In the Allahabad High Court
Civil Revision No: 10 of 1913
(1913) 11 ALJ 489
April 17th, 1913
Lalman Shukla vs. Gauri Dutt continues to be one of the most widely cited cases in contract law. It was one of the earliest cases in India dealing with the aspects of general offer, consent, and acceptance. The Indian Contract Act was legislated in the year 1872, and this case of 1913 remains one of the earliest cases in which the provisions of this act were weighed and interpreted.
Facts of the case:
- The defendant was the owner of a firm, and the plaintiff was the ‘munib’ of the firm.
- In January 1913, the nephew of the defendant, Mr. Gauri Dutt absconds from his home at Cawnpore.
- The defendant sends his servants to different places to look for his nephew; the plaintiff was one of those people who were sent to Haridwar. He was handed some money by the defendant for his railway fare and other expenses.
- Meanwhile, the defendant issued handbills announcing that if anyone who finds his nephew and brings him back then he would be rewarded with Rs. 501. The plaintiff Lalman Shukla does not have the notice of this.
- The plaintiff traces the boy to Rishikesh and brings him back to Cawnpore.
- He is awarded with two sovereigns and twenty rupees. The plaintiff, unaware of the announcement of reward, continues his work.
- Six months later, he is removed from the job, and he claims the money from his master, and Mr. Dutt refuses to pay the said remuneration.
- Lalman Shukla files a case at the Court of Small Causes at Cawnpore. And later files an application for revision against the judgement of the Court of Small Causes, in the Allahabad High Court.
The primary question of law in this case was whether the plaintiff, Lalman Shukla entitled to the said remuneration.
From the plaintiff’s side:
- It was contended by the plaintiff that the Privity of Contract in this present case was immaterial and that neither motive, nor knowledge of the contract was essesntial.
- It was contended that the very performance of the plaintiff in finding the missing boy was sufficient enough for him to be entitled to the reward. The counsel cited Section 8 of the Indian Contract Act 1872 in this regard which says, “The performance of the act or the acceptance of any consideration of a proposal is an acceptance of the proposal.”
- Similar cases dealing with general offers were cited by the plaintiffs. In the case of Gibbons vs. Proctor where a Superintendent of Police had offered a reward to anyone for providing information about a criminal. A police officer who did not know about the reward, provided some useful information to the superintendent, and was later held entitled to the reward.
- In Williams vs. Crawardine, a man had posted a handbill for information about a murderer with a reward of £20. A woman furnished him with such information without knowledge of such reward, and was later held entitled to it.
From the defendant’s side:
- The defendants contended that since the petitioner had no knowledge of the offer and the reward, there could be no formation of any valid contract.
- The petitioner had no knowledge of the offer, and therefore there could be no acceptance. The counsel for the defendants relied on the case of Fitch v. Snedekar.
- In this case, the plaintiff had helped reveal the identity of a murder culprit. There was a reward offered, but he did not know about the same. He later got to know of the reward and filed suit to claim it. However, the court said that there can be no acceptance of the offer without its knowledge.
- They further cited Further under section 2(b) of the Indian Contract Act, 1872 that says “When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise”. Hence there was no acceptance.
The Allahabad High Court dismissed the plaintiff’s case. The acceptance of the offer was not complete because the plaintiff had no information about the hand-bills. For acceptance of an offer, knowledge of the offer is essential.
It was decided by the honourable Court that the offer and agreement cannot be said to be valid because the plaintiff did not do any new act for receiving the award. The act that the plaintiff performed was an obligation in the course of his employment and not a part of the agreement for reward. There was no consideration on behalf of the plaintiff for which he can claim the defendant’s reward.
This case remains one of the most important cases in the field of contract law in India. Various provisions of the Act were intricately discussed and widely interpreted by the Honorable Court, and the essentials of contract making were dealt with extensively.
- Fitch vs. Snedaker (1868) 38 N.Y. 248
- Gibbons v Proctor (1891) 64 LT 594
- Williams v Carwardine, (1833) 110 ER 590