FRESHERS’ INDUCTION MOOT 2022

Campus Law Centre

IN THE COURT OF HON’BLE DISTRICT JUDGE AT

HOLT, STATE OF SAKHI

CASE PERTAINING THE OFFECENCE UNDER SEC

14,16,18,73 OF Indian Contract Act ,1872,
SEC 9.INDIAN PARTNERSHIP ACT

MEMORIAL ON BEHALF OF PLAINTIFF

COUNSEL APPEARING ON BEHALF OF PLAINTIFF
 TABLE OF CONTENTS

Page No.

Index of Authorities 3

Statement of Jurisdiction 4

Statement of Facts 5

Statement of Issues 6

Summary of Arguments 7

Arguments Advanced 8

Prayer 14

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 INDEX OF AUTHORITIES

STATUTES:
1. The Indian Contracts Act, 1872
2. Indian partnership act 1932

BOOKS:
1. Law of Contract and Specific Relief by Avtar Singh

CASES:
1. Raghunath Prasad vs Sarju Prasad 1923 51 I.A. 101
2. Subhas Chandra v Ganga Prasad AIR 1967 SC 878
3. Poosathuri v Kappanna Chettiar AIR 1920 PRIVY COUNCIL 65,66

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 STATEMENT OF JURISDICTION

The plaintiff approached the Hon’ble Court to exercise its jurisdiction as per section 15 of the
Code of Civil Procedure, 1908.

Section 15 of the Civil Procedure Code, 1908 reads:

Court in which suits to be instituted. —Every suit shall be instituted in the Court of the lowest
grade competent to try it.

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 STATEMENT OF FACTS

1. Two brothers, Mr. Jacob and Mr. Peralta, living in the Pimento district of Holt, a state within
the country of Sakhi, are running a business of car manufacturing in partnership. The elder
brother Jacob is a mechanical engineer. The younger brother Peralta, on the other hand, has a
commerce background.
2. . Mr. Jacob took over the technical and operations aspect of the business, while Mr. Peralta
handled the commercial and legal aspects of the business. They feel that it was the right time
to expand it and buy another manufacturing unit with storage capacity
3. Mr. Jacob’s elder brother-in-law, Mr. Scully is a real estate giant and has several properties in
his own name. In the initial years of business of the brothers, when Jacob was struggling
financially, Mr. Scully loaned him a sum of Rs. 1,00,00,000 ( One crore rupees), to be repaid
in 5 years at the interest of 7% (Seven Percent) per annum. Mr. Jacob, in turn, felt extremely
thankful and indebted to his brother-in-law who helped him at the time of his dire need . The
said amount was utilized by Mr. Jacob in the business as well as for his personal use,
unbeknownst to his brother, Mr. Peralta.
4. After a vigorous search for three months, in December 2022, the brothers finally zeroed in on
a property belonged to Mr. Scully. When both brothers came to visit, Scully himself showed
the entire property including the backyard and the empty plot beside the land (refer to
Annexure A). Mr. Scully also said “We have been using this entire area for years. We have
decided to sell all our properties here and move abroad as soon as possible”. Later that night,
over a chat after a few drinks, Mr. Scully casually revealed to Mr. Peralta that the property
wasn’t inclusive of the empty plot but it was often used by him. Mr. Peralta remained
unattentive but was nodding all along the chat.
5. Unfortunately, Mr. Peralta got sick the very next day and had to urgently travel to a foreign
country to get his treatment. On the other hand, Mr. Scully grew impatient.He also claimed
that he was getting many offers for the said property and he was only waiting on the brother
duo to buy the property, given his familial relation with Mr. Jacob. He personally called Mr.
Jacob to finalize the deal and agreed to close it upon payment of the partial amount .
6. Mr Peralta was unreachable as he was undergoing medical treatment. Mr. Jacob was not
experienced enough in this area and he had not dealt with these matters earlier as it fell within
the realm of responsibilities of Mr. Peralta. Moreover, he was also not aware of the
specifications of this deal either.
7. Mr. Jacob signed the contract for sale with Mr. Scully on 10th January 2023, fixing the sale
price at Rs. 6,00,00,000 (Rupees Six crores), by paying an advance amount of Rs. 3,00,00,000
(Rupees Three Crores) towards part payment. The relevant clause of the agreement is
provided in Annexure B Mr. Jacob was under the impression property came along with the
empty plot which he believed could be used as a separate storage unit . the prevailing market
price was neither discussed nor considered as an issue while concluding the contract for sale
of the property
8. One month later, on 12th February 2023, when the time came for completion and handing over
possession of the property, Mr. Jacob came to know that the empty plot which they were planning to
use as a storage facility was not part of the property under the agreement for sale. The brothers pull
the plug on the deal and refused to make payment for the rest of the amount

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 STATEMENT OF ISSUES

ISSUE 1
WHETHER THE PLAINTIFF’S CONSENT IN THE CONTRACT HAS BEEN
OBTAINED UNDER UNDUE INFLUENCE AND HENCE NOT FREE?

ISSUE 2
WHETHER THE PLAINTIFF (Mr.Scully) CAN CLAIM DAMAGES?

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 SUMMARY OF ARGUMENTS

1. Whether the consent in the contract is given under undue influence?

It is humbly submitted before the Hon’ble Court, the consent in the contract is “free
consent” defined under Section 14 of the Indian Contracts Act, 1872 and is NOT
affected by “undue influence” defined under Section 16 of the Indian Contracts Acts,
1872.

2. WHETHER THE PLAINTIFF CAN CLAIM DAMAGES?

It is humbly submitted before the Hon’ble Court, that plaintiff can claim damages
under Section 73 of the Indian Contracts Acts, 1872.
And As mentioned in cluse (4) of aggreement to sale (Annexure B)

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 ARGUMENTS ADVANCED

• The consent under the contract is not “free consent” and under
“undue influence”

1) Section 12 of the Indian Contract Act, 1872

Free consent

Consent is said to be free when it is not caused by—

(1) coercion, as defined in section 15, or

(2) undue influence, as defined in section 16, or

(3) fraud, as defined in section 17, or

(4) misrepresentation, as defined in section 18, or

(5) mistake, subject to the provisions of sections 20, 21 and 22. Consent is said to be so
caused when it would not have been given but for the existence of such coercion, undue
influence, fraud, misrepresentation or mistake.

Section 16 of the Indian Contract Act, 1872

Undue Influence

(1) A contract is said to be induced by “undue influence” where the relations subsisting
between the parties are such that one of the parties is in a position to dominate the will of
the other and uses that position to obtain an unfair advantage over the other.

(2) In particular and without prejudice to the generality of the foregoing principle, a person is
deemed to be in a position to dominate the will of another.
a) where he holds a real or apparent authority over the other, or where he
stands in a fiduciary relation to the other; or
b) where he makes a contract with a person whose mental capacity is
temporarily or permanently affected by reason of age, illness, or mental or
bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a
contract with him, and the transaction appears, on the face of it or on the evidence adduced,
to be unconscionable, the burden of proving that such contract was not induced by undue
influence shall lie upon the person in a position to dominate the will of the other.

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2) The aforementioned sections’ application was given by the court in Raghunath Prasad vs
Sarju Prasad 1 to determine the undue influence the following stages are to be looked at

i. whether the relationship is such that one party is in a position to dominate the will
ii. whether the issue of the contract has been induced by undue influence (i.e whether
the transaction is unconscionable)
iii. onus probandi

i. Whether Mr. Scully was in the position to dominate the will of Ms. Tanushka

Mr. Scully is brother in law of Mr Jacob .Mr.Jacob has very high regard for Mr .Scully.They
both are in comfortable position .Mere both were related ,no presumption of undue
Influence can arise (Subhas Chandra v Ganga Prasad2). Mr. Scully is not in the dominant
position in this relationship as described by Section 16(2a)3

3) ii. Whether the issue of the contracts has been induced by undue influence
Mr Scully clearly told to both the brothers that the plot is not included in property to be sell.
Mr Prelata nodded to the say of Mr.jacob. In this case ,Mr Jacob may rely on advice of Mr
Scully but his brother Mr Prelata already check every material specification related to
property .It is the duty of partner in partnership firm as per section 9 of partnership act 1932
to reveal every material facts to partner and Mr Scully in good faith believes that Mr.Jacob
already knows it.As held in case of Poosathuri v Kappanna Chettiar^4 , It is mistake to treat
undue influence as have been established by proof of relation of parties having being such
that the one naturally relied upon the other for advice and the other goes to the position to
dominate the will of first in giving it .Upto that point " influence " alone has made out .Such
influence may be used wisely , judicially and helpfully .More than mere influence must be
proved so as to render influence in language of law undernsection 16 of Indian contract act
1872.

1
Raghunath Prasad vs Sarju Prasad 1923 51 I.A. 101
2
Subhas Chandra V Ganga Prasad AIR 1967 SC 878
3 The Indian Contract Act, 1872
4. Poosathuri v Kappanna Chettiar AIR 1920 Privy council 65,66

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 • Whether Mr scully misrepresented property?
Under section 18 of Indian contract Act 1872
Misrepresentation” defined.—

“Misrepresentation” means and includes—

(1) the positive assertion, in a manner not warranted by the information of the person making
it, of that which is not true, though he believes it to be true;

(2) any breach of duty which, without an intent to deceive, gains an advantage of the
person committing it, or any one claiming under him, by misleading another to his
prejudice, or to the prejudice of any one claiming under him;

(3) causing, however innocently, a party to an agreement, to make a mistake as to the

substance of the thing which is the subject of the agreement.

In this case ,Mr Scully told Mr Prelata every material information on drinks but Mr Prelata
nodded in affirmation signifying that he is getting what Mr Scully was saying Hence, there is
no misrepresentation from side of Mr Scully

According to section 19 ,if consent is caused by misrepresentation ,it is not void if there is
adequate means to discover the truth with ordinary diligence. In this case Mr Jacob and Mr
Prelata had all the means to discover the truth hence no misrepresentation

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Whether Plaintiff (Mr.scully) can claim
damages ?

Section 73 of the Indian Contract Act, 1872

When a contract has been broken, the party who suffers by such breach is entitled to receive,
from the party who has broken the contract, compensation for any loss or damage caused to
him thereby, which naturally arose in the usual course of things from such breach, or which
the parties knew, when they made the contract, to be likely to result from the breach of it.

Such compensation is not to be given for any remote and indirect loss or damage sustained
by reason of the breach.

Compensation for failure to discharge obligation resembling those created by contract.—

When an obligation resembling those created by contract has been incurred and has not been
discharged, any person injured by the failure to discharge it is entitled to receive the same
compensation from the party in default, as if such person had contracted to discharge it and
had broken his contract.

Explanation.—In estimating the loss or damage arising from a breach of contract, the means
which existed of remedying the inconvenience caused by the non-performance of the contract
must be taken into account

In this case ,it is clearly mentioned that in case of breach of agreement parties can claim
damages .As Mr Jacob breach the agreement on 12 Feb 2023 , due date of payment and completion
of contract ,he fails to make the payment of 3,00,00,000 to Mr Scully. Due to delay in
payment,already signed agreement with Mr. Jacob can't sell to someone else and loses opportunity
cost as we know Mr Scully is giant bussiness man .He can easily sell property to other with more than
said amount .He created some liability tonsetlle down in foriegn country.
So,he can claim damages under section 73 of Indian contract act

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Mahub Chander v Raj Coomar (1874) 14 Beng LR 76
12
the Indian Contracts Act, 1872
13
the Indian Contracts Act, 1872
14
Avtar Singh, Contract and Specific Relief, 12th Ed Pg. 293
15
McEllistrim v Ballymacelligott Coop Agricultural & Dairy Society 1919 AC 548

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 PRAYER
In light of the issue raised, arguments advanced, authorities cited, and the pleadings made
before this Hon’ble Court, the plaintiff respectfully prays for injunction of contract and
claim damages.

Signed

s/d- Counsel for the Plaintiff

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