Commercial Law Case Briefs
INDIAN CONTRACT ACT
1. S. 124 - Gajanan Moreshwar Parelkar v Moreshwar Madan Mantri (Indemnity) (Plaintiff, at the request of the defendant, executed two mortgages in favour of Mohandas. Defendant wrote a letter promising to indemnify the plaintiff against any suits by the mortgagee, along with executing a third mortgage in place of the previous two. Plaintiff prays that the defendant obtains a release of liability from Mohandas; Issues: 1) Can the indemnified ask for performance of the contract of indemnity without suffering actual loss? 2) Whether the obligation of the plaintiff was absolute. Held: S 124,125 do not apply, as said sections do not cover the transaction. ICA is not exhaustive, and principles of equity will allow the indemnified to enforce said contract of indemnity without having suffered actual loss, when the obligation of the indemnity holder is absolute. Here, obligation is absolute. RATIO: There exist contracts of indemnity, which do not fall within the ambit of S 124,125. Contracts of indemnity can be enforced without the actual loss of the indemnified so long as there is an absolute liablity of the type covered by the contract of indemnity.)
2. S. 124 - Lala Shanti Swarup vs Munshi Singh & Others (Indemnity) (Vendor sold an encumbered land to vendee, who promised to make required payment against a mortgage to the mortgagee; Vendee fails to do so, vendor sustains loss in the form of ¾th of their property being sold; Vendor sues under implied contract of guarantee. Issue: Is there a contract of guarantee? Is the suit barred by limitation? Held: A conveyance which contains a covenant whereby th epurchaser promises to pay off encumberances on the sold property is nothing but an implied contract of indemnity, whose cause of action arises when ACTUALLY DAMNIFIED (Mortgage decree being passed does not amount to actual damnification))
3. S. 125 – Gray v Lewis & Parker v Lewis (Indemnity)
4. S. 126 – Mountstephen v Lakeman
1. S. 124 - Gajanan Moreshwar Parelkar v Moreshwar Madan Mantri (Indemnity) (Plaintiff, at the request of the defendant, executed two mortgages in favour of Mohandas. Defendant wrote a letter promising to indemnify the plaintiff against any suits by the mortgagee, along with executing a third mortgage in place of the previous two. Plaintiff prays that the defendant obtains a release of liability from Mohandas; Issues: 1) Can the indemnified ask for performance of the contract of indemnity without suffering actual loss? 2) Whether the obligation of the plaintiff was absolute. Held: S 124,125 do not apply, as said sections do not cover the transaction. ICA is not exhaustive, and principles of equity will allow the indemnified to enforce said contract of indemnity without having suffered actual loss, when the obligation of the indemnity holder is absolute. Here, obligation is absolute. RATIO: There exist contracts of indemnity, which do not fall within the ambit of S 124,125. Contracts of indemnity can be enforced without the actual loss of the indemnified so long as there is an absolute liablity of the type covered by the contract of indemnity.)
2. S. 124 - Lala Shanti Swarup vs Munshi Singh & Others (Indemnity) (Vendor sold an encumbered land to vendee, who promised to make required payment against a mortgage to the mortgagee; Vendee fails to do so, vendor sustains loss in the form of ¾th of their property being sold; Vendor sues under implied contract of guarantee. Issue: Is there a contract of guarantee? Is the suit barred by limitation? Held: A conveyance which contains a covenant whereby th epurchaser promises to pay off encumberances on the sold property is nothing but an implied contract of indemnity, whose cause of action arises when ACTUALLY DAMNIFIED (Mortgage decree being passed does not amount to actual damnification))
3. S. 125 – Gray v Lewis & Parker v Lewis (Indemnity)
4. S. 126 – Mountstephen v Lakeman