KEDARNATH BHATTACHARJI V. GORIE MAHOMED (1886)

KEDARNATH BHATTACHARJI V. GORIE MAHOMED (1886)

This article is written by Saniya Arfa, in her 3^rd year of B.A.LL. B from Amity University Kolkata, during her internship at LeDroit India. It provides a case analysis of Kedarnath Bhattacharji v Gorie Mahomed (1886) focusing on the concept of consideration under Contract Law.

KEYWORDS

Consideration, Public Subscription, Contract Formation, Reliance, Enforceability, Promise, Indian Contract Act

ABSTRACT

This case analysis discusses Kedarnath Bhattacharji v. Gorie Mahomed (1886), a leading case on the enforceability of promises under contract law. The case arose when the defendant promised to donate money for constructing a town hall but later refused to pay. The court examined whether the plaintiff’s act of starting construction based on the promise amounted to valid consideration. The judgment held that when a promisee incurs liability relying on the promisor’s assurance, the promise becomes legally binding. The case is an important authority

on how voluntary promises become enforceable. The analysis concludes with the case’s relevance in modern contract law.

CONTENTS

• Introduction
• Legal Framework
• Facts
• Issues
• Arguments by Petitioner
• Arguments by Defendant
• Judgement
• Conclusion
• Reference

INTRODUCTION

The law of contracts is built on the foundational principle that agreements must be supported by consideration in order to be enforceable. While commercial contracts readily satisfy this requirement, the position becomes complicated when promises are made in the context of charity, public donations, or moral obligations. The case of Kedarnath Bhattacharji v. Gorie Mahomed (1886) is a landmark decision that addresses this complexity by examining whether a voluntary promise—specifically, a subscription towards the construction of a public town hall—can create legally binding liability. This case is frequently cited in Indian contract law as it clarifies how the act of relying on a promise can transform a seemingly moral commitment into an enforceable legal obligation.

In India, Section 2(d) of the Indian Contract Act defines consideration as an act, abstinence, or promise done at the desire of the promisor. This definition becomes crucial in determining when the actions of the promisee can be treated as valid consideration, especially in situations where the promisor offers financial support not for personal benefit but for public welfare. The central question that arises is whether a donation made purely out of goodwill or benevolence can still bind the promisor if the promisee, acting on that promise, incurs expenses or undertakes liability. The court in this case had to closely examine the relationship between moral expectations and legal enforceability.

The dispute arose when the defendant gave his name as a subscriber for the construction of a town hall but later refused to pay his promised amount. The plaintiff argued that he had already commenced construction work and entered into a binding contract with a builder relying on the defendant’s assurance. Therefore, the defendant’s promise had directly induced action and caused the plaintiff to incur liability. This raised an important legal issue: can reliance by itself constitute consideration?

Through this case, the court established a significant principle—that when a promisee changes their position to their detriment relying upon a promise, the promise can be enforced even if made voluntarily. Thus, the judgment bridges the gap between moral duty and legal responsibility, and continues to influence modern interpretations of consideration, especially in matters involving public subscriptions and charitable commitments.

LEGAL FRAMEWORK

The foundation of this case lies in the interpretation of consideration under the Indian Contract Act, 1872, particularly Section 2(d). According to the Act, consideration means any act, abstinence, or promise done at the desire of the promisor. This provision establishes that for an agreement to become a legally enforceable contract; the promisee must undertake some act because the promisor desired it. Unlike gratuitous promises based merely on moral duty, the law recognizes only those promises supported by consideration as binding. Thus, the central legal question in this case was whether the plaintiff’s act of commencing construction reliance on the defendant’s promised subscription constituted such consideration.

Another important concept is the intention to create legal relations, which, although not explicitly defined in the Act, is an essential requirement for enforceability. In charitable or public subscription contexts, promises are usually made voluntarily without a formal contract. Courts must therefore determine whether the promisor could reasonably foresee that the promisee would incur expenses or liabilities based on the promise. If so, the performance undertaken by the promisee may be treated as valid consideration, converting a moral promise into a legal one.

The case also touches upon unilateral promises, where the promisor makes an offer and the promisee accepts it through conduct rather than words. In such situations, the promise becomes binding the moment the promisee begins performing the requested act. This principle becomes relevant when a public body or individual starts work relying on a subscription promise.

Additionally, the case aligns with the broader legal doctrine of promissory reliance, which recognizes that when a promisor induces the promisee to alter their position, the law may enforce the promise to prevent injustice. Although Indian law does not fully adopt promissory estoppel in contract formation, the reasoning in this case closely reflects its essence.

Thus, the legal framework of this case rests on interpreting consideration, reliance-based performance, and enforceability of promises made for public purposes under the Indian Contract Act.

FACTS

The plaintiff, Kedarnath Bhattacharji, was a Municipal Commissioner of Howrah and one of the trustees of the Howrah Town Hall Fund. At that time, a proposal was under consideration to construct a Town Hall in Howrah, provided that adequate funds could be raised through public subscriptions. Acting on this idea, the commissioners and other interested people began collecting contributions from the public.

As the subscription list grew to a satisfactory level, the Commissioners—including the plaintiff—entered a formal contract with a contractor to construct the Town Hall. Initially, the estimated cost of the building was Rs. 26,000, for which the Commissioners made themselves jointly liable. However, as more subscriptions were collected, the plans for the Town Hall were expanded, increasing the final estimated cost to Rs. 40,000. Despite this increased cost, the Commissioners, with full authority and sanction, continued to remain personally liable to the contractor for the entire amount.

During this period, the defendant, Gorie Mahomed, when approached by the committee, wrote his name in the subscription book and pledged a contribution of Rs. 100 towards the construction of the Town Hall. The plaintiff, being one of the parties who had already incurred liability towards the contractor, sought to recover the promised amount from the defendant.

However, the defendant refused to pay his pledged subscription. This led the plaintiff to file a suit in the Small Cause Court on behalf of himself and all other persons jointly interested, seeking recovery of the Rs. 100 promised by the defendant. The key question that arose was whether such a subscription could be legally enforced, and whether the plaintiff, as one of the persons liable for construction expenses, was entitled to sue for the recovery of the amount.

ISSUES

1. Whether the suit filed by the plaintiff, as a Municipal Commissioner and trustee, on behalf of himself and all other persons jointly interested in the construction of the Howrah Town Hall, is legally maintainable under the Civil Procedure Code.

2. Whether the defendant’s subscription of Rs. 100, written in the subscription book for the construction of the Town Hall, constitutes a legally enforceable promise.

3. Whether the plaintiff and other commissioners, having incurred liability to the contractor based on the faith of the defendant’s subscription, can treat such reliance as valid consideration under contract law.

4. Whether a voluntary public subscription can give rise to a binding contract when the promisee undertakes or increases liability relying on the promisor’s pledge.

ARGUMENTS BY PETITIONER

1. The defendant’s subscription created a binding promise.

The plaintiff argued that when the defendant voluntarily wrote his name and pledged Rs. 100 for the construction of the Town Hall, he made a clear and definite promise to pay. This was not a casual or moral statement, but a commitment intended to support a public project.

2. There was valid consideration because liability was incurred on the faith of the promise.

The plaintiff and other Commissioners entered into a binding contract with the contractor to construct the Town Hall relying on the promised subscriptions, including the defendant’s. By doing so, the plaintiff incurred legal liability. This act—undertaken in reliance on the defendant’s pledge—constituted consideration under law.

3. The subscription was made with full knowledge of the purpose.

The defendant subscribed knowing that the money was needed to build the Town Hall and that the Commissioners would undertake contractual obligations based on public contributions. Therefore, the defendant knew his promise would induce action and create liability.

4. The plaintiff is entitled to sue on behalf of all interested parties.

As a Municipal Commissioner and trustee of the Town Hall Fund, the plaintiff argued that under the Civil Procedure Code, he could sue for the recovery of the amount on behalf of himself and all others jointly interested, since all commissioners were equally liable for the construction expenses.

5. Non-payment would cause financial loss and unfair burden.

Since the plaintiff and others were already financially bound to pay the contractor, failure of the defendant to honor his pledge would unjustly impose additional financial liability on the Commissioners who acted in good faith.

ARGUMENTS BY DEFENDANT

1. The subscription was a voluntary promise without legal intention.

The defendant argued that his act of writing Rs. 100 in the subscription book was merely a voluntary charitable pledge and not a binding contractual promise. He contended that he had no intention to create legal obligations when making the subscription.

2. There was no consideration to support a contract.

The defendant maintained that his promise lacked consideration because he did not demand, request, or direct the plaintiff to undertake any act in exchange for the subscription. Therefore, the plaintiff’s later act of entering into a contract with the builder could not be treated as consideration “at the desire of the promisor.”

3. No agreement existed between the parties.

The defendant claimed that he never entered into any agreement or contract with the plaintiff or the Commissioners. Since there was no meeting of minds, no offer and acceptance, and no contractual discussion, he could not be held legally liable.

4. Starting construction was an independent decision of the Commissioners.

According to the defendant, the Commissioners began construction on their own decision, and their act of incurring liability was not induced directly by him. Thus, they could not claim that their actions were done in reliance on his subscription.

5. A charitable or public subscription is not enforceable at law.

The defendant argued that public or charitable contributions, as a rule, are motivated by goodwill and cannot be enforced unless backed by clear legal consideration. Therefore, he contended that a mere promise to donate money does not automatically create legal liability.

JUDGEMENT

The Calcutta High Court, delivered by W. Comer Petheram, C.J., held in favour of the plaintiff and declared that the defendant’s subscription of Rs. 100 was legally enforceable.

The Court first held that the suit was maintainable. Under the Civil Procedure Code, the plaintiff—being a Municipal Commissioner and trustee of the Howrah Town Hall Fund—was entitled to sue on behalf of himself and all other persons jointly interested in the construction of the Town Hall. Therefore, there was no procedural defect in the suit.

On the main issue, the Court held that the defendant’s subscription constituted a valid contract supported by good consideration. The Court reasoned that:

• The defendant subscribed knowing fully that the money was meant for constructing the Town Hall.

• He also knew that the Commissioners would enter into obligations with the contractor on the faith of such subscriptions.

• By writing his name in the subscription book, the defendant effectively made this promise:

“In consideration of your agreeing to enter into a contract to build this Town Hall, I agree to pay the amount I have subscribed.”

The Court stated that this understanding created a perfectly valid and enforceable contract, because the Commissioners incurred legal liability to the contractor relying on the defendant’s promise. This liability constituted consideration, fulfilling all essential elements of a contract.

Therefore, the Court answered both questions referred by the Small Cause Court in the affirmative:

1. The suit was maintainable.
2. The plaintiff and the trustees were entitled to recover the subscribed amount.

The Court concluded by directing that the defendant must pay the Rs. 100, and also held that the plaintiff was entitled to costs, including the costs of the reference hearing.

CONCLUSION

The decision in Kedarnath Bhattacharji v. Gorie Mahomed stands as a landmark judgment that clarifies the enforceability of promises made through public or charitable subscriptions. The Court recognised that when a promisee undertakes a liability or changes their position in reliance on a promisor’s pledge, such reliance itself becomes valid consideration under Section 2(d) of the Indian Contract Act, 1872. By subscribing his name with full knowledge that the Commissioners would enter into contractual obligations on the strength of the collected funds, the defendant created a binding promise capable of enforcement.

This judgment importantly bridges the gap between moral obligation and legal obligation. While many charitable promises may be unenforceable due to absence of consideration, this case establishes that when the promisor’s act induces the promisee to incur expenditure or legal liability, the promise ceases to be merely moral and becomes legally binding. Thus, the Court protected the legitimate expectations of parties who act in good faith and prevented unjust enrichment and unfair withdrawal of promised support.

The case also highlights the significance of intention and reliance in contract law. It reinforces that contractual liability does not always require formal negotiation or direct benefit to the promisor; instead, the promisee’s reliance and incurred detriment can be sufficient. In modern contexts—such as public fundraising, online crowdfunding, and community projects—this principle remains highly relevant. The judgment ensures accountability and safeguards public trust in collective efforts.

Overall, the ruling strengthens the doctrine of consideration by broadening its practical application and ensures that public projects do not suffer due to arbitrary denial of promised contributions. It continues to serve as an important precedent in Indian contract law for determining when voluntary promises become enforceable commitments.

REFERENCE

1. Kedarnath Bhattacharji v. Gorie Mahomed, (1887) ILR 14 Cal 64.
2. Indian Contract Act, 1872 – Section 2(d), Definition of Consideration.
3. Code of Civil Procedure, 1908 – Provisions relating to representative suits.
4. Pollock & Mulla, The Indian Contract Act and Specific Relief Acts, LexisNexis.
5. Avtar Singh, Law of Contract and Specific Relief, Eastern Book Company.
6. R.K. Bangia, Contract Law, Allahabad Law Agency.
7. Indian Kanoon – Case Document of Kedarnath Bhattacharji v. Gorie Mahomed.