Lalman Shukla v. Gauri Dutt

In this 5-minute read the readers will learn about the basic concepts of offer and acceptance which make up the whole law of contracts and how the Indian judiciary helped evolve the law.
CITATION(1913) 11 ALJ 489
COURT 
JUDGES/CORAMJustice Banerji
DATE OF JUDGEMENT 

Introduction

Lalman Shukla vs. Gauri Dutt, is a popular case related to offer and acceptance of a contract. This was an application for revision against the Judgement & Order of B. Shoe Prasad, Judge of the Court of Small Causes at Cawnpore. This landmark case is based on the rule that if the offer is not known at all then no acceptance to the offer is made, hence the offer is invalid and no compensation can be claimed for the same.

Facts

The facts of the case are as follows: The plaintiff was in the defendant’s service as a munim. The defendant’s nephew absconded, and the plaintiff ordered to find out the missing boy. In the plaintiff’s absence, the defendant issued handbills, offering a reward of Rs. 501 to anyone who might find out the boy. The plaintiff traced him and claimed the reward. The plaintiff did not know of the handbills when he found out the boy. The plaintiff was duly rewarded with 2 sovereigns at Hardwar and Rs. 20 on coming back home. When he came to know of the reward, he brought an action against the defendant to claim his reward.

Issues

The case primarily revolved around one single issue which was ‘Whether there was a valid acceptance to the offer made?’

Contentions of the Parties

It is contended on behalf of the plaintiff, that privity of contract was unnecessary and both motive and knowledge were futile. It was contended that the realization of all the terms and conditions of the offer entitles the appellant for securing the reward in question. The Plaintiff had heavily relied on the case of Williams vs. Carwardine[1] and Gibbons vs. Proctor.[2]

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The defendant contends that the plaintiff claim can only be maintained on the basis of a contract,

  1. that there must have been an acceptance of the offer and an assent to it,
  2. that there was no contract between the parties in this case and
  3. that in any case the plaintiff was already under an obligation to do what he did and was, therefore, not entitled to recover.

Summary of court decision and judgment

The Trial Court dismissed the suit on the basis that: That the offer of a reward was announced after the plaintiff had left, and there was no subsequent promise to pay the reward. `In revision, after carefully analyzing the facts of the case with respect to the authorities cited and arguments advanced, the Allahabad High Court affirmed (ii) but rejected (i). The Court held that since the plaintiff was ignorant of the offer of reward, his act of bringing the lost boy did not amount to the acceptance of the offer, and therefore, he was not entitled to the reward.

In summation, the Judge proclaimed that there was a subsisting obligation and the performance of terms and conditions of this offer without its prior knowledge restricted the plaintiff from insisting a reward for its conduct.  

Analysis

The case established intention to enter and perform the obligations as an essential part of Section 10 of Indian Contract Act, 1872. The High Court very efficiently pointed out the limitations on the part of the appellant to provide a valid acceptance. The striking point about this judgement was that the definition of ‘consideration’ under Section 2 (d) of the Indian Contract Act, 1872 does not find a mention while deciding the case which would have otherwise raised more questions to answer while settling the principle in this case, on the assumption that the definition of consideration in Section 2(d) is the same as the English definition replete with elements of benefit and detriment.

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Conclusion

This case played a crucial role in laying down the principle of general offer, which one made to the public at large. This case is of utmost importance and relevant in law to understand the concept of offer and acceptance altogether. An action without the knowledge of the proposal is no acceptance and does not confer any rights on acceptor. Also communication of offer to offeree is an essential to a valid offer.


[1] [1833] 4 B & A 621

[2] [1891] 64 L.T. 594.