SESSION 2

1. Mohori Bibee v. Dharmodas Ghose ........................................................................................ 2

2. Srikakulam Subramanyam v. Kurra Subba Rao ...................................................................... 2
3. Nash v. Inman .......................................................................................................................... 2
4. Inder Singh v. Parmeshwardhari Singh ................................................................................... 3
5. Madhub Chander v. Raj Coomar ............................................................................................. 3
6. Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co. ................................................. 3
7. Gujarat Bottling Co. Ltd. v. Coca Cola Ltd............................................................................. 4
8. Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. ltd. ......................... 4
9. Continental Drug & Co Ltd. v. Chemoids & Industries Ltd. .................................................. 5
10. Hakam Singh v. Gammon (India) Ltd ................................................................................. 5
11. Derry v. Peek, 1899 14 APP CAS 337 ................................................................................ 5
12. Vokes v. Arthur Murray 212 SO.2D 906 (1968) ................................................................. 6
13. M.P. Sugar Mills v. State Of U.P., AIR 1979 SC 621 ......................................................... 6
14. Lalman Shukla v. Gauri Dutt, (1913) 11 ALJ 489 .............................................................. 7
15. M.C. Chacko v. The State Bank Of Travancore (1969) 2 SCC 343 .................................... 8
16. Webb v. Mcgowin, 27 ALA. APP. 82 (1935) ..................................................................... 8
17. Tweddle v. Atkinson 1861 B&S 393, Court of Queen’s Bench .......................................... 9
18. Subhash Chandra Mushib v. Ganda Prasad Mushib, AIR 1967 SC 878 ............................. 9

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 1. Mohori Bibee v. Dharmodas Ghose
Facts
The defendant in the present case was a minor who sought the mortgage of his own immovable
property in favour of a money lender, Brahmo Dutta. Accordingly, he received a loan of Rs.20,000
through Brahmo Dutta’s attorney with the knowledge that the defendant was a minor. It was
claimed that no relaxation could be extended to the defendants since he had misrepresented his
age.
Issue
a. Whether a contract was a minor is void or voidable
b. Whether the defendant was to return the amount of loan received by him on the mortgage
of the property
Judgement
The Privy Council held that any contract with a minor is void/ void-ab-initio. This made the
mortgage agreement void in the eyes of the law. Accordingly, the defendant could not be forced
to return the amount of money back to the money lender.
2. Srikakulam Subramanyam v. Kurra Subba Rao
Facts
The respondent and his father had constituted a Hindu Joint Family. After the death of his father,
the respondent’s mother and guardian agreed to sell certain property to the appellants in lieu of the
discharge of few of the father’s debts. The instant case was filed by the respondent claiming
possession of the property of the land.
Issue
a. Whether a guardian could enter into a valid contract on behalf of a minor
b. Whether there was a valid and subsisting contract between the appellants and the
respondent
Judgement
It was found that under S.53A of the Transfer of Property Act, the words “transferor” referred to
the person who “contracts to transfer for consideration any immovable property by writing signed
by him or on his behalf.” It was found that it was within the competence of a guardian to enter into
such a contract on behalf of a minor. The same was binding on the minor since it was since it was
entered into for his benefit.
3. Nash v. Inman
Facts
A tailor supplied waistcoats to an undergraduate student who was a minor. Among these were
thirteen fancy waistcoats. When the minor refused to pay for the same, the tailor brought an action
for the recovery of the amount due to him.
Issues
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 a. Whether the goods provided to the minor constituted a necessairy
b. Whether a valid contract subsisted between the minor and the tailor
Judgement
It was held that at the time of the supply of goods, the minor already had in his possession an ample
supply of clothes and that fancy waistcoats did not constitute a necessairy. Since, the defendant
was a minor, he had limited capacity to contract, and therefore unless the contract was for a supply
of necessity, an action to recover the same from the minor would fail.
4. Inder Singh v. Parmeshwardhari Singh
Facts
The defendant in the case sold property to the plaintiff for a very small sum. His mother brought
the present suit before the court and claimed that her son was a congenital idiot and was incapable
of entering into such contracts. She claimed that the plaintiffs were aware of his metal health
condition and had taken advantage of the same.
Issue
a. Whether a valid contract was concluded between defendant and the plaintiffs
Judgement
The Court held that a person entering into a contract must be one that understands what he is doing
and is able to make a rational judgement as to his interests in the matter. Even if a person appears
to be normal, but is incapable of forming a rational decision, the law affords protection. It was
concluded that in the instant case, that the defendant was incapable of forming a judgement of his
own and was therefore of unsound mind for the purposes of the Indian Contract Act.
5. Madhub Chander v. Raj Coomar
Facts
The plaintiff and the defendant were rival shopkeepers in a locality in Calcutta. The defendant
agreed to pay a sum of money to the plaintiff if he would close his business in that locality. The
plaintiff accordingly did so, but the defendant refused to pay. The plaintiff sued him for the money
contending that the restraint in question was only partial as he was restrained from exercising his
profession only in one locality.
Issue
Whether the agreement entered into between the parties constituted a valid restraint of trade or not
Judgement
The judge drew support from the use of the word "absolutely" in Section 28, which deals with
restraint of legal proceedings. As this word is absent from Section 27, therefore, he concluded, that
it was intended to prevent not merely a total restraint but also a partial restraint. It was held that an
agreement in restraint of trade, whether general or partial, qualified or unqualified, would be void.
6. Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co.

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Facts
The case dealt with the sale of goodwill by an inventor and a manufacturer of guns and ammunition
who agreed with the buyer company to not deal in the same trade for 25 years and to refrain from
engaging in any business that was carried on by the company. However, the investor still went
ahead and engaged with another manufacturer of guns and ammunition.
Issue
Whether the agreement amount to a restraint on trade
Judgement
It was held that the first condition of the agreement was valid and ensured the protection of the
interests of the purchaser. However, it was found that the second part dealing with the restriction
on engaging with competing players was found to be restrictive. It was found that all restrictions
on trade were in general contrary to public policy and were therefore void. But the exception was
that certain restrictions on trade could be justified where there was reasonable reference to public
interest.
7. Gujarat Bottling Co. Ltd. v. Coca Cola Ltd.
Facts
Gujarat Bottling Co entered into an agreement with Coca Cola to distribute its drinks. The contract
imposed a negative contract on GBC and forbade it from bottling, distributing or dealing with any
other company. This contract was for a period of five years and could be terminated on by either
party on sending a one-year prior notice or by mutual consent.
Issue
a. Whether the clause amounted to restraint on trade under S.27
Judgement
It was found that the agreement was not in restraint of trade since its application was confined to
duration of the agreement and not post the same. It was also mutually entered into by the parties
for the promotion of coca cola products and therefore would not amount to a restraint on trade.
8. Niranjan Shankar Golikari v. Century Spinning and Manufacturing Co. ltd.
Facts
A company engaged in the manufacture of tyre cord yarn was offered collaboration by a foreign
producer on the condition that the company shall maintain secrecy of all the technical information
and that it should obtain corresponding secrecy arrangements from its employees. The defendant
was appointed for a period of five years, the condition being that during this period he shall not
serve anywhere else even if he left the service earlier.

Issue
a. Whether the contract amounted to a restraint on trade
Judgement
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It was found that the reason that the party had an issue with the clause since he had been offered a
high remuneration. Since the restraint was one on the basis of time, nature and area of employment,
it was found that the same could not be considered to have been too wide, unreasonable or
unnecessary.

9. Continental Drug & Co Ltd. v. Chemoids & Industries Ltd.

Facts
The contract in question fell under the concurrent jurisdiction of both the Bombay and Alipore
courts, but the contract provided that “any dispute arising between the parties, settlement of the
same legally or otherwise, will be decided in Bombay.”

Issue
Whether there was an absolute restraint on the right to sue as contemplated under S.28 of the Act
Judgement
The Court held that where there were two courts that were competent to try a suit, an agreement
between the parties setting out that only one of those places would have jurisdiction in the event
of a dispute would not be considered a restriction on the right of taking legal proceedings.
10. Hakam Singh v. Gammon (India) Ltd
Facts
In this case, the petitioner approached the Court in Varanasi, the place where the cause of action
had arisen, for referring the matter to arbitration. However, the clause in the contract between the
parties had a stipulation that such disputes would be decided in Mumbai.
Issue
Whether the contract was right in conferring jurisdiction to courts which had no connection to it
Judgement
The Court noted that parties could not confer jurisdiction on a court which did not possess
jurisdiction under the CPC. But where two courts or more have concurrent jurisdiction, the parties
can decide which court can try the matter.
11. Derry v. Peek, 1899 14 APP CAS 337
Facts
Plaintiff received a prospectus regarding the incorporation of Defendant’s company, which
highlighted that the company would have the right to use steam or mechanical power. After
receiving the prospectus, Plaintiff bought shares of the company, relying on the allegations of the
prospectus, and believing that the company had the absolute right to use steam or mechanical
power. The board of trade refused to allow steam or mechanical power, and the company was
wound up, unable to complete its work. Thereafter, Plaintiff brought suit against Defendant for
fraudulent misrepresentations.
Issue

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Whether it is deceit when a company forms a prospectus to solicit investors, which later proves to
be wrong?
Judgement
The court found this to be an action of deceit, under which the establishment of misrepresentation
alone is not enough to prove liability. In this case, Plaintiff relied on the prospectus, which may
have been misrepresentation, but Defendants reasonably believed they could glean approval of the
board of trade and should not be held liable for their later failure to do so. An action of deceit will
only stand in a court when a plaintiff can show not only misrepresentation, but also that defendants
knew they would be unable to follow through with their representations.
12. Vokes v. Arthur Murray 212 SO.2D 906 (1968)
Facts
Appellant dance student enrolled in 14 dance courses at a dance studio for a total cash outlay of
over $ 31,000 dollars. Appellant brought a suit against the corporation, the studio, and an instructor
who sold her the courses, alleging they were guilty of undue influence and misrepresentation in
inducing her to sign the contracts. She alleged that sales promotions, illustrative of the entire
fourteen separate contracts, were procured by false representations to her that she was improving
in her dancing ability, that she had excellent potential, that she was responding to instructions in
dancing grace, and that they were developing her into a beautiful dancer, whereas in truth and in
fact she did not develop in her dancing ability, she had no “dance aptitude” and in fact had
difficulty in “hearing the musical beat.”
Issue
Whether trade puffing can be considered a misrepresentation of a material fact, which could be
actionable in fraud.
Judgement
The court considers the notions of fraud and misrepresentation and makes the finding that, for a
misrepresentation to be actionable, it must be a question of fact. In this case, although the
instructors opined as to Plaintiff’s dancing ability, they did not tell her the whole truth. The large
expenditures that Plaintiff made, in pursuit of her “progress”, were not justified by the fact that she
was not improving. Thus, the court found that there was a factual question, to be determined,
regarding the Defendants’ misrepresentation, and reversed, allowing Plaintiff a new trial.
Generally, when a tradesman engages in puffing to promote its services, it is not considered
actionable as fraud. In this case, however, it was apparent to Defendant that the expenses Plaintiff
was undergoing were not justified by her abilities, and his puffing became fraudulent when he
caused her to make expenditures in reliance of non-existent abilities.
13. M.P. Sugar Mills v. State Of U.P., AIR 1979 SC 621
Facts
The Government of UP announced to a tax exemption from sales tax for three years to all new
industrial units of the state. Based on this, the plaintiff sought confirmation from Director of
Industries who reiterated the decision of UP govt. Further unequivocal assurance was given by
Chief Secretary of Govt., on behalf of UP Government, to plaintiff about the same. Plaintiff on
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this categorical assurance, borrowed money from financial institutions, brought plant and
machinery and set up a new plant in UP. However, the State govt. went back upon this assurance
and instead now promised to give partial concession to which plaintiff consented and started
production. Once again, however, the State govt. went back even on this promise denying any
concession to be given. Plaintiff sued the government on account of promissory estoppel.
Issue
Whether plaintiff can have a cause of action on grounds of promissory estoppel?
Judgement
In light of categorical promise made by Chief Secretary, on behalf of Government, that plaintiff
will be entitled to sales tax exemption in respect of new industrial plant established in UP, and the
knowledge of government that such promise is to be acted on, it will be inequitable to allow
Government to go back on promise because it was in fact acted on by promisee resulting into
altering his position which could not now be restored. Plaintiff not only borrowed money from
various financial institutions, purchased machinery but also established hydrogenation plant in UP
and went ahead with production. Hence, rule of promissory estoppel can be evoked in present case
to be of avail to plaintiff.
14. Lalman Shukla v. Gauri Dutt, (1913) 11 ALJ 489
Facts
The nephew of the defendant departed from his home secretly and no one was able to find him.
The defendant sent his servants to different places to search for his nephew. All the servants went
to Haridwar to search for the nephew of the defendant. The Plaintiff acted as the munib of the firm
who was sent to Haridwar to search for the defendant’s nephew. Meanwhile, the defendant issued
handbills claiming that if anyone finds his nephew and brings him back then he would be rewarded
with Rs. 501. In Haridwar, the plaintiff found the nephew of the defendant and communicated the
same to the defendant and brought him back to Cawnpore. The plaintiff on his return was rewarded
with two sovereigns and twenty rupees. The plaintiff satisfied with the reward started with his
usual daily work. After 6 months, the defendant removed the plaintiff from work due to some
dispute. Thereafter, the plaintiff claimed Rs. 499 as the reward for tracing down the defendant’s
nephew. The plaintiff alleged that while leaving for Haridwar, along with the expenses and other
gifts, he was also promised to be paid Rs. 501.
Issue
Whether the reward of Rs. 499 claimed by the plaintiff should be provided?
Judgement
The acceptance of the offer as was claimed to be fulfilled by the plaintiff was not a complete one
because the plaintiff had no information about the hand-bills. For the acceptance of an offer,
knowledge of the offer is essential. The handbills were advertised after the plaintiff went for tracing
the defendant’s nephew in Haridwar. The act of the plaintiff to search for the defendant’s nephew
was not because of the reward offered in the hand-bill but was because it was his duty to search
for him. He already had a subsisting employee obligation to be fulfilled.

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The offer and agreement cannot also 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 a part of 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.
15. M.C. Chacko v. The State Bank Of Travancore (1969) 2 SCC 343
Facts
Highland Bank had availed of an overdraft facility from the Bank of Kottayam. MC Chacko was
the manager of Highland Bank and his father KC Chacko had given letters of guarantee for
amounts, if they fell overdue. In the meantime, KC Chacko had made a deed of partition in respect
of his properties. Clause 17 in the partition deed said the following: “If in pursuance of the letter
given by me to the Kottayam Bank at the request of my eldest son, Chacko ….any amount is due
and payable to the Kottayam Bank, that amount is to be paid by my son, Chacko. If the same is
not so done and any amount becomes payable (by me) as per my letter, for that my eldest son,
Chacko and the properties in Schedule A alone will be answerable for that amount.”

Issue
Whether Kottayam Bank, which was not a party to the partition deed, could sue on the basis of the
same?

Judgement
The Kottayam Bank not being party to the deal was not bound by the covenants in the deed, nor
could it enforce the covenants. It is settled law that a person not a party to a contract cannot subject
to certain well recognized exceptions, enforce the terms of the contract. The Kottayam Bank not
being a party to the deed could enforce the charge only if it was a beneficiary under the terms of
the contract, and it is not claimed that the Bank was a beneficiary under the deed.
16. Webb v. Mcgowin, 27 ALA. APP. 82 (1935)
Facts
Webb (P), acting within the scope of his employment, was engaged in clearing the upper floor of
a mill. P was in the act of dropping a 75-pound block to the ground below when he saw McGowin
directly underneath the block. If P had dropped the block, McGowin would have suffered serious
bodily harm or death. P could have remained safe on the upper floor of the mill by dropping the
block. However, the only way to prevent the block from hitting McGowin was for P to fall with
the block and divert its direction. P fell with the block and diverted its direction in such a way the
McGowin was not injured. In doing so, P suffered seriously bodily injuries. P was badly crippled
for life and unable to do physical or mental labor. McGowin promised to pay P $15 every two
weeks for the rest of P’s life. McGowin followed through with the payments until his death eight
years later. After McGowin’s death the payments stopped. P sued McGowin’s estate (D).
If a promisee cares for, improves, and preserves the property of the promisor, though done without
his request, is it a sufficient consideration for the promisor’s subsequent agreement to pay for the
service because of the material benefit received?
Issue

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Whether there was sufficient consideration in the present instance
Judgement
Life and preservation of the body have material, pecuniary values, measurable in dollars and cents.
A moral obligation is a sufficient consideration to support a subsequent promise to pay where the
promisor has received a material benefit, although there was no original duty or liability resting on
the promisor. Here the court distinguished this case from other cases where the consideration is a
mere moral obligation. In this case, the court found that the promisor, McGowin, received a
material benefit constituting a valid consideration for his promise.
17. Tweddle v. Atkinson 1861 B&S 393, Court of Queen’s Bench
Facts
William Tweddle and John Guy’s daughter were due to marry each other. The two men agreed
between them that they would each pay a sum to Tweddle’s son for the couple’s maintenance.
After Guy’s death, Tweddle’s son sued his estate to enforce the agreement made with his father.
Issue
Could the claimant sue on a contract he was not a party to?
Judgement
The High Court held in favour of the defendant. The claimant was not a party to the agreement as
he had not provided consideration for it. He therefore had no power to sue to enforce the contract.
The general rule under the common law is that a person who has not provided consideration for an
agreement cannot sue in contract law to enforce it. Consideration must move from the person
seeking to enforce the contract.
18. Subhash Chandra Mushib v. Ganda Prasad Mushib, AIR 1967 SC 878
Facts
Plaintiff claimed that the will deed of his father conveying the entire property to defendant,
plaintiff’s nephew, was brought about by exercising undue influence over the donor. To the
contrary, the deed details that the gift of the property was made out of natural love and affection
between the donor and defendant. Further, after the conveyance of the property to defendant, when
some suit arose on the independent settlement deeds executed upon the transferred property (before
the death of the plaintiff’s father, (i.e. donor), donor explicitly filed the statement that “he no longer
holds any interest in the property”.
Issue
Whether the deed of gift was brought about by the undue influence?
Judgement
Under Section 16 of the Indian Contract Act, the first thing to prove so as to claim undue influence
is the existence of such a relationship between the parties that one is in a position to dominate the
will of the other. But mere relationship of such a nature will not raise any presumption of undue
influence; for it must be further proved that the defendant had used such a relation to obtain an

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unfair advantage over the plaintiff. The Court observed that no presumption of undue influence
arises in case of gift to a son, grandson, son-in-law, although made during the donor’s illness or
old age. Though, the relationship of solicitor-client, spiritual advisor and devotee, doctor-patient,
parent and child are those in which such a presumption arises.
The statement filed by donor that “he no longer holds any interest in the property” shows that he
was fully conscious and consented the transfer of property to the defendant. Further, the fact that
donor was actively involved in the management of his property clearly proves that no undue
influence was exercised over him.

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