Source: http://lawtimesjournal.in/coercion-undue-influence-difference-between-coercion-and-undue-influence/
Timestamp: 2019-04-22 09:11:42+00:00

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Coercion and undue influence are terms of contract law, legally recognized under the Indian Contract Act, 1872, which is the law governing contractual obligations between parties in the State of India.
5. Not hereby expressly declared to be void.
Explanation – It is immaterial whether the Indian Penal Code (XLV of 1860), is or is not in force in the place where the coercion is employed.
A, on board an English ship on the high seas, causes B to enter into an agreement by an act amounting to criminal intimidation under the Indian Penal Code.
A has employed coercion, although his act is not an offence by the law of England, and although section 506 of the Indian Penal Code was not in force at the time when or place where the act was done.
2. unlawful detaining or threatening to detain any property.
The definition makes it clear that the commission or threatening to commit any act must be forbidden/prohibited by the Indian Penal Code. IPC is the substantive law defining and prescribing punishments for criminal offences in territory of India.
In Chikkam Ammiraju v. Chikkam Seshama [iii] , the Madras High Court had to decide whether a threat to commit suicide was coercion. A, a Hindu, by a threat to commit suicide, induced his wife and son to execute a release in favour of his A’s brother in respect of certain properties which they claimed as their own. It was held by a majority “that a threat to commit suicide comes within the meaning of Section 15 of the Indian Contract Act, 1872 and the release deed was therefore voidable in nature. Threat to commit suicide was considered as an act forbidden by the Indian Penal Code, 1860. The majority bench further held, that when a person threatens to kill oneself, he is acting to his own prejudice and also for the prejudice of his spouse and son, and the basic requirements of Section 15, were thus fulfilled. However, Oldfield, J., dissented from the majority by saying that suicide is not an act forbidden by the Indian Penal Code but only an attempt to suicide is.
Section 15 also states that coercion can also be caused be 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. For example, it is coercion when an agent who is due to leave refuses to hand over the account books to the new entrant until the principal executes release in his favour. [vi] The detention of property must be unlawful in nature.
The section also states that the act causing coercion should not necessarily be against the a party to the contract. If the act is to the prejudice of any person whatever, and with the intention of causing any person to enter into an agreement, it is enough to cause coercion. For example, in Ranganayakamma v. Alwar Setti[vii] the widow was forced to adopt a child by the relatives of the adopted boy. If she didn’t do so the relatives did not allow the dead body of the widow’s husband to be taken out of home until the adoption was made. This amounted to coercion.
If a person holds a real or apparent authority over the other party it is expected that he won’t abuse that authority to obtain an undue advantage from the other party.
3. Where he enters into a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness or bodily distress – The law tries to protect people whose mental capacity might be temporarily or permanently be affected on account of his old age, illness or bodily distress and therefore, doesn’t let anyone take undue advantage of such a person.
In Merci Celine D’Souza v. Renie Fernandez,[xvii] an infirm person, totally dependent on the defendants for his existence, gifted his property to them. It was discovered by the court that the defendants tried to obtain an undue advantage and the gift deed was not attested by the two witnesses as the law requires it to be.
1. Coercion is defined under Section 15 of the Act whereas, Undue Influence is defined under Section 16 of the Act.
2. In Coercion the parties may or may not be related to each other. It is not mandatory for any kind relationship to exist between the parties. However, in the case of undue influence the parties are in relation to each other.
3. Coercion is committed when a party obtains the consent of the other party by committing or threatening to commit any act which is punishable under the Indian Penal Code, 1860 to make him enter into an agreement. Undue Influence refers to an improper use of authority or power by one party over the other to make him enter into an agreement.
4. In coercion use of physical force exists. In undue influence there exists use of mental or moral pressure.
5. In coercion. when the contract is avoided, the benefit received has to be restored or refunded to the injured part. Thus, the injured party has to be put in his original place. When the contract is avoided in the case of undue influence, it is the discretion of the court whether to direct the aggrieved party to restore or refund the benefit received.
[iii]I.L.R (1918) 41 Mad. 33.
[iv]Indian Contract and Specific Relief Acts, 9th ed., 150.
[vi]Muthiah Chettiar v. Karupan Chetti, I.L.R (1927) Mad. 786: A.I.R. 1927 Mad. 852:105 I.C.5.
[vii] I.L.R (1889) 13 Mad. 214.
[viii]Davies v. Provincial Marine Insurance Co., 8 Ch. D. 469; Amrit Lal v. Ram Kumar, A.I.R 1962 Punj. 325.
[ix]Raghunath v. Vajivandas, I.L.R (1906) 30 Bom. 578.
[x]Philip v. Franciscan Association, A.I.R 1987 Ker. 204.
[xi]Daya Shankar v. Bachi, A.I.R. 1982 All. 376.
[xii]Subhash Chandra v. Ganga Prasad, A.I.R. 1967 S.C. 878.
[xiii]Bank of Montreal v. Stuart, (1911) A.C. 120; Tauga Bai v. Yeshvant, A.I.R. 1945 P.C. 8.
[xiv]U.P. Government v. J.R. Bhatta, A.I.R. 1956 All. 439.
[xv]Dhanipal Das v. Maneshar Baksh Singh, 33 I.A. 118.
[xvi]Daya Shankar v. Bachi, A.I.R. 1982 All. 376.
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