Coercion under section 15 of Indian Contract Act

Coercion under section 15 of Indian Contract Act

Introduction

Section 10 of the Indian Contract act 1872 specifies the essentials needed for a valid contract. One of the essentials is that parties should enter into a contract with their free consent. Section 14 of the Indian Contract act says that consent is said to be free when it is not caused by Coercion, Undue Influence, Fraud, Misrepresentation or mistake. So if the consent has been caused by these mentioned factors, then the contract formed is not the valid one.

In this article, only Coercion under section 15 of Indian contract act has been discussed in detail.

Meaning of Coercion

Coercion has been defined in Section 15 of the Indian contract act, “Coercion is the committing or threatening to commit, any act forbidden by Indian Penal Code, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.”

We can analyse from this section that coercion is said to have taken place where the consent has been caused either by:

  1. Committing, or threatening to commit any act forbidden by IPC; or by
  2. Unlawful (illegal) detaining or threatening to detain any property.

Such an act should be to the prejudice of any person whatever. Now each of the situations has been discussed in detail.

Act forbidden by Indian Penal Code (IPC)

It has been already explained above that if a person commits or threatens to commit any act forbidden by IPC with a view of obtaining consent of the other party to an agreement, then it will deemed that such consent has been obtained from coercion. For example, X threatens to stab Y if Y does not agree to sell his car to X. Here Y’s consent is not free and has been obtained by coercion.

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In order to constitute an act under coercion it is not necessary that the Indian Penal code should be applicable at the place where the consent has been so caused. This can be clearly understood by reading explanation to section 15 which says, “It is immaterial whether the Indian Penal Code is or is not in force in the place where coercion is employed.”

There is an interesting case of Chikkan Ammiraju v. Chiikkan Seshamma. The question before the Madras High Court was that whether threat to commit a suicide will come under coercion. It was held by Wallis, C.J. and Seshagiri Ayyar, J. that threat to commit a suicide comes under the meaning of Coercion. Whereas Oilfield, J., dissented he was of the view that threat to commit suicide is an act not forbidden by Indian Penal Code only attempt to commit suicide is punishable under section 309 of Indian Penal Code.

Unlawful detaining of Property

Section 15 clearly states that coercion can also be caused by unlawful detaining or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. For example, if an outgoing agent refuses to give account books to the new agent until and unless the principal executes release in his favor, this amounts to coercion (Muthiah Chettiar v Karupan Chetti, ILR. (1927) Mad. 786). Whereas it is clear that if the detention of property is lawful then it is not coercion under this section.

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Prejudice of Person

In order to constitute coercion under section 15 of Indian Contract act 1872 it is not necessary that it should be directed towards the contracting party. If the act is within the prejudice of any party contract with an intention to cause that party enter into an agreement, it is enough to come under concept of Coercion.  For example, X unlawfully detained Y’s daughter Z in order to coerce Y to sell his property, the case here formed will be covered under section 15 of the Indian Contract act.

It is also not at all necessary that wrongful act causing coercion should proceed from the party to the contract. This was held in the case of Ranganayakamma v Alwar Seth.

Is threat to strike Coercion?

This question arose in the case of Workmen of Appin Tea estate v Industrial Tribunal. In this case workers demand of bonus was accepted after they threatened to strike. The question which was placed here was that whether the decision between Union Workers and Indian Tea association could be declared void on the grounds of Coercion under section 15 of Indian Contact act. It was held that such threat does not come under threat to commit an offence under IPC nor it is detaining or threatening to detain any property.

Hence, it was concluded that Threat to strike is no coercion.

Similarly, statutory compulsion is also no coercion.

“Duress” under English Law

Duress under common law consists in actual violence or threat of violence to a person. It basically includes only fear of loss or bodily harm including imprisonment, but not a threat of damage to goods (Atlee v Backhouse).

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Duress versus Coercion

  • In India coercion means committing or threatening to commit an act forbidden by Indian Penal Code. Whereas Duress under Common Law refers to actual violence done or threatening to do the violence. As in India coercion is confined to the acts forbidden by Indian Penal Code, In England this is not so.
  • In India coercion maybe arrowed against a person or his/her property. It means Coercion can be there by detaining or threatening to detain any Property. Whereas in England Duress will only be constituted by acts or threats against the person of a man not against his property.
  • In India, Coercion may proceed from a person who is not even a party to the contract. It may also be directed against a person who is not a party to a contract (stranger) to a contract. Coming on to England, Duress should proceed only from the party to contract and should also be directed towards party to the contract himself, or his wife, parent child, or any near relative.

Conclusion

It has been a very well established fact that In order to make any valid contract, it is necessary that there should be no coercion applied. Coercion has been clearly defined in Section 15 of the Indian Contract act. There are certain case laws describing this section more efficiently. Coming on to the common law we have got “Duress” which sounds quite similar to “Coercion.” In spite of some similarity there are certain differences.

Author: Dheeraj Diwakar,
Dr. Ram Manohar Lohia National Law University, Lucknow 1st year

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