Case Commentary: Lalman Shukla v. Gauri Dutt
Lalman Shukla V. Gauri Dutt is touted as a landmark judgment for
the validity of the contract under the Indian Contract Act, of 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 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 his finding the missing boy was
sufficient enough for him to be entitled to the reward. 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 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 know 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, of 1872,
“When one person signifies to
another his willingness to do or to abstain from doing anything, to obtain the
assent of that other to such act or abstinence, he is said to propose”.
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 of 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 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. 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 honorable 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.
Related Cases
The petitioner in presenting
his case had relied upon Gibbons v. Proctor (1891) in the English Contract
Law. In this case, the court held that if any person performs certain
conditions of the contract, even if he is not aware of the reward or he does
not have the knowledge of the reward, he is entitled to get the reward.
The respondent on the other
hand relied on the famous U.S. case Fitch v Snedaker (1868).
In this case, Fitch after
giving the information about the murderer’s identity found out about the reward
and then claimed it. The court in the said case had held,
“The form of action in all such
cases is an assumption. The defendant proceeded against as upon his contract to
pay, and the first question is, was there a contract between the parties? To
the existence of a contract, there must be mutual assent, or, in another form,
offer and consent to the offer. . .without that there is no contract. How,
then, can there be consent or assent to that of which the party has never heard?.
. The offer could only operate upon plaintiffs after they heard of it”
Therefore, Fitch was not entitled to the
reward as he accepted the offer in ignorance. And the person accepting the
offer, the offeree, must have all the information regarding the reward before
claiming for rewards associated with that action.
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 judgment 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.
Case Citations
· Lalman Shukla vs. Gauri Dutt
[1913] 40 ALJ 489
·
Fitch vs. Snedaker [1868] 38 N.Y. 248
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