Question

In which case it has been laid down that a promise to pay subscription is binding on the promisor if promisee has undertaken some liability on the faith of the promisee:

• A. Lalman Shukla v. Gauri Dutt
• B. Kedar Nath v. Gorie Mohd
• C. Bhagwandas v. Girdhari Lal
• D. Banwari Lal v. Sukhdarshan Dayal

Answer 1

The Correct Option is B

The Correct Option is (B):Kedar Nath v. Gorie Mohd

Answer 2

This question asks for the case authority behind a specific rule, that a promise to pay a subscription becomes binding once the promisee has relied on it by incurring a liability.

1. Lalman Shukla v. Gauri Dutt: this case dealt with a servant who searched for a missing boy without knowing a reward had been announced, and it is the leading authority for the rule that a person cannot accept an offer they were unaware of. It has nothing to do with subscription promises.
2. Kedar Nath v. Gorie Mohd: in this Calcutta High Court decision, the defendant had promised a subscription toward the construction of a town hall, and the plaintiff, relying on the promised subscriptions, went ahead and incurred a contractual liability with a contractor. The court held the defendant's promise was binding because the promisee had altered his position and undertaken a liability on the strength of that promise, which supplied the consideration. This is exactly the rule the question describes.
3. Bhagwandas v. Girdhari Lal: this case is concerned with where a contract is formed when acceptance is communicated by telephone, deciding that the contract is complete where the acceptance is heard. It has no connection with subscription promises.
4. Banwari Lal v. Sukhdarshan Dayal: this is not the recognised authority for the subscription-reliance rule, the doctrine is specifically associated with the Kedar Nath line of cases.

Since Kedar Nath v. Gorie Mohd is the direct precedent for holding a subscription promise binding once the promisee has acted on it, option (B) is correct.

So, the correct answer is Kedar Nath v. Gorie Mohd.