Which of the following statements are relevant as 'Admission'? (i) 'A' undertakes to collect rents for 'B'. 'B' sues 'A' for not collecting rent due from 'C' to 'B'. 'A' denies that rent was due from 'C' to 'B'. (ii) 'A' sells a horse to 'B'. 'B' asks whether horse is sound? 'A' says to 'B' - 'Go and ask 'C', 'C' knows all about it.' 'C' tells about soundness of horse.

Problem (i): C's Statement That He Owed Rent — Under Section 19, IEA / Section 17, BSA

The Problem Unfolded

A undertakes to collect rents for B. B sues A for not collecting rent due from C to B. A denies that any rent was due from C to B. The question is: can C's statement that he owed rent to B be used as an admission, and if so, against whom?

At first glance, C is a stranger to this suit. The general rule in the law of evidence is that statements by strangers to a proceeding are inadmissible. But Section 19 of the IEA (Section 17, BSA) carves out an important exception: "Statements made by persons whose position or liability it is necessary to prove as against any party to the suit, are admissions, if such statements would be relevant as against such persons in relation to such position or liability in a suit brought by or against them, and if they are made whilst the person making them occupies such position or is subject to such liability."

The illustration to the section is, in fact, this very problem: A undertakes to collect rents for B. B sues A for not collecting rent due from C. A denies that rent was due from C to B. A statement by C that he owed B rent is an admission, and is a relevant fact as against A.

The Logic of the Section

The key to understanding this provision lies in the chain of liability. A was appointed by B specifically to collect rents from C. A's duty to B — and therefore A's liability in the suit — depends entirely upon whether C owed rent to B. A cannot be held negligent for failing to collect what was never owed. So, in this suit between B and A, C's liability to B is a fact that must be proved as against A.

Now, if B had filed a suit directly against C for recovery of rent, C's statement that he owed rent to B would unquestionably be admissible as C's own admission in that suit. Section 19 takes that very admission — which would have been good against C in a suit against him — and says it is equally good in the suit against A, where C's liability is the controlling fact. The admission does not bind C in the sense of conclusively deciding anything, but it makes the statement relevant in a proceeding to which C is not even a party.

The object of the section, as it has been described, is not so much to declare that certain statements are relevant per se, but to add to the category of persons by whom an admission may be made before it qualifies as an admission within the scheme of the Act. As Taylor on Evidence notes, in an action by the trustees of a bankrupt, the bankrupt's own admissions made before the act of bankruptcy are admissible in proof of the petitioning creditor's debt — the same logic governs Section 19.

Conditions That Must Be Satisfied

For C's statement to be relevant under Section 19, three conditions must concurrently be met:

• First, C's position or liability must be one that it is necessary to prove as against a party to the suit — here, it is necessary to prove C's liability to pay rent in order to establish A's failure in duty.

• Second, the statement must be one that would be relevant as against C himself if a suit were brought directly by or against C — yes, C's acknowledgment that he owed rent would be admissible against him in a direct suit by B.

• Third, the statement must have been made while C occupied that position or was subject to that liability — meaning C must have made the statement while he was still a tenant owing rent, not after the liability had ended.

If these three conditions are satisfied, C's statement becomes relevant as an admission in the suit between B and A. It is relevant as against A — meaning, A cannot defeat B's claim simply by denying C's liability when C himself has admitted it.

A Supplementary Illustration

The learned author Field gives an excellent parallel example: A and B are jointly liable for a sum of money to C. C sues A alone. A objects that B should be joined as he is jointly liable. An admission by B of his joint liability becomes relevant between A and C under this section. The principle is the same — where the liability of a party depends on the position or liability of a stranger, that stranger's admission travels into the suit as evidence.

Problem (ii): C's Statement About the Horse's Soundness — Under Section 20, IEA / Section 18, BSA

The Problem Unfolded

A sells a horse to B. B queries whether the horse is sound. A says to B: "Go and ask C, C knows all about it." C tells B about the soundness of the horse. The question is: is C's statement an admission, and can it be used against A?

Section 20 of the IEA (Section 18, BSA) answers this directly: "Statements made by persons to whom a party to the suit has expressly referred for information in reference to a matter in dispute are admissions." The illustration to the section is, word for word, this very problem: "The question is, whether a horse sold by A to B is sound. A says to B — 'Go and ask C, C knows all about it.' C's statement is an admission."

The Principle of Vicarious Adoption

The foundation of this section is the doctrine of vicarious or adopted admission. When a party himself refers the other to a third person for information about a disputed matter, he implicitly declares that whatever that person says shall stand in the place of his own statement on the subject. As Lord Ellenborough famously observed in Williams v. Innzs (1805 1 Camp 364) — from which the very illustration of this section is drawn — "If a man refers another upon any particular business to a third person, he is bound by what that third person says or does concerning it, as much as if that had been said or done by himself."

The principle is that when A says to B "Go and ask C," A is placing C in his own shoes for the purpose of that inquiry. A has approved of C's utterance in advance and adopted it as his own. The law treats C, in effect, as A's chosen spokesperson on the matter of the horse's soundness.

The Requirement of Express Reference

A critical requirement under Section 20 is that the reference must be express — not casual, not inferential, not ambiguous. The words of the section are clear: there must be an express referral for information in reference to a matter in dispute. Where the defendant said, "If C will say that he did deliver the goods, I will pay for them" — C's statement was held admissible and the defendant was bound by it, as decided in Daniel v. Pitt (1806 1 Camp 366). Similarly, in Lloyd v. Willan (1794 1 Esp 178) it was held that if one party offers to settle provided a witness makes a statement on oath as to a certain fact in dispute, and the statement is made, it binds the party making the offer. These cases illustrate the same logic that animates the horse illustration.

The Supreme Court of India, explaining the scope of this section in Hirachand Kothari v. State of Rajasthan (AIR 1985 SC 998), held: "The word 'information' occurring in Section 20 is not to be understood in the sense that the parties desired to know something of which none of them had any knowledge. Where there is a dispute as regards a certain question and the court is in need of information regarding the truth on that point, any statement that the referee may make is nevertheless information within the meaning of Section 20." The Court also held that the section applies even to reference to arbitration.

In KM Singh v. Secretary, Association of Indian Universities (1992 3 SCC 129), the plaintiff agreed that if two named persons stated on special oath that his resignation was not extracted by fraud, he would withdraw that ground. An oath commissioner was appointed and the statements went against the plaintiff. The Supreme Court held he was bound by those statements — a vivid application of the same principle.

Is C's Admission Conclusive Against A?

A particularly important question is whether C's statement under Section 20 conclusively binds A. The answer is — not conclusively, but binding nonetheless, subject to A's right to show it was wrong. Stephen in his Digest expressed the view that the referee's admission was conclusive on A in English law, treating the referee as being in the position of an arbitrator. However, under the Indian Evidence Act, Section 31 preserves the position that admissions are not conclusive proof of the matters admitted — they may, in appropriate circumstances, operate as estoppels. A can therefore still challenge C's assessment of the horse's soundness, but he cannot simply ignore it as if C's statement had no legal significance at all.

The Common Thread: Two Exceptions to One Rule

Both sections are exceptions to the general rule that statements of strangers to the proceeding are not admissible in evidence.

Both sections demonstrate the same underlying philosophy — that the law of admissions is not a technical straitjacket but a flexible instrument of truth. When the facts of a dispute make the statement of a stranger logically indispensable, the law finds a way to receive it, provided the conditions are met. As the Supreme Court observed in ECT Farming Society (1974 2 SCC 319), "the effect of an admission depends upon the circumstances in which it was made" — and in both these problems, the circumstances are precisely those which the legislature contemplated when it enacted these two carefully designed provisions.