Coercion: Indian Contract Act, 1872

    “One who uses coercion is guilty of deliberate violence. Coercion is inhuman.”

                                                             – M.K Gandhi[1]

    Introduction

    Coercion is one of the most said and the most sought-after topics of the Indian Contract Act, 1872. Indian Contract Act of 1872 completely transformed the commercial aspects of the country. When you have a country with 1,210,569,573 people[2] and as if this is any less, we live in the 21st century, which is full of monetary desires. People fulfilling their own desires end up committing and even force their bodies to do an act which would harm another person’s pocket. Coercion is one such way through which the evil-minded achieve their intentions.

    The Indian Contract Act, 1872 came into force on 1st September, 1872 and it is pertinent in all the states except Jammu and Kashmir although after the scrapping of article 370 it is clearly evident that the present government would likely make the Act applicable in J&K sooner or later. The Act is one of the best examples of brilliance in lawmaking. The act almost covers all the mercantile aspects and issues involved, it contains the remedy for each and every obstacle that may occur in the monetary agreement and cause instability in the making of a contract between two parties. It is clearly evident that the Act should and must contain the “what to do and how to do” in issues pertaining to fraudulent and malicious practices done towards the victim. Thus, it has clear mentioning of coercion and therefore it is directly related to the main subject. Thus this blog would be limited to the Indian Contract Act since the topic itself makes the scope of research very much limited. This research will further clarify the difference between coercion and duress, it is of utmost importance since the two subjects have very minor differences between them, the differences between the two cannot be clearly made out by a layman on the first instance. The blog will critically analyse coercion under the Indian Contract Act, 1872. It will also mention how and when coercion is successfully established. The blog would also try to cite some cases related to coercion in order to successfully explain the process and its real-life applicability. This blog will further try to show the ground reality of how coercion is bad for free and fair business deals, it has been present in the human civilisation from ancient ages but the word became popular only in the early 16th century that is 1515-1525s. Although humans have been successful in finding the solution for such a mendacious stumbling block, the problem still continues to threaten the innocents who want to carry out their business transactions and deals in a legal way. 

    Meaning And Origin Of Coercion 

    Coercion is not a recent term, it has its presence dating back to the 15th century and was used earlier and mostly for religious confessions or conversions. It was used in such a way that the person who is a victim or a person who is supposed to be coerced was oppressed in the name of divinity. Person would be left with no other option but to obtain and profess the religion of the oppressor. 

    Etymologically the word ‘Coercion’ comes from an old French word, ‘Cohercion’[3]. Coercion is one of the most talked about term as it is generally used in the daily discourse of life as well like for example :- If a boy ‘A’ who is attending the primary school gets bullied by boy ‘B’ and is forced to share his food with the bully, it would be said that the boy was coerced into sharing his food with the bully. There can be abundant examples of the usage of coercion in our daily course of life although the usage of coercion in the legal world has a very specific setting where it is used. 

    Historically, coercion was used by powerful people, basically elitists and fascists, coercion was a mode of making people do things which they wouldn’t agree to do if Might and Suppression weren’t used. Thus, coercion has been the center of attention for many famous philosophers and legal luminaries. Although, it is not many time ago when the detailed study and understanding of the phenomenon started to happen. One of the major drawbacks of this attention is that when many philosophers and legal theorists give definition to one term, then many-a-times these explanations cause a lot of confusion and ambiguity. Similar things happened with coercion, many philosophers gave a similar type of definitions but with minor fluctuations. Basic terms that could be associated with coercion are duress, harassment, punishment, oppression, threatening, force or intimidation. The use of coercion according to some philosophers is basically using power to clinch expedience over others and to impose certain obligations over others, so that others cannot challenge the happening and also make the weak section retain their weaknesses by not letting them harness their rights. These types of powers in the modern world are harnessed by states and dictators and some terrorist organisations. We can thus, from this, clarify that coercion was all about violence. The most usage of coercion is done by states to enforce the law and make the society reasonably restricted. States accomplish this type of motives either by force or by directly chastising the wrongdoers or desperados. The state does use coercion but for the purpose of law enforcement and to make people come into an agreement so that there is the smooth functioning of the state and putting a restraint on the negative/violent acts of the private individuals. ‘War for pear’ is a correct saying that can be used for describing the usage of coercion by the state. It is also very evident that it does so to maintain national security and to make possible coexistence of private individuals.

    Coercion is defined under section 15 of the Indian Contract Act, 1872 as ‘Coercion’ is the committing or threatening to commit, any act forbidden by the 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.[4]

    It is immaterial whether the Indian Penal Code is or is not in force in the place where the coercion is employed. For example if :-

    ‘A’ threatens ‘B’ that if A does not give him Porsche car then he would infect the A’s computer with virus, so here the case requires the provisions given in the Information Technology Act because infecting the computer with virus falls under the ambit of the IT Act and furthermore infecting a computer is not covered under the Indian Penal Code. The Indian Penal Code was enacted 161 years ago, it is not a rocket science to understand that the modern crimes won’t have any mention in the IPC. 

    Criminal Justice System and Coercion  

    The question that arises in the common mind is whether coercion defined under the Indian Contract Act, 1872 needs any reform like its counterpart the Indian Criminal Justice System, which  unfortunately has not faced any tangible re-modelling since Indian independence that happened 72 years ago.

    Giving an answer to this question is a child’s play, as mentioned earlier in the blog that it is inconsequential whether Indian Penal Code is in or is not in force in the place where coercion is waged[5]. And the Indian Penal Code is nothing but Indian Criminal Justice System’s main arm and thus, it is one and the same. When it comes to reforming the Section 15 of the Indian Contract Act, 1872, it would be unnecessary to improvise something which needs no improvisations as coercion in every language means the same and as the same effect and needs the same resolving pattern. For example, coercion has two main ingredients:-

    1)     Bullying.

    2)     Forcefully making an agreement.

    Thus, whatever might be the way but the end result remains the same and that is making someone come to an agreement when he/she has no intention of entering the agreement. So changing/reshaping section 15 of the Indian Contract Act, 1872 is not needed until and unless the main definition of coercion changes, which is obviously not happening any sooner.

    Constituents of Coercion 

    As the blog in its earlier section mentions about the basic ingredients of coercion but those ingredients are only mentioned to illuminate that why coercion cannot have variations in its meaning and why every common law country including India does not have very different sets of rules and punishment to imply. Thus, it is immensely important to elucidate on the constituents of coercion. Conditions and whether or not the following constitute Coercion is mentioned below:- 

    1. Q beats up P and makes him sign a contract.
    2. R told S that if he did not agree to give him a Kohinoor necklace, he would set fire to his house.
    3. A told B that if he did not agree to give him his car, he would set fire to his house burgled.
    4. C told E that if he did not agree to give him a Gold Egg, he would burn his crops.
    5. Z told D that if he did not agree to give him a loan, he would have his son’s house burgled.
    6. S told R that if he did not agree to give him a platinum ring, he would infect his smartphone with a virus.
    7. A storehouse refused to let a client collect his goods unless the owner agreed to sell 50 per cent of the goods to him at the prevailing market price.

    https://legalreadings.com/insolvency-and-bankruptcy-code-and-real-estate-laws/

    In case number 1, Q beats up P, thus  Q commits the offence of beating up a person. In cases, number 2,3,4 and 5 R, A, C and Z have committed the offences which are covered in the Indian Penal Code. Therefore, all the acts are entitled to be considered as coercion under Section 15. Infecting a smartphone is an offence which is not covered under the Indian Penal Code, but it is covered under the Information Technology Act. As mentioned earlier in the blog that IPC was enacted when there was no technological advancement. Therefore case number 6 won’t be considered under Section 15. In the last case, it is clearly evident that the storehouse unlawfully detained the property and thus, this can be considered coercion under Section 15 of the Indian Contract Act. Basic things that can be perceived are:-

    • Sometimes, the offence is committed against the person with whom the agreement is to be made. For example, if ‘A’ beats up ‘B’ and asks him to sell his assets to him.
    • Sometimes, the offence is committed against the party which has no part in the agreement.

    Checking for Coercion

    Checking coercion can be done in two parts, which are listed and elucidated below.

    • It is an essential requirement that the said act which was committed must be caused to ‘any person’. Coercion has no exception and it can be committed against any person of whatever status, although it also needs to be considered whether the act was committed against the person who is the part of an agreement or the person who is not the part of any such agreement.
    • If the said act forces one person to come into an agreement which in his free consent he wouldn’t, then the second part is also fulfilled. Thus, the fulfillment of these two parts makes the person commit coercion. Thus, the person who is forcefully made to come into a contract must not be the victim himself.

    Cases related to Coercion

    Askari Mirza v. Bibi Jai Kishori

        Bibi Jai Kishori gave a loan to Askari Mirza, later she found that Askari Mirza had lied to her to getting the loan. 

        She thus became anxious and filed a criminal case against Askari Mirza. 

        Although they later found an agreement where Askari Mirza was supposed to give the money back immediately. 

        It was said by Askari Mirza that the agreement was secured by coercion constituting the threat of filing the criminal charges. 

        The court thus had to decide whether a threat of filing criminal charges was coercion within Section 15. 

        The court later said that to threaten a criminal prosecution is not per se an act forbidden by the Indian Penal Code. Such an act could only be one forbidden by the Indian Penal Code if it amounted to a threat to file a false charge. And so a plaintiff, who sets up a plea of coercion based upon a threat of this nature, has to establish three things, namely, that a threat was uttered, that it was a threat to commit an act forbidden by the Indian Penal Code, and that the threat was uttered with the intention of causing the plaintiff to enter into the agreement complained of.

    The case of Askari Mirza v. Bibi Jai Kishori cleared the fog around such unknown topics. One of the most significant being that filing of a false charge or threatening to file a false charge is an offence under the IPC. The threat of filing a charge for an offence that a person has indeed committed is not forbidden by the IPC. Consistent with this, the court noted: ‘Of course if the charge of cheating was a true one, there is an end to the plaintiff’s case, for a threat to bring such a charge would not be an act forbidden by the Indian Penal Code.[6]

    Andhra Sugars Limited v. State of Andhra Pradesh

    • As mentioned under the Andhra Pradesh Sugarcane ( Regulation of Supply and Purchase) Act, 1961, and the rules framed under it, the cane producer in the factory sector is free to make or not to make an offer of sale of cane to the occupier of the factory.
    • But if he makes an offer, the occupier of the factory is bound to accept it. It was claimed that the agreement was caused by coercion. The Supreme Court ruled:-

    The consent of the occupier of the factory to the agreement is not caused by coercion, undue influence, fraud, misrepresentation or mistake. His consent is free as defined in Section 14 of the Indian Contract though he is obliged by law to enter into the agreement. The compulsion of law is not coercion as defined in section 15 of the act. In spite of the compulsion, the agreement is neither void nor voidable. In the eye go the law, the agreement is freely made.[7]

    The Supreme Court took the position that it would be a case of coercion only if the contract was entered in by committing or threatening to commit an offence under the Indian Penal Code. The imposition of the law is not coercion within Section 15. The position was reiterated in S.S. Sakhar Karkhana Limited v C.I.T., Kolhapur. Under the co-operatives of Maharashtra compulsorily took deposits from its farmer members. The Supreme Court noted on the agreement between the co-operatives and its members:[8]

    “The mere fact that the contract has to be entered in conformity with and subject to restrictions imposed by law does not per se impinge on the consensual element in the contract. ‘Compulsion of law is not coercion’ and despite such compulsion, ‘in the eye of law, the agreement is freely made’, as pointed out in Andhra Sugars Ltd. v. the State of A.P.”

    Section 15 

    Act forbidden by Indian Penal Code:- For an act to be considered as coercion, it is essential it to fulfill some requirements. One of such requirements is that the act which is performed should be recognized as an offence. Like making a threat to the person so that he would be forced to perform an act which he would never agree to do if he wasn’t forced to. Under the Indian Contract Act, 1872, threatening to commit suicide is also considered to be coercion.[9] Threatening to file criminal charges, although isn’t an offence, but filing a false criminal charge is.[10]

    Unlawful detaining of Property:- When one person is coerced by unlawfully, violently or forcefully detaining his property or by confining it. Consider :

        A person whose son owed money to another person. 

        Later on, the son died and therefore the person who gave the money seized the house of the son. 

        and furthermore threatened to sell it if the father doesn’t give him the money that his son owed. 

    Coercion and Duress

    The basic difference between the two terms is that coercion can be engaged antagonistically towards any person in fact against a stranger as well but duress, unlike coercion, cannot be employed on the stranger, it can be engaged only against the person who is subject to the agreement.[11]

    There is no condition as such of immediate violence just after the coercion, it’s not a requisite element of coercion. Whereas in duress, there needs to be violence and it should be evident and not just a threat. As mentioned earlier coercion can be engaged against any person, unlike duress which just entertains the party that was the part of the agreement. Unlawful detention is also a type of coercion. Whereas unlawful detention of the property is not the party English law of contract.

    Conclusion                                                                   

    Coercion under Indian Contract Act, 1872 is perfectly executed and is one of the best examples of lawmaking. Under English Law of Contract, it is often called a duress and both the terms also have major differences among them. It is although very discernible that Indian Contract is the most perfect or to say faultless act ever created and this thus, makes the whole agreement and business deals smooth and curable when gone wrong.  Coercion under Section 15 of the Indian Contract Act, 1872 is effective and its applicability is undoubtedly unquestionable. The best segment of section 15 is that it is versatile and is open for all sorts of new criminally motivated sectors because for fulfilling the compartments of coercion, the only parts that need to be filled are not more in number and also section 15 isn’t very specific in approach thus making it unbarred and henceforth making it open-gateway in which any act which forces the person to get into an agreement which he wouldn’t if he wasn’t forced violently, threatened or if his property wasn’t detained. 

    Coercion is a long-standing term, which hasn’t faced any substantial change in its 500 years course, although some countries have a different approach in dealing with coercion, the end result isn’t very different from what common law countries get. Coercion is the pre-eminent factor which makes a person enter into an agreement without his intention in doing so. The burden of proof falls on the person who is shielding himself with the help of coercion and it is also an acceptable approach since any random person would come running to the court with the excuse of being coerced (falsely). As the coercion is nothing but just a dissenting term, which can only be associated with negative terms. Furthermore, the punishments are subjective in nature when it comes to the person who has committed coercion.

    The contract can be termed as voidable if there is any minute chance of the existence of coercion and that it is completely dependent on the disgruntled party. When coercion is performed by the state, the state has the complete right of maintaining peace even it has to reasonably coerce its subjects in doing what is required for maintaining essential decorum. It also stops private individuals from committing an offence which they might commit and damage the authenticity of the contract.

    “Coercion cannot but result in the chaos in the end” – Mahatma Gandhi

    References: 

    [1]Anand T. Hingorani and Ganga and Hingorani, THE ENCYCLOPAEDIA OF GANDHIAN THOUGHTS, 1985.

    [2] CencusInfo India 2011 final population total ‘Bharat ki Jan gan’, available at http://censusindia.gov.in/2011census/censusinfodashboard/stock/downloads/Profiles_1.

    [3]The etymology of the word Coercion, https://www.dictionary.com/browse/coercion, visited on January 11, 2020.

    [4]Akhileshwar Pathak, CONTRACT LAW, Oxford University Press, 2011, p. 180.

    [5]The Indian Contract Act, 1872.

    [6]Askari Mirza v. Bibi Jai Kishori Alias Iqbal Rani, (1912) 16 IC 344.

    [7]Akhileshwar Pathak, Contract Law, Oxford University Press, 2011,  p.182.

    [8]Andhra Sugars Limited v. State of AP, AIR 1968 SC 599.

    [9]Chikkam Amiraju v. Chikkham Seshamma, 34 Ind Cas 578, (1917), 32 MLJ 494.

    [10]Askari Mirza v. Bibi Jai Kishori Alias Iqbal Rani, (1912) 16 IC 344.

    [11]Coercion and Duress, https://www.scconline.com/legalterms/difference. Visited on January 11th, 2019.

    BY – RUSHIKESH D. PATIL | MAHARASHTRA NATIONAL LAW UNIVERSITY, NAGPUR

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