Lalman Shukla Vs Gauri Dutt – Case Analysis

Introduction

The case of Lalman Shukla Vs Gauri Dutt is a very important case and is considered to be a landmark judgement. This case is referred to in multiple cases that deal with the Law of Contracts. The case examines the element of acceptance in a contract and that if there is no acceptance, the contract will not be valid. The case is related to the validity of a contract. The concept of validity of a contract is discussed in Section 8 of the Indian Contract Act 1872.

Details Of Lalman Shukla Vs Gauri Dutt Case

• Hon’ble Judge – Justice Banerji
• Decided on- 17^Th April 1913
• Parties involved: Plaintiff/Appellant- Lalman Shukla, Defendant/Respondent- Gauri Dutt
• Statutes referred to in the decision of this case- Indian Contract Act, 1872

Facts Of Lalman Shukla Vs Gauri Dutt Case

The defendant’s (Gauri Dutt) nephew went missing and absconded from his wife. On hearing this, Gauri Dutt sent out a few of his servants in order to search for him. The plaintiff (Lalman Shukla) was one of the servants who went out to search for the absconded nephew. The servants were given the money for travelling as well as other expenses. Lalman Shukla travelled to Haridwar from Kanpur to search for the nephew.

While the plaintiff was away, the defendant made an announcement that whomsoever successfully found the missing nephew and brought him back home safely will be awarded a sum of Rs.501 as prize money. However, since this announcement was made when the plaintiff was away, he was not aware of this offer. On finding the nephew and bringing him back home, the defendant gave the plaintiff two sovereigns and an amount of Rs.2 on his return. The plaintiff was satisfied and did not demand anything more.

Roughly about six months later, the defendant fired the plaintiff and dismissed him from his service. In response to this act, the plaintiff asked for the reward money i.e., the Rs.501 which he thought belonged to him as he brought back home the missing nephew. Hence, Lalman Shukla filed a case against Gauri Dutt to claim the money.

Issues Involved in Lalman Shukla Vs Gauri Dutt Case

The following issues are raised in Lalman Shukla Vs Gauri Dutt case-

1. Whether Lalman Shukla was entitled to receive the reward money?
2. Whether there was the element of acceptance between the defendant and the plaintiff?
3. Whether the situation is considered to be a contract and if there existed a contractual relation between the two?
4. Whether the decision given by the lower court is valid?

Judgment of Lalman Shukla Vs Gauri Dutt

In Lalman Shukla Vs Gauri Dutt case, Hon’ble Justice Banerji dismissed the appeal and gave the verdict that Gauri Dutt was not liable. The judge after analysing the facts of this case, said that in order for a contract to exist and for a contractual relationship to be present, there must be two important elements. The elements are Offer and Acceptance. In the case of Lalman Shukla vs Gauri Dutt, both offer and acceptance were not present. When the offer was made, the plaintiff was neither present nor did he know about the announcement. Henceforth, according to the Indian Contract Act 1872, the plaintiff was not entitled to get the reward money for bringing the absconded nephew back home. The Allahabad high court agreed to the decision of the lower court and did not overrule the judgement.

Analysis of the Lalman Shukla Vs Gauri Dutt Case Judgment

The case of Lalman Shukla vs Gauri Dutt was solely based on the Indian Contract Act ,1872. It discussed various concepts that comes under the Act.

The plaintiff argued that he had performed the task which was assigned to him efficiently and that he should be rewarded for that. The plaintiff argued that performing his part was the essential element in order to claim the Rs.501 and that he did not have to know about the announcement for the contract to exist. There were two landmark case judgements which were in favour of the plaintiff. The first case was Gibbons V. Proctor. In this case, the Superintendent of Police announced that anyone who gave him valid information about the whereabouts of a criminal will be rewarded. A police officer who was in search of this criminal, he did not know about this reward but nevertheless provided some useful information on the whereabouts of the criminal. He then came to know about the reward which was offered and thus claimed it. This case set a precedent and went down as a landmark judgement as this proved that an offer can be accepted even when one of the parties is not aware of it.

The second case law which was in favour of Lalman Shukla was Williams v. Crawardine. This case was similar to Gibbons v. Proctor and re-established the fact that the knowledge of an offer is not necessary for its acceptance.

Lalman Shukla, the plaintiff referred to Section 8 of the Indian Contract Act 1872 which states that – “Acceptance by performing conditions, or receiving consideration. —Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal. —Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.”. This necessarily means that if one part of the contract performs his/her part of the contract then it automatically means that the offer is accepted.

However, Gauri Dutt, the defendant claimed the opposite. If the plaintiff was not even aware of the offer in the first place, there can be no acceptance and thus there won’t be a legally binding contract as well. The plaintiff was away from town when the reward was announced therefore there was no way he was even aware of the offer. The case law which was used by the defendant was, Fitch v. Snedekar. In this case, the facts are very similar to that of Gibbons v. Proctor, however the court said that the plaintiff could not claim the reward as there was no element of knowledge of the offer as well as acceptance of the offer from his side. Therefore, the contract is non-existent.

The final judgement was however in favour of Gauri Dutt, the defendant as he did not have to pay the reward to the plaintiff which is a fair judgement.

Elements Of A Contract

There are some major elements that are a part of the Indian Contract Act 1872 of the Indian constitution. The contract will be considered valid and not void only if it contains the following elements:-

The offer

An offer is a promise that is to be upheld. This is only if both the parties agree to the terms and conditions of the offer. The offer is generally also termed a proposal since it is considered to be an invitation from one party to another. The parties will then enter into a contract by mutually agreeing and accepting the offer. An ‘offerer’ is the term to refer to the person who made the offer and the ‘offeree’ is the other party who is receiving the offer. The offer must be communicated, it must be to obtain something in return, it should contain a statement that expresses an intention and there must be no ambiguities.

Acceptance

Acceptance refers to the unconditional agreement to the terms of an offer. This may be in the form of writing or can even be oral. This solely depends on the nature of the contract. There must be unconditional acceptance, it should be communicated and intentional.

Consideration

Consideration is the act of exchanging something valuable. For example, when you buy a product at the store in exchange for money. The money and the product being exchanged here is the consideration.  The consideration may not always be monetary, it can also be rights, responsibilities and promises. Some contracts can even be unilateral where the consideration can be just the performance of one party.

Legal capacity

This refers to an individual’s ability to abide and act under the eyes of the law. It is important for both the parties to be legally and financially capable in order to enter into the contract. Any person above the age of 18 is considered to be legally capable to enter into a contract.

There are certain exceptions when it comes to parties entering a contract. The law does not allow some people from getting into contracts. Some of them include;

1. Children below the age of 18
2. Mentally ill people
3. Under the influence of alcohol, drugs or other intoxicants
4. People who are not aware of the language used in the contract

Meeting of the Minds

Both parties must mutually consent to the terms of the contract so as to avoid any kind of complications in the future. The parties must be completely aware of the duties and obligations that they are expected to fulfil.

Reasons Why A Contract Can Be Void

A contract can be void for the following reasons –

1. Coercion/Duress
2. Undue influence
3. Mistakes
4. Unconsciousness
5. Force Majeure
6. Fraud
7. Misrepresentation

Opinion On The Judgement

The judgement given by Hon’ble Justice Banerji is indeed the right judgement in my opinion and has helped in laying down the basic fundamentals of a contract. The judgement was celebrated as it clarified and explained what is an acceptance in a contract and how important it is in order for a contract to be valid. The offer given to Lalman Shukla and the other servants was a general offer and thus for a contract to exist under these circumstances, there should be knowledge of the offer as well as acceptance of the offer. These two elements were not present in this situation; thus, the contract is said to be void. This judgement has helped one understand the Law of Contracts according to the Indian Constitution. It has once again made it clear that, for an offer to be considered or even accepted there must be both knowledge as well as acceptance.