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Anil Lalcheta   19 July 2017

Indian contract act 1872,Stifling prosecution OR VALID

A" and "B" enter into a contract, whereby B is to receive goods from A and A is to receive money worth rs. 10000 from B ........... However B fails to pay the said amount within the time period..... As a consequence A files a suit against B for recovery of money...... After some time B knew that he is guilty.... So he contacts A and says that u withdraw the suit and i promise to pay u the said amount + Rs 5000 within 3 months......... Now if B does not pay 10000 + 5000 than can A enforce the subsequent agreement which says u withdraw case and i shall pay u 10000+5000??????? CAN IT BE SAID as STIFLING PROSECUTION??? Or valid contract??


 3 Replies

Siddharth Srivastava (Advocate)     19 July 2017

You just ask B to record the settlement in court in pending case and insteadof withdrawing the case make a request the court for 3 months so B could comply with its commitment. Alternatively instead of withdrawing the case you can get the suit stay sindie so that if B does not comply with its commitment you can get the case reopened. You can also opt for consent decree.

1 Like

Kumar Doab (FIN)     19 July 2017

When B has realized that he/she is guilty then what is the need of such deferred payment?

And another agreement?

Let B pay in full and on the spot.

Ms.Usha Kapoor (CEO)     20 July 2017

28. Agreements in restrain of legal proceedings, void –

1[***]Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to the extent.

As per  thisdefinition B has not absolutely restrained A from filing a suit forever. Since B has failed to pay 10000+5000 if A withdraws case against him.  Let us assume A has withdrawn the case with the hope thsat B would pay 15000 which is obviously more than what is due to A. If B fails to pay this amount within  3 months promised time A can again file a suit for recovery of his Rs,15000 etc. Here B has not  absolutely restrained A from proceeding legally to recover the money due to him. So B's action doesn't amount to restraint of legal proceeding or stifling  A's  prosecution. Hence B is not guilty of restraint of legal proceedings of A and therefore section 28 indian contract Act is not violated by B.

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