1948 (3) TMI 49 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the promissory note.
2. Consideration under Section 2(d) and Section 25(2) of the Indian Contract Act.
3. Binding nature of the letter dated January 29, 1914.
4. Obligation to finance the Gollaprole litigation.

Issue-Wise Detailed Analysis:

1. Validity of the Promissory Note:
The primary question in the appeal was whether the promissory note dated March 29, 1933, executed by the respondent for Rs. 1,50,000 was supported by "consideration." Both the original and appellate jurisdictions of the High Court of Madras answered this question in the negative. The promissory note was executed in consideration of amounts advanced for the Gollaprole litigation.

2. Consideration under Section 2(d) and Section 25(2) of the Indian Contract Act:
Section 2(d) of the Indian Contract Act defines consideration as something done at the desire of the promisor. Section 25(2) states that an agreement made without consideration is void unless it is a promise to compensate someone who has already voluntarily done something for the promisor. The High Court found that the advances made by the Maharajah and his successors were not made at the "desire" of the respondent but were in pursuance of an undertaking given by the first plaintiff's father to the respondent's father. Therefore, the advances did not qualify as consideration under Section 2(d) or Section 25(2).

3. Binding Nature of the Letter Dated January 29, 1914:
The letter dated January 29, 1914, from the first plaintiff's father to the respondent's father, promising to finance the litigation, was central to the case. The letter stated: "If the Raja of Pittaparam were to file a suit against you in respect of the said adoption, if Vundur Ramayamma Garu does not advance moneys for the expenses of the case we shall without fail advance for expenses and have case conducted without fail." The High Court and the Board found that this letter created a binding obligation on the Maharaja of Venkatagiri to finance the litigation, which was not supported by consideration and thus not binding on the appellant.

4. Obligation to Finance the Gollaprole Litigation:
The High Court found that the advances made for the litigation were not loans made at the request of the respondent but were made in fulfillment of the promise contained in the letter of January 29, 1914. The Venkatagiri family financed the litigation from 1915 to 1928 without objection, indicating that they felt bound by the promise. The respondent's requests for funds were seen as demands for what he considered his right under the promise, not as requests for loans. Therefore, the advances were not made at the "desire" of the respondent within the meaning of Section 2(d) of the Contract Act.

Conclusion:
The Board concluded that the promissory note was not supported by consideration as defined under the Indian Contract Act. The advances made for the litigation were not at the "desire" of the respondent but were in fulfillment of a prior promise, which was not binding on the appellant. Consequently, the appeal was dismissed with costs.