Professional Documents
Culture Documents
TOPIC
PAGE NO.
INTRODUCTION
2-3
WHAT IS COERCION?
4-5
ACT FORBIDDEN BY THE INDIAN PENAL CODE
6-7
UNLAWFUL DETAINING OF PROPERTY
7
PREJUDICE TO THE PERSON
7
BURDEN OF PROOF
8
COMPULSION OF LAW
8
EXTENT OF COERCION UNDER THE LAW
9-10
COMPARISION WITH ENGLISH LAW
10-11
DIFFERENCE BETWEEN COERCION AND DURESS
12
LAW COMMISSION RECOMMENDATIONS
13-14
CONCLUSION
15
BIBLIOGRAPHY
16
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INTRODUCTION
A contract as defined by the Indian Contract Act of 1872 is an
agreement enforceable by law. Though the definition of a
contract is simple enough, they are various facets and
intricacies to this. There are various essential requirements for
a valid contract like lawful object, lawful consideration,
competency to contract, free consent, etc. as stated under
Section 10 of the Indian Contract Act, 1872.
Out of these various intricacies one is Free consent. According
to Section 10 of the Indian Contract Act, 1872 free consent is
one of the essential requirements of a contract. Section 14
defines Free Consent. Consent is said to be free if it is not
caused by:
Coercion (Section 15) Consent is said to be caused by
coercion when it is obtained by pressure exerted by either
committing or threatening to commit an act forbidden by
the Indian Penal Code or unlawfully detaining or
threatening to detain any property.
Undue influence (Section16) A contract is said to be
induced by undue influence where the relation
subsisting between the parties are such that one of the
parties is in a position to dominate the will of the other
and uses that position to obtain an unfair advantage over
the other.
Fraud (Section17) Means and includes the following
acts done with the intention to deceive or to induce a
person to enter into a contract. (a) the suggestion that a
fact is true when it is not true and the person making the
suggestion does not believe it to be true (b) active
concealment of a fact by a person who has knowledge or
belief of the fact, (c) promise made without the intention
of performing it.
Misrepresentation (Section 18) When a person
positively asserts that a fact is true when his information
does not warrant it to be so, though he believes it to be
true, it is misrepresentation. A breach of duty which
brings an advantage to the person committing it by
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misleading the other to his prejudice is also a
misrepresentation.
Mistake (Section 20,21,22) Where both parties to an
agreement are under a mistake as to a matter of fact
essential to the agreement, the agreement is void. An
erroneous opinion as the value of the thing, which forms
the subject matter of the agreement, is not deemed as
mistake as to a matter of fact. Unilateral mistake, i.e. the
mistake in the mind of only one party does not affect the
validity of the contract.
The above five are the vitiating factors to free consent. If the
contract made by any of the above four reason, the contract is
voidable at the option of the aggrieved party. If the agreement
induced by mutual mistake, the agreement would stand void or
cancelled. An agreement can be treated as a valid contract only
when the consent of the parties are free and not under any
undue influence, fear, pressure etc. The consent of the parties
must be genuine and free.
There are five vitiating factors to free consent, however, I would
focus only upon Coercion in this assignment work.
Section 15 of the Indian Contract Act, 1872 defines coercion as:
Coercion is the committing, or threatening to commit,
any act forbidden by the Indian Penal Code (45 of 1860)
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.
ILLUSTRATION
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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 1860).
WHAT IS COERCION?
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. The term is often associated with circumstances
which involve the unethical use of threats or harm to achieve
some objective.
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Coercion invalidating a contract need not proceed from a
party to the contract, or be immediately directed against a
person whom it is intended to cause to enter into the contract.
The act or the threat to commit the act should have caused the
party to enter into the contract. The term cause is not a
term of art but one of science. Nothing can be said to be the
cause of a particular effect, unless it is the proximate and
immediate cause of that effect. When a particular effect is said
to be caused by a particular factor, it must be clearly and
cogently established that the effect is the direct outcome of the
particular cause. Thus, in order for coercion to invalidate a
contract, it has to be instrumental in making the party agree
to the contract.
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injury in order to make the threat credible, but it is the threat of
(further) injury which brings about the change in transformation
rules.
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ACT FORBIDDEN BY THE INDIAN PENAL
CODE
The words Act forbidden by the Indian Penal Code make it
necessary for the courts to decide whether a given act of coercion is
such as to amount to an offence under the Indian Penal Code of
1860. There has been considerable case law with regard to this
section.
In the case of Ranganayakamma v. Alwar Setti1, a 13 year old
Hindu widow consented to adopt a boy, when the relatives of the
adopted boy obstructed the removal of her husband until she gave
her consent to the adoption.
The court held that this constituted an offense under Section 297 of
the Indian Penal Code which enacts that whosoever with the
intention of wounding the feelings of any person, or with the
knowledge that the feelings of a person are likely to be wounded,
offers an indignity to any human corpse, or causes disturbance of
any person assembled for the performance of funeral ceremonies, is
liable to imprisonment of fine or both. Thus, it was held that the
consent was obtained by coercion within the meaning of Section 15
of the Indian Contract Act.
Mere threat of bringing a criminal charge does not amount to
coercion, as it is not forbidden by the Indian Penal Code. But threat
of bringing a false charge with the object of making another enter
into a contract is coercion.
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by that Code.1 That view seemed to be correct. The penal code
forbids only what it declares punishable.
A demand by workers under the Industrial Dispute Act backed by a
threat of Strike being not illegal, the threat of strike would not
amount to coercion3.
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The term prejudice used in this section does not imply merely the
emotion of prejudice. Some form of legal injury must follow in order
that a person is said to be prejudiced. When the threat to commit
suicide by a husband caused a wife to release the property, the
court held that the wife was prejudiced. 6
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BURDEN OF PROOF
The defendant relying on the defence of coercion should set out all
the facts constituting these invalidating circumstances. A suspicion
or mere probability is not enough to constitute coercion. Thus, in a
contract between two parties where coercion was not the solitary
reason to enter into a contract, there is no burden of proof on the
party threatened to show that but for the threat, no agreement
would have been made.
The burden of proof does not lie on the innocent party to show that
but for the threats, no contract would have been formed. It is for the
party using the alleged threats to establish that the acts of alleged
threats or unlawful pressure contributed nothing to the consent of
the other party to the contract.
COMPULSION OF LAW
Compulsion of law is not coercion under Section 15 and the contract
in the eyes of the law is freely made. The mere fact that the contract
has to be entered into in conformity with and subject to restrictions
imposed by law does not per se impugn on the consensual element
in the contract.
Compulsion of law is not coercion and despite such compulsion, in
the eye of the law the agreement is freely made.
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In Andhra Sugars Ltd. V State of Andhra Pradesh 7 , a case of
the exigibility of the sales tax on sale of sugar, the cane-grower
was not bound to offer can to the factory of his area but if he did, the
factory was bound to accept it under the the Andhra Pradesh Sugar
(Regulation of Supply and Purchase) Act 1961. This was held to be
an agreement not caused by coercion.
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7. Andhra Sugars Ltd. v State of Andhra Pradesh AIR 1968 SCC 599
The words of this section are far wider than anything which then
existed in the English authorities; it must be assumed that this was
intended. As the definition stands the coercion invalidating a
contract need not proceed from a party to a contract 8 or be
immediately directed against a person whom it is intended to cause
to enter into the Contract or any member of his household, or affect
his property, or be specifically to his prejudice. This was not so under
the earlier English law on duress The Concept of duress has
however been rapidly evolving and these differences no longer seem
to hold. In fact, duress under English law is now perhaps broader
than coercion as defined under the Act, and has been discussed
later.
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COMPARISON WITH ENGLISH LAW
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 in s.15 is much wider and includes
the unlawful detention of property also. Further, coercion may be
committed by any person, not necessarily a party, or his party, or his
parent, wife or child. It may be directed against any person, even
immediate violence and also unnerve a person of ordinary firmness
of mind, these requests are not necessary in Indian law.
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arising from the realization that there is no practical choice open to
him.14
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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.
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15. Universe Tankships of Monrovia v. ITWF, [1983] 1 AC 366, 400 : [1982] 2 All ER 67 (HL)
16.Dai-Ichi Karkaria Pvt. Ltd. V. ONGC, AIR 1992 Bom 309 (buyer threatened non-performance to make
seller agree to renegotiated terms)
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DIFFERENCE BETWEEN COERCION AND
DURESS
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LAW COMMISSION RECOMMENDATIONS
WITH RESPECT TO COERCION
The 13th report of the Law Commission of India which was chaired
by Shri M C Setalvad contained a segment on Section 15 that is the
definition of coercion. The definition of coercion given in the Indian
Contract Act is not exhaustive. It cannot apply to situations in
modern times where coercion can be induced by very many ways.
The phrase any act forbidden by the Indian Penal Code is what was
critically examined by the Law Commission. The purpose of the
Indian Penal Code is to create offences and not merely forbid them.
The Indian Penal Code forbids only that which it deems punishable.
There are laws other than the Indian Penal Code performing the
same function.
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the meaning of Section 15. The issue here was whether suicide is an
act forbidden by the Indian Penal Code. The court held that the word
forbidden is wider than the term punishable. As an attempt to
commit suicide is punishable under the Indian Penal Code, the threat
to commit suicide would also come under the ambit of acts
forbidden by the Indian Penal Code. The dissenting judge was of
the opinion that the section should be construed strictly and that an
act which was not punishable by the Indian Penal Code cannot be
forbidden by it as a penal code forbids only what it punishes.
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CONCLUSION
In this assignment work I have tried to throw light on the concept of
coercion in the context of the Indian Contract Act. Simultaneously I
have also compared it with the position in England.
In the first place, the Indian Penal Code only declares offences
punishable and not forbidden. Secondly, in the present context,
the Indian Penal Code is not the only law that defines and punished
offences in India.
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Thus, it is my opinion that the definition of coercion should be
updated and the law commission recommendation should be
implements forthwith.
BIBLIOGRAPHY
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