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1913 Supreme(Mad) 280

IN THE HIGH COURT OF MARAS
Tyabji, J.
A.R. Iswaram Pillai
Versus
S. Taregan And Ors.
Decided On : 13 November, 1913

The proper person to bring an action is the person whose right has been violated, and a person who acquires a right to enforce a contract is the promisee and not a stranger to the contract.

Headnote:

Hypothecation Bond - Contract Enforcement - Trusts Act - Indian Contract Act - Specific Relief Act - Equity Principles

Fact of the Case:

The plaintiff sues for a sum of Rs. 610, claimed as due on a hypothecation bond to which the plaintiff was not a party. The defendants argued that the plaintiff, being a stranger to the contract, could not sue on it.

Finding of the Court:

The court found that the plaintiff's suit was defective and that the proper person to bring an action is the person whose right has been violated, and that the person who acquires a right to enforce a contract is the promisee and not a stranger to the contract.

Issues: The main issue was whether a person who is not a party to the contract can enforce it, and whether the terms of the hypothecation bond could be enforced at the instance of the plaintiff.

Ratio Decidendi: The court applied principles from the Indian Contract Act, Specific Relief Act, and Equity to determine that a person who acquires a right to enforce a contract is the promisee and not a stranger to the contract.

Final Decision: The appeal was dismissed with costs.

JUDGMENT

Tyabji, J.

1. The plaintiff sues for a decree for a sum of Rs. 610 which includes the principal sum of Es. 450 and interest. This sum is claimed as due on a hypothecation bond purporting to be executed on the 27th August 1907 to which the plaintiff was not a party, but which was executed by one sahib Shaik Uduman Tharagan in favour of the 1st and 2nd defendants and of the father of the 3rd and 4th defendants, whom I shall refer for brevity as the defendants. Sheik Uduman Tharagan the executant of that bond was a debtor of the plaintiff and he asked the defendants (in terms to which I shall immediately refer) to pay off the sum of Rs. 450 which was due from Sheik Uduman Tharagan himself to the plaintiff.

2. The material portions of the hypothecation bond are as follows: " The Hypothecation bond executed on the 27th August 1907 to "the defendants...." the sum received on the hypothecation to you of the following properties belonging to me....", then the particulars of the Rs.2000 are given which includes the following item " a sum of Rs. 450 is kept with you in order to be paid to and get a receipt from "...the plaintiff" on account of the balance due to him in respect of the purchase of yarn."

3. It will thus be seen that the plaintiff claims to have a contract enforced to which he was not a party but which was entered into between his debtor and the defendants.

4. The defence is First, that the plaintiff being a stranger to the contract could not sue on it ; and secondly that, though the consideration for the hypothecation bond was originally fixed at Rs. 2000, (including the payment of the sum now in question), yet that that agreement was modified by a notice given by the defendants Vakil 20 days after the date of the hypothecation bond; and that subsequent to that notice even as between the said Sheik Uduman and the defendants there was no contract that the defendants should pay the said sum to the plaintiff and that, the charge created by the hypothecation in favour of the defendants was effective only in so far as the consideration had actually passed between the parties thereto at the date of the said notice viz., for Rs. 1250. The endorsement of the hypothecation bond and a decree Exhibit 4 which refers to it or relied upon as evidence of this modification of the terms of the hypothecation bond.

5. Both the lower courts have dismissed the suit and the learned District Judge in doing so said, "the only question argued is whether there was privet of contract between the plaintiff" and he defendants.

6. It was argued before us that the plaintiff was entitled to sue on the contract notwithstanding that he was not a party to it--and mainly on two grounds. The first argument was that by the terms of the hypothecation bond it was agreed that a trust should be created in favour of the plaintiff and that if this was so the plaintiff could enforce the agreement. In the second place it was argued that the general rule of law that a person who is not a party to a contract cannot become entitled by that contract to demand the performance of any duty under it was not more applicable in India after the decision of the Privy Council in Khwaja Mahomed Khan v. Husaini Begam (1910) I.L.R. 32 A. 410 especially as that decision is explained and applied in Debnarain Dutt v. Ramasadhan Mundal (1913) 17 C.W.N. 143 a decision of Sir Lawrence Jenkins C.J. and Sir Ashutosh Mukerjee J. of the Calcutta High Court. It seems to me however that what were put forward as two distinct heads of arguments were in the circumstances of the present case indistinguishable and that both depend upon the consideration of the same question. For it is admitted that if the terms of the hypothecation deed are given effect to in their entirety, the plaintiff would receive the money from the defendants. The consideration of the question whether the plaintiff is entitled to have the terms of the hypothecation deed enforced is not, it appears to me materially advanced b

















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