Table of Contents

 Acknowledgement…………………………………………………..2
 Declaration………………………………………………………......3
 Aims and objectives…………………………………………………4
 Hypothesis……………………………………………………….…...4
 Research methodology………………………………………………4
 Introduction……………………………………………………….....5
 Abdul Aziz and Others v. Masum Ali and Others……………..….6
 Contract………………………………………………………….…..7
 Consideration………………………………………………………...8
 Promises of Charitable Nature…………………………………..…11
 Unilateral Promises……………………………..………..……...…..12
 Revocation of Unilateral Promises……………………………….....13
 Promissory Estoppel and Government Agencies....……………..…14
 Estoppel of Licensee……………………………………………….....15
 Conclusion……………………………………………………..……...16
 Bibliography……………………………………………………..……17

Page 1 of 17
 Acknowledgement
A project is a joint endeavour which is to be accomplished with utmost compassion, diligence
and with support of all. Gratitude is a noble response of one‘s soul to kindness or help
generously rendered by another and its acknowledgement is the duty and joyance. I am
overwhelmed in all humbleness and gratefulness to acknowledge from the bottom of my
heart to all those who have helped me to put these ideas, well above the level of simplicity
and into something concrete effectively and moreover on time.

This project would not have been completed without combined effort of my revered Faculty-
in-charge Dr. Tanaya Tarai (OSD Academics and Publications) whose support and guidance
was the driving force to successfully complete this project. I express my heartfelt gratitude to
her. Thanks are also due to my parents, family, siblings, my dear friends and all those who
helped me in this project in any way. Last but not the least; I would like to express my sincere
gratitude to our Law teacher for providing us with such a golden opportunity to showcase
our talents. It was truly an endeavour which enabled me to embark on a journey which
redefined my intelligentsia, induced my mind to discover the intricacies involved.

Moreover, thanks to all those who helped me in any way be it words, presence,

Encouragement or blessings...

- NIYATI KISHORE

- 2nd Semester

- B.A. LL.B (Hons.)

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 Declaration

I hereby declare that the work reported in the B.B.A.LL.B (Hons.) Project entitled ― “Abdul
Aziz and Others v. Masum Ali and Others AIR 1914 All 22 a legal glossary” submitted at
Maharashtra National Law University, Aurangabad is an authentic record of my work carried
out under the supervision of Dr. Tanaya Tarai. I have not submitted this work elsewhere for
any other degree or diploma. I am fully responsible for the contents of my Project Report.

(Signature of the Candidate) NIYATI KISHORE

Maharashtra National Law University, Aurangabad

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 AIMS AND OBJECTIVES

The Aims and Objectives of this project are:

1. The researcher tends to throw light on the case Abdul Aziz and Others v. Masum Ali and
Others AIR 1914 All 22.

2. The researcher tends to show legal analysis of the case.

3. The researcher tends to throw light on the various issues raised in the case.

HYPOTHESIS

This project summarises the topic of ‘Abdul Aziz and Others v. Masum Ali and Others AIR
1914 All 22 Legal glossary’ and also discusses the significant prospective of the same. The
project will help us in enhancing our knowledge about judicial interpretation and its
significance in liability for Law of Contracts.

RESEARCH METHODOLOGY

For this study, doctrinal research method was utilised. Various articles, e-articles, reports and
books from library were used extensively in framing all the data and figures in appropriate
form, essential for this study.

The method used in writing this research is primarily analytical.

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INTRODUCTION

A contract is formed when two or more different people or groups make a formal, legally
binding agreement (either written or spoken). Contracts are legally binding following offer
and acceptance. Some jurisdictions, for example those whose legal systems are based on
common law, also require a third element: consideration. Consideration can be thought of as
payment, although is more accurately described as anything given or promised by one party
in exchange for the promise or action of another.

First, there must be a valid offer made by one party to another party. The offer may be written
or spoken, and is a proposal to enter a legally binding agreement on clear terms.

The offer is made by the offeror to the offeree. The offer may be definitely stated through
writing or speech (an express offer) or it may be implied by the way the offeror behaves or
acts (an implied offer). An example of an express offer is where A says to B “Will you sell
me your car for rupees 1000?” An example of an implied offer is where a bus company run a
regular service between points A and B: there is implied offer from the bus c ompany to take
any person waiting at a bus stop on the route who is willing to pay the usual fare.

The offer may be accepted or rejected by the offeree, who may also reject the original terms
and propose a counteroffer. If the offer is accepted, this acceptance must be complete, with
no conditions or limitations. The acceptance must be communicated to the offeror. This
acceptance may be written, oral or may be implied by behaviour.

A third element is also required if the contract is to be enforceable; that third element is
consideration. Consideration is the payment for a promise e.g. If Y promises to build a wall
for X for rupees 1,000, the consideration for the promise to build the wall is rupees 1,000.
However, consideration does not have to be monetary it can be anything of value to the
contracting parties.

A party may be able to escape his or her contractual obligations If there is a defence to the
formation of a contract. Defences include one party misleading the other, known as fraud in
the inducement; a contract for an illegal activity; or lack of legal capacity where a party is not
able to enter into a legally binding contract because that party is not old enough, is suffering
from a mental illness that means they cannot fully appreciate the terms of the contract or for
some other reason.

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 Abdul Aziz and Others v. Masum Ali and Others

AIR 1914 All 22: ILR (1914) 36 All 268

Facts of the Case

Islam Agency Local Committee at Agra, a mosque had to be repaired and subscriptions were
raised for the repairs. Munshi Hafiz Abdul Karim was appointed treasurer, and money was to
be realized by, and deposited with, him. He himself promised to pay Rs. 500. Another sum of
Rs. 500 was promised by one Jan Muhammad, who sent a cheque for the amount to the
treasurer. The treasurer sent it for collection to the bank in September, 1907, but they
returned it as it was not properly endorsed. It was again presented to the Bank nearly a year
and a half afterwards, in January, 1909, but was returned as being out of date. Hafiz Abdul
Karim died on the 20th of April, 1909. This suit was brought against the heirs of Hafiz Abdul
Earim for the recovery of this Rs. 1,000, that is, Rs. 500 promised by him, and Rs. 500, the
amount for which Jan Muhammad had paid a cheque which was not cashed in time, and
another item the liability for which was not disputed. The court below made the heirs liable
for the Rs. 1,000. The defendants appealed to the High Court.

Issues involved

Whether a promise is enforceable without any consideration?

Analysis

It was contended by the appellants that the money promised by the treasurer was not beyond
the stage of promise and had enough money with him but had not transferred that from his
private account. They also contended that he would not incur any liability on the performance
of the promise. Quoting Sir Fredrick Pollock criticizing KedarNath Bhattacharji v. Gorie
Mahomed, the plaintiff stated that no question would arise if the committee had not done
anything in pursuance of a promise and distinguished.

To this, the respondents stated that the promise made by the treasurer himself, the money
should have gone to his account and would be in their possession. They stated that Mr Haifz
had the intention of paying as his name had appeared in the list of subscribers prepared and
would not do an overt act to mark a payment.

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Judgement of the Court

With regard to the subscription of Munshi Abdul Karim, it was a mere gratuitous promise on
his part. It was held by the Honourable Court that the promise was not enforceable because
there was no consideration in the sense of benefit, as the person who promised gained nothing
in return for the promise made and the secretary of the committee to whom the promise was
made suffered no determinant (liability) as nothing had been done to carry out the repairs.
Hence the suit was dismissed.

It was also held that Munshi Abdul Karim cannot be said to have been an agent of the
committee and even if he was, it is very doubtful that he could have been held guilty of gross
negligence. His undertaking of the office of treasurer was purely gratuitous. The court stated
that the mistake in the endorsement was a natural one and the delay in re-representing the
cheque or obtaining a duplicate may be well explained.

Conclusion

The judgement passed by the Honourable Court that the person who made the promise gained
nothing in return for the promise made and the secretary of the Committee to whom the
promise was made, suffered no detriment as nothing had been done to carry out the repairs.
As stated by Sir Frederick Pollock, that “consideration is the price for which the promise of
the other is bought and the promise is thus given for value is enforceable.” When a party to
an agreement promises to do something, he must get something in return.

Thus, under the circumstances of the present case, Munshi Abdul Karim could not have been
sued in his lifetime. It is quite clear that if no suit lay against Munshi Abdul Karim in his
lifetime and no suit could be brought after his death against his heirs. The result is that the
appeal was allowed to the extent that the decree of the court below by dismissing the claim in
respect of the two items of Rs. 500 each.

Contract

According to section 2(h) of Indian Contract Act, 1872 a Contract is “an agreement
enforceable by law.” A contract is basically an agreement between two parties creating a
legal obligation for both of them to perform specific acts. Each party is legally bound to
perform the specified duties such as rendering a payment or delivering goods. In order for the
contract to be enforceable, each party must exchange something of value (called

Page 7 of 17
“consideration”).A contract may be used for various transactions, including the sale of land
or goods, or the provision of services. They may be either oral or written, though courts
prefer that agreements be put in writing.

Every contract is an agreement, but every agreement is not a contract. An agreement becomes
a contract when the following conditions are satisfied:

 There is some consideration for it.

 The parties are competent to contract.
 Their consent is free.
 Their object is lawful.

Consideration

Section 25 of the Indian Contract Act opens with the declaration that “an agreement made
without consideration is void ....” In England also “Promises without consideration are not
enforced, because they are gratuitous. In Rann v. Hughs 1the Lord Chief Baron SKYNNER
observed:

It is undoubtedly true that every man is by the law of nature bound to fulfil his engagements.
It is equally true that the law of the country supplies no means, nor affords any remedy, to
compel the performance of an agreement made without sufficient consideration.

Consideration has been variously defined. The simplest definition is by Blackstone:

“Consideration is the recompense given by the party contracting to the other.”

In other words, it is a price of the promise. In the words of Pollock, “Consideration is the
price for which the promise of the other is bought, and the promise thus given for value is
enforceable.” Another simple definition is by Justice PATTERSON:

Consideration means something which is of some value in the eyes of the law. It may be
some benefit to the plaintiff or some detriment to the defendant.

But the most commonly accepted definition is that which was attempted by LUSH J in Currie
v. Misa2

1
House of lords (1778) 7 term reports 346.
2
(1875) LR 10 ex 153,162

Page 8 of 17
“A valuable consideration in the sense of the law may consist either in some right, interest
profit or benefit accruing to the one party, or some forbearance, detriment, loss, or
responsibility given, suffered or undertaken by the other.”

The definition of consideration as a “price of the promise” has been commended by Cheshire
and Fifoot. According to the learned writers, “it is easier to understand, it corresponds more
happily to the normal exchange of promises and it emphasises the commercial character of
the English contract. It reveals the essential simplicity of the concept.”

Similarly, the Calcutta High Court has observed in a case that “consideration is the price of a
promise, a return or quid pro quo, something of value received by the promisee as
inducement of the promise.”

In Section 2(d) of the Indian Contract Act consideration is defined as follows:

When, at the desire of the promisor, the promisee or any other person has done or abstained.
From doing or does or abstains from doing, or promises to do or to abstain from doing,
something, such act or abstinence or promise is called a consideration for the promise.

This is rather a practical definition. The purpose is to emphasise the simple fact that
consideration is some act, done or promised to be done, at the desire of the promisor. It also
avoids the practical difficulties caused by the theory of consideration as consisting of some
act which is beneficial to one party or detrimental to the other. This antithesis has been
described to be not altogether happy. The Act simplifies the matter by saying that any kind of
act or abstinence which is done or undertaken to be done at the desire of the promisor is a
sufficient consideration.

The definition of consideration in Section 2(d) requires, in the first place that the act or
abstinence, which is to be a consideration for the promise, should be done at the desire of the
promisor; secondly, that it should be done by promisee or any other person and, lastly, that
the act or abstinence may have been already executed or is in the process of being done or
may be still executory, that is to say, it is promised to be done.

The definition of consideration in Section 2(d) clearly emphasises that an act or abstinence
which is to be a consideration for the promise must be done or promised to be done in
accordance with the desire of the promisor. In other words, an act shall not be a good

Page 9 of 17
consideration for a promise unless it is done at the desire of the promisor. In Durga Prasad v.
Baldeo:3

The plaintiff, on the order of the Collector of a town, built at his own expense, certain shops
in a bazar. The shops came to be occupied by the defendants who, in consideration of the
plaintiff having expended money in the construction, promised to pay him a commission on
articles sold through their agency in the bazar. The plaintiffs action to recover the
commission was rejected.

The only ground for the making of the promise is the expense incurred by the plaintiff in
establishing the Ganj (market) but it is clear that anything done in that. way was not ‘at the
desire’ of the defendants so as to constitute consideration. The act was the result not of the
promise but of the Collector’s order.

On the other hand, an act done at the promisor’s desire furnishes a good consideration for his
promise even though it is of no personal significance or benefit to him. The decision of the
Calcutta High Court in KedarNath v Gorie Mohamed4 has become well known in this
connection.

It was thought advisable to erect a town hall at Howrah provided sufficient subscription could
be got together for the purpose. To this end the Commissioners of Howrah municipality set
out to work to obtain necessary funds by public subscription. The defendant was a subscriber
to this fund for Rs. 100 having signed his name in the subscription book for that amount. On
the faith of the promised subscriptions the plaintiff entered into a contract with a contractor
for the purpose of building the hall. But the defendant failed to pay the amount and contended
that there was no consideration for his promise.

He was, however, held liable: Persons were asked to subscribe knowing the purpose for
which the money was to be applied they knew that on the faith of their subscription an
obligation was to be incurred to pay the contractor for the work. The promise is: ‘In
consideration of your agreeing to enter into a contract to erect, I undertake to supply money
for it.’ The act of the plaintiff in entering into contract with the contractor was done at the
desire of the defendant (the promisor) so as to constitute consideration within the meaning of
Section 2(d).

3
(1880) 3 ALL 221
4
1886 ILR 14 Cal 64.

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It was indeed a promise to pay for the performance of an act and it could not have been
revoked once the promisee entered performance. In England also “the law for centuries has
been that an act done at the request of another, express or implied, is sufficient consideration
to support a promise”. Writing in an article Lord Justice Denning says “Nowadays there are
some grounds for suggesting that an act may be good consideration even though it is not a
benefit to the promisor nor a detriment to the promisee. If a man promises a charitable
institution that he will pay £ l00 into its funds if it procures nine other persons to do the same,
justice requires that his promise should be held binding on him as soon as it has procured the
nine others to pay £ 100 each; but the act done by the institution is not a benefit to him nor a
detriment to the institution.” A trend of this kind is observable in a decision of the Supreme
Court. On the death of their father, his two sons picked up a clash. Their mother intervened
writing to the junior son that in case his elder brother did not pay the sum of rupees fifty
lakhs which was due to him out of the family assets, she would pay the same. The brother
paid a part of the amount. The mother supplemented the payment to a certain extent, but she
had still to pay the balance amount and for that she claimed a reduction in the computation of
her net wealth. The Court allowed the deduction. The contract was a part of the family
arrangement. It was not hit by Section 25 as purchase of family peace in such circumstances
is good consideration.

A loan given to the son at the instance of his father who executed all the essential documents
was held to be enforceable against the father.

Promises of Charitable Nature

The decision of the Calcutta High Court in KedarNath case was followed by the Madras High
Court in two cases in both of which the court laid down that a promise to pay a subscription
becomes enforceable as soon as any definite Steps have been taken in furtherance of the
object and on the faith of the Promised subscription. In one of these cases:

A sum of Rs 5000 was promised by the defendant as a personal contribution for the purpose
of constructing a bridge. He was held liable to pay the amount on the completion of the
bridge.

In a subsequent case, Doraswami Iyer v Arunachala Ayyarzo, the Madras High Court
explained the principle of KedarNath v Gorie Mahomed on the footing that there was not a
bare promise to subscribe, but also a request that the promisee should do an act (construction

Page 11 of 17
of the town hall in that case), and that where there is no such, request for an act the promise
will be a bare promise and without any consideration. The facts of the case were:

The repair of a temple was in progress. As the work proceeded, more money was required
and to raise this money subscription were invited and a subscription list raised. The defendant
put himself down on the list for Rs 125 and it was to recover this sum that the suit was filed.

But no recovery was allowed. CORNISH J proceeded like this:

The plaint found the consideration for the promise as follows: That plaintiffs relying on the
promise of the subscriber incurred liabilities in repairing the temple; The question is, does
this amount to consideration? The definition of consideration in the Contract Act is that
where at the desire of the promisor the promisee has done or abstained from doing something,
such act or abstinence is called consideration. Therefore, the definition postulates that the
promisee must have acted on something amounting to more than a bare promise. There must
be some bargain between them in respect of which consideration has been given. There must
have been some request by the promisor to the promisee to do something in consideration of
the promised subscription.

The learned judge found support in the English case of Hudson, Re “where the promise was
to contribute a large sum of money for the payment of Chapel debts, the promisor having
died after paying a large instalment, the balance could not be recovered from his executors.
The claim was considered to be unsustainable in as much as the promisee had not undertaken
any liability as part of the bargain with the promisor. Applying these principles to the present
case, the learned judge said that there was no evidence of any request by the subscriber to the
plaintiff to do the temple repairs.”

The principal difference between these cases is that in the KedarNath case the construction of
the hall began on the faith of the promised subscriptions, but in the present case, temple
repairs were already in progress when the subscriptions were invited. The action was not
induced by the promise to subscribe but was rather independent of it.

Unilateral Promises

A unilateral promise is a promise from one side only and is intended to induce some action
by the other party. The promisee is not bound to act, for he gives no promise from his side.
But if he carries out the act desired by the promisor, he can hold the promisor to his promise.

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His act is at the same time an acceptance of and a consideration for the promise. “An act done
at the request of the offeror in response to his promise is consideration, and consideration in
its essence is nothing else but response to such a request.”

It should be noted that in all the above cases where liability arose it arose only when the
promisee had by doing some act, on the faith of the promise, altered his position. It follows,
therefore, that where the promisee has done nothing, there is no consideration. Accordingly,
in Abdul Aziz v Masum Ali5 the defendant promised Rs 500 to a fund started to rebuild a
mosque but nothing had been done to carry out the repairs and reconstruction. The subscriber
was, therefore, held not liable. Similarly, it has been pointed out in other cases that a mere
promise to subscribe to a charitable institution cannot be sued upon.24 Thus where the
defendant had agreed to pay from time to time, out of his own pocket certain sums
proportionate to the value of the goods imported by him, to a charitable society, the promise
was held to be not enforceable, being without consideration.

Revocation of Unilateral Promises

There is yet another problem concerning such unilateral contracts. It is no doubt true that a
promise which is given in return for an act is revocable before the promisee begins to alter his
position by acting upon the promise. But may it be revoked after the promisee has
commenced performance? If, for example, the promise is to pay a sum of money if the
promisee walks from Lucknow to Kanpur, can it be revoked after the promisee has embarked
upon the journey? The decision in KedarNath v Gorie Mohammad6 suggests, though not in so
many words, that such a revocation is impossible. The defendant, in that case, was held liable
as soon as the contract for the construction of the hall was entered into.

The same appears from the decision of DENNING LJ in Errington v. Errington.7 The owner
of a house had mortgaged it. The house was in the occupation of his son and daughter-in-law.
He told them that the house would become their property if they paid off the mortgage debt in
instalments and they commenced payment. In these circumstances, the court felt that it would
be unjust if the promisor could revoke this promise at his pleasure. His Lordship said:

“The father’s promise was a unilateral contract...a promise of the house in return for their act
of paying the instalments. It could not be revoked by him once the couple entered on

5
AIR 1914 ALL 22: 36 ALL 268
6
ILR (1886) 14 CAL 64
7
(1952) 1 KB 290

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performance of the act, but it would cease to bind him if they left it incomplete and
unperformed.”

Either way there is some difficulty. If the promisor is at liberty to revoke, he can frustrate the
promise at his pleasure. On the other hand, if he has no such liberty, he will be bound even
though the promisee may stop performance at his sweet will. The House of Lords, therefore,
suggested in Morrison Steamship Co Ltd v. The Crown8 that the mere commencement of
performance does not convert the offer into a contract in the sense that the promisor is bound
to stay with his promise, but that if he revokes it, he may be sued for damages or on a
quantum meruit.

Promissory Estoppel and Government Agencies

The position of the doctrine of promissory estoppel as against the Government and its
agencies is thus summarised by RM SAHAI J of the Supreme Court in Amrit Banaspati Co v.
State of Punjab9.

Law of promissory estoppel which found its most eloquent exposition in Union of India v.
lndo Afghan Agencies10, crystallised in Motilal Padampat Sugar Mills v State of U.P11 as
furnishing cause of action to a citizen, enforceable in a count of law, against the Government
if it or its officials in the course of their authority extended any promise which created or was
capable of creating legal relationship, and it was acted upon by the promisee, irrespective of
any prejudice. It was reiterated in Union of India v Godfrey Philips (India) Ltd12 and was
taken further when it was held that no duty of excise was assessable on cigarettes
manufactured by the assesse by including the cost of corrugated fibre board containers when
it was clearly represented by the Central Board of Excise and Customs in response to the
submission made by the Cigarette Manufacturers Association and the representation was
approved and accepted by the Central Government that the cost of containers would not be
included in the value of cigarettes for the purpose of assessment of excise duty. In Delhi
Cloth and General Mills Ltd v Union of India13 it was held: ‘All that is now required is that
the party asserting the estoppel must have acted upon the assurance given to him. Must have

8
(1924) 20 LI LR 283
9
(1992) 2 SCC 411
10
(1968) 2 SCR 366
11
AIR 1979 SC 621
12
AIR 1986 SC 806
13
AIR 1987 SC 2414

Page 14 of 17
relied upon the representation made to him. It means that the party has changed or altered his
position by relying on the assurance or representation. The alteration of his position by the
party is the only indispensable requirement of the doctrine. It is not necessary to prove further
any damage, detriment or prejudice to the party asserting the estoppel.

In Pournami Oil Mills v State of Kerala14 the Government was not permitted to go back on its
earlier promise of wider exemption from sales tax in pursuance of which certain industries
were set up. A subsequent notification curtailing the exemption was held to be applicable to
industries established after the notification. A promise which is against public policy or in
violation of a statutory prohibition cannot be the foundation of an estoppel.

Estoppel of Licensee

The party who was granted a liquor licence was held to be estopped from saying afterwards
that some of the restrictions imposed upon his trade freedom, particularly the one under
which the Government reserved with it the power to vary issue prices, were unreasonable.
Unreasonableness has to be considered in the totality of the circumstances including public
interest. Liquor consumption has to be reduced and, therefore, free trade of such an item
cannot be encouraged. The power to vary issue prices is a method of exercising control of
this trade. The courts will only prevent a crushing use of this power. Such power does not
also offend Section of the Contract Act because there is no uncertainty about the nature of the
price variation clause. Its unreasonable use can always be prevented under writ jurisdiction.

A person, who had acquired title to the land of a Council by adverse possession, agreed
subsequently to hold the same under a term licence from the Council. On the expiry of the
term the Council told him to hand over possession. He tried to assert his title by adverse
possession. He was not allowed to do so. Whatever rights he had acquired became substituted
under the new arrangement which he voluntarily accepted. The new arrangement constituted
a promissory estoppel against him.

14
AIR 1987 SC 590

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 Conclusion

Consideration is an essential element of a valid contract. A promise

without consideration cannot be enforced by law except under certain
circumstances. Consideration is the necessary evidence by law of the
intention of the parties to effect their legal relations. Consideration,
broadly speaking, is the price paid by the promisee for the obligation
of the promisor. The term ‘consideration’ is used in the sense of
“something in return”, i.e. quid pro quo. An agreement without
consideration is a bare promise and exnudo pacto non aritio actio, i.e.,
cannot be held to binding on the parties.

Page 16 of 17
 Bibliography

The researcher has consulted following sources to complete the rough proposal:

PRIMARY SOURCES

• Avtar Singh on Law Of Contracts

• Ashley’s Law Of Contracts

SECONDARY SOURCES

• www.manupatra.com

• www.indiankanoon.com

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