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TMI Blog1929 (11) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... pay on my behalf to P.L.M. Palaniuppa Chettiar term carrying on money-lending business at Thenkarai, Periyakulam Town, the amount due by me to him, and obtain a receipt, i am m receipt of Rs. 1,200. 3. Then it proceeds to state the other creditors who were to be paid and the consideration is said to have been received in that manner. 4. The 3rd defendant pleaded that there was no privity between him and the plaintiff and that there was no cause of action. 5. The District Munsif dismissed the suit against the 3rd defendant and passed a decree against the 1st and 2nd defendants. 6. On appeal the Subordinate judge reversed the judgment of the District Munsif and remanded the case for trial. 7. On appeal against this order of remand the High Court set aside the order of remand and directed the Subordinate Judge to dispose of the case in the light of the observations made by the High Court. One of the questions which the High Court wanted the Sub-Judge to decide was whether the 3rd defendant undertook orally to pay the money to the plaintiff and pointed out that if the oral agreement was proved, the plaintiff would be entitled to a decree against the 3rd defendant, but if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1918)35MLJ692 . 13. The question has therefore to be decided on the footing that no trust has been created, that the 3rd defendant was not plaintiff's agent and that there was no novation or obligation undertaken by the 3rd defendant to the plaintiff. 14. The rule of common law laid down in Tweddle v. Atkinson (1861) 1 B. Section 393 : 121 E.R. 762 is that a stranger to the consideration cannot sustain an action on the promise made between two persons unless he has in some way intervened in the agreement. 15. As regards relief given by Courts of Equity, Gandy v. Gandy (1885) 30 Ch. D. 57 gives a right of action to the third person only when the person with whom the contract is made is a trustee express or implied for the third person for whom the benefit is intended. The conditions necessary to be fulfilled before a person not a party to a contract can enforce any claim under it in a Court of Equity are laid down in Gandy v. Gandy (1885) 30 Ch. D. 57 in In re Empreiss Engineering Company (1880) 16 Ch. D. 125 and in In re Rotherham Alum and Chemical Company (1883) 25 Ch. D. 103. The observations of Lord Hatherley in Touche v. Metropolitan Railway Warehousing Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent became personally liable. In our opinion this contention is not sound. Jamna Das was no party to the contract between Mussammat Lakhpati Kuar and Pandit Ram Autar Pande. No Indian or English case has been cited to us in which it has been ever held or suggested that the transferee of the equity of redemption in mortgaged property becomes personally liable to the mortgagee. 20. The case was carried in appeal to the Privy Council and the decision of their Lordships of the Privy Council is reported in Jamna Das v. Ram Autar Pande and the decision of the Allahabad High Court was upheld. Lord Macnaghten observed: This is a perfectly plain case. The action is brought by a mortgagee to enforce against a purchaser of the mortgaged property an undertaking that he entered into with his vendor. The mortgagee has no right to avail himself of that. He was no party to the sale. The purchaser entered into no contract with him, and the purchaser is not personally bound to pay this mortgage debt. 21. In Itti Panku Memon v. Dharman Achan I.L.R.(1917) M. 488 : 34 M.L.J. 193 the question arose as to a third party's right to sue on a contract. Sir John Wallis, C.J., and Bakewell, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt. Beasley, J., after an exhaustive review of the authorities came to the conclusion that a second mortgagee who retained in his hands sufficient portion of the consideration to discharge the first mortgage and who does not discharge the first mortgage cannot be sued by the first mortgagee on the covenant between the mortgagor and the second mortgagee. This case was carried in appeal (O.S.A. No, 95 of 1927) where Sir Murray Coutts Trotter, C.J. and Pakenham Walsh, J., upheld the decision of Beasley, J. The learned Judges observed: The learned Judge held that as there was no privity between the plaintiff and 2nd defendant with regard to the mortgage Exhibit A(1), the plaintiff could not claim any benefit under it...The point of law has been fully discussed by the learned Judge and he has considered all the important authorities. It is not disputed as a general rule of law that only those who are parties to a contract can sue on it. The Privy Council decision in Jamna Das v. Ram Autar Pande (1911) L.R. 39 LA. 7 : I.L.R. A. 63 : 1911 21 M.L.J. 1158 (P.C.) and in Nanku Prasad Singh v. Kamla Prasad Singh 26 C.W.N. 771 (P.C) are conclusive that the reservation of part of the purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assumpsit, and that the rule of Common Law on the basis of which it was dismissed is not, in their Lordships' opinion applicable to the facts and circumstances of the present case. Here the agreement executed by the defendant specifically charges Immovable property for the allowance which he binds himself to pay to the plaintiff. She is the only person beneficially entitled under it. In their Lordships' judgment, although no party to the document, she is clearly entitled to proceed in equity to enforce her claim. Their Lordships desire to observe that in India and among communities circumstanced as the Muhammadans, among whom marriages are contracted for minors by parents and guardians, it might occasion serious injustice if the common law doctrine was applied to agreements or arrangements entered into in connection with such contracts. 25. This case has in some decisions of this Court been taken as laying down the rule that Indian Courts are not bound by the common law doctrine laid down in Tweddle v. Atkinson (1861) 1 B. Section 393 : 121 E.R. 762 In Itti Panku Menon v. Pharman Achan I.L.R. (1917) M. 488 : 34 M.L.J. 193 one of us (Kumaraswami Sastri, J.) took this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenance or marriage though the same was not made a charge. 32. We may also in this connection refer to Sudalai v. Gomathi (1912) M.W.N. 908 Arumugha v. Chinnammal (1911) 2 M.W.N. 524 and Rajagopala v. Radhayya (1912) M.W.N. 39 Reference has been made by the respondent's advocate to the observations of Coutts Trotter, C.J., in Muniswami Naicken v. Vedacliella, Naickdn AIR1928Mad23 . All that was decided was that the case fell within the rule in Khwaja Muhammad's case. After referring to that case and to the provisions of Hindu Law he observes: All I desire to say is that I think that in view of that the provisions of law in such matters should be applied with greater flexibility than they would be applied in England and that it is quite possible to argue that such a case as this if it occurred in England would be covered by the general principle I have referred to. 33. Cases of estoppel or of novation obviously stand on a different footing and have nothing to do with the principle laid down in Tweddle v. Atkinson (1861) 1 B. Section 393 : 121 E.R. 762. 34. We may point out in this connection that the view taken in Debnarayan Dutt v. Chunilal Ghose I.L.R. (1913) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agrees with the criticism passed on that case by Page, J., in Jiban Krishna Mullik v. Nirupama Gupta I.L.R.(1926) C. 922. Rankin, C.J., took the view that it was wrong on the authority of either Khwaja Muhammad Khan's case or Debnarayan Dutt's case I.L.R.(1913) C. 137 to suppose that in India persons who were not parties to a contract could be admitted to sue thereon except where there was an obligation in equity amounting to a trust arising out of the contract or in case of communities where marriages were contracted for monies by parents and guardians. The learned Chief Justice observed: But putting aside such cases, I see no reason to think that the law in India contains a series of exceptions to the principle that a contract can only be sued upon as such by a party thereto. A trust may be founded on the contract and is capable of being enforced by a party to the trust in appropriate proceedings as was pointed out in Page v. Cox (1852) 10 Hare 163 : 68 E.R. 882. It is another matter altogether to say that a person not a party to a contract may bring a suit upon the contract by reason of near relationship to the promisee. Nearness of relationship is a fact which, like ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property to B. In the recital in the sale-deed B agreed to pay off the mortgage and the plaintiff sued B. It was held that the plaintiff cannot avail himself of the stipulation in the sale-deed between the mortgagor and the vendee that the vendee was to redeem the mortgage. Bucknill, J., in the course of the judgment refers to Nanku Prasad Singh v. Kamta Prasad Singh 26 C.W.N. 771 : 3 Pat. L.T. 637 (P.C.) where their Lordships of the Privy Council held that a recital in a sale by A to B that B is to pay off a mortgage would give no cause of action to the mortgagee to sue B. The learned Judge quotes the judgment of Lord Atkinson who dismissed the appeal with the following remark: Their Lordships have considered this case and they think it is clear that no personal liability was incurred by the purchasers of the equity of redemption. Their Lordship, therefore, think that the decree of the High Court was right and that the point made by the appellant failed, 39. It is argued that where all the parties to a contract are before the Court and complete justice can be done between them, there is nothing to prevent the Court from giving a decree to a person although he is not a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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