Saturday, September 21, 2013

Contract Law: A Unique solution for corruption free politics - An Interesting Read

National development of a country is based on a sound social, economic and political system and it can sustain only when these systems are free from corruption, specially politics. Corruption is the synonym of politics today. Politicians have forgotten their legal and ethical duties towards the people and towards their nation. During elections they promise to provide a better government to the nation but after winning, they remain engaged in scams, corruption and other illegal activities. To curb these activities Indian Penal Code, Prevention of Corruption Act, etc have been enacted but all in vain because administration of law and justice becomes puppet before their muscles and money power. The Lokpal law was considered to be the ray of hope but its demand is still not fulfilled by the government. In this paper an attempt is made to present a totally different legal weapon to fight against corruption, not in criminal law but in civil law, especially in The Contract Act 1872. This Act has capability to be the best to eradicate corruption from Indian politics.
The landmark decisions of Hon'ble Courts in Balfour v Balfour, Carlill v Carbolic Smoke Ball Company and many more are in support of this view. Lokpal and other laws will be required no more if this Act is applied. Lord Stovel had said that contract is not a joke to pass time; it is that powerful medium by which we can explore the "Right to reject" and this right is the demand of present. The author through this paper is exploring the hidden power of the Contract, which can stop corruption in Indian politics and also suggesting the minor changes required to make this Act capable to be the best anti corruption law of India.

The whole India is suffering from a disease popularly known as "corruption" and it is now on incurable stage due to its corrupt political system. Therefore removal of corruption from politics is the most important task (the giant task). Here the question is "what is corruption?" 
Corruption Corruption is an act which is done with intent to give somebody (including himself) undue benefit and which is inconsistent with the legal and official duties and the rights of people. It is understood an act against law; such as, giving money to get a government job or to get a judgment in one's favor etc. It includes bribery, supply of girls etc.
In a simple word corruption means to get work by means of illegal gratification. Politicians of India were not corrupt at the time of its transformation from slave country to democratic country .Mahatma Gandhi, Sardar Patel, Lai Bahadur Shastri etc. were some of them. But India is that unfortunate country where above great leaders took birth and presented a value-based ethical politics, is now facing the problem of corruption. As we all know that India has a system of Executive Parliament, therefore, Centre Government, State Government, their offices and even Public Corporations are not untouched by the untouchable disease of political corruption. This political corruption has polluted not only the government acts but also the industries, educational system, society and even the valued culture of India's age long civilization. 
According to the report of Transparency International's CPI of 2012, India's image on tackling corruption has not improved. In the list of most corrupt countries it is at 94th position out of 176 nations. Recent example is helicopter deal scam, while 2 G spectrum case, fodder scam (Chara Ghotala), uniform scam etc. are already well known scams. Thus corruption is that cancer like disease which has developed its poisonous roots in the nation's body and is killing its life. Contract In a general sense contract means a deal between two parties. In The Contract Act 1872 under section 2(h) it is defined as an agreement enforceable by law is a contract. When we try to understand it we find two phrases in this definition. The first is "enforceable by law" that means legal assistance and protection is available on dispute, while second is an agreement which is defined in section 2 (e). This section states that every promise and every set of promises, forming the consideration for each other, is an agreement.
Here we again find two key words in this definition.
The first is consideration which means something in return while another is promise which is defined in section 2 (b) and states that when offer is accepted it becomes a promise. Promise is also having two key words, one is offer and the second is acceptance. It is here not noteworthy that for offer and acceptance at least two parties are required. Section 10 of The Indian Contract Act 1872 says that these parties must be competent according to the Indian Majority Act 1875, and their agreement must be based on free consent with lawful consideration and for lawful object.
Contract Law:
How Capable to Fight Against Corruption in Politics Now the question arises that how Contract Law is capable to eradicate corruption from Indian politics. To understand it we have to look the essentials of contract, as prescribed in section 10 and in other provisions of ICA 1872. It can be presented as follows:
Competent Parties Offer and Acceptance. Not based on family or social relationship. Terms and Condition must be certain Received free consent of parties. Agreement must not be declared void by law. Consideration and Object must be lawful. Time and place must be certain. Analysis of Politics as Contract (during elections) Politics during elections is contract because it has all the features of contract, for this we analyze the politics during elections on the basis of essentials of contract required under section 10 and above mentioned description.
Offer in Politics during election Section 2(a) of Indian Contract Act defines it as When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. Here at the time of election the contesting politician makes proposal/ offer to the people that he would give a fair and corruption free governance, employment, education, health facilities to the people if public cast vote in his favor and make him winning candidate. It is an express offer and communication of this offer is also completed by means of propaganda. Acceptance in Politics during election Section 2 (b) of this Act defines it that When a person to whom the proposal is made, signifies his assent thereto, the proposal is said to be accepted. Here when a candidate is won it means his offer was accepted by the people and in such a manner as prescribed by the offerer. It is notable here that, politician's offer was of general nature because it was given to the people. Rules regarding communication state that acceptance must also be communicated in such way as offer was communicated. But in Carlill v Carbolic Smoke Ball Company [1893] Q.B. 256 (C.A.)'s case the court decided that for general offer, communication of acceptance is not necessary.
Facts of this case in brief are as follows:
Carbolic Smoke Ball Co. manufactured and sold The Carbolic Smoke Ball by placing ads in various newspapers and offered a reward of 100 pounds to any person who after its contract influenza, colds, or any other disease. Carlill purchased and used it as directed but contracted influenza and made a claim for the reward. Carbolic Smoke Ball refused to pay and plead that the acceptance was not communicated by Carlill, The court held that a person who makes an offer may decline to require notice of acceptance if he or she wishes. To accept an offer, a person need only follow the indicated method of acceptance. If the offerer either expressly or impliedly intimates in his offer that it will be sufficient to act without giving notice of acceptance, performance is sufficient acceptance without notification. Therefore Co. was liable One may ask a question here that his election winning was caused by the votes of only a part of people not by the whole of population; thus, his offer was accepted only by a few people which cannot be identified so why should he be bound for all. It has two answers.
Firstly the people is a group and is one party and if majority of that group has expressed their intention by giving him votes more than other candidate, that must be considered unqualified acceptance. In this reference it is notable that if for acceptance, people's full voting be only considered than in same condition India cannot be called a democratic country in literal sense (i.e. government of people for people and by people) because here too the government is not formed "by the people" but by the majority of people e.g. the current UPA government is a result of votes of majority of people not by whole people so what about the people who gave vote to BJP or others. Therefore, his winning is acceptance from other party i.e. people of India.
Secondly the remaining people is stranger to consideration (that means beneficiary); therefore they also Section 2 (b) also states that A proposal, when accepted, becomes a promise.
The offer of that politician has been accepted by the people; therefore, it has become a promise. People's promise to give him vote (which was performed as he has been elected) and politician's promise to provide a fair and corruption free government (now it is his turn to fulfill the promise). Consideration in Politics during election As per section 2 (d) 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 contractual requirement is also fulfilled in the situation because fair government is consideration for people while seat in election is consideration for that politician.
These considerations are not unlawful, immoral or opposed to public policy as per under section 23 ICA. Legal Relationship in Politics during election In the landmark case of Balfour v Balfour [1919] 2 KB 571 the court held that contract must not based on family or social matters like domestic arrangement, invitation for picnic etc. The facts of this case in short are that Mr. Balfour is the Defendant and Mrs. Balfour is the Plaintiff. The two lived in Ceylon and visited England on a vacation.
The plaintiff remained in England for medical treatment. The defendant has agreed to send her a specific amount of money each month until she could return. The defendant later asked to remain separated. Mrs. Balfour sued for restitution of her conjugal rights and for alimony equal to the amount her husband had agreed to send. Mrs. Balfour obtained a decree nisi and five months later was granted an order for alimony. The lower court entered judgment in favor of the plaintiff and held that the defendant's promise to send money was enforceable. The court held that Mrs. Balfour's consent was sufficient consideration to render the contract enforceable and the defendant appealed. In appeal it was finally decided that social agreements are not contract, intention to create legal relation is an essential element of a contract and in this case, there is no intention to create a legal relation. The question is, whether voting and contesting in election is social or family matter or a legal matter. Answer is that it is a legal matter based on creating legal relationship; therefore, this requirement is also fulfilled. In other words the court hereby not denied that political matters are based on legal relationship.
Competent Parties in Politics during election According to section 11. Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject. It is beyond any doubt as voters age and contestant's age is already fixed which is 18 years or above. Parties must not be of unsound mind or disqualified by law under ICA. This requirement is also required for contesting election. Free Consent in Politics during election.
Under section 14 0f ICA it is defined as:
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. In election people cast their vote without any coercion, undue influence, fraud, misrepresentation, or mistake and The Election Commission of India does all efforts to make it free and fare.
Thus this element is also present in election process. Lawful Object and Consideration in Politics during election Under Section 23 of ICA it is provided that The consideration or object of an agreement is lawful, unless -
1. it is forbidden by law; or
2. is of such nature that, if permitted it would defeat the provision of any law or is fraudulent; or
3. involves or implies, injury to the person or property of another; or
4. the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. Here participating in elections is not unlawful, immoral or opposed to public policy. Not Declared Void by Law Participating in elections is not that type of agreement which is declared void by law Other Requirements All other features of a contract are also present in elections like certain terms and conditions, time and place etc.
The Indian Contract Act:
The Best Anti Corruption Law In the above mentioned facts we find that the whole election is nothing except contract. Therefore the author is of firm opinion that why election should not be declared a contract and applied The Contract Act. The question is that how will it work? As it is already discussed that politician promised the people for a fair government and people promised to vote for him so it is a promise. On the day of election people performed their part. The result of polling is its evidence. Now it is his turn to perform his part by fulfilling the promises made to the people. Here politicians breach contract and do nothing; therefore an action for breach of contract must be brought by the people after lapsing a reasonable time. The court on this can provide remedies available in The Contract Act 1872.
These remedies are-
1. Compensation for no fulfillment of promises: people should be awarded compensation from that politician who breached contract. Author's suggestion is that from the awarded compensation a part of it should be given to the complainant as cost of his efforts and remaining should be deposited in a welfare fund made for this purpose so that welfare schemes can be maintained. Collection should be according to the process of collection of arrears of revenue.

2. Perpetual Injunction on future participation: His remaining tenure should be terminated so that he could not continue. In another words "Right to Reject" can be introduced. Though it will be more than Right to Reject.
3. Quantum Merit: His salaries allowances and benefits should be minimized as per ratio of the work done.
4. Specific Relief for unperformed tasks: He should be compelled to perform the incomplete tasks for which he had availed grants, funds etc. If this happens, politicians will definitely deprive themselves from making false promises and misusing of public funds. It will certainly lower down the rate of corrupt activities. No FIR, no police, no prosecution, no imprisonment and no new law still the corrupt and corruption will be stopped. 

Suggestions or Things Needed to do Few changes as well as arrangements will be required like:
1. Declaring elections a "contract". 
2. Creating right to reject in the form of perpetual injunction.
3. Setting up of election courts to dispose these cases on fast track. This can be done by giving this power to the High Courts (by making a separate Bench) or Election Commission of India. Lower courts should be barred to exercise this jurisdiction.
4. All procedure should be under judicial review of Supreme Court.
5. Complaint procedure should be strictly regulated to stop its misuse.
6. Compensation or specific relief on the principles of Specific Relief Act 1963 should be given.
7. Heavy compensation should be imposed so that it will be a lesson for the new comer in politics.
8. Legal awareness program should be introduced regarding this issue.
9. Public notices of their breach of contract and perpetual injunction on his contesting in elections should be given so that everyone can take lesson.
10. A guilty of this breach must be stopped permanently in all types of elections.
11. Even he must be debarred in public employment.
12. Criminals as well as undertrials must be declared legally disqualified for this contract (in contesting).

We can hereby say that one breach of promise means end of political life permanently Conclusion In the case of Darlimpal v. Darlimpal (1811) 161 ER 161, Lord Stovel rightly said that contract is not a joke to pass time. Its provision can resist corruption. Corruption is a communicable disease which kills of the spirit of substantial development .Basically the whole election system is nothing but a contract so after declaring election as a contract and applying the Indian Contract Act, 1872, this can give far better result than "Right to rejectâ€. Politicians will definitely deprive themselves from making false promises, misleading of public and misusing of public fund corruption rate will certainly decrease.

This scheme to impose contractual obligation is required to derogate the deceptive promises and fairy tales which is generally pronounced by our leaders in fun. In search of effective anti corruption tools, it will turn the demerits of election system into merits as well as corruption related to the politics. There is no need of Lokpal, ICA is competent to be a unique solution for corruption free politics. It was well said by The American scholar G.Edward Griffi that- "To oppose corruption in government is the highest obligation of patriotism".
Therefore start opposing corruption by making it contract.

List of key words:
ICA: Indian Contract Act 1872
KB: Kings Bench
CPI: Corruption Perception Index
Q.B: Queen's Bench
C. A.: Court of Appeal
ER: England Reporter
R.S. Jha*
*Research Scholar,

1. Singh, Avtar, Contract & Specific relief, Eastern Book Company Lucknow, 2010
2. Kapoor, ND, Elements of Mercantile Law, Sultan Chand & Sons Educational Publishers, New Delhi, 1997
3. Subbarao, G.C. Venkat, Jurisprudence & Legal Theory (translated by Tej Prakash), Eastern Book Company Lucknow, 1997 4. Paranjape, N. V., Jurisprudence & Legal Theory, Central Law Agency, Allahabad, 1997


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