Contracts are an essential part of our life. Unknowingly we engage in several contracts in our daily life. The contracts are beneficial for business, trade, and transaction purposes. The contracts can be either expressed or implied. The contracts dealt with under the INDIAN CONTRACT ACT, 1872 in India. Lalman Shukla v Gauri Datt is one of the crucial cases that talk about the validity of a contract when there is no acceptance and the condition of knowledge about the proposal to accept the offer under the Indian Contract Act 1872. This case mainly deals with the general offer and communication of the proposal.
FACTS OF THE CASE
In the case of Lalman Shukla v Gauri Dutt, the defendant was the owner of a firm where the plaintiff works as a muni. The defendant’s nephew absconded from his home in January 1913. After knowing the same, the defendant sent all his servants in search of his missing nephew. The plaintiff went to Haridwar from Kanpur in search of the defendant’s nephew and was handed some money by the defendant for his railway fare and other expenses.
After Lalman Shukla left the house, the defendant announced a reward of Rs. 501 for those who bring back his missing nephew. The plaintiff does not have any idea of the defendant issuing such handbills. The plaintiff traced the boy at Rishikesh then the defendant rewarded him with two sovereigns and Rs. 20.
Six months after the above incident, the plaintiff got removed from the job. Then he bought a suit against the defendant claiming a reward of Rs. 499 at the Small Causes Court for the performance of his act. The court of small causes dismissed the case, an appeal was filed in the High Court of Allahabad.
LEGAL ISSUES RAISED IN THIS CASE
- Which type of offer does the defendant is claiming.
- Whether it is a valid acceptance or not.
- Whether it amounts to a valid contract or not.
- Does the reward of Rs. 499 should be given to the plaintiff or not.
- Whether the decision taken by the lower court was appropriate or not.
ARGUMENTS OF THE PLAINTIFF (Lalman Shukla)
The plaintiff asserted that it was immaterial that the privity of the contract nor the motive and the prior knowledge. He affirmed it was a general offer to everyone, so he took the proposal and performed the given condition. The plaintiff stated that prior knowledge about the proposal is not necessary to perform the contract.
It was contended that the mere performance of the offer to find the missing boy was enough for him to claim the reward. They cited Section 8 of the Indian Contract Act 1872, which, ‘The performance of an act or the acceptance of any consideration of a proposal is an acceptance of the proposal.’ They referred to this section that the performance of the offer can be regarded as an acceptance and stated he was entitled to the reward of Rs. 499.
The petitioner cited the case of Gibbons v. Proctor (1891) in the English Contract Law of the UK. In this case, the court held that prior knowledge of the plaintiff is not necessary to perform the contract; he is entitled to the reward if he serves the required conditions of the contract.
ARGUMENTS OF THE DEFENDANT (Gauri Dutt)
The defendants contended that it lacks a proper acceptance to communicate to them, so the offer section 2(a) converts into a valid contract. Section 2(b) of the Indian Contract talks about the promise that includes acceptance as part of it. There is no acceptance from the side of the plaintiff which is one of the basic essential features of the contract. The section 3 of Indian Contract Act 1872 is very important in this case, communication of the proposal that the acceptor should communicate about the offer and its conditions before accepting it. The defendant affirmed that Lalman Shukla did not know about the offer because he went to Haridwar in search of the missing boy at the time the defendant issued such handbills. At the time of performing the contract, the plaintiff does not know about the proposal, which means that one cannot execute or accept it without knowing the existence of the proposal. The plaintiff is acting as a servant, and he performed the act as a part of his employment. Moreover, for a valid contract sec 2(h), there must be an agreement enforceable by law, and that agreement must contain acceptance.
The defendant cited the very famous U.S. case law Fitch v Snedaker (1868) is similar to the present case. In this case, the plaintiff found a criminal and informed the police. He subsequently got to know about the reward announced by the govt for giving information about the criminal, he filed a suit claiming a reward, and the court held the verdict that if a person accepts an offer, he must be aware of the complete terms or knowledge before performing the act. So the plaintiff cannot claim the reward without having full knowledge of the offer.
The appeal was dismissed by J. Banerjee and upheld the decision of the small causes court. The high court of Allahabad highlighted that the case lacked the knowledge of the proposal and acceptance. This case deals with a general offer made to people who have complete knowledge about the terms and conditions of the proposal and perform the act accordingly. In this case, the plaintiff lacked knowledge of the offer and had not communicated the acceptance to the defendant. Mainly he acted in a position of a servant to his master. The plaintiff already had an obligation of a servant. He is fulfilling his duty in tracing the missing boy and not as an offeree to the contract. Hence Lalman Shukla is not entitled to the reward of Rs. 499.
The above case law refers to a general offer that deals with the public in general. The judgment lays down a clarity of acceptance for a general offer. Knowing the offer, communication, and acceptance of the proposal are very important in the general offer. As there is no proper communication of assent and knowledge of the offer in the present case, the plaintiff cannot get the reward in return. This case explains clearly the essentials of the contract and the Indian contract act.
Author(s) Name: Lankadi Uma Devi (Dr. B.R. Ambedkar College of Law, Andhra University)
 Lalman Shukla v Gauri Datt (1913) 40 ALJ 489
 Indian Contract Act 1872, s 8
 Gibbons v Proctor (1891) 64 LT 594
 Indian Contract Act 1872, s 2(a)
 Indian Contract Act 1872, s 2(b)
 Indian Contract Act 1872, s 3
 Indian Contract Act 1872, s 2(h)
 Fitch v Snedaker (1868) 38 N.Y. 248