Section -23. What considerations and objects are lawful, and what not
The consideration or object of an agreement is lawful, unless-
it is forbidden by law4 ; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent ; or involves or implies, injury to the person or property of another; or 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.
Illustrations
(a) A agrees to sell his house to B for 10,000 rupees. Here B‟s promise to pay the sum of 10,000 rupees is the consideration
for A‟s promise to sell the house, and A‟s promise to sell the house is the consideration for B‟s promise to pay the 10,000 rupees.
These are lawful considerations.1. The original words British India” have successively been amended by the A.O. 1948 and the A.O. 1950 to read as above.
2. Paragraph 2, ins. by the A.O. 1937, and as amended by the A. O. 1948 was Rep. by the A. O. 1950.
3. The second Illustration to s. 21 rep. by Act 24 of 1917, s. 3 and Sch. II.
4. See ss. 26, 27, 28 and 30, infra.(b) A promises to pay B 1,000 rupees at the end of six months, if C, who owes that sum to B, fails to pay it. B promises to
grant time to C accordingly. Here, the promise of each party is the consideration for the promise of the other party, and they are
lawful considerations.
(c) A promises, for a certain sum paid to him by B, to make good to B the value of his ship if it is wrecked on a certain
voyage. Here, A‟s promise is the consideration for B‟s payment and B‟s payment is the consideration for A‟s promise, and these
are lawful considerations.
(d) A promises to maintain B‟s child, and B promises to pay A 1,000 rupees yearly for the purpose. Here, the promise of
each party is the consideration for the promise of the other party. They are lawful considerations.
(e) A, B and C enter into an agreement for the division among them of gains acquired or to be acquired, by them by fraud.
The agreement is void, as its object is unlawful.
(f) A promises to obtain for B an employment in the public service and B promises to pay 1,000 rupees to A. The agreement
is void, as the consideration for it is unlawful.
(g) A, being agent for a landed proprietor, agrees for money, without the knowledge of his principal, to obtain for B a lease
of land belonging to his principal. The agreement between A and B is void. as it implies a fraud by concealment, by A, on his
principal.
(h) A promises B to drop a prosecution which he has instituted against B for robbery, and B promises to restore the value of
the things taken. The agreement is void, as its object is unlawful.
(i) A‟s estate is sold for arrears of revenue under the provisions of an Act of the Legislature, by which the defaulter is
prohibited from purchasing the estate. B, upon an understanding with A, becomes the purchaser, and agrees to convey the estate
to A upon receiving from him the price which B has paid. The agreement is void, as it renders the transaction, in effect, a
purchase by the defaulter, and would so defeat the object of the law.
(j) A, who is B‟s mukhtar, promises to exercise his influence, as such, with B in favour of C, and C promises to pay 1,000
rupees to A. The agreement is void, because it is immoral.
(k) A agrees to let her daughter to hire to B for concubinage. The agreement is void, because it is immoral, though the letting
may not be punishable under the Indian Penal Code (45 of 1860).
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