UNDER DOCTRINE OF PRIVITY OF CONSIDERATION
BENCH: Mr. Justice Innes; Mr. Justice Kindersley
FACTS:
- There was a transfer of property consisting of land, by the mother of the defendant through a gift deed which was thereby registered
- The terms of the deed stipulated for an amount of Rs. 653/- to be paid every year to the Plaintiff
- An Iqrarnama or agreement in favour was executed by defendant in favour of the plaintiff promising to pay such amount
- Defendant failed to pay the annual amount to the plaintiff which led to a suit for recovery on behest of the Plaintiff
ISSUE:
Whether an action can be brought against the defendant for recovery of the amount stipulated in contract where consideration has moved by the Mother of the defendant
CONTENTIONS BY PLAINTIFF:
- That the Plaintiff is entitled to sue as Defendant’s mother to gift the property to the defendant was defendant’s promise to pay
CONTENTION BY DEFENDANT:
- That there was no consideration on behest of the plaintiff. Hence suit is invalid
JUDGEMENT:
The Hon’ble Court observed that according to section 2(d) of the Indian Contract Act (1872), 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. Upholding this point of law, the right of the plaintiff to recover annuity due from the defendant as per the contract was valid. The defendant was held liable to pay the annuity to the plaintiff.
