Areti Singarayya vs Areti Subbayya and Others

Devadoss, J.—The main question argued in this second appeal is whether the plaintiff could maintain the suit against the 2nd defendant. The

2nd defendant is the vendee of certain property from defendants 3 to 5. Under the deed, Ex. A, he undertook to discharge a debt of Rs. 888 due

by defendants 3 to 5 to the 1st defendant. The plaintiff brings the suit against the defendants alleging that the 1st defendant is a benamidar for him

and that he is entitled to the amount mentioned in Ex. A. The learned District Munsif found that the 1st defendant was a benamidar for the plaintiff

and gave a decree against defendants 3 to 5 and exonerated the 2nd defendant on the ground that there was no privity of contract between the

plaintiff and the 2nd defendant. On appeal the learned Subordinate Judge held that inasmuch as all the parties to the transaction were before the

Court, the Court was entitled to pass a decree against the 2nd defendant as well, and he modified the decree of the Court of first instance by

passing a decree against the 2nd defendant as well. It is contended before me that the decision of the Subordinate Judge is wrong as the 2nd

defendant did not undertake to pay the plaintiff the amount mentioned in the sale deed; and reliance is placed upon Isti Panku Menon v. Dharman

Achan ILR (1917) M 488. In that case a Full Bench of this Court held that the principle of the decision in Tweddle v. Atkinson (1861) 1 B & S

393 applied to India and a stranger to the contract could not sue on the contract even though under the contract some benefit was reserved for

him. In this case, the vendee and the person to whom the vendee undertook to pay the amount are before the Court. Whether in a case like this the

plaintiff should fail because the undertaking was not to him is a question which is not free from difficulty. In Dzvarakanath Ash v. Priya Nath Malvi

36 IndCas 792 a Bench of the Calcutta High Court held relying upon the well-known case of Gregory v. Williams (1817) 3 Mer 582 that where

all the parties were before the Court it was open to the Court to give relief to the plaintiff even though no promise was made to him by the person

liable. In the case of Gregory v. Williams (1817) 3 Mer 582 the engagement was with one Parker, and it was he that paid the consideration, but

Gregory did not furnish any consideration and he was no party to the contract. Parker acted as his trustee; and Gregory derived an equitable right

through the mediation of Parker''s engagement. Sir William Grant, M. R., held that inasmuch as Parker and Gregory were plaintiffs the plaintiffs

could succeed. In Debnarayana Dutt v. Chunilal Ghose ILR (1913) C 137. Sir Lawrence Jenkins examined the case of Tweddle v. Atkinson

(1861) 1 BS 393 and stated: "" The bar then in the way of an action by the person not a direct party to the contract was probably one of procedure

and not of substance. In India we are free from these trammels and are guided in matters of procedure by the rule of justice, equity and good

conscience."" This case has been examined by a Bench of this Court in Iswaram Pillai v. Sonnivaveru Taragon ILR (1913) M 753. Some

observations in that judgment are, no doubt, against the view taken by Sir Lawrence Jenkins in the Calcutta Case. There are exceptions to the

principle enunciated in Tweddle v. Atkinson (1861) 1 B & S 393 as in the case of family settlements, partition arrangements, etc. Persons who are

not actual parties to the agreement or engagement are entitled to sue for the benefit reserved to them under such arrangements or engagements. But

apart from that where a Court has before it all persons and is in a position to do complete justice to the case, it would be straining the law to hold

that the suit should fail on the ground that the defendant did not contract with the plaintiff to pay the amount which he contracted to pay on his

behalf. In a recent case decided by this Court which is reported in Garudappa Peria Thiruvadi Ayyangar and Another Vs. Pokutti Janaki and

Others, . Venkatasubba Rao, J., observes at page 697: ""The 2nd and 3rd defendants have undertaken to pay the plaintiff Rs. 1,500. The

undertaking is absolute. They have not said that they will be liable to pay Rs. 500 only in the event of the security being sufficient to pay off both

the mortgages. ''The competition Is only as between the plaintiff on the one hand and the 2nd and 3rd defendants on the other.....There is no third

party involved. The contest is merely between the plaintiff on the one hand and the defendants 2 and 3 on the other."" And he held that the plaintiff

was entitled to succeed. It is unnecessary to refer to a number of cases on the point, such as Jamnadas v. Ram Autar Pande ILR (1911) A 63 and

Khwaja Muhammad Khan v. Hussaint Begam ILR (1910) A 410. So long as the principle of the decision in Gregory v. Williams (1817) 3 Mer

582 is held to be good law there is no reason why the plaintiff in this suit should not succeed. The case of Gregory v. Williams (1817) 3 Mer 582

is cited with approval in In re, Empress Engineering Company 16 Ch D 125. Lord Justice James clearly says that any objection on the score of

misjoinder would not have been tolerated in that case. That being so, I think the judgment of the learned Subordinate Judge is right, and the plaintiff

is entitled to a decree against the and defendant as well.

The other point raised in the case is as to interest claimed by the plaintiff. By Ex. A the 2nd defendant did not undertake to pay any interest. It is

a sum certain and the plaintiff is entitled to claim interest only from the date of demand. There is no evidence that he made any demand prior to the

date of plaint. The Subordinate Judge is not right in awarding interest from the date of breach of contract. The plaintiff is entitled to interest at 6 per

cent, per annum from the date of plaint as given by the District Munsif. The decree will be modified to this extent. With this modification the second

appear is dismissed with proportionate costs of the 1st respondent.