A criminal prosecution was instituted against a person and fearing the result of prosecution, he entered into an agreement in consideration of the other party abandoning the prosecution. It was held that the threat of criminal prosecution is not per se an act forbidden by the Indian Penal Code. Hence, consent is valid.
Basic information:
Coercion: Coercion is the act or process of persuading someone forcefully to do something that they do not want to do. Section 15 in the Indian Contract Act 1872 defines coercion as committing or threatening to commit or carry out any act forbidden by the India Penal Code or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.
Contract with a minor: A minor is one who has not attained the age of 18, and for every contract, the majority is a condition precedent. By looking at the Indian law, minor’s agreement is a void one, meaning thereby that it has no value in the eye of the law, and it is null and void as it cannot be enforced by either party to the contract.
Facts of the case:
• Bibi Jai Kishori, the defendant gave a loan to Askari Mirza, the plaintiff who is a minor.
• Later Bibi Jai Kishori found out that the loan was secured on the basis of a lie (truth was not told that Askari Mirza is a minor) and entering into a contract is void as per Indian Contract act.
• So, Bibi Jai Kishori endangered him (act of coercion) to file criminal charges if he does not repay the money as there is no contract and previous contract stands void.
• Askari Mirza and her mother filled a complaint in the court stating that they were forcefully made to return the money even after entering into a contract and thus should be penalized for the same.

ISSUE:
Whether a threat of filing criminal charges lead to coercion under Section 15 of the Indian Contract Act.
Judgement:
The judgement passed in the court was that the coercion is wrongful and is punishable under the Indian Penal Code, but is not in this particular case because the basic condition of entering into a valid contract is breached and thus there will be charges applied and Askari Mirza had to repay Bibi Jai Kishori the entire loan amount as soon as possible or would be held accountable for the same.