This article is written by Simran Sanjay Doshi, Studying at Kes ‘Shri Jyantilal H. Patel Law College, L.L.B, 1st Year during her internship at LeDroit India.
SCOPE OF THE ARTICLE
1. Introduction
2. Soundness of mind under section 12
3. Test of Unsoundness of mind and Burden of Proof
4. Contractual incapacity due to unsoundness of mind
5. Persons of Unsound Mind
6. Contractual capacity during Lucid Intervals
7. Effect on Contractual incapacity due to Intoxication
8. English Law v. Indian law: Analysis
9. Conclusion
10. References
Abstract
The Indian Contract Act,1872 specifies many essentials which are to be satisfied to have the validity of the contract. Among them there is Section 12 under this act which states that the soundness of mind is one of the most important feature for a valid contract to be enforceable between the two parties.
Only a sound mind person is capable of making a rational judgement and understanding the consequences of his actions and on the other hand an unsound mind person is unfit to make a valid contract as due to his incapacity or intoxication he is not in the state of understanding anything and not capable of making a rational decision on his own. This article presents a brief understanding of the unsoundness of mind, lucid intervals, intoxication under the contract law along with the relevant case laws and critical analysis between the English law and Indian law.
Key Words: Unsoundness of mind, Incapacity, Rational Judgement, Intoxication, Lucid interval, Mental Incapacity, Sanity.
Introduction
The prerequisite for entering into the contract is that the parties must be competent for it to be valid and enforceable. The competence of parties means that they should have soundness of mind among them and parties should be able to understand the rational and prudent consequences of their actions. And this does not make any of the person disable from entering into the contract just because they were suffering from lunancy.
There are appearances where the person behaves normally but he is incapable of understanding the things. Therefore, any mental incapacity arising out due to any of the reason which affects the understanding and making rational judgement then that person becomes incapable to enter into the contract, instead it will render the contract to be void and unenforceable. This article critically examines the determination of tests of the unsoundness of mind and burden of proof lies on whom. Also covers the contractual capacities during lucid intervals and incapacities due to intoxication of the persons and the analysis of differences between the English and Indian laws.
Soundness of mind under section 12
The general presumption is that while constituting a valid & binding contracts it is understood that the person doing so is capable of entering into a contract, he has capacity for arriving at a rational judgement and is being responsible for the consequences of his actions under the contract during the time of making it.
As per the Indian Contract Act, 1872 the Soundness of mind under the Section 12 of the act provides what is a sound mind for the purpose of contracting and it states that “At the time of making a contract it can be said that the person was of sound mind, if at that time that person was capable of understanding and was able to make a rational judgement as to its effect upon the interests.”
A person who is usually of sound mind but occasionally becomes of unsound mind then he must refrain from entering into any contract during the duration of his unsoundness of mind. Also, if a person who is usually of unsound mind but occasionally has come to his soundness of mind and have an understanding of things then that person can enter into the contract during the duration of his soundness of mind.
The case law Indar Singh v. Parmeshwardhari Singh (AIR 1957 PAT 491) , under which the plaintiff filed a suit to get the valid title of the property through a registered sale deed. The original owner of the property was Babu Mangaldhari Singh and upon his death to his legal heir his son (Defendant No. 1). The Defendant No. 1 had agreed to sell the property at Rs. 7000 to plaintiff and later Defendant No. 1 refused to admit it before the Sub-Registrar the same.
And upon this Defendant No. 2 who was the mother of Defendant No. 1 challenged this transaction contending that the plaintiff knowingly took the advantage of his mental condition to obtain the sale deed of the property as her son was person of unsound mind / idiot who was incapable of understanding any of the property transactions.
The High Court held that under the Indian Contract Act, 1872 the true test of soundness of mind should be in accordance as already specified. Generally, Sanity is always presumed and hence the person alleging the unsoundness of mind must prove it. And based on the evidences of the family members and independent witnesses it was proved that he was incapable understanding property transactions and forming a rational judgement. Therefore, the sale deed was held void and it did not transfer any valid title to plaintiff. It was also further clarified that there should be incapability of understanding the transactions or judge rationally, mere weakness of the mind is not enough.
Test of Unsoundness of mind and Burden of Proof
There is usually a presumption that there is sanity of the person and hence he needs to prove sufficiently this enough to satisfy the case who alleges such unsoundness of mind. The temporary forgetfulness or mere weakness of mind are not sufficient for test of proving the unsoundness of mind. It also becomes necessary to prove the idiocy or mental incapacity in order to constitute that person to be of having unsoundness of mind.
In the Madangopal Marwadi v. Sadashe Sonak (AIR 1941 Nag 251), where it was held that if the person of usually sound mind the burden of proving that he was of unsound mind it lies on the person who challenges the contracts validity and where if the person is usually of unsound mind but at the time of the contract was of sound mind the such burden of proving lies on the person who affirms it.
Under the Mohamed Yakub v. Abdul Quddus (AIR 1923 Pat 187), where the burden of proving the insanity lies on the person who alleges it.
Under the Lakshmi v. Ajay Kumar (AIR 2006 P&H 77), it was held that at the time of formation of contract the point of insanity must be proved.
Contractual incapacity due to unsoundness of mind
According to the Indian Contract Act,1872 under the Indian Laws, a person of unsound mind when he is in the state of unsoundness is not competent to contract and the agreement becomes void. For declaring an agreement to be void the most important thing is to check whether that person was suffering from mental disability at the time of executing the agreement which was held in the case of Nilima Ghosh v. Harjeet Kaur (AIR 2011 Del 104).
In the case of Ashfaq Quresh v. Aysha Quresh (Nivedita Yadav) (AIR 2011 Chh 58), under it the Hindu girl was married to Muslim man. The girl filed a suit on the grounds stating that she was not conscious during the conversion and nikah ceremony and also she was under the intoxication at the material time and not in her senses.
She also stated that she had not live for a single day with that man. It was held before the Court that she proved all the stated facts and it was declared that marriage agreement between them was void on the ground that she was intoxicated and was not in a position to make a reasonable decision and form a rational judgement in regards to her interests.
Persons of Unsound Mind
1. Lunatics: A person of unsound mind can be said as lunatics. Here, a person may not be always lunatic, he may usually be of sound mind but for certain duration can have lunatic intervals. The lunancy may be temporary only. Such lunatic person can enter into an agreement if at the time of making the contract he was of sound mind and capable of taking rational decisions otherwise any contracts entered becomes void with an exception of necessities.
2. Idiots: A person said to be an idiot who does not have the capacity to manage his affairs or judgements from birth. An idiot has no acumen to judge his actions but lunatics have lucid intervals and thus, it can be called as different from the lunatics. The lunatics cover all the persons insane except the idiots. The Judgement in the Hari Singh Gond v. The State of MP (AIR 2009 SC 31), was held that a person who is unable to remember his parents name, count even till 20 or even cannot tell the days of the week can be called as an idiot person. The Idiots they do not have any lucid intervals.
3. Mental Decay: With the extreme old age, there is loss of mental energy and vigor. Also there is senile decay where the consequences of one’s action is not understandable due to inability. To render the contract void, such infirmity in mind must be proved.
Contractual capacity during Lucid Intervals
The lucid period is a temporary period during which an individual regains the sufficient understanding to make a legally binding decision or the rational judgement, otherwise considered to lack the mental capacity or other conditions which lacks the persons competency to enter into the contract. If any legal act performed during this duration then will be considered valid even if any person usually lacks his mental capacity to do so.
The legal requirements are that there should be mental clarity, should have the legal capacity to contract. There should be medical evidences and the witness testimony. Legal actions are also valid and enforceable if the individuals was indeed lucid.
In the Johnson v. Brown, under this case due to mental illness the Brown was considered as incompetent and during the mental clarity entered into a contract during that duration. Johnson sought to enforce the agreement who was the other party of the contract. The Court has to determine whether Brown was experiencing the lucid interval at the time of entering the contract. The Court held that the contract was valid and Brown was held lucid and such indications was proved by the medical expert testimony and observations from the witnesses.
Effect on Contractual incapacity due to Intoxication
As per the judgement of Yogendra Singh v. Prem Lata Anr (RFA no. 36/2005), it was held that just the mere alcohol consumption does not mean the person has lost his sense of rational judgement or the consequences of understanding his actions.
Due to drunkness if a person become incapable to understand the results of his actions or make rational decisions at the time of entering the contract then such contract declared void. The plaintiff to declare contract entered with defendant to be void, he needs to submit the findings before the court that he was not in senses at the time which effect the agreement, his mental capacity also gets affected and he was incapable of understanding the terms. Thus, such intoxication during the time of execution of agreement led him to become of unsound mind.
English Law v. Indian law: Analysis
Both the laws are different from each other with regards to unsoundness of mind.
Under English law, the person with unsound mind can enter into contract unless he prove that in Court that person was incapable of understanding the terms of the contract and such other party was aware of this incapability. However, under Indian law, such contract where a person of unsound mind enters becomes void and unenforceable. But a person of sound mind when enters into the contract then will be bound by it.
In English law, the contract with a drunken person is not voidable unless the other party knows that he is incapable of understanding the terms of the contract. But in Indian law, a drunken person if lost his ability to make a rational judgement then such persons become incompetent to enter into a contract.
Conclusion
The presence of the Section 12 of Indian Contract Act, 1872 is of significance as it functions as a protective mechanism against contracts which are made on indiscretion, safeguarding the interests of the parties by disregarding the validity of such contracts.
Although, the proving is difficult of unsoundness or soundness of mind at a particular material time or the determination of the level of intoxication is also quite hard. Since, they do not have effect on the decision making but their very presence of this section under Indian law safeguards against such contracts.
It is also been observed that the English and Indian laws are having different aspects, however, both prevents from a party to take advantage of unsoundness of mind of a person and use for his own benefits.
References
3.https://www.indiacode.nic.in/showdata?actid=AC_CEN_3_20_00035_187209_1523268996428&orderno=12&utm
4.https://www.manupatra.com/roundup/325/Articles/Unsoundness%20of%20Mind%20in%20Contract.pdf
5. https://blog.ipleaders.in/unsoundness-of-mind-contract-india/
