Durga Prasad v. Baldeo (1880): Why Building a Market for the Collector Was Not Consideration

A Collector asks a businessman to set up a grain market in his town. The businessman spends his own money, builds shops, and sells or lets them to traders. The traders then promise to pay him a commission. Later they refuse. Can he sue?

The Allahabad High Court said no, in Durga Prasad v. Baldeo and Others, (1881) ILR 3 All 221. The case is a short but sharp lesson on what "consideration" means, and it is a favourite of the Civil Judge Exam, PCS J Exam and APO Exam.

Case Snapshot

On the date: the court records of this case give 31 March 1880, while some commentary gives 3 March 1880. This blog follows the court records.

The Facts, Step by Step

Durga Prasad set up a market called Hume Ganj in Etawah. He did it at his own expense, at the request of the Collector. He built shops there. The defendants occupied some of them. They collected commission on goods sold in the market and paid him a share.

He then sued to enforce a written agreement dated 22 June 1875. In it the defendants promised him the commission. He said the document only recorded an understanding that already existed between them.

Read Blog: R.M. Malkani v. State of Maharashtra

What the Lower Courts Decided

The trial court decreed the claim against most of the defendants. On appeal, the Judge accepted that the suit could be maintained. But he held that the promise had no consideration within Section 2(d) of the Contract Act and fell outside Section 25(2). He also found the document was not properly executed. He reversed the decree and dismissed the claim.

Durga Prasad then filed a second appeal in the High Court.

The High Court's Reasoning

Oldfield J. dealt with the appeal in a few clear steps.

Step one: the finding of fact. The lower court's finding that there was no consideration was a factual conclusion. A second appeal does not lightly open such findings.

Step two: the deed was silent. The deed did not state any consideration. The only possible basis was the money Durga Prasad had spent in setting up the market.

Step three: not at the defendants' desire. That expense was not incurred at the desire of the defendants. Durga Prasad acted to please the Collector. The defendants were not in his mind when he set up the market. So what he did could not count as consideration for their promise.

Step four: Section 25(2). That provision protects a promise to compensate for something done voluntarily for the promisor. The Court found nothing shown to have been done for the promisors, or to meet a legal duty they owed.

The appeal was dismissed with costs, and the decree in favour of the defendants who were not parties to the appeal also stood.

The Rule to Take Away

The key point is that the act must be done at the request or desire of the promisor to count as consideration. Doing it for a third person, here the Collector, is not enough. Section 2(d) of the Indian Contract Act speaks of an act done at the desire of the promisor, and this case shows how strictly that phrase can bite.

Notice what the case does not say. It does not say that the plaintiff did nothing, or that the defendants gained nothing. The defendants did benefit from the market. But benefit alone, without a request from them, was not consideration.

Why It Matters in Contract Law

The case is usually taught under these ideas:

•        Consideration must move at the promisor's desire. The plaintiff's act must be at the promisor's request.

•        Third-party requests do not count. An act done for a stranger, even one with authority, cannot support a promise from someone else.

•        Section 25(2) is narrow. It does not rescue a promise where nothing was done for the promisor.

•        A written promise still needs consideration. The deed here existed, but it named none.

One summary of the case on a coaching site describes it as showing that adequate and real consideration is needed for a valid contract, and that informal agreements without it are not enforceable.

How to Write It in an Exam

For a short note, a four-line answer is enough:

1. Facts: market built at the Collector's request; traders promised commission.

2. Question: was there consideration under Section 2(d)?

3. Holding: no, because the act was not done at the desire of the promisors.

4. Rule: the act must be at the promisor's request; Section 25(2) did not apply.

For a problem question, it helps to ask three things in order. Who asked for the act? Who made the promise? Is the promisor the same person as the one who asked? If not, consideration fails.

A tip for Prelims: remember the pair Etawah and Hume Ganj, and the year 1880.

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Questions Aspirants Ask

What is the citation of Durga Prasad v. Baldeo?

(1881) ILR 3 All 221, Allahabad High Court.

Who decided the case?

Pearson and Oldfield, JJ., with the judgment delivered by Oldfield J.

What was the main legal issue?

Whether the plaintiff's expense in setting up a market was consideration for the defendants' promise to pay commission.

What did the plaintiff do?

He set up the Hume Ganj market in Etawah at his own expense, at the request of the Collector, and built shops there.

Why did the plaintiff lose?

The expense was not incurred at the desire of the defendants. He acted to please the Collector.

Which sections of the Contract Act were involved?

Section 2(d), which defines consideration, and Section 25(2).

What was the date of the written agreement?

22 June 1875.

Did the deed state any consideration?

No. The deed did not state any consideration.

What is the rule from the case?

The act must be done at the request of the promisor to be consideration. An act for a third party is not enough.

How did the appeal end?

It was dismissed with costs.

What to Remember

Durga Prasad v. Baldeo can be remembered with one question: who asked for it? If the answer is anyone but the promisor, consideration is in trouble.

Case law like this is easiest to learn when it is taught with a framework and tested with problems. At Aashayein Judiciary, Nitesh Sir and the faculty do exactly that. Use our Judiciary Notes, practise contract PYQ questions, and sit a Mock Test to see how well you can apply Section 2(d). Join our Online Judiciary Coaching to build strong Civil Judge Exam and PCS J Exam preparation.