Unnderstanding Lalman Shukla v. Gauri Dutt in 2020

    This article is written by Shaily Garg, a Fourth year B.Com. LLB (Hons.) Student of University Institute of Legal Studies, Panjab University, Chandigarh.

    Lalman Shukla v. Gauri Dutt
    Lalman Shukla v. Gauri Dutt

    The present case deals with the principle of Offer and Acceptance to constitute a valid contract under the Indian Contract Act, 1872. The case was filed in 1913 in Allahabad High Court and the judgment was pronounced by Hon’ble Justice J. Banerjee.

    Proposal or Offer is defined in Section 2(a) of the Indian Contract Act, 1872 as “when one person will signify to another person his willingness to do or not do something (abstain) with a view to obtain the assent of such person to such an act or abstinence, he is said to make a proposal” and Section 2(b) deals with the Acceptance which states that “when the person to whom the proposal is made signifies his assent thereto, the offer is said to be accepted. Thus, the proposal when accepted becomes a promise”.

    Facts of the Case: Lalman Shukla v. Gauri Dutt

    The Nephew of Gauri Dutt (here ‘Defendant’) absconded from his home in January 1913 and was not detected anywhere after all fruitless efforts. Then, Gauri Dutt, the defendant ordered his various servants in the search of the boy, and among them was Lalman Shukla, the Plaintiff who was the munim in the Defendant’s firm.

    The plaintiff was asked to visit Haridwar from Cawnpore to trace the boy and his railway fare and other expenses to be borne by the Defendant. After the servant Lalman Shukla had left, Gauri Dutt announced that the person who would find out a missing boy to be given a reward of Rs. 501.

    Meanwhile, Plaintiff detected the boy in Rishikesh and handed him to the defendant back to his native place. He was rewarded with two sovereigns for his appreciable work and Rs. 20 extra for his return expenses to Cawnpore. The plaintiff continued his services under the defendant and didn’t demand any further payment for six months.

    Later on, he was dismissed from the services by the defendant, and then he bought a suit against him claiming the prize money of Rs 499. He stated that it was promised by his master that whoever would find this boy would be entitled to this reward but he didn’t receive the whole amount. He alleged that the defendant had not performed the specific performance of his promise.

    Issues of the Case: Lalman Shukla v. Gauri Dutt

    The present case after rejected by the lower court on the ground that there was no contract between the parties, went to the Allahabad High Court, where the following issues were raised:

    1. Whether the current situation amounts to a valid contract?
    2. Whether the Plaintiff is entitled to prize money of Rs. 499 or not?
    3. Whether the decision by the lower court was appropriate or not?

    Contentions of the Parties: Lalman Shukla v. Gauri Dutt

    It was contended by the Petitioner that he had found the boy after the declaration of reward by the Plaintiff that means he had performed the act and was sufficient to be deserving of the reward attached to such performance.

    The fact that the person performing the act had the knowledge of the reward associated or not is immaterial. He further referred to Section 8 of the Indian Contract Act, 1872, which states that the performance of a condition of a proposal is an acceptance of the proposal and in the current case, the condition was the whoever found the missing child of the defendant would be rewarded with the promised amount and thus considering the provision he claimed to have fulfilled the condition, hence the plaintiff is entitled to claim the reward.

    On the contrary, it was contended by the defendant that in order to convert an offer into a contract there must be acceptance of that offer, and assent from the party is the basic essential for this. The plaintiff was busy tracing the boy at the time of the announcement of the reward and hence, he was not aware of it. As a result, he had not accepted the reward which clearly doesn’t convert the offer into a valid contract between the parties. Also, the plaintiff was acting as a servant and was discharging his duties and responsibilities while searching for the boy which excluded him from this reward.

    Observation and Judgment of the Court: Lalman Shukla v. Gauri Dutt

    It was observed by the Court that Plaintiff Lalman Shukla had no knowledge about the offer when he discovered the missing boy. There was no communication with him regarding the reward before he found the missing boy. In order to covert the proposal into an enforceable agreement, there should be a knowledge of it and an assent to be given in accordance with it which was absent in the present case. Therefore, it was held by the Hon’ble Court that the Plaintiff could not be entitled to Rs.499 of the reward by the defendant.

    Also, the plaintiff was in the service of the defendant and went to search for the missing boy. Though it was not in the ordinary scope of his position as a munim to trace a missing relative of his master, he willfully agreed to go Haridwar from Cawnpore for this particular task and undertook an obligation. Therefore, the performance of the act cannot be regarded as a consideration for the defendant’s promise as there was already a subsisting obligation which was needed to be fulfilled.

    Conclusion: Lalman Shukla v. Gauri Dutt

    The basic principle of a valid contract is that there must be an agreement enforceable by law and such an agreement consists of offer and acceptance. Such an offer must be communicated to the offeree and an offeree/acceptor should have knowledge of the offer so that he could accept that.

    No knowledge of the offer means no acceptance. If a reward is declared for completing a particular task, only the person who accomplishes the task can accept the offer. Whereas, in the present case the offeree lacked acceptance and communication and hence, not entitled to the reward in return. Also, an offer of reward made by the way of advertisement on any media, then knowledge of such fact is required for acceptance of reward by the party who view it.

    Lalman Shukla v. Gauri Dutt

    Lalman Shukla v. Gauri Dutt

    Lalman Shukla v. Gauri Dutt

    Lalman Shukla v. Gauri Dutt

    Lalman Shukla v. Gauri Dutt