Case: Chinnaya vs Ramaya
Facts:
A lady transferred her property to her daughter (defendant), by a deed of gift. Such deed was registered. One of the terms of the gift deed was that the daughter would pay a sum of Rs. 653/- every year to the lady’s sister (plaintiff). The defendant executed an agreement in favour of the plaintiff promising to do the same. The defendant failed to pay the annual amount to the plaintiff. Hence, the plaintiff sued the defendant for the recovery of the same.
Issue:
Whether the plaintiff can bring an action against the defendant for the amount promised in a contract where the consideration for such promise has been furnished by the mother of the defendant (plaintiff’s sister)?
Plaintiff’s contention
- The consideration for the defendant’s mother to gift the property to the defendant was defendant’s promise to pay an annuity to the plaintiff. Hence, the plaintiff is entitled to sue the defendant to recover the same.
Defendant’s contention
- The plaintiff had not furnished any consideration under the contract. Hence, she is not entitled to sue the defendant for the recovery of the amount promised to her.
Held :
As per section 2(d) of the Indian Contract Act (1872), “When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or does or abstains from doing, or promises to do or abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. From this definition, it is clear that in a valid contract the consideration need not flow from the promisee only. It could flow from any other person who is not a party to such contract thus, the decision was in favour as this was a valid consideration.
