Thursday, October 11, 2007

Contract Act_Practical Problems_42

A borrower grants a power of attorney to bank authorising the bank to sell a ertain property belonging to him and appropriate the sale proceeds towards his ndebtedness. He also agrees not to institute any legal proceedings against the bank challenging either the bank's actions or its statements of account. The property is sold for a low price and the bank calls upon the borrower to pay the balance. Can the borrower institute legal proceedings against the bank questioning the sale ?

Yes- The borrower can institute legal proceedings since the clause in the agreement restraining the borrower from legal proceedings is void as per Section 28 of the Indian Contract Act and thus unenforceable. Section 28 in this respect reads as :

Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under the contract by the usual legal proceedings in the ordinary tribunals, is void to that extent.

3 comments:

Anonymous said...

great efforts, i recd the link from your student of navkar

Anonymous said...

work must go ahead it is almost great benefit to all law students including cpt

Tejpal sheth said...

thanks for your word. My work will continue. I am happy that it pass on benefit to studnets irrespective of race, caste, city or particular coaching class....i will try my best to update it almost every day....