Advertisements
Advertisements
प्रश्न
Given below is a statement of legal principle followed by a factual situation. Apply the principle to the facts given below and select the most appropriate answer.
Legal Principle: Contract is an agreement freely entered into between the parties. But when consent to an agreement is obtained to undue influence, the contract is voidable at the option of the party whose consent was so obtained.
Factual Situation: The Pragya had been worked for a businessman Anurag since the age of 18, working for a range of Anurag's businesses. In 2000, (aged 21) Pragya purchased a flat. In 2005, Mr. Anurag's business was facing financial difficulties, and he asked Pragya to offer up her flat as a financial security against an overdraft facility for the business. In July of that year, the bank's solicitors wrote to Pragya, advising that she should take Independent legal advice before putting her property up as a security for the debt. The bank also notified Pragya that the guarantee was unlimited in both time and financial amount. Having discussed the arrangement with Anurag, Pragya was unaware of the extent of the borrowing but was assured that her mortgage would not be called upon and that his own properties which were also used as security would be looked at first. A charge was executed over the Pragya's property in August 2005. In 2009, Mr. Anurag's business went into liquidation and the bank formally demanded ` 60,24,912 from Pragya. Pragya raised the defense of undue influence – stating that Mr. Anurag had induced her to enter into the agreement, and the bank had full knowledge/notice of this undue influence which should set aside the bank's right to enforce the debt recovery against Pragya. The bank is contending that there is no undue influence.
Assume it is a case of undue influence. Decide whether the bank has done enough to allay concerns of undue influence?
पर्याय
The bank had not made all reasonable steps to allay themselves of the concerns regarding undue influence. The fact that; on advice from the bank, the defendant did not seek independent advice, should have been taken as confirmation of undue influence.
yes, the Bank has advised Pragya that she should take independent legal advice before putting her property up as security for the debt.
Pragya has a duty to be aware of the consequences of her act.
Bank has done enough as it had notified Pragya that the guarantee was unlimited in both time and financial amount.
उत्तर
The bank had not made all reasonable steps to allay themselves of the concerns regarding undue influence. The fact that; on advice from the bank, the defendant did not seek independent advice, should have been taken as confirmation of undue influence.
Explanation:
The bank had not made all reasonable steps to allay themselves of the concerns regarding undue influence. The fact that, on advice from the bank, the defendant did not seek independent advice, should have taken as confirmation of undue influence. The bank did not take enough steps to put concerns of undue influence at rest. The bank was already aware of the element of undue influence in this case and should have taken more appropriate steps in this regard.
