SC clarifies ‘Non Est Factum’ plea in Contract Law

NEW DELHI

On August 17, 2023, the Supreme Court elucidated the conditions necessary for a valid non-est factum plea, in the case of Ramathal vs K Rajamani. The term ‘non-est factum’, stemming from Latin origins, translates to “it is not the deed”. In the realm of Contract Law, this defence allows an individual to negate the consequences of a document they have signed.
The Court underlined that the plea permits the signatory of a document to argue its invalidity, based on a misapprehension about its nature when it was signed. Justices Vikram Nath and Ahsanuddin Amanullah presiding over the case, set forth the following criteria for a successful non-est factum plea:
=The person asserting the plea should belong to a group who, due to circumstances beyond their control, such as blindness or illiteracy, couldn’t comprehend the document’s purpose. This lack of understanding must have necessitated dependency on others for advice before signing.
=A grave error regarding the document’s content and its implications must have been made by the signatory.
=The signed document should significantly differ from what was intended.
The High Court had previously stated in a second appeal that the Trial Court rightly dismissed the suit, as there was neither any mention nor an issue framed concerning the non-est factum plea. However, the Supreme Court bench observed that the plea was, in fact, explicitly and stringently put forth. Consequently, while the question of whether the plaintiffs could prove the plea remains separate, it was evident that the plea was made. Thus, the High Court’s assertion that the plaintiffs didn’t put forth the non-est factum plea was found incorrect.