Report No. 185

Section 111

This section deals with 'Proof of good faith in transactions where one party is in relation of active confidence'. The section reads as follows:

"111. Where there is a question as to the good faith of a transaction between parties, one of whom stands to the other in a position of active confidence, the burden of proving the good faith of the transaction is on the party who is in a position of active confidence."

There are two illustrations below this section. They read as follows. T

"(a): The good faith of a sale by a client to an attorney is in question in a suit brought by the client. The burden of proving the good faith of the transaction is on the attorney.

(b) The good faith of a sale by a son just come of age to a father is in question in a suit brought by the son. The burden of proving the good faith of the transaction in on the father."

Section 111 is a general provision and is not confined to contracts. There is a related provision in Section 16 of the Indian Contract Act. Section 16 states in sub section (3) that the provision of Section 16 shall not affect the provision of Section 111 of the Indian Evidence Act, 1872.

The 69th Report considered (see paras 53.4, 53.5) various aspects and came to the conclusion that there is no need to unify the two provisions. One reason was that Section 111 is general and was applicable to all transactions while Section 16 is confined to contracts. Section 111 placed the burden of proof on the person who was in a position of confidence whereas Section 16 of the Contract Act defined 'undue influence' and sub section (3) thereof required that initially it must be established that the contract, on the face of it or on the evidence adduced, was unconscionable, and only then the burden would shift to the other side.

The 69th Report stated in para 53.5 that Section 111 does not call for any amendment. We agree.

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