BLS LLB 5 Years Sem 5 Contract I 2024-25 - ATKT 75/25 Question Paper with Solutions

Strictly, the Indian Contract Act, 1872, does not use the expression "void contract", and the answer should say so, because a contract is by definition enforceable (Section 2(h)). The Act uses two related expressions.

Section 2(g). Void agreement. "An agreement not enforceable by law is said to be void." Such an agreement is a nullity from the beginning, void ab initio. It creates no rights and no obligations, and no suit lies upon it. An agreement by a minor, or one in restraint of trade, is of this kind.

Section 2(j). Contract which becomes void. "A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable." Here a valid contract existed and something later destroyed its enforceability, as under Section 56 when performance becomes impossible or unlawful.

The expression "void contract" in ordinary usage means the second of these.

Section 2(d) of the Indian Contract Act, 1872: "When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise."

In Currie v. Misa (1875) it was defined as "some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other". It is the price for which the promise of the other is bought.

Section 25 makes it essential: "an agreement made without consideration is void", subject to the exceptions in that section.

• when the lawful charges of the finder, in respect of the thing found, amount to two thirds of its value.

1. Right to possession against the whole world except the true owner. Armory v. Delamirie (1722): a chimney sweep's boy who found a jewel and handed it to a goldsmith for valuation was held entitled to recover it, or its full value, from the goldsmith, because the finder's title is good against everyone but the rightful owner.

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."

The maker is the promisor or offeror; the person to whom it is made is the promisee or offeree (Section 2(c)). A proposal, when accepted, becomes a promise (Section 2(b)).

Its essentials are that it must be communicated (Section 4), must be made with a view to obtaining assent, must intend to create legal relations, and must be certain in its terms (Section 29).

Section 13 first defines consent: "Two or more persons are said to consent when they agree upon the same thing in the same sense", that is consensus ad idem.

Section 14. Free consent. "Consent is said to be free when it is not caused by:

1. coercion, as defined in Section 15;
2. undue influence, as defined in Section 16;
3. fraud, as defined in Section 17;
4. misrepresentation, as defined in Section 18;
5. mistake, subject to the provisions of Sections 20, 21 and 22.

Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation or mistake."

Free consent is one of the essentials of a valid contract under Section 10.

For full marks, cover: all six modes with their sections, and finish with the remedies that follow a breach.

Discharge of a contract means the termination of the contractual relation, so that the parties are freed from the obligations they undertook. There are six modes.

1. By performance (Sections 37 to 61). Section 37 requires the parties to perform, or offer to perform, their promises. Section 38 deals with attempted performance or tender: a promisor who offers to perform and is refused is not responsible for non performance and does not lose his rights. The tender must be unconditional, at a proper time and place, of the whole of what is due, with an opportunity to see that he is able and willing, and to inspect goods. Sections 42 to 45 govern joint promises, 46 to 50 time and place, 55 time as the essence, and 59 to 61 appropriation of payments.

2. By mutual agreement (Sections 62 to 67). Novation, rescission and alteration under Section 62; remission under Section 63, for which no consideration is required in India; waiver; merger; and Section 67, which excuses a promisor whom the promisee has not afforded reasonable facilities for performance.

6. By breach (Sections 39, 73 to 75). Actual breach, at or during the time for performance, and anticipatory breach, before it, by repudiation or by disabling oneself. Section 39 entitles the promisee to put an end to the contract where the other has refused to perform, or disabled himself from performing, in entirety, unless he has acquiesced in its continuance. Hochster v. De La Tour (1853) allows an immediate suit.

Remedies for breach: rescission with compensation under Section 75; damages under Sections 73 and 74; quantum meruit; and specific performance or injunction under the Specific Relief Act, 1963.

Explanation. Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless (a) the circumstances are such that it is the duty of the person keeping silence to speak, or (b) his silence is, in itself, equivalent to speech.

A duty to speak arises in contracts uberrimae fidei, that is of the utmost good faith, such as insurance, family settlements and contracts of guarantee; in fiduciary relationships; where a statement is a half truth; and where circumstances change after a true statement was made (With v. O'Flanagan, 1936). Section 55(1)(a) of the Transfer of Property Act, 1882, imposes such a duty on a seller of immovable property as to material defects in the property or title known to him.

Misrepresentation, Section 18

"Misrepresentation means and includes:

1. the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true;

For full marks, cover: Section 13, the objective test, what destroys agreement under Sections 20 to 22, the contrast with free consent, and the consequence.

Consensus ad idem means "agreement upon the same thing". Section 13 of the Indian Contract Act, 1872: "Two or more persons are said to consent when they agree upon the same thing in the same sense."

Consent is an essential of a valid contract under Section 10, and it is logically prior to every other essential: if the parties never agreed on the same thing, there is nothing to test for free consent, consideration or legality.

What is required

1. Identity of the subject matter: both parties must have the same thing in mind.
2. Identity of sense: they must understand it in the same sense, not merely use the same words.

• Section 21. A mistake as to a law in force in India does not make a contract voidable; a mistake as to a foreign law has the same effect as a mistake of fact.
• Section 22. "A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact." A unilateral mistake is the mistaken party's own misfortune.
• An erroneous opinion as to value.

Consequence

Where there is no consensus ad idem the agreement is void, not voidable. Section 65 requires restoration of any advantage received, and Section 72 allows recovery of money paid under a mistake.

The one exception in the section: sale of goodwill

"Exception 1. Saving of agreement not to carry on business of which goodwill is sold. One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business."

Three conditions must be satisfied: the sale must be of the goodwill; the restraint must be on a similar business within specified local limits; and those limits must appear reasonable to the court. This is the only place in Section 27 where reasonableness enters.

Statutory exceptions under the Indian Partnership Act, 1932

• Section 11(2): partners may agree that a partner shall not carry on any business other than that of the firm while he is a partner.

3. Restraints operating during employment are valid. Niranjan Shankar Golikari v. The Century Spinning and Manufacturing Co. Ltd. (1967 SC): a negative covenant restraining an employee from serving a competitor during the term of his employment is not in restraint of trade, because the employee is bound to serve his employer exclusively during that period.
4. Restraints operating after employment are void. Superintendence Company of India (P) Ltd. v. Krishan Murgai (1980 SC); Percept D'Mark (India) Pvt. Ltd. v. Zaheer Khan (2006 SC), where the Supreme Court held that a negative covenant operating after the term of the contract is hit by Section 27.
5. Protection of confidential information and trade secrets survives the employment, because preventing the misuse of confidential information is not a restraint on exercising a trade.

Section 22: "A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact."

Section 20, which makes an agreement void, requires that both parties be mistaken as to a matter of fact essential to the agreement. Here only A is mistaken; B knows perfectly well that the pearls are imitation. There is therefore no bilateral mistake, and Section 20 does not apply.

Step 2. B's silence is not fraud.

The Explanation to Section 17 states the general rule: "Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud." There are only two exceptions: (a) where it is the duty of the person keeping silence to speak, and (b) where his silence is in itself equivalent to speech.

On the facts as given, neither exception applies:

• A sale of goods between ordinary parties is not a contract uberrimae fidei. The rule is caveat emptor, let the buyer beware, and the seller is under no general duty to point out that the buyer has overestimated the quality of the goods.

• if the buyer's mistake was merely as to a quality or attribute of the goods, that is that he assumed they were old, the contract stands, even if the seller knew of the mistake and said nothing; but
• if the buyer believed the seller was promising that the oats were old, that is a mistake as to the terms of the contract, and the seller knew it, then there is no contract, because there was no agreement on the same terms.

Applying that to the necklace: A's mistake is about a quality of the goods, that the pearls are real, and not about what B was undertaking. So A is bound.

The qualification that must be stated

The answer would change if A believed that B was contracting to sell a necklace of real pearls, and B knew that this was A's understanding of the bargain. That is a mistake as to the terms, not the quality, and a party may not snap up an offer he knows to be mistaken.

For full marks, cover: the definition of specific performance and the change made in 2018, then Section 14(d) on determinable contracts, the definition of a partnership at will in Section 7 of the Partnership Act, and the conclusion, with the remedies that remain.

(a) What is specific performance of contract?

Specific performance is an equitable remedy by which the court directs a party to a contract to perform it according to its terms, instead of leaving the aggrieved party to a claim for damages. It is governed by Chapter II of the Specific Relief Act, 1963.

Its justification is that damages are not always an adequate substitute. Money will buy another consignment of wheat; it will not buy the particular plot of land or the particular painting.

The facts state that "the duration of Partnership is not specified in that contract". It is therefore a partnership at will.

Step 2. A partnership at will can be dissolved at any moment.

Section 43 of the Partnership Act: "Where the partnership is at will, the firm may be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm."

So even if the court compelled A and B to become partners today, either of them could dissolve the firm tomorrow by a written notice, and the decree would be worthless.

Step 3. Section 14(d) of the Specific Relief Act.

As substituted in 2018, Section 14 provides that the following contracts cannot be specifically enforced: "... (d) a contract which is in its nature determinable."

A partnership of unspecified duration is the standard illustration of a determinable contract, and it was the express illustration to the old Section 14(1)(c) before the amendment. The court will not decree what may lawfully be undone the next day.

Step 4. A second, independent ground: Section 14(c).

3. Where the agreement contained a negative stipulation, an injunction under Section 42 of the Specific Relief Act, even though the affirmative agreement cannot be enforced.
4. Nothing prevents the parties from performing voluntarily; the bar is on the court compelling them.

A contrast worth adding. Had the contract specified a duration, the position would still be difficult under Sections 14(b) and 14(c), but the determinability objection would fall away, and the English cases have granted specific performance of an agreement to execute a partnership deed for a fixed term where the parties had already begun to act on it (England v. Curling, 1844). The determinable point is therefore the decisive one on these facts, which is exactly why the examiner specified that the duration was not stated.

2. It must be expressed in some usual and reasonable manner, unless the proposal prescribes a manner. Section 7(2).
3. It must be communicated to the proposer. A mental resolve is not acceptance. Sections 3 and 4.
4. Silence is not acceptance: Felthouse v. Bindley (1862).
5. It must be given by the person to whom the proposal was made, unless the offer is general.
6. It must be given while the proposal subsists, before it lapses or is revoked under Section 6.
7. The acceptor must have knowledge of the proposal. Under Section 4, the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
8. Acceptance may be by performing the conditions of the proposal. Section 8: "Performance of the conditions of a proposal ... is an acceptance of the proposal." This is how a general offer is accepted.

Anson's image captures the effect: "Acceptance is to a proposal what a lighted match is to a train of gunpowder. It produces something which cannot be recalled or undone."

Held. The suit was dismissed. There can be no acceptance without knowledge of the offer, so no contract came into existence. The court added a second ground, that the plaintiff, being a servant already sent to search, was under a pre existing obligation, and performance of an existing duty is no consideration.

Step 4. Applying it. B acted "without the knowledge of the above reward". There was therefore no acceptance, no agreement and no contract, and his later discovery of the offer cannot work backwards to convert a completed act into an acceptance. A is under no contractual liability.

The one route by which B might still recover

Section 25(2) provides that an agreement made without consideration is not void if it is "a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor". So if A now promises to pay B, that promise is enforceable without any fresh consideration and without writing, because B's act was voluntary and was done for A.

For full marks, cover: that this is a valid contingent contract and not a wager, Sections 31 and 32, then the remedies against each party in turn, with Section 73 for damages and Sections 10 and 14 of the Specific Relief Act read with Section 8 for a decree for the horse itself.

The nature of the agreement

This is a valid contingent contract, not a wagering agreement.

Section 31 of the Indian Contract Act, 1872: "A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen."

Here the sale of the horse is certain; only the price depends on the result of the race. The event, the horse winning, is collateral to the contract of sale, and the contract is contingent as to the amount payable.

1. The contract is enforceable. The contingency has occurred, so under Section 32 the obligation has crystallised: A must deliver the horse and B must pay Rs. 80,000.
2. B's refusal is a breach, and if it amounts to a refusal to perform in entirety, Section 39 entitles A to put an end to the contract.
3. A's remedies:

• Damages under Section 73, being the loss which naturally arose in the usual course of things. For a wrongful refusal to accept and pay for goods, the measure is the difference between the contract price and the market price at the time of the breach, that is between Rs. 80,000 and whatever the horse is then worth. If the market price equals or exceeds Rs. 80,000, A has suffered no loss and will recover only nominal damages.
• A suit for the price, where the property in the horse has already passed to B, under Section 55 of the Sale of Goods Act, 1930.
• Compensation on rescission under Section 75, if A rightfully rescinds.
• A must mitigate his loss, under the Explanation to Section 73, by taking reasonable steps to sell the horse elsewhere.

• A decree for delivery of the horse itself under Section 8 of the Specific Relief Act, which allows a person entitled to the immediate possession of a particular article of movable property to compel its specific delivery where compensation in money would not afford adequate relief, or where it would be extremely difficult to ascertain the actual damage. The Explanation presumes that money is not adequate relief for an article having a special value to the plaintiff.
• A winning racehorse is a strong candidate for special value, since it is not an ordinary article of commerce and no equivalent can simply be bought. That is the argument B should make.
• Section 21 allows B to claim compensation in addition to, or in substitution for, specific performance, provided he claims it in the plaint.

1. B must be able to prove readiness and willingness to pay the Rs. 80,000 under Section 16(c), and must aver it in his plaint.

Advice in short

• A should tender the horse, and on B's refusal, sell it in the market and sue for the shortfall under Section 73.

"Such compensation is not to be given for any remote and indirect loss or damage sustained by reason of the breach." The Explanation requires the court to take into account the means which existed of remedying the inconvenience caused, which is the statutory form of the duty to mitigate.

This codifies Hadley v. Baxendale (1854), which laid down the two rules: ordinary damages, arising naturally, and special damages, arising from special circumstances communicated to the defendant.

1. Nominal damages

Nominal damages are a small token sum awarded where the plaintiff proves a breach of his legal right but no actual loss. The award vindicates the right rather than compensating a loss. The maxim is injuria sine damno, legal injury without actual damage.

When awarded:

• where a buyer wrongfully refuses to take delivery but the market price has risen, so the seller can sell elsewhere at a profit and has lost nothing;

Hadley v. Baxendale (1854). The crankshaft of the plaintiffs' mill broke, and the defendants, carriers, delayed its delivery to the makers. The mill stood idle throughout the delay. The plaintiffs claimed their lost profits. Held, the loss was not recoverable: the carriers had not been told that the mill was stopped for want of the shaft, so the loss did not arise naturally and was not within their contemplation. Two rules were laid down: damages should be such as may fairly and reasonably be considered as arising naturally from the breach, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of its breach.

Victoria Laundry (Windsor) Ltd. v. Newman Industries Ltd. (1949). A boiler was delivered five months late to a laundry. The laundry recovered its ordinary loss of profit, which the sellers knew it would suffer, but not the very large profits it would have made on certain exceptionally lucrative dyeing contracts with the Ministry of Supply, of which the sellers knew nothing.

Karsandas H. Thacker v. Saran Engineering Co. Ltd. (1965 SC) applies the same reasoning in India, refusing damages for a loss the defendant did not know of.

2. Wrongful dishonour of a cheque by a banker where the customer has sufficient funds in his account. The injury is to the customer's credit and reputation. The settled rule is that the damages are inversely proportionate to the amount of the cheque: the smaller the cheque wrongfully dishonoured, the greater the damage to the customer's credit, because the dishonour of a small cheque suggests that the customer cannot meet even a trifling obligation. The rule applies with greater force to a trader than to a non trader, who must prove his loss.

Cases: Marzetti v. Williams (1830); Davidson v. Barclays Bank Ltd. (1940); and in India Bank of Bihar v. Damodar Prasad and the line of banking cases following Marzetti.

Note the departure from ordinary principle. In both exceptions the real injury is to reputation or feelings, so the claim behaves more like a claim in tort than in contract, which is precisely why they stand outside the general rule.

The Indian position is distinctive, and this is the point the examiner is testing. Section 74 abolishes the English distinction between liquidated damages and a penalty. Whatever the clause is called, the court awards only reasonable compensation, and the named sum is a ceiling, not an entitlement.

The cases:

• Fateh Chand v. Balkishan Das (1963 SC): the Supreme Court held that Section 74 is a departure from the common law, that the court is not bound to award the sum named, and that the aggrieved party is entitled only to reasonable compensation not exceeding it. Forfeiture of earnest money beyond a reasonable amount was disallowed.
• Maula Bux v. Union of India (1969 SC): where the loss can be proved, the party must prove it; Section 74 dispenses with proof of the precise amount only where the loss is of a kind that cannot be measured. Forfeiture of a reasonable amount as earnest money is permissible, but forfeiture of a large security deposit was held to be a penalty.

For full marks, cover: Sections 2(h) and 10, then each essential as a heading with its sections and cases: offer and acceptance, intention to create legal relations, lawful consideration, capacity, free consent, lawful object, agreements not expressly declared void, certainty and possibility, and legal formalities.

The foundation

Section 2(h): "An agreement enforceable by law is a contract." Section 2(e): "Every promise and every set of promises, forming the consideration for each other, is an agreement."

So Agreement + Enforceability at law = Contract. As Anson put it, all contracts are agreements, but all agreements are not contracts.

• A general offer is accepted by performing its conditions (Section 8): Carlill v. Carbolic Smoke Ball Co. (1893).
• An invitation to offer is not a proposal: Harvey v. Facey (1893); Pharmaceutical Society of Great Britain v. Boots Cash Chemists (1953).

2. Intention to create legal relations

Though not stated in the Act, the courts require that the parties intended legal consequences.

• Social, domestic and family arrangements are presumed not to be intended to create legal relations: Balfour v. Balfour (1919).
• The presumption is rebuttable: Merritt v. Merritt (1970), where a written agreement made after separation was enforceable.
• Commercial agreements are presumed to be intended to create legal relations, and the burden of displacing the presumption is on the party denying it: Rose and Frank Co. v. J.R. Crompton and Bros. Ltd. (1925).

3. Lawful consideration

• Section 2(d) defines it; Section 25 provides that an agreement without consideration is void.

• Minor: an agreement by a minor is void ab initio: Mohori Bibee v. Dharmodas Ghose (1903 PC). No ratification (Suraj Narain v. Sukhu Aheer, 1928), no estoppel, but restitution of traceable property may be ordered, and Section 68 makes the estate liable for necessaries.
• Sound mind, Section 12: capable, at the time of contracting, of understanding the contract and forming a rational judgment as to its effect upon his interests.
• Disqualified persons: alien enemies, foreign sovereigns and diplomats, convicts, insolvents, and corporations acting ultra vires.

5. Free consent

Section 13: consensus ad idem, agreeing upon the same thing in the same sense. Section 14: consent is free when not caused by coercion (15), undue influence (16), fraud (17), misrepresentation (18) or mistake (20 to 22).

• Coercion: Chikham Amiraju v. Chikham Seshamma (1912 Mad), threat of suicide; Ranganayakamma v. Alwar Setti (1889 Mad).
• Undue influence: Mannu Singh v. Umadat Pande (1890 All); Subhas Chandra Das Mushib v. Ganga Prasad Das Mushib (1967 SC). Section 16(3) shifts the burden of proof where the transaction is unconscionable.

7. Agreements not expressly declared void

Sections 26 to 30, 36 and 56 declare void agreements in restraint of marriage (26), in restraint of trade (27), in restraint of legal proceedings (28), those that are uncertain (29), those by way of wager (30), those contingent on an impossible event (36), and those to do an act impossible in itself (56).

• Madhub Chunder v. Rajcoomar Doss (1874 Cal) on restraint of trade; Gherulal Parakh v. Mahadeodas Maiya (1959 SC) on wagers being void but not illegal.

8. Certainty and possibility of performance

Section 29: "Agreements, the meaning of which is not certain, or capable of being made certain, are void." Illustration: an agreement to sell "a hundred tons of oil" without saying what kind is void; but if the seller deals only in coconut oil, the nature of his trade makes the meaning certain and the agreement is good. Section 56, first paragraph: an agreement to do an act impossible in itself is void.

For full marks, cover: Section 31 with its three essentials and illustration, then Sections 32 to 36 in order with the Act's own illustrations, then the comparison with a wagering agreement, and close with the practical examples of insurance, indemnity and guarantee.

Definition

Section 31 of the Indian Contract Act, 1872: "A contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen."

Illustration: A contracts to pay B Rs. 10,000 if B's house is burnt. This is a contingent contract.

Essentials:

1. The performance depends on a condition, that is on the happening or non happening of a future event.

Illustrations:

• A makes a contract with B to buy B's horse if A survives C. This contract cannot be enforced by law unless and until C dies in A's lifetime.
• A contracts to pay B a sum of money when B marries C. C dies without being married to B. The contract becomes void.

Section 33. Enforcement of contracts contingent on an event not happening. "Contingent contracts to do or not to do anything if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible, and not before."

Illustration: A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.

Section 34. When an event on which a contract is contingent is to be deemed impossible, if it is the future conduct of a living person. "If the future event on which a contract is contingent is the way in which a person will act at an unspecified time, the event shall be considered to become impossible when such person does anything which renders it impossible that he should so act within any definite time, or otherwise than under further contingencies."

Section 36. Agreements contingent on impossible events void. "Contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made."

Illustrations:

• A agrees to pay B Rs. 1,000 if two straight lines should enclose a space. The agreement is void.
• A agrees to pay B Rs. 1,000 if B will marry A's daughter C. C was dead at the time of the agreement. The agreement is void.

The scheme in one view

Practical instances

• Insurance is the model contingent contract: the insurer pays on the happening of an uncertain event, and the insured has an insurable interest, which is exactly what a wagerer lacks.

For full marks, cover: the four sections in two pairs, that is Sections 5 and 6 for immovable property and Sections 7 and 8 for movable property, each in full, the two comparison tables, and the policy against self help that ties Section 6 together.

Chapter I of Part II of the Specific Relief Act, 1963, deals with the recovery of possession of property, in Sections 5 to 8. The scheme is symmetrical: for each kind of property there is a general remedy and a special one.

Part A. Immovable property

Section 5. Recovery of specific immovable property

"A person entitled to the possession of specific immovable property may recover it in the manner provided by the Code of Civil Procedure, 1908."

Features:

6(4). "Nothing in this section shall bar any person from suing to establish his title to such property and to recover possession thereof."

Features:

• The suit is summary and possessory, not proprietary. The only issues are whether the plaintiff was in possession and whether he was dispossessed otherwise than in due course of law.
• Title is no defence at all, however good the defendant's title may be.
• The possession protected must be settled possession, not the momentary possession of a trespasser.
• Section 6(4) preserves the defeated party's right to sue on title under Section 5, so the two are complementary and not alternatives.

Sections 5 and 6 compared

Explanation 2. A special or temporary right to the present possession of movable property is sufficient to support a suit under this section.

Features:

• The plaintiff need not be the owner. A bailee, pawnee, finder or lessee, having a special or temporary right to possession, may sue, and may sue even the true owner who takes the goods from him before the special right ends.
• The ordinary decree gives the defendant the option of delivering the goods or paying their assessed value.

Section 8. Liability of person in possession, not as owner, to deliver to persons entitled to immediate possession

"Any person having the possession or control of a particular article of movable property, of which he is not the owner, may be compelled specifically to deliver it to the person entitled to its immediate possession, in any of the following cases:

(a) when the thing claimed is held by the defendant as the agent or trustee of the plaintiff;

(b) when compensation in money would not afford the plaintiff adequate relief for the loss of the thing claimed;

Illustrations of Section 8: an idol or family deity, an heirloom, a rare manuscript, a family portrait, title deeds, and shares in a private company not available in the market.

Related provisions

• Section 9. Defences respecting suits for relief based on contract. Except as otherwise provided, where any relief is claimed under Chapter I, the defendant may plead any ground available to him under any law relating to contracts.
• Section 22 of the Act permits a plaintiff suing for specific performance of a contract for the transfer of immovable property to claim possession, or partition and separate possession, in the same suit, provided it is specifically claimed.

For full marks, cover: Sections 36 to 42 in order, the two classifications of injunction, the three tests for a temporary injunction, every clause of Section 41, and close with Section 42.

What preventive relief is

Preventive relief is relief granted by restraining a person from doing what he ought not to do, or by compelling him to undo it. It is the subject of Part III of the Specific Relief Act, 1963, Sections 36 to 42, and it is granted by injunction.

Section 36. Preventive relief how granted. "Preventive relief is granted at the discretion of the court by injunction, temporary or perpetual."

An injunction is an order of a court directing a person to do, or to refrain from doing, a particular act.

The two classifications

By stage. Section 37.

38(2). Where the obligation arises from contract, the court shall be guided by the rules and provisions contained in Chapter II, that is by the law of specific performance.

38(3). Where the defendant invades or threatens to invade the plaintiff's right to, or enjoyment of, property, the court may grant a perpetual injunction where:

• (a) the defendant is trustee of the property for the plaintiff;
• (b) there exists no standard for ascertaining the actual damage caused, or likely to be caused, by the invasion;
• (c) the invasion is such that compensation in money would not afford adequate relief;
• (d) the injunction is necessary to prevent a multiplicity of judicial proceedings.

The Explanation deems a trespass to property occasioning or likely to occasion irreparable injury to be an invasion within clause (c).

• (a) to restrain any person from prosecuting a judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings;
• (b) to restrain any person from instituting or prosecuting any proceeding in a court not subordinate to that from which the injunction is sought;
• (c) to restrain any person from applying to any legislative body;
• (d) to restrain any person from instituting or prosecuting any proceeding in a criminal matter;
• (e) to prevent the breach of a contract the performance of which would not be specifically enforced;
• (f) to prevent, on the ground of nuisance, an act of which it is not reasonably clear that it will be a nuisance;
• (g) to prevent a continuing breach in which the plaintiff has acquiesced;
• (h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding, except in case of breach of trust;

Lumley v. Wagner (1852) is the origin: a singer could not be compelled to sing for the plaintiff, but she was restrained from singing for a rival. In India, Niranjan Shankar Golikari v. The Century Spinning and Manufacturing Co. Ltd. (1967 SC) upheld a negative covenant restraining an employee from serving a competitor during the term of his employment.