A Detailed Analysis Of Provisions Related To Coercions Under The Indian Contract Law

Introduction

An agreement enforceable by law constitutes a valid contract. In the case of a contract, each party is legally bound between both parties. Under section 2(h) of the Indian Contract Act, 1872 (ICA), the term contract has been definedas an agreement enforceable by law. The term agreement has been defined under section 2(e) of the ICA, 1872 as “every promise and every set of promises forming consideration for each other becomes an agreement.” An agreement involves a promise from both sides, and when an agreement becomes enforceable under the law, a valid contract arises. An important essential element of a valid contract is the offer and subsequent acceptance to form an agreement. An offer is the manifestation of the promisor’s mind, and an offer can be both positive and negative, that is, to do or not to do something. Towards this offer, consent should be signified and communicated by an act or omission by which the promisee or the party accepting the offer intends to express their consent, and this consent is known as acceptance Once a proposal is accepted by the other party and it is timely communicated to the party who proposed in a proper manner, it becomes a binding contract, provided that consideration and object are legal and the parties do have the intention to create legal relationships. 

Essentials of a Valid Contract

It has been duly stated under section 10 of the Indian Contract Act (ICA), 1872 that all agreements are contracts if they are made by parties the free consent of parties/individuals competent to contract, with a lawful object and for a lawful consideration, and are not hereby expressly declared to be void. Thus, there are six essentials mentioned in section 10 to constitute a valid contract. These are as follows:

1. There must be an offer from either side of the party and acceptance from the other party.
2. There must be free consent of parties to contract.
3. Parties must have the capacity to contract.
4. There must be a lawful consideration.
5. There must be a lawful object. 
6. The contract must not be hereby expressly declared to be void.

There Must be Free Consent of Parties to Contract 

One of the essentials of a valid contract, as mentioned in section 10, is that the parties should enter the contract with their free consent. Under section 14 of the ICA, 1872, free consent is said to be free when it is not caused by:

1. Coercion (section 15), or
2. Undue Influence (section 16), or
3. Fraud (section 17), or
4. Misrepresentation (section 18), or
5. Mistake (section 20, 21 & 22). 

Coercion under the Indian Contract Law 

It has been duly stated in section 15bof the ICA, 1872 that the act of committing, or threatening to commit, any act prohibited by the Indian Penal Code (45 of 1860), or the wrongful detention, or threatening to detain, any property, to the detriment of any party, with the intent of forcing any person to enter an arrangement, is referred to as “coercion.” Coercion involves forcing an individual to enter a contract. When intimidation or threats are used under pressure to gain the party’s consent, there is no free consent. For instance, X went out to play tennis with his friends. Y, a stranger, approaches X and pulls out a knife, and asks Y to give all his possessions. In this situation, the consent of X is obtained by coercion. The contract becomes voidable because of coercion. It means that the contract is voidable at the whim of the party whose consent was not freely given. As a result, the aggrieved party will decide if the contract can be enforced or terminated. According to the definition of coercion stated under section 15 of ICA, 1872, coercion is said to be there when the consent of an individual has been caused either by:

1. Committing, or threatening to commit any act prohibited by the Indian Penal Code, or by
2. Unlawful detention or threatening to the detention of any property.

1. Committing or threatening to commit any act prohibited by the Indian Peal Code

It has been noted above that if an individual commits or threatens to commit any act forbidden by the Indian Penal Code with the object of obtaining the consent of the other individual to an agreement, then consent in such a case is deemed to have been obtained by coercion. It has been stated under section 15 of the ICA, 1872 that the applicability of the Indian Penal Code at the place where the consent has been caused is immaterial to coercion. For instance, X, while onboard an English ship on the high seas, uses criminal threats to force Y to sign an agreement under the Indian Penal Code (45 of 1860). X then sues Y in Calcutta for breach of contract. About the fact that his act is not illegal under English law and despite Section 506 of the Indian Penal Code, X has used intimidation. The Penal Code (45 of 1860) was not in effect at the time or location of the statute.

In Ranganayakamma v. Alwar Setti, it has been held by the Madras High Court that mental pressure inflicted on a widow by her family members or relatives to adopt a boy after her husband’s death will amount to coercion and the consent so obtained will not be free consent. Even the threat to commit suicide to obtain consent would amount to coercion. In Chikkan Amiraju v. Chikkam Seshama, it has been held by the Madras High Court that a threat to commit suicide would amount to coercion, as defined under section 15 of the ICA, 1872. A major flaw with this provision is the exclusion of other penal codes and the inclusion of the Indian Penal Code only. Because of this limitation, the Law Commission of India in its 13^th report recommended the amendment of section 15 of ICA, 1872, to ensure inclusion of the other penal codes as well.

2. Unlawful detention, or threatening to the detention of any property

It has been noted above that if an individual detains or threatens to detain any property to obtain the consent of the other individual to the agreement, to the prejudice of any person whatever, then consent in such a case is deemed to have been obtained by coercion. Here the term ‘to the prejudice of any person whatever’ is used to indicate the fact that the act causing coercion should not necessarily be directed against the contracting party, and it is enough the act is to the prejudice of any person whatever, and with the intention of causing any person to enter into an agreement. It has been held in Krishan Lal Kalra v. N.D.M.C., it has been held if a person is dispossessed of his property under illegal threat that unless he parts with the possession, he would be detained under the Maintenance of Internal Security Act (MISA), parting with the property under such threat would amount to coercion under section 15.

The party defending the coercion has the burden of proof more on their shoulders than the other party. This is because pure chance or fear does not constitute a hazard. To establish compulsion, an individual must demonstrate that there was a legal danger that compelled him to enter a contract he would not have entered otherwise.

Conclusion

From the above discussion, one of the essentials of a valid contract, as mentioned in section 10, is that the parties should enter the contract with their free consent. The act of committing, or threatening to commit, any act prohibited by the Indian Penal Code (45 of 1860), or the wrongful detention, or threatening to detain, any property, to the detriment of any party, with the intent of forcing any person to enter an arrangement, is referred to as coercion. The contract becomes voidable because of coercion. It means that the contract is voidable at the whim of the party whose consent was not freely given. As a result, the aggrieved party will decide if the contract can be enforced or terminated. If an individual commits or threatens to commit any act forbidden by the Indian Penal Code with the object of obtaining the consent of the other individual to an agreement, then consent in such a case is deemed to have been obtained by coercion. Similarly, if an individual detains or threatens to detain any property to obtain the consent of the other individual to the agreement, to the prejudice of any person whatever, then consent in such a case is deemed to have been obtained by coercion.

References

1. The Indian Contract Act, 1872, No. 2(h) (Indian).
2. The Indian Contract Act, 1872, No. 2(e) (Indian).
3. Diganth Raj, What are the essentials of Contract? IPleaders, https://blog.ipleaders.in/what-are-the-essentials-of-contract/ (last accessed Apr. 18, 2021).
4. Meera Annie Koshy, What do you mean by revocation of proposals and acceptance under a contract? (2020) IPleaders, https://blog.ipleaders.in/mean-revocation-proposals-acceptance-contract/ (last accessed Apr. 18, 2021).
5.  The Indian Contract Act, 1872, No. 10 (Indian).
6.  Dr. R.K. Bangia, The Indian Contract Act, (12^th Edition, 2005), Allahabad Law Agency, Haryana
7. The Indian Contract Act, 1872, No. 14 (Indian).
8. The Indian Contract Act, 1872, No. 15 (Indian).
9. Mariya Paliwala, Free Consent Under the Indian Contract Act, 1872 IPleaders, https://blog.ipleaders.in/free-consent-3/ (last accessed Apr. 18, 2021).
10. Bangia, supra note 6, at 112.
11. The Indian Contract Act, 1872, No. 15 (Illustration) (Indian).
12.  Ranganayakamma v. Alwar Setti, I.L.R. (1989) 13 Mad. 214.
13. Chikkan Amiraju v. Chikkam Seshama, I.L.R. (1918) 41 Mad. 33.
14. Bangia, supra note 6, at 115.
15. Krishan Lal Kalra v. N.D.M.C., A.I.R. 2001 Delhi 402.