The correct answer is option 'C', which means that the agreement is voidable. Let's understand why.

Coercion is a form of undue influence where one person compels another to enter into an agreement by committing or threatening to commit an act that is forbidden by law or causes harm to the person or property. In this case, A agrees to sell his car worth Rs. 1,00,000 to B for only Rs. 20,000, and A's consent is obtained by coercion. Coercion is considered a valid ground to render an agreement voidable.

To further understand why the agreement is voidable, let's break down the concept of voidable agreements:

1. What is a voidable agreement?
- A voidable agreement refers to a contract that is valid and enforceable unless the party whose consent was obtained by coercion, fraud, misrepresentation, or undue influence chooses to avoid it. The party whose consent was coerced has the option to either continue with the agreement or reject it.

2. Coercion as a ground for voidability:
- Coercion is a type of undue influence where one party forces or compels the other party to enter into an agreement against their free will. It is considered a valid ground for voidability because it undermines the voluntary consent of the coerced party.

3. Effect of voidability:
- When an agreement is voidable, the party whose consent was obtained by coercion has the option to either affirm the agreement or avoid it. If the coerced party chooses to avoid the agreement, it becomes void ab initio, meaning it is treated as if it never existed. The coerced party can rescind the contract and recover any losses suffered as a result of the agreement.

In this case, A's consent was obtained by coercion since he agreed to sell his car worth Rs. 1,00,000 for only Rs. 20,000. As a result, A has the option to avoid the agreement and declare it voidable. He can choose to rescind the contract and recover any losses or damages suffered due to the coercion.

To summarize, the agreement between A and B is considered voidable because A's consent was obtained through coercion. A has the option to avoid the agreement and declare it void ab initio.