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CHACKO AND ORS. V. MAHADEVAN

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CASE NAME: CHACKO AND ORS. V. MAHADEVAN

LEGAL MAXIM:

INTODUCTION:

In this case the contract is declared void because one or both parties were mentally incapable of entering into a contract. The name of the case is Chakho & Ors v. Mahadevan.[1]

Due to Alcoholic psychosis brought on by alcohol use, most often planned by the respondent, severely impairs his capacity for logical decision-making. Following “Res Ipsa Loqiutur,” the court decided in the petitioner’s favor under Sections 10 and 12 of the Indian Contract Act of 1872[2]. According to the ruling, a person cannot be legally enforceable if they are incapable of understanding the situation and weighing the implications of the agreement that results from it.

FACTS OF THE CASE:

The claim that Mahadevan was tricked by signing the deed of sale, extension A3, on September 4, 1983, has been made by Chacko, the plaintiff in the plaint, against Mahadevan. The security bond for the sum of Rs. 1000 has been executed, which was borrowed from Mahadevan. Chacko then checked himself into a hospital to receive mental health care, and during that time Mahadevan had made an attempt to enter the concerned property on 11th of October 1983 when Chacko and his wife acquired a duplicate of the deed from the appropriate registry office and they examined the document, they discovered that it was an inadequately executed deed of sale for three cent without defining the dimensions and boundaries of that property.

Last year, dated September 14, 1982, Chacko sell his one cent of land. When he was able to sell a plot of property for one cent for eight thousand rupees in consideration it seemed inconceivable that he had sold the land for Rs.353 percent the year before like Mahadevan now claims. The suit O.S. Chacko and his spouse filled out the 431 of 1983 form. Now Annakutty is trying to set apart the sale agreement that was signed on July 11, 1983, at the level that it becomes vitiated by fraud, becomes void as a result, and subject to a prohibitory injunction for preventing Mahadevan from entering that place. The allegations contained in the complaint that Chacko had receive alcohol from Mahadevan and others, according to the record.

The record is then declared null and void. In this case, Chacko tried to make the case that the parties when they entered into the contract, they weren’t dealing at a distance. Chacko failed to create such a case that is based on the evidence. The only thing that could be shown was that Chacko owed money to Mahadevan. After the documentation for the debts was finished, Chacko figured it to be nothing more than a security deed. But Mahadevan defended the lawsuit by claiming he didn’t drink alcohol. Before the document’s enforcement, Chacko had loaned money on multiple occasions from Mahadevan. And in respect of the amount owned by Mahadevan the terms of the Deed of Sale, Extension A3 was signed by Chacko. Mahadevan consequently asked that the lawsuit should be dismissed. Taking the lead and possession of the property described in the sale deed signed on July 11, 1983. Mahadevan has filled O.S. 497 of 1983 in order to stop Chacko and Annakutty from interfering with each other’s having the three cents mentioned in Ext. A3. But Chacko and Annakutty defended this claim. They defended that the sale being null and void and giving Mahadevan no title or property.

ISSUE OF THE CASE:

The contract between Chacko and Mahadevan is valid or not?

JUDGEMENT OF THE COURT:

The trial court determined in his judgement that the aforementioned selling deed ext. Dated July 11, A-3 1983, was lawful because Chacko and his wife Annakutty were unable to prove that the circumstances of the selling document is void, and as a result, Mahadevan obtained ownership of the aforementioned property. The Trial Court and the lower appeal court said that Chacko and Annakutty had been unable to substantiate the fraud claim made in the complaint. Hence, the Trial Court and the Appellate Court both agreed that there was no fraud or unjustified influence or any other irregularity in the transaction. As result the appellate court also rejected non-est factum argument made by Chacko and Annakutty. And the lower Appellate Court concluded that there was no declaration that the transaction was illegal. After this the lower Appellate Court then heard the case on behalf of Chacko and Annakutty. In regard to Ext. A2 the land in Ext. being sold for Rs. 18,000 per cent. A-2 (sale deed dated April 9, 1982) and $3.land in Ext. for Rs 1000. The sale deed for A-3, dated 11-7-1983, showed that this was an unjust transaction, and that the sale deed from 11/7/1983 should be thrown out.

Mahadevan submitted the second petition in Kerala high court for consideration. After this the Supreme Court has reviewed the First Appellate Court’s decision from June 29, 1988. And concluded that Chacko was not guilty and didn’t sign the contract while being of sound mind. As stated in the document these findings were derived from the medical Certificate. The Supreme Court subsequently ruled that the verdict demonstrated that it had been recorded. it was implied that Chacko was not mentally sound when he signed the contract. In Trichur began receiving therapy at the Psychiatric Hospital for Alcoholic Psychosis from 11th August, 1983 to 14th August, 1983.

This is a finding of a fact over which the High Court had no jurisdiction in the Second Appeal. Because it was previously established and supported by the evidence of the facts. On 4th September 1982 the sale of one cent of the land for Rs. 18,000; nevertheless, 10 months later, three cents of the identical home went for Rs. 1000. The land was sold on 4th September, 1982, and this was added to that. This supported the First Appellate Court’s stance that Chacko was not of sound mind when he signed the sale agreement on July 11, 1993, at that time. And at the least, three cents of land must cost at least Rs. 54000 if one cent of land is worth Rs. 18,000.

No reasonable person in their right mind would sell property with a worth of Rs. 54,000 for Rs. 1000/-, according to the well-known Latin proverb “Res ipsa loquitur,” which translates to “things speak for themselves.” Many thus believed that Chacko had been the victim of a scam at the time and had signed a sale deed for the land on 11.7.1983 when he was not mentally competent. Following a review of the facts, the High Court’s challenged decision was reversed, and the First Appellate Court’s decision from June 29, 1998, was reinstated. The sale deed from 11.7.1983 was also declared invalid. A sale deed that was executed by the use of fraud against the transferor, who was also not of sound mind, was judged subject to annulment and not explicitly enforced. The transferor was deemed incompetent, which led to this choice being made.

RATIONAL BY THE COURT

The price for the sale of three cents should have been somewhere around Rs 54,000, but the court found that the deed was invalid because Chacko was mentally incompetent at the time it was executed because, just 10 months before, he had sold one cent of land for Rs 8,000. And only 1,000 rupees, a small amount, was paid for this land. The court determined that the maxim of “Res Ipsa Loqiutur” applied and that no one acting in good conscience would do such a thing. And furthermore, the fact that “Chacko” was diagnosed with alcoholic psychosis just prior to the transaction only served to confirm that there was a high probability that “Mahadevan” had given him alcohol, which led to his psychosis and left him hallucinating and detached from reality.

STATUTE AND CASE LAWS:

Statute:

A person is said to be of sound mind for the purposes of making a contract, if , at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests.

A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind.

A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind[4].

All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Nothing herein contained shall affect any law in force in 3[India], and not hereby expressly repealed, by which any contract is required to be made in writingor in the presence of witnesses, or any law relating to the registration of documents[6].

Case laws:

It was said by the court that even if the defendant did not prove that he was intoxicated, even if he was intoxicated; his condition would have barred him from rescinding the contract.

This was an appeal from the District of Columbia Supreme Court. Justice Clifford concurred with the court’s finding and noted in his view that: The complainant claimed that he was quite intoxicated at the time he signed the trust deed and was unable to understand its implications or make a thoughtful choice. After conducting several tests, the court determined that he was not in the proper frame of mind to enter into the contract and discharged his obligation. The degree of mental disability that, in the eyes of the law, disqualifies a person from signing a valid and effective deed of conveyance is difficult to define accurately and unambiguously.

 Insanity that renders an individual irresponsible for the act in question, regardless of whether it is unlawful, disqualifies him from entering into a contract or signing a legal document to transfer real estate or personal property. Insanity also disqualifies an individual from knowing the difference between right and wrong regarding the act in question.

CONCLUSION:

Chacko could not have fully understood the contract and gave his logical agreement to it because he was not of sound mind when he joined the deal. The contract was therefore unenforceable in accordance with section 12(b) of the Indian Contract Act of 1872[9]. The evidence in the case showed that Chacko wasn’t mentally competent to enter into the contract.

The fact that Res Ipsa Loquitur demonstrated that the price at which the plaintiff agreed to sell the land to the defendant seemed very unreasonable because it was 1/54th of the amount that someone would typically be willing to pay for the land strengthened the argument that the consent was not given with a conscious and rational mind. Given the wide range of values, a man of sound mind could not execute this form of sale deed.

So, the price paid by Mahadevan was so egregiously inadequate as to shock the Court’s conscience. The lower court’s ruling was based on the argument that since Chacko had sold one cent of land for Rs 8,000 the previous year, it was inconceivable that he would have sold three cents of land for only Rs 1000. This raises doubts in the minds of a sane person.

Yet, in the identical circumstance, the contract in question would have been regarded as lawful if it had been established that the plaintiff was of sound mind when they entered the arrangement.

Similar to how the contract would have been valid if Chacko had only sold the land to Mahadevan for Rs. 54000, it would have been noted that the plaintiff was receiving treatment for alcoholism psychosis one month after signing the contract, negating any possibility that he was under the influence of alcohol at the time of contract signing. Deeds signed by such a person are, at the very least, voidable; however, if the party still has the mental capacity to understand the situation clearly and draw the appropriate conclusions regarding the subject matter of the contract, a simple lack of understanding is not sufficient grounds to challenge the legality of the contract.

[1] Chacko & Ors v Mahadevan (2007) 7 SCC 363

[2] Indian Contract Act 1872, s 10, 12

[3] ibid

[4] ibid

[5] ibid

[6] ibid

[7] Babcock v Engel [1920] 58 Mont, 597, 194 P. 137

[8] 8 Johnson v Harmon [1876] 94 U.S. 371

[9] Indian Contract Act 1872, s 12(b)

written by Esha chatterjee, Birla global university, 6th semester.

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