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What Considerations and Objects are Lawful and What not

Contract Act, 1872 – 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 law1; 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.

1. See ss. 26, 27, 28 and 30, infra.


The very first head under which an agreement becomes unlawful is, when the consideration or object of agreement is forbidden by law. G.T. Girish v. Y. Subba Raju [Supreme Court of India, 18 January 2022]

 

G.T. Girish v. Y. Subba Raju

Transfer of Property Act, 1882 – Section 52 – Lis Pendens – A transfer which is made lis pendens is not a void document. It does create rights as between the parties to the sale. The right of the party to the suit who conveys his right by a sale is extinguished. All that Section 52 of the Transfer Property Act provides is that the transfer which is made during the pendency of the proceeding is subjected to the final result of the litigation.