PROJECT REPORT ON

THE
INDIAN
CONTRACT ACT
1872

Acknowledgement

I would like to take this opportunity to

thank every one who put forth their time and

efforts to help me to develop this project. This

project took a long time from the collection of

information to the compilation.

This project could not have been written

without the guidance of our Prof. Amita Verma

who not only served as our supervisor but also

encouraged us to make this project report.

COERCION

According to section 15 of The Indian Contract Act

1872, Coercion 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 intention of causing any person to
enter into an agreement.1

Coercion is said to be there where there were

the consent of a person has been cause either by :-

1. Committing , or threatening to commit any

act forbidden by the Indian Penal code, or
by

2. Unlawful detaining, or threatening to detain

any property.2

Such an act should be to the prejudice of any

person whatever.

ESSENTIALS OF COERCION

1) Act forbidden by the Indian Penal Code

It has been noted above that if a person

commits or threatens to commit an act
1
Bare Act, The Indian Contract Act, 1872, section 15
2
Avtar Singh, The law of contract, Eastern Book Company, Lucknow, 1978,
p. 109
 forbidden by the Indian Penal Code with a view
to obtaining the consent of the other person to
an agreement, the consent in such a case is
deemed to have been obtained by coercion. For
instance, A threatens to shoot B if B does not
agree to sell his property to A at a stated price,
Bs consent in this case has been obtained by
coercion.

For coercion, it is not necessary that the

Indian Penal Code 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 Indian Penal Code is or is not in force in the
place where the coercion is employed. The
following illustration3 would explain the point :-

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. A afterwards sues B for
breach of contract at Calcutta. A has employed
coercion, although his act is not an offence by
law of England, and although section 506 of the

3
Illustration to Section 15
 Indian Penal Code was not in force at the time
when, or at the place where, the act was done.

In Ranganayakamma v. Alwar Setti,4

the question before the Madras High Court was
regarding the validity of the adoption of a boy a
widow, aged 13 years. On the death of her
husband, the husbands dead body was not
allowed to be removed from her house for
cremation, by the relatives of the adopted boy
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.
According to Pollock and Mulla, by obstructing
the removal of the corpse the possible offence
tried to be committed was under section 297,
Indian Penal Code, which provides punishments
to a person for wounding the feelings of the
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 Indian Contract Act as the widows
consent had been obtained by undue influence. 5

4
I.L.R. (1889) 13 Mad. 214.
5
Indian Contract and Specific Relief Acts, 9th ed., p. 134
 In Chikkan Ammiraju v. Chikkam
Seshama.6 The question before the Madras
High Court was that whether coercion could be
caused by a threat to commit suicide. In this
case A, a Hindu, by a threat of suicide, induced
his wife and son to execute a release deed in
favour of As brother in respect of certain
properties claimed 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 commercial 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 were satisfied. Oldfield J, who
dissented, was, however, of the view that
suicide is not an act forbidden by the Indian
6
I.L.R. (1918) 41 Mad. 33
 Penal Code (only an attempt to commit suicide
is punishable under section 309, Indian Penal
Code) and a threat to do that could not be
considered to be a threat to do a forbidden act
within the meaning of section 15 of the Contract
act.

The majority view in this case appears to

be quite convincing. Section 309,I.P.C. makes
an (unsuccessful) attempt to commit suicide
punishable. In this case there was nothing but a
threat to (successfully) attempt a suicide. As
(successful) attempt to commit suicide is not
punishable under I.P.C. because there is no
possibility of punishing the wrongdoer, a threat
to commit suicide, therefore, should be treated
as coercion. Section 15 of the contract act
should be amended to expressly cover such
cases also, so that uncertainty caused by
different views on the subject is avoided.

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 recommended 7
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. A Penal
Code forbids only what it declares punishable. There
are Laws other than the Indian Penal Code
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.

2) 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
7
13th report (1958), p. 21
 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 release in
his favour, it is coercion as held in Muthiah
Chettiar v. Karupanchetti.8

If the detention of property is not unlawful,

there is no coercion. Thus, if a mortgagee
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 as held in
Bengal Stone Co. Ltd v. Joseph Hyam.9

Forcible dispossession of property under threat

is coercion

If a person is dispossessed of his property

under illegal threat that unless he parts with the
possession he would be detained under MISA
( Maintenance of Internal Security), partying
with the property under such threat amounts
to coercion under section 15.
8
AIR (1927) Mad. 852
9
(1918) Cal.L.J. 78
 In Krishan Lal Kalra v. N.D.M.C.10 is an
example of persons affected by excesses of
Emergency period proclaimed in 1975.

In this case the plaintiff was given license

by the N.D.M.C. (New Delhi Municipal
Committee) to run an open air Restaurant in
Connaught Circus, New Delhi. The lease was to
expire on 31st May 1978. The plaintiff, who
started running the Restaurant under the name
and style Rumble Open Air Restaurant,
was allegedly thrown out of the premises after
taking forcible possession thereof without due
process of law by the defendant who sent
demolition squad with police force on 7th
August, 1976. There was also a threat that 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. 10 lacs.

It was held that a person is not bound by

any act done under duress or coercion. In this
case the threat that the plaintiff would be

10
AIR (2001) Delhi 402
 detained under MISA amounted to coercion. The
plaintiffs 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 filling the
suit till the payment of the decreed amount.

To the prejudice of a preson

Section 15 requires that there should be

committing or threatening to commit, ant 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.

It means that the act causing coercion

should not necessarily be directed 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 Bs son, C, in order to coerce B to enter
into the agreement, the case would be covered
within this section. Apart from that, it 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 widows
husband to be taken out of the home until the
adoption is made, this is coercion as held in
Ranganayakamma v. Alwar setti.11

Threat to strike is no coercion

In workmen of Appin Tea Estate v.

Industrial Tribunal,12 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 the cause 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 threat was neither a threat to commit an
offence under the Indian Penal Code, nor was it
11
I.L.R. (1889) 13 Mad, 214
12
AIR (1966) Assam 115
 unlawful detaining of 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 statute 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.,13 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 in
such a case 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.14
13
AIR (1968) S.C. 599
14
R.K.Bangia, Indian Contract Act, Allahabad Law Agency, Faridabad, 2004,
p. 113
 Hence it can be concluded by making it clear
that coercion as thus defined implies a committing or
threatening to commit some act which is contrary to
law with fulfilling the essentials of coercion.

BIBLIOGRAPHY

1. Bangia R.K., Indian contract Act, Allahabad Law

Agency, 10th edition.

2. Singh Avtar, Indian Contract Act, Eastern Book Co.,

1978.

3. Pollock and Mulla Indian Contract and Specific

Relief Acts, 9th edition

4. www.Indiankanoon.com.

5. www.manupatra.com.