this
particular case persons were asked to subscribe, knowing the purpose to which the money was to
be applied, and they knew that on the faith of their subscription an obligation was to be incurred
to pay the contractor for the work. Thus, under these circumstances the contract arises and it is a
perfectly valid contract and for good consideration; it contains all the essential elements of a
contract which can be enforced by law by the persons to whom the liability is incurred.

DoraiswamiIyer v. ArunachalaAyyar (1935) In this case the trustee temple sought to recover
a contribution promised by a subscriber to a subscription list for the repairs of a temple. The
question in this case was that whether there was valid consideration. The court in this case has
held that there is no evidence that there was any request by the subscriber when he put his name
in the subscription list to the plaintiffs to do the temple repairs or that there was any undertaking
by them to do anything. The court opined that this was a bare promise unsupported by
consideration and dismissed the suit.

VenkataChinnaya Rau v. VenkataramayaGaru In this case plaintiffs sister by a deed of

gift transferred certain property to the defendant, her daughter, with the directions that the she
should pay an annuity to the plaintiff. The defendant executed a writing in favour of plaintiff to
pay the annuity. Afterwards she declined to pay on the ground that no consideration has moved
from the plaintiff i.e. the promise. In this case court has held that the plaintiff is entitle to collect
annuity because consideration indirectly moved from plaintiffs sister to the plaintiff (this is
known as doctrine of constructive consideration).

NawabKhwaja Muhammad Khan v. NawabHusainiBegam (1910)Case was brought by the

plaintiff a Muhammadan lady, against the defendant, her father-in-law, to recover arrears of
certain allowance, called kharch-i-pandan, under the terms of an agreement executed by him
prior to and in consideration of her marriage with his son, both she and her future husband being
minors at the time. The defendant admitted the execution of the document on which the suit was
brought, but disclaimed liability principally on two ground, namely, (1) that the plaintiff was no
party to the agreement, and was consequently not entitled to maintain the action, and (2) that she
had forfeited her right to the allowance thereunder by her misconduct and refusal to life with her
husband. The High Court in this case confined solely to the question of the plaintiffs right to
maintain the action and decreed the plaintiffs claim. The His Majesty in Council on the appeal
by the defendant observed that by the agreement on which the present suit is based the defendant
binds himself unreservedly to pay to the plaintiff the fixed allowance; there is no condition that it
should be paid only whilst the wife is living in the husbands home, or that his liability should
cease whatever the circumstances under which she happens to leave it.

Ajudhia Prasad Vs. ChandanLal(1937) - two minors borrowed money under a mortgage deed.
They were over 18 but less than 21 years of age, but fraudulently concealed the fact that a
guardian had been appointed for them under Guardians and Wards Act. Question was whether
the lender could get a decree for the principal amount or sale of mortgaged property. It was held
that a mortgagee cannot recover the money lent by him to a minor on the principle of restitution.
The court refused to follow the enlarged view of restitution and held that the grant of a money
decree against the minor would be tantamount to enforcing the minors pecuniary liability under
the contract which is void.

Subhash Chandra v. Ganga Prasad (1967) Suit was filed for declaring that a deed of
settlement executed by the plaintiffs father and the plaintiffs sister in favour of the plaintiffs
brothers son in respect of certain properties as fraudulent, collusive and invalid and for
cancellation of the said document. The High Court went on to presume from the great age of the
donor that his intelligence or understanding must have deteriorated with advancing years and
consequently it was for the court to presume that he was under the influence of his younger son
at the date of the gift. The Supreme Court based on the English Common Law observed that
there is no presumption of imposition or fraud merely because a donor is old or of weak
character. Moreover, there is no presumption of undue influence in the case of a gift to a son,
grandson, or son-in-law, although made during the donors illness and a few days before his
death.
The SC observed in the present case there was practically no evidence about the
domination of plaintiffs younger brother at the time of the execution of the deed of gift or even
thereafter. The circumstances that a grandfather made a gift of a portion of his properties to his
only grandson a few years before his death is not on the face of it a unconscionable transaction.