UNDER SECTION 25, INDIAN CONTRACT ACT, 1872
KEDARNATH BHATTACHARJI V. GORIE MAHOMED (1887)
(Suit was valid, plaintiff entitled to costs)
BENCH: WC Pethekam, Beverley
FACTS:
- Plaintiff was the Municipal commissioner of Howrah and amongst the trustees of the Howrah town hall fund, who stated that in order to gather the required amount to build the town hall, funds may be raised by subscription
- The subscribers of the fund promised the sum of money while undertaking that in pursuance of the commissioner entering into a contract for erecting the building, they are paying a certain amount.
- After certain amount was raised, the plaintiff entered into a contract with the contractors for building the hall. One of the subscribers, who had promised to pay Rs.100 refused to pay and plaintiff sued.
ISSUES:-
- Whether the suit for payment of the amount subscribed is legally maintainable by the plaintiffs.
- Whether the amount subscribed by the trustees can be claimed in case of no consideration
OBSERVATIONS:-
- Ordinarily, when somebody becomes a trustee via subscription for a charitable object, it cannot be recovered as there is absence of consideration.
- However, in the current facts and circumstances the persons subscribing were aware of the purpose for which the money was to be applied and also knew that on the account of their subscription, the plaintiff entered into the contract.
JUDGEMENT:
The court considered the current contract to be a perfectly valid contract and with good consideration. It was held that plaintiff and other persons interested could sue for the amount subscribed and defendant has to pay the money promised. Hence, the judgement of the High court ordered the judge of small cause court to decree the suit for the amount claimed. Plaintiff was entitled to costs.
