Lalman

Shukla v.
Gauri Dutt
Legal and Business Environment
Priyanshu shrivastav 23R21E00C0
 Lalman Shukla V. Gauri Dutt is
touted as a landmark judgment for
the validity of the contract under
the Indian Contract Act, 1872.
The case was filed in the
Allahabad high court in the year
1913 and was presided over by
Justice Banerji at the Allahabad
High Court.
 Facts Of The Case:
In this case, the defendant Gauri Dutt’s Nephew had absconded and was
nowhere to be found. After the defendant became aware of the same, Dutt
had sent all the servants in search of the missing nephew. The plaintiff
Lalman Shukla was one of the servants who had gone out in search of the
nephew. The plaintiff eventually found him and brought him back.

When Lalman Shukla had left the house to leave for Haridwar from Kanpur
he was handed some money for his railway fare and other expenses. As soon
as Lalman Shukla had left the house, the defendant announced a reward of
Rs. 501 for whosoever found Dutt’s nephew. Shukla had no idea that such an
announcement was made. The plaintiff found the missing nephew and brought
him back to his home in Kanpur. Six months after the said incident occurred,
Dutt sacked the plaintiff.
After being removed from the job, the plaintiff claimed the money from the
defendant and the latter denied to pay the said remuneration. As a result the
plaintiff Lalman Shukla filed a case against Gauri Dutt, his master, for not
rewarding him as he was entitled to.

Issues Raised In This Case:

The main issues which were raised in this case were as follows:
~Whether Lalman Shukla was entitled to get the reward from Gauri Dutt for
tracing the missing boy.
~Whether there was a valid acceptance of the offer made by the plaintiff.
~Whether there exists a contract or whether the situation amounts to a
contract between the two.
 Arguments On Behalf Of The Plaintiff
(Lalman Shukla)
The plaintiff Lalman Shukla strongly affirmed that the very performance of
him finding the missing boy was sufficient enough for him to be entitled to the
reward. Since according to Gauri Dutt’s condition whoever found the lost boy
and brought him back would get the reward. Therefore, as per the condition of
the defendant, the plaintiff had traced the boy and brought him back.
He stated that it is not important to have prior knowledge about the reward,
especially under this circumstance. He also emphasized the fact that section 8
of the ICA 1872, states that The performance of the act or the acceptance
of any consideration of a proposal is an acceptance of the proposal’.

And in this present case, the condition as stated by the defendant Gauri Dutt
was to find the missing child to be rewarded Rs 501.
He stated that it was immaterial that the person who has performed the act
must have the knowledge of the condition to claim the reward.
 Arguments On Behalf Of The Respondent
The defendant asserted and strongly argued that the plaintiff Lalman Shukla
was not aware of the offer and had no knowledge about it before finding the
defendant’s nephew.
So an offer without the knowledge of the offeree or the promise cannot be
accepted and also there was no such possibility for the plaintiff to accept the
offer without even knowing about it.
Gauri Dutt argued that according to section 2(a) of the Indian Contract Act,
1872,
“When one person signifies to another his willingness to do or to abstain from
doing anything, with a view to obtaining the assent of that other to such act or
abstinence, he is said to make a proposal”.
Further under section 2(b),
“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”
Therefore, the defendant contended that assent was essential to create a
contract between both parties. This means that before accepting the offer the
offeree must have complete knowledge about the facts to give assent or
approval. But in this particular case, the plaintiff was completely unaware of
the reward which was associated with it and the plaintiff was merely doing his
duty.
Therefore, according to section 2(h) of the ICA, since there was no acceptance
there was no agreement that can be enforceable by law.
So according to the defendant Gauri Dutt, Lalman Shukla was not entitled to
get the reward and hence he couldn’t claim it.

Ratio Decidendi:-
In the present case of Lalman Shukla vs Gauri Dutt, it is derived that in order
to enter into a contract, two critical aspects should be considered,
1. To have complete knowledge of the facts of the offer or proposal
2. Acceptance of the offer
A person to whom the offer is made, the offeree, must accept the proposal.
The communication regarding the offer is also very important as mentioned in
section (4) of the ICA. It states that communication can only be complete when
it comes to the knowledge of the person to whom it is made.

To convert a proposal into an agreement both knowledge and assent must be

present. Here, in the given instance, both were missing.

As the plaintiff had no knowledge and hadn’t given his approval or accepted the
proposal there did not exist a valid contract between the two.

At the time when the plaintiff was searching for the boy, his obligations and
duties were as a servant. Therefore the plaintiff Lalman Shukla was not
entitled to get the award.
 The Judgement
In the said case, the petitioners’ appeal against the respondent Gauri Dutt was
dismissed by the court.

After analyzing all the facts of the case, the honourable high court held that
for creating or entering into a valid contract there has to be knowledge and
assent to the offeree made by the proposer.

Here, the plaintiff did not know the reward before performing his act. He only
came to know about it later, in which case there was no possibility of accepting
the offer.
Hence, there was no contract. Therefore, Lalman Shukla was not entitled to get
or claim the reward.
The judge reiterated that the plaintiff was fulfilling his obligations as a
servant of tracing the missing boy which was a part of his duty. Therefore, the
plaintiff’s suit against the defendant was completely dismissed by the court.
 In the End
The case between the plaintiff Lalman Shukla and the defendant Gauri Dutt
examined the validity of the contract in the absence of prior acceptance.
According to the judgement given by the Allahabad high court, a contract
without acceptance is void.

Therefore, despite his services, the plaintiff Lalman Shukla was not entitled to
get the reward as the mere performance of the act does not mean an assertion
to the contract. Additionally, to turn an agreement into a proposal, it has to be
enforceable by law. And lastly, the communication of the proposals means that
the person to whom the offer or the proposal is made must come to the
knowledge of the acceptor before accepting the proposal.
Thank
You!