DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY
2018-19

SUBJECT: Law of Contracts

Final Draft on:

COERCION and DURESS

UNDER THE GUIDANCE OF SUBMITTED BY

Dr. Manoj Kumar Tanurag Ghosh

Asst. Professor (Law ) B.A. LLB (Hons)

Dr. RMLNLU, Lucknow Roll No.: 147

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 Table Of Contents

 Acknowledgement

 Introduction

 What is Coercion?

 Techniques of causing coercion

 Acts Forbidden By IPC

 Need For Amendment of Section 15

 Duress Under The English Law

 Elements and Forms Of Duress

 Comparison With English Law

 Conclusion

 Bibliography

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 ACKNOWLEDGEMENT

I am really thankful for this chance to make this project. I would like to thank my professor Dr.
Manoj Kumar under whose guidance all of this was made possible. I would also like to thank
Madhu Limaye Library for providing me with resources for completing the project on time. I thank
Dr RMLNLU for providing me the chance to study law and explore its aspects so freely. Lastly, I
would like to thank my parents and friends without whose support, this project would not have
been possible.

Tanurag Ghosh

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 INTRODUCTION

Coercion is defined as “It is the committing, or threatening to commit, any act forbidden by the
Indian Penal Code, or the unlawful detaining, or threatening to detain, any property, to the
prejudice of any person whatever, with the intention of causing any person to enter into an
agreement.” Coercion is the practice of compelling a person or manipulating them to behave in an
involuntary way (whether through action or inaction) by use of threats, intimidation or some other
form of pressure or force. Coercion may involve the actual infliction of physical or psychological
harm in order to enhance the credibility of a threat. The threat of further harm may then lead to the
cooperation or obedience of the person being coerced. It may also refer to more subtle means of
influence such as sweet talking, begging, charming, and seduction.

“What is Coercion?
An agreement the consent to which is caused by coercion is voidable at option of the party whose
consent was so caused. “Coercion” is defined in Section.15.

According to Sec.15, “ Coercion is the committing or threatening to commit, any act forbidden by
the Indian Penal Code (XLV of 186o), or the unlawful detaining or threatening to detain, any
property to the prejudice of any person whatever, with the intention of causing any person to enter
into an agreement.” Coercion is the practice of compelling a person or manipulating them to
behave in an involuntary way (whether through action or inaction) by use of threats, intimidation
or some other form of pressure or force. Coercion may involve the actual infliction of physical or
psychological harm in order to enhance the credibility of a threat. The threat of further harm may
then lead to the cooperation or obedience of the person being coerced.

Any person’s set of feasible choices is obtained from the combination of two elements: the initial
endowment (the perceived initial state of the world, which the chosen actions are going to affect)
and the transformation rules (which state how any chosen action will change the initial endowment,
according to the person’s perception).It follows that coercion could in principle take place by
purposely manipulating either the transformation rules or the initial endowment (or both). In
practice, however, the detailed choice reaction of a victim to a change in initial endowment is
generally unpredictable. Hence effective coercion can only be carried out through manipulation of
the transformation rules. This is done by the credible threat of some injury, conditional on the
victim’s choice. often, it involves the actual inflicting of injury in order to make the threat credible,
but it is the threat of (further) injury which brings about the change in transformation rules.
Coercion does not remove entirely the victim’s ability to choose, nor does it necessarily affect his
or her ranking of potential alternatives.”

“ As Roman jurists used to say, coactus volui, tamen volui (I willed under coercion, but still I
willed). In the terminology of rational choice theory, coercion does not remove a person’s

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objective function, but only affects the constraints under which such function is maximized. Yet,
the purpose of coercion is to substitute one’s aims to those of the victim. For this reason, many
social philosophers have considered coercion as the polar opposite to freedom. Various forms of
coercion are distinguished: first on the basis of the kind of injury threatened, second according to
its aims and scope, and finally according to its effects, from which its legal, social, and ethical
implications mostly depend.

Techniques Of Causing Coercion

Consent is said to be caused by coercion when it is obtained by pressure exerted by either of the
following techniques:

1. Committing or threatening to commit any act forbidden by the Indian Penal Code: or
2. Unlawfully detaining or threatening to detain any property.”

“Act Forbidden By The Indian Penal Code

The words “act forbidden by the Indian Penal Code” make it necessary for the court to, decide in
a civil action, if that branch of the section is relied on, whether the alleged act of coercion is such
as to amount to an offence. The mere fact that an agreement to refer matters in dispute to arbitration
was entered into during the pendency, and in fear, of criminal proceedings is not sufficient to avoid
the agreement on the ground of “coercion”, though the agreement may be void as oppose to
public.”

“For instance, A threatens to shoot B if B does not agree to sell his property to A at a started price,
B’s consent in this case has been obtained by coercion.”

For coercion its not necessary that the IPC should be applicable at the place where the consent has
been so caused. Explanation to Section 15 makes it clear that to constitute coercion, “It is
immaterial whether the IPC is or not in the force in the place where the coercion is employed”.
The following illustration1 will explain the point: s

A, on board an English ship on the high seas, causes B to enter into an agreement by an act
amounting to criminal intimidation under the Indian Penal Code (45 of 186o).A afterwards sues
B for breach of contract at Calcutta. A has employed coercion, although his act is not an offence
by the law of England, and although section 5o6 of the Indian Penal Code (45 of 186o) was not in
force at the time when or place where the act was done.

In Ranganayakamma v Alwar Setti2 the question before the Madras High Court was regarding
the validity of the adoption of a boy by a widow, aged 13 years. on the death of her husband, the

1
The Indian Contract Act, 1872

2
Ranganayakamma v Alwar Setti, [1889] I.L.R. 13 Mad. 214.

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husband’s dead body was not allowed to be removed from her house for cremation, by the relatives
of the adopted buy until she adopted the boy it was held that the adoption was not binding on the
widow as her consent had been obtained by coercion. 3

“In Chikkan Ammiraju v Chikkam Seshama, 4 the question before the Madras High Court was
that whether coercion could be caused by a threat to commit suicide. In this A, a Hindu, by a threat
of suicide, induced his wife and son to execute a release deed in favor of A’s brother in respect of
certain properties as their own by the wife and the son. The question before the court was whether
a threat to commit suicide could be considered to be an act forbidden by the Indian Penal Code.

It was held by Wallis, C.J. and Seshagiri Ayyar, J. that a threat to commit suicide amounted to
coercion within the meaning of Section 15 of the Indian Contract Act and therefore the release
deed was voidable. It was observed that the threat to commit suicide could be considered to be an
act forbidden by the Indian Penal Code and also the threat to kill oneself was an act where a person
was acting to his own prejudice and also to the prejudice of his wife and the son and thus the
requirements of Section 15 was satisfied.

oldfield, J., who dissented was however of the view that the suicide is not an act forbidden by the
Indian Penal Code (only an attempt to commit suicide is punishable under Section 3o9, Indian
Penal Code and threat to do a forbidden act within the meaning of Section 15 of Indian Contract
Act.

Pollock and Mulla are of the view that the minority view is correct, and they recommend
amendment of Section 15 so as to cover cases of threat also. 5”

3
According to Pollack and Mulla, Indian Contract and Specific Relief Acts, 9th ed., p. 134 by obstructing the
removal of the corpse the possible offence tried to be committed was under section 297, Indian Penal Code, which
provides punishment to a person for wounding the feelings of a person by offering indignity to any human corpse.
The authors also think that the case could well have been covered under Section 16 of the the Indian Contract Act as
the widow’s consent had been obtained by undue influence.
4
Chikkan Ammiraju v Chikkan Seshama,[1918] I.L.R. 41 Mad. 33.
5
Indian Contract and Specific Relief Acts, 9th ed., 1950

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Need for amendment of Section 15
“It may be noted that committing or threatening to commit any act forbidden by the Indian Penal
Code constitutes coercion. Acts forbidden by other penal laws are not included in the definition.
The Law Commission of India in its report on the Indian Contract Act has recommended6
amendment of Section 15 and inclusion in the definition other penal laws also. The
recommendation is as under:”

“The proper function of the Indian Penal Code is to create offences and not merely to forbid only
what it declares punishable. There are laws other than the IPC performing the same function. We
suggest that the words ‘ Any act forbidden by the Indian Penal Code’ should be deleted and a
wider expression be substituted therefore so that penal laws other than the Indian Penal Code may
also be included. The explanation should also be amended to the same effect.”

“Unlawful detaining of Property

According to Section 15, coercion could also be caused by the unlawful detaining, or threatening
to detain, any property, to the prejudice of any person whatever, with the intention of causing any
person to enter into an agreement. For example, if an outgoing agent refuses to hand over the
account books to the new agent until the principal executes in his favor, it is coercion’. 7 If the
detention of property is not unlawful, there is no coercion. Thus if a mortgage refuses to convey
the equity of redemption except on the terms dictated by him, there is nothing unlawful in it and
therefore no coercion is caused in this case. 8

To The Prejudice of a person

Section 15 requires that there should be committing or threatening to commit any act forbidden by
the Indian Penal Code, or the unlawful detaining , or threatening to detain, any property, to the
prejudice of any person whatever, with the intention of causing any person enter into an agreement.
It means that the act causing coercion should not be necessarily against the contracting party, it is
enough that the act is to the prejudice of any person whatever, and with the intention of causing
any person to enter into an agreement.
If for example, A unlawfully detains B’s son, C, in order to coerce B to enter into the agreement
the case would be covered within this Section.
Apart from that, it is also not necessary that the wrongful act causing coercion should proceed
from the party to the contract. Thus, if in order to coerce a widow to adopt a child, the relatives of
the adopted boy do not allow the dead body of the widow’s husband to be taken out of the home
until the adoption is made, this is coercion. 9”

6
Law Commission of India, 13th report on Indian Contracts, 1958 , p.21
7
Muthiah Chettiar v Karupan Chetti, [AIR 1927 Mad. 852]
8
Bengal Stone Co. Ltd v Joseph Hyam, [1918] Cal L.J. 78
9
Rangnayakamma v Alwar Setti, [1889] I.L.R. 13 Mad. 214

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Threat to strike is no coercion
“In Workmen of Appin Tea Estate v Industrial Tribunal,10 the demand of the workers for bonus
was accepted after a threat of strike. The question which had arisen was, whether such a decision
between the union of workers and the Indian Tea Association could be declared void on the ground
that there was coercion. It was held that because of the doctrine of collective bargaining under the
Industrial Disputes Act, the demand of the workers could be backed by a threat of strike. Such a
threat was neither an offence under the Indian Penal Code, nor was it unlawful detaining or
threatening to detain any property and hence it did not amount to coercion and as such the
agreement was valid.”

Statutory compulsion is no coercion

“When a statue requires a contract to be entered into, the consent in such a case is not deemed to
be caused by coercion, undue influence, fraud, misrepresentation or mistake. In Andhra Sugars
Ltd. V State of A.P.11 if any cane grower offered to sell his sugarcane to a factory in a certain
zone, the factory was bound to accept the offer under the Andhra Pradesh Sugarcane (Regulation
of Supply and Purchase) Act, 1961, and accordingly the agreement was entered into. It was held
that even though there was a legal compulsion for the factory to make the agreement, the agreement
could not be said to be entered into by the lack of free consent, and there was no coercion either.

Duress under the English Law

Under common law duress contains in actual violence or threat of violence to a person. It only
includes fear of loss to life or bodily harm including imprisonment, but not a threat of damage to
goods.12 The threat must be to do something illegal i.e. to commit a tort or a crime. 13 There is
nothing wrong in threat to prosecute a person for an offence14 or to sue him for a tort15 committed
by him, although threatening illegal detention would be duress. Moreover duress must be directed
against a party to the contract, or his wife, child , parent or other near relative, and also caused by
the party to the contract or within his knowledge.”

According to the Black’s Law Dictionary, duress may be “any unlawful threat or coercion used…
to induce another to act [or not act] in a manner [they] otherwise would not [or would]”.

10
Workmen of Appin tea estate v Industrial tribunal, [AIR 1966 Assam 115]
11
Andhra Sugars Ltd. V State of A.P. [A.I.R 1968 SC 599]
12
Atlee v Backhouse, [1838] 3 M&W
13
See Ware and De Frevile Ltd. V Motor Trade Association, [1921] 3 KB. 40:
14
Fisher & Co. v Appolinaris Co. [1875] LR 10 Ch.App 297
15
Powell & Hoyland [1851]6 Ex. 67

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Elements of Duress
“It is a fact that people enter into contracts on a daily basis as a result of pressure of one kind or
another. As Lord Wilberforce and Lord Simon remarked in Barton v Armstrong 16, “in life
including the life of commerce and finance, many acts are done under pressure so that one can
say that the actor had no choice but to act.” Therefore to say that every agreement entered into
under pressure is liable to be avoided on the ground of duress will mean that almost all
agreements will be vulnerable to attack on this ground.

The law has to determine the pressure which is unacceptable and so amount to duress and
pressure which is acceptable and therefore should not constitute duress. This has been done by
laying done two requirements which must be satisfied for relief to be available on the grounds of
duress. There must be pressure which amounts to compulsion of will of the complainant and the
pressure must be one that the law does not regard as legitimate. As Lord Scarman explained in
Universe Tankships Inc of Monrovia v. ITF17. There are “two elements in the wrong of duress:

(1) Pressure amounting to compulsion of will of the victim, and

(2) The illegitimacy of the pressure exerted

The first element concerns the coercive effect of pressure on the complainant. It inquires whether
the complainant’s consent was truly given. However, the complainant’s defective consent alone
is not sufficient to constitute duress. The second element is necessary. The pressure that impairs
the complainant’s free exercise of judgment must be illegitimate. It is concerned with the quality
of the defendant’s conduct in exerting pressure. The defendant must have behaved in a way
which makes the pressure affecting the complainant’s consent to be regarded as illegitimate.”

Forms of Duress

Originally, the parameters of the doctrine were very narrow in that an agreement could be avoided
for duress only where the duress was in the form of a threat to the person. Subsequently, it was
accepted that duress of goods can also vitiate consent to an agreement, and recent developments
in respect of economic duress show that the categories of duress should not be regarded as closed.

1. Duress of Person

Duress of the person may consist in violence to the person, or threats of violence, or in
imprisonment, whether actual or threatened. The threat of violence need not be directed at the
claimant: a threat of violence against the claimant’s spouse or near relations and a threat against
the claimant’s employees has been held to constitute duress. It is suggested that even a threat

16
Barton v. Armstrong [1976] A.C. 104.
17
Universe Tankships Inc of Monrovia v. ITF [1983] 1 A.C. 366.

9
against a stranger should be enough if the complainant genuinely that the submission was the only
way to prevent the stranger from being injures or worse.”

“The complainant only needs to prove that the pressure was the reason why he entered into the
contract and the court will conclude that illegitimate pressure induced the contract unless there is
evidence that the illegitimate pressure in face contributed nothing to the decision to enter the
contract. It is not necessary for the claimant in case of threat to person to demonstrate that he had
no practical alternative but to enter into the challenged contract.

In the case of Antonio v Antonio18 where a wife succumbed to a long campaign of threats of
violence and intimidation by her husband and transferred him half the shares in her company and
enter into a shareholders’ agreement with him, the court found that the transfer and the agreement
were both induced by duress. The court did not even enquire into whether she had any practical
alternative such as seeking legal remedy.

2. Duress colore officii

In cases where the illegitimate pressure is in the form of an unlawful demand for payment by a
public official, a distinction is to be drawn between cases where the complainant paid the money
in order to obtain a service from the public official (such as granting of a license or permit) and
cases where the complainant paid the money by way of tax or similar impost. In the first category,
the court readily infers that the claimant had no practical alternative but to submit to the demand
of the public official since, as Littledale J. put in the Morgan v. Palmer19, the complainant could
not otherwise obtain the services he required. But in cases where the payment is by way of tax,
there is a practical alternative open to the claimant in the form of legal proceedings to challenge
the legality of the public official’s demand for tax.”

3. Economic Duress

“Certain threats or forms of pressure, not associated to the person, nor limited to the seizure or
withholding of goods, may give grounds for relief to a party who enters into a contract as a result
of threat or pressure. In cases of economic duress the main question is whether the claimant had
practical or adequate alternative or not. The alternative must be practical or reasonable in the sense
that it was adequate for the claimant’s purpose in the circumstances. In the case of a threat to
breach a contract, for example if the circumstances are such that the claimant can easily obtain the
required goods or services from an alternative source at a reasonable prize then the court is likely
to regard this as a reasonable alternative and therefore may regard this as a strong evidence that
the claimant’s decision to enter into the agreement was not induced by illegitimate pressure; but it
is different where the circumstances are such that it would be difficult or impossible to find the
substitute for the contracted goods or services within the time available at a reasonable cost.”

18
Antonio v. Antonio [2008] EWHC 1199 (QB).
19
Morgan v. Palmer [1824] 2 B. & C. 729 at 739

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In North Ocean Shipping Company Limited v. Hyundai Construction Co. Ltd.20, the builders
building a ship under a contract for the plaintiffs, threatened, without any legal justification, to ””
“terminate the contract unless the plaintiffs agreed to increase the price by 1o%. It was held that
this amounted to a case of economic duress and that the plaintiff would be entitled, on that ground,
to refuse payment of the additional 1o%.

In B. & S. Contracts and Design Ltd. V. Victor Green Publications Ltd.21, the plaintiffs had
contracted to erect an exhibition stand for the defendants at Olympia, but their workmen went on
strike. To get the work done, the defendants agreed to contribute £45oo to pay off the workmen’s
claims. It was held by the court of appeal that this promise was made under duress as the defendants
had no realistic alternative but the promise to pay, given the serious threat to their economic
interests.”

4. “Threat to goods is no Duress

It has been noted above that the common law recognizes only a threat to man’s person and not to
his goods to constitute duress. This is different from the Indian law where Section 15 of the Indian
Contract Act recognizes unlawful detention, or a threat to detain property as coercion. The position
under English Law may be referring to the case of Skeate v Beale22. In this case a landlord
threatened to sell his tenants good’s having a distress of against the tenant for rent. The landlord
withdrew this distress in exchange of the tenant paying” “ E, 3-7 sh.6d immideieatley and
promising to pay the remaining amount of E 16-2sh.-6d. within a month. In an action by the
landlord to the recovhad been obtained sum of 16 pounds 2sh 6d. from the tenant, the tenant
pleaded that this promise had been obtained under duress by threatening sale of his property in so
far as the distress was wrongful. The tenanat’s plea was rejected and he was made to pay the
amount in accordance with the promise because threat regarding goods cant constitute duress.

In India, in case of coercion not only the contract is voidable under Section 19, but if some money
has been paid or goods delivered by a party to the contract under coercion, the same is recoverable
under Section 72. The section reads as under:

20
North Ocean Shipping Company Limited v. Hyundai Construction Co. Ltd. [1979] QB 705
21
B. & S. Contracts and Design Ltd. v. Victor Green Publications Ltd. [1984] I.C.R. 419.
22
Skeate v Beale [1840] 11 A. & E. 983

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A person to whom money has been paid, or anything delivered by mistake or under coercion must
repay or return it.” “For example a railways company refuses to deliver up certain goods to the
consignee, except upon the payment of an illegal charge for carriage. The consignee pays the sum
charged in order to obtain the goods. He is entitled to recover so much of the charge as was illegally
excessive.

If a person is dispossessed of his property under illegal threat that unless the parts with possession,
he would be detained under MISA (Maintenance of Internal Security) parting with the property
under such threat amounts to coercion under Section 15.

In Krishnan Lal Kalra v NDMC 23 the plaintiff was given license by the NDMC” “to run an open
air restraint in Connaught Circus, New Delhi. The lease was to expire on 31st may 1978. The
plaintiff who started running the restraint under the name and style “Rumble open Air Restaurant”
was allegedly throw out of the premises after taking the forcebile possesion thereof without the
due process of the law by the defendant who sent demolition squad with police force on 7th August
1976. There was also a threat the plaintiff would be detained under MISA, if he did not hand over
the possession of the property.

The plaintiff alleged that there was coercion and he filed the present suit claiming damages of Rs.
1o lacs.”

It was held that the person was not bound by any act done under duress or coercion. In this case
the threat that the plaintiff would be detained under MISA amounted to coercion. The plaintiff’s
suit was decreed for a sum of Rs. 9,11,525.12 with cost as well as interest @ 12% w.e.f 7th
August,1979, i.e. the date of filing the suit till the payment of the decreed amount.”

Where a party had entered into a loan transaction willingly, there would be no element of coercion.
In Union of India v M.V. Damodar24, the defendants took loan for purchase of vessels, which
purchase was made through Shipping Development Fund Committee, which enjoyed monopolistic
character. It was not obligatory of the defendants to take loan from the committee. The loan was
advanced by the committee at a subsidized rate of interest which was below the rate of interest
than prevailing in the market. Keeping in view the facts of the case, the Bombay High Court held

23
Krishnan Lal Kalra v NDMC, [A.I.R 2001 Delhi 402]
24
Union of India v M.V. Damodar, [A.I.R 2005 Bom. 137]

12
that the contention of the defendants that they were forced to enter into contract with the plaintiff
because of economic duress due to monopolistic character of the committee was not tenable.

“Comparison with English Law

The following comparison has been attempted by the Madras High Court.

“What the Indian Law calls ‘coercion’ is called in English Law ‘Duress or Menace’ Duress is said
to consist in actual or threatened violence or imprisonment of the contracting party or his wife,
parent or child, by the other party or by anyone acting with his knowledge and for his advantage.
But coercion as defined in Section 15 is much wider and includes the unlawful detention of
property also. Further, coercion may be committed by any person, not necessarily a party to the
contract. Again it need not to be directed against the contracting party, or his parent, wife or child.
While in English law Duress must be such as will cause immediate violence and also unnerve a
person of ordinary firmness of mind, these requisites are not necessary in Indian Law”.

Under the English law, actual or threatened violence to the victim’s person has long been
recognized to amount to duress, but duress may consists of actual or threatened imprisonment,”
“and now also includes wrongful threats to property or threat to seize goods, and wrongful or
illegitimate threats to economic interests, where the victim has no alternative but to submit. The
effect of duress is not to make the act of the victim non-voluntarily, nor does it deprive him with
a “choice between evils”. The classic case of duress is, not the lack of will to submit but “the
victim’s intentional submission arising from the realization that there is no practical choice open
to him”. There has developed tremendous jurisprudence around the concept of duress, especially
“economic duress”. Devising a test for this concept involves a delicate balancing act for, in a sense,
all contracts are made under pressure- each party “threatens” the other that unless his terms are
accepted. other party will not get the reciprocal benefits under the contract. The test in English law
has been to distinguish between legitimate and illegitimate pressures, and only the latter is said to
amount to duress. Threats to commit an otherwise lawful act are ordinary not duress. Thus, a threat
to breach the contracts in order to reach an agreement as to its variation has been generally regarded
as a legitimate commercial pressure, especially where this is the result of an unanticipated
difficulty or based on a bona fide and reasonable belief that unless the demand is met, the party
would unable to perform. If however the threat is “immoral or unconscionable”, this might be held
to constitute duress. Thus, an unlawful threat by a trade union to continue the “boycott” of a ship;
a threat to break an existing contract coupled with unreasonable and overwhelming commercial
pressure; refusal to rescue a vessel in distress or those on board save on extortionate terms; have
all been held to be cases involving duress. The doctrine of economic duress has also been accepted
by the Bombay High Court to be part of Indian law. However to the extent this decision is seen as
an authority importing the doctrine of duress in Indian Law, its correctness is not free from doubt.”

13
 Summary

In this project, we come to understand as to what exactly is coercion, its relevance to the law of
contracts and its importance. We come to know that free consent which is one of the fundamentals
of an agreement becoming a contract can be heavily influenced by coercion.

We come to understand what acts could constitute coercion and which acts do not amount to
coercion. We understand how it has manifested into the society by analyzing cases which are set
as precedents and we come to understand the Judiciary’s view of coercion.

Next we understand why and how are the statutes which deal with this concept are now old and
impractical and understand the need of amendment of present statutes for better implementation
in reality.

We come to understand Duress and its practicability in contracts. We come to understand different
types of it and which acts could amount to duress and which could not because it is very important
for one to understand the nature of an act while signing a contract. We also analyse cases to see
the statute’s practical implementation and how it is perceived by the judiciary.

Lastly, we come to understand the difference between the perceptions of Indian and English laws
regarding these and also understand how are they different but can be compared to each other for
better understanding. All of this gives a fair idea to an individual for the concepts of Coercion and
Duress and how they become so important in law of contracts.

14
Bibliography
1. “THE INDIAN CONTRACT ACT” BY SIR DINSHAW FARDUNJI MULLA
2. “INDIAN CONTRACT ACT AND SPECIFIC RELIEF ACT” BY AVATAR SINGH
3. Law of Contract-I with specific relief act by D.R. R.K Bangia

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