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1955 Supreme(AP) 241

Andhra Pradesh High Court
Kommineni Veeramma - Appellant
Versus
Kommineni Appayya - Respondent
Decided On : 10-16-55

A stranger to a contract cannot sue to enforce its terms unless the case comes within one of the recognized exceptions, such as where the contract creates a trust in favor of a stranger or where the contract is a family arrangement intended to secure a benefit to a third party as a beneficiary.

Headnote:

CONTRACT - SPECIFIC PERFORMANCE - STRANGER TO CONTRACT - RIGHT TO SUE - EXCEPTIONS - TRUST - FAMILY ARRANGEMENT - BENEFIT TO THIRD PARTY - ENFORCEABILITY.

Fact of the Case:

The plaintiff, Veeramma, was the daughter of Nagayya, who gifted his house and site to the defendant, K. Appayya, under Exhibit A-1. Differences arose between the plaintiff and the defendant, and the defendant filed a criminal complaint against the plaintiff's husband and others. The parties compounded the case under Exhibit A-3, which provided that the defendant should execute a dakhal deed conveying the house and site in favor of the plaintiff, who should thereafter maintain Nagayya in the house for his life. The plaintiff took charge of her father and maintained him till his death pendente lite. The defendant defaulted to execute a dakhal deed in her favor as agreed by him in Exhibit A-3. The plaintiff, therefore, sued for specific performance of the arrangement.

Finding of the Court:

The Court held that the plaintiff, being a stranger to the arrangement evidenced by Exhibit A-3, could not sue to enforce its terms. However, the Court also held that the plaintiff was entitled to specific performance as a beneficiary under the compromise arrangement and as one who had discharged her obligations thereunder.

Issues: 1. Whether a stranger to a contract can sue to enforce its terms? 2. Whether the plaintiff was a beneficiary under the compromise arrangement evidenced by Exhibit A-3? 3. Whether the plaintiff had discharged her obligations under the compromise arrangement?

Ratio Decidendi: 1. A stranger to a contract cannot sue to enforce its terms unless the case comes within one of the recognized exceptions, such as where the contract creates a trust in favor of a stranger or where the contract is a family arrangement intended to secure a benefit to a third party as a beneficiary. 2. The plaintiff was a beneficiary under the compromise arrangement evidenced by Exhibit A-3 because the arrangement was intended to secure a benefit to her as a member of the family. 3. The plaintiff had discharged her obligations under the compromise arrangement by maintaining Nagayya for the rest of his life.

Final Decision: The Court allowed the second appeal and restored the decree of the District Munsif, directing that the parties bear their own costs throughout.

( 1 ) THE plaintiff is the appellant. The facts are these. One Nagayya owned a house and vacant site forming the subject-matter of this second appeal. He had a daughter Veeramma, the plaintiff. She married K. Basavayya, a nephew as well as the wife s brother of Nagayya. Nagayya was a whimsical old man who quarrelled with his wife frequently. Their quarrels culminated in a suit by the wife for separate maintenance against Nagayya and a decree allotting a portion of the suit house for her residence. Nagayya gifted tiie house and site in favour of his nephew K. Appayya the defendant, under Exhibit A-1, dated 20th June, 1945. There is a recital in Exhibit A-1 that the donee had been maintaining Nagayya and that the gift was made out of love and affection. Differences soon arose between the plaintiff and the defendant the former being backed by her husband and other relations. The defendant was unr ble to take possession of the property gifted under exhibit A-1. The gift was challenged as having been procured by fraud practised on Nagayya. The lower appellate Court was inclined to the view that the gift exhibit A-1 was nominal and could have been got cancelled by Nagayya. Be it as it may, the defendant filed a criminal complaint Exhibit A-2 dated 26th March, 1946, against the plaintiff s husband K. Basavayya and three others accusing them of offences under section 323, 341, 447 and 504, Indian Penal Code. The defence was that the complaint was false. On the intervention of certain mediators the parties compounded the case under Exhibit A-3, dated 24th April, 1946. One of the terms of Exhibit A-3 is that the defendant should execute a dakhal deed conveying the house and site in favour of the plaintiff who should thereafter maintain he? father Nagayya in the house for his life. The plaintiff however, was not a party to Exhibit A-3 though she and her father Nagayya took an active part in biinging about the compromise. There was a settlement of a family quarrel and the plaintiff took charge of her father and maintained him till his death pendente lite. The defendant defaulted to execute a dakhal deed in her favour as agreed by him in exhibit A-3- The plaintiff therefore sued for specific performance of the arrangement. The defendant pleaded that Exhibit A-3 had been obtained from him fraudulently and that a sum of Rs. 100 and a quantity of paddy had been agreed to be paid to him though not so specified in Exhibit A-3 and that there had been default in such payment. The Courts below have rejected this plea of the defendant the trial Court granted a decree for specific performance while the appellate Court dismissed the suit. Hence this second appeal.

( 2 ) IT appears to have been conceded by the advocate for the plaintiffin the lower appellate Court, in deference to authority that the plaintiff being a stranger to the arrangement evidenced by Exhibit A-3 could not sue to enforce its terms. It was argued before me that this admission was due to a misapprehension of the law. On question of fact parties are bound by the admissions of their advocates, whether made in the course of the trial or in the appellate Court, because an advocate s general powers in the conduct of a suit include the abandonment of aa issue of fact, which in his discretion, he thinks it inadvisable to press. Venkata v. Bhashyakarlu, (1902) L. R. 29 I. A. 56: I. L. R. 25 Mad. 367 (P. C. ). and Ulichi v. Nallamalli, A. I. R 1928 Mad. 900. Such admissions cannot be resiled from merely on the ground that the party or his advocate was not posted with all the facts at the time. Admissions of counsel on a point of law are, however, not binding on the parties as an estoppel and the Court is free to give effect to its view of the law irrespective of such admissions. Tagore v. Tagore, (1872) 9 Beng. L. R. 377, 401 (P. C. ). Beni Prasad v. Dhudnath, (1899) L. R. 26 I. A. 216 : I. L. R. 27 Cal. 156, 162-163. Societe Banqut etc. , v. Girdhari, A. I. R. 1940 P. C. 90. Muthusami v





















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