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1913 Supreme(SC) 3
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD SHAW OF DUNFEMLINE, LORD MOULTON, SIR JOHN EDGE, AND MR. AMEER ALI.
SETH KANHAYA LAL - Appellant
Versus
THE NATIONAL BANK OF INDIA, LIMITED - Respondents
On Appeal from the Chief Court of the Punjab.
Decided On : February 6, 7, 25, 1913.
Solicitors for appellant: T. L. Wilson & Co.
Solicitors for respondents: Sanderson, Adkin, Lee & Eddis.
Coercion under Section 72 of the Indian Contract Act is used in its ordinary sense and is not limited by the definition in Section 15, which applies only to the formation of contracts. Payment made under protest to stop wrongful property interference is involuntary and recoverable.
Headnote:(A) Indian Contract Act, 1872 - Section 72 - Recovery of money paid under coercion - Meaning of "coercion" - Not limited to the definition in Section 15. Section 15 applies to "free consent" in the formation of contracts, whereas Section 72 deals with the repayment of money paid under coercion in its general and ordinary sense. (Paras 34-38)
(B) Civil Procedure Code, 1882 - Section 278 - Remedy for wrongful attachment - Availability of a statutory remedy is permissive and does not preclude a suit for recovery of money paid under protest to stop wrongful interference with property. (Para 32)
(C) Voluntary vs. Involuntary Payment - Payment made under protest to prevent wrongful interference with property is not voluntary, even if other legal remedies are available. The wrongdoer cannot dictate which remedy the injured party should have pursued. (Paras 28-30)
Facts of the case:
The owner of certain mills and machinery had the property wrongfully attached and possessed by a party seeking to satisfy a money decree against a third party. To stop the interference and regain possession, the owner paid the balance of the decree under protest and subsequently filed a suit for the recovery of the money and damages.
Findings of Court:
The payment was involuntary and produced by coercion, specifically the wrongful interference with the owner's enjoyment of property. The court found that the definition of coercion in Section 15 of the Indian Contract Act is restricted to the context of entering into an agreement and does not apply to the general use of the word "coercion" in Section 72.
Issues: Whether the term "coercion" in Section 72 of the Indian Contract Act is limited by the definition in Section 15, and whether payment made under protest to end a wrongful attachment is "voluntary" if alternative legal remedies exist.
Ratio Decidendi: Section 15 is part of a chapter on the requisites of a valid contract and defines coercion to determine "free consent." Section 72 is in a different chapter concerning relations resembling contracts and uses "coercion" in its ordinary sense. Wrongful interference with property constitutes coercion, and the existence of other legal alternatives does not make the payment voluntary.
Result: Appeal allowed.
Appeal from a judgment and order of the Chief Court (January 27, 1911) affirming an order of the District Judge, Delhi (November 18, 1902), dismissing the appellants suit.
On August 28, 1902, the appellant, as plaintiff, commenced a suit against the respondents.
By his plaint the appellant alleged that he had since June 25, 1902, been the sole proprietor of certain mills at Sabzi Mandi, Delhi, and of the machinery and other property therein, and that the respondents having obtained a money decree against the Delhi Cotton Mills Company, Limited, obtained warrants of attachment against his said mills, premises, and the property therein, and on August 20, 1902, wrongfully took possession of them thereunder, to obtain satisfaction for a sum of Rs. 83,005, the balance then unpaid under the said decree.
By paragraphs (4.), (5.), and (7.) of his plaint the appellant alleged substantially as follows—That on August 20, 1902, the respondents manager, accompanied by the bailiff of the Court and several peons, forcibly entered the said premises and dis possessed the appellants servants, and professed to attach all the movable effects and placed the same under lock and key, leaving certain peons in charge thereof; that subsequently the respondents had by their servants forcibly entered the premises; that the appellant was, by reason of these acts of the respondents, practically ousted from his mills and could not work them; that the continuing damage to the appellant was very great, and that, as it was probable that by objection to the attachment under the Civil Procedure Code a considerable period would elapse before he could obtain an order setting aside the attachment, the appellant was compelled on August 27, 1902, to pay to the respondents, under protest, the sum of Rs. 83,005, being the balance due to the respondents under their decree against the said company.
The appellant claimed by his plaint to recover the said Rs. 83,005, and he further claimed Rs. 10,000 as damages. The respondents in reply to this plaint filed preliminary pleas by way of demurrer relating to the claim for the return of the money paid under protest. The first of these pleas was that "the suit as framed will not lie." They also traversed all the facts alleged in relation to the claim for damages.
On these pleadings the District Judge framed certain preliminary issues, which in substance amounted to this question Did the appellants plaint shew any cause of action for the return of the money paid? These issues were argued before the District Judge upon the hypothesis that the facts alleged by the appellant in his plaint were true.
The District Judge on November 18, 1902, delivered judgment upon the preliminary issues. He held that no action could lie under s. 72 of the Indian Contract Act unless the facts alleged amounted to " coercion " within the definition in s. 15 of that Act, and that they did not do so. He was, however, of opinion that the Contract Act was not exhaustive, and that the plaintiff (appellant) could claim for money had and received, if the facts shewed such a cause of action apart from that Act, but he held that the payment was in law a voluntary payment and not recoverable. The appellants suit for recovery of the money paid was accordingly dismissed, the District Judge directing that the case should proceed upon the question of damages only.
After certain proceedings, including an appeal to His Majesty in Council, which proceedings have no direct bearing upon the question raised by the present appeal, and which are referred to in the judgment, the order of the District Judge dismissing the claim for the return of the money paid came before the Chief Court upon appeal.
The Chief Court (Johnstone and Rattigan JJ.) on January 27, 1911, gave judgment dismissing the appeal. In the course of their judgment they said as follows —
"In our opinion s. 72 of the Indian Contract Act, which specifically deals with the question as to when money mu
