​Indian Evidence Law – Bharatiya Sakshya Adhiniyam, 2023Proof of Good Faith in Transactions Where One Party Is in a Relation of Active Confidence [Section 114]
1. Introduction
The concept of good faith occupies a significant place in transactions involving trust and confidence. According to Black’s Law Dictionary (8th Edition), good faith means honesty in belief or purpose, faithfulness to one’s duty or obligation, observance of reasonable commercial standards of fair dealing, and the absence of any intention to defraud or gain an unconscionable advantage.

Ordinarily, the law presumes that acts are done in good faith. However, this presumption does not operate uniformly in all situations. Where a transaction takes place between parties standing in a fiduciary or confidential relationship, the law adopts a more cautious approach. Section 114 of the Bharatiya Sakshya Adhiniyam, 2023 specifically addresses such situations by shifting the burden of proof.

2. Statutory Provision under Section 114
Section 114 provides that:

• Where a question arises as to the good faith of a transaction between parties,
• and one party stands to the other in a position of active confidence,
• the burden of proving the good faith of the transaction lies on the party who is in the position of active confidence.

Thus, when a dominant party derives benefit from a transaction with a weaker party who has reposed trust in him, the law requires the dominant party to justify the fairness and honesty of the transaction.

3. Illustrations
The section is clarified through illustrations:

1. Advocate–Client Relationship
   Where the good faith of a sale by a client to his advocate is questioned in a suit filed by the client, the advocate must prove that the transaction was entered into in good faith.
2. Parent–Child Relationship
   Where a son who has just attained majority challenges the good faith of a sale made to his father, the father bears the burden of proving that the transaction was bona fide.

4. Scope and Principle Underlying Section 114
The general rule of law is expressed in the maxim “Omnia praesumuntur rite esse acta”, meaning all acts are presumed to have been done rightly and regularly, unless the contrary is shown. Section 114 operates as an exception to this rule.
In transactions involving active confidence, the law presumes the possibility of undue advantage and therefore shifts the burden of proof. The rationale is that the weaker party may not be in an equal bargaining position and may have relied entirely on the honesty and integrity of the dominant party.

5. Meaning of “Active Confidence”The expression active confidence refers to a relationship where:

• One party is duty-bound to protect the interests of the other, and
• The other party reposes trust and reliance on him.

Such relationships are fiduciary in nature. Common examples include:

• Advocate and client
• Doctor and patient
• Parent and child
• Guardian and ward

In these relationships, the dominant party cannot retain benefits arising from a transaction unless he can satisfy the Court that the transaction was fair, voluntary, and made with competent and independent advice.

6. Relation Between Section 114 and Section 16(3) of the Contract Act
Although Section 114 of the Bharatiya Sakshya Adhiniyam and Section 16(3) of the Indian Contract Act deal with similar ideas, they are distinct in scope and application:

1. Nature of Transactions
   • Section 16(3) of the Contract Act applies only to contracts.
   • Section 114 applies to all kinds of transactions, whether contractual or not.
2. Nature of Relationship
   • Section 16(3) uses the expression “position to dominate the will of another”.
   • Section 114 uses the expression “position of active confidence”.
     Section 114 is narrower and applies primarily to fiduciary relationships, similar to situations in loco parentis.
3. Requirement of Unconscionability
   • Under Section 16(3), the burden shifts only if the transaction is shown to be unconscionable.
   • Under Section 114, there is no requirement to prove unconscionability; the burden automatically lies on the dominant party once active confidence is established.

7. Conclusion
​Section 114 of the Bharatiya Sakshya Adhiniyam, 2023 embodies a rule of protective justice. It recognises that transactions between parties in a relationship of trust and confidence are vulnerable to abuse. By placing the burden of proving good faith on the party in a position of dominance, the law seeks to prevent exploitation and ensure fairness. This provision strengthens ethical standards in fiduciary dealings and reinforces judicial scrutiny where imbalance of power exists.