Indian Contract Act, 1872 (Section 58)

Indian Contract Act, 1872 (Section 58)

In the Hansraj Gupta case, they talked about a law called the Indian Contract Act from 1872, specifically Section 58. This section talks about something called a mortgage. A mortgage is like a promise tied to property, saying, “If I can’t pay you back, you can have this property.”

So, in the case, Hansraj Gupta had this promise linked to the company’s things (like assets). It’s like saying, “If the company can’t pay back the money it borrowed from Hansraj Gupta, he can take these things to recover his money.”

The court in this case said that this promise was strong and legally okay. It means that the agreement between Hansraj Gupta and the company about using the company’s stuff as a guarantee was done according to the rules set by the Indian Contract Act. This helped make sure that the promise made by the company was fair and could be enforced legally.