D. Subbiah alias Devarayan Chettiar vs A. Pr. L. Alagappa Chettiar and Others

Ganapatia Pillai, J.—These two appeals arise out of the common judgment of-the learned Subordinate Judge of Devakottai disposing of two

suits OS No 7 of 1952 and O.S. No. 7 of 1952 out of which A.S. No. 154 of 1956 arises was instituted by one Annapoorani Achi for recovery

of money due to her on a deposit voucher executed by the first defendant as one of the partners of a money-lending Nattukottai Ghettiar Firm of

Palladam. She died during the pendency of the suit and her adopted son has been brought on record as the second plain iff. Defendants 1 to 3

along with the father of Annapoorani Achi above mentioned were the partners of the Palladam Firm.

The case in the plaint was that Stridhanam and Seermurai money belonging to Annapoorani Achi was onginaly deposited with two firms, and

subsequentlv in 1921 the money came to be deposited with the Palladam Firm (Y. PRL FIRM) fourth defendant is the undivided son of the first

defendant and the fifth defendant is the undivided son of the third defendant. Sixth defendant is the husband of Annapoorani Achi the first plaintiff.

Sixth defendant was impleaded as mrtv to the suit on the allegation that the deposit voucher, dated rGtXgust iLFZl taken to his order. The

document itself recites that the money deplsted was X Stridhanam of Annapoorani Achi and it was deposited through the mlTS her father

Kasmathan Chettiar and the money was payable to the order of the husband of the lady. Sixth defendant, though he did not file a written statement

3 into the witness-box and supported the case of his wife, the first plaintiff claimed any interest the money and proclaimed his readiness to

consentto a decree being passed in favour of the first plaintiff for the sum due. The main contest raised by defendants 1 to 5 who were the

contesting defendants centred round three questions The first was that the transaction was a loan and nota consequently its recovery was barred by

limitation. The second wat that the first plaintiff Annapoorani Achi had no right of suit in he self suit ought to have been brought by the sixth

defendant. In supporo this they relied on the rule that a stranger to a contract could not sue on the contract for the benefit secured to that stranger.

The third defence related to a S� of fact namely the guarantee alleged to have been given by the first mas Devakottai for repayment of money

due by her husband to the first efendanfind an agreement for adjustment of such borrowings made by her husband from om of the Stridhanam

amount due to her. Following up this plea it was specifically said that a sum of Rs. 4,341 due to the first defendant on a promissory note executed

by the husband of Annapoorani Achi had been so adjusted. The other suit O.S. No. 20 of 1952 was instituted by the first defendant in the litigation

OS No 7 of 1952 (Alagappa Chettiar). That suit was laid against sixth defendant n the prior litigation that is the husband of Annapoorani Achi as

the first defendant Annapoorani Achi herself as the second defendant, and her adopted son as ""he third defendant. That suit was laid on the

promissory note, Exhibit B"", dated S January, 1937 executed by Theivarayan Ghettiar, husband of Annapoorani favour of the plaintiff in that suit.

The question in issue in that suit is was really the defence raised by Annapoorani namely that she could not be made Table any part of the sum due

on the promissory note of her husband. Both the suits were, by consent of parties, tried together and the learned Subordinate Judge came to the

following conclusion or findings.

According to him the transaction sued upon in (O.S. No. 7 of 1952) was a deposit and not a loan. Secondly he held that the first suit (O.S. No.

7 of 1952) was no barred by limitation On the plea raised by first defendant in O.S No 7 of 1952 regarding the specific contract of guarantee or

adjustment between himself and Annapoorani the learned Judge disbelieved the case of the first defendant21 fid there was no such contract or

agreement. On the question of giving a See to Annapoorani for the money due to her, the learned Judge held that she had no right of suit as she

was a stranger to the deposit transaction and dismissed the suit. Against that decree the second plaintiff in O.S. No. 7 of 1952 has preferred the

first mentioned appeal, A.S. No. 154 of 1956 in forma pauperis.

In O.S. No. 20 of 1952 the learned Judge gave a decree for the sum claimed against the first defendant alone, namely, the husband of

Annapoorani and dismissed that suit against Annapoorani Achi and her adopted son (defendants 2 and 3). Against the decree dismissing the suit

against defendants 2 and 3, the plaintiff in that litigation has preferred the second mentioned appeal.

Mr. Ramamurthy, on behalf of the appellant, in A.S. No. 569 of 1956 did not seek to controvert the finding that the transaction with the

Palladam Firm, which would be the compendious name by which we would refer to it hereafter, was really a deposit and not an ordinary loan. We

need therefore say no more about it. On perusing the records we fully agree that the learned Subordinate Judge was right in coming to that

conclusion on the materials before him. On this finding no question of limitation arises.

The two questions upon which Mr. Ramamurthy centered his attention were : (1) a question of fact, the truth of the agreement pleaded in the

written statement of the first defendant in O.S. No. 7 of 1952 whereby Annapoorani is said to have guranteed repayment of her husband''s

borrowings from the first defendant and agreed to adjustment of such repayments against the deposit amount due to her. The second question is a

question of law, namely whether in the circumstances of the case (O.S. No. 7 of 1952) Annapoorani Achi had a right of suit and whether the

learned Subordinate Judge could have granted a decree in her favour or in favour of her son, the second defendant for the sum due on the deposit

transaction.

We shall take up the question of fact first [after considering the evidence their Lordships concluded). We are in entire agreement with the

learned Subordinate Judge on his finding that the agreement in question was not true and was really an after-thought and possibly a false plea set

up to get over the difficulty by having to pay the wife her stridhanam money without being able to set it off against the debt due by the husband.

We now go to the question of law. Mr. Ramamurthy conceded that there was no direct authority on the point which he was trying to press on

us. He relied on the analogy of the rule of law by which a banker who lends money to one of his customers is entitled to set off that loan against

that customer''s money in his hands on another account. That is a special rule applicable to banking law where two essential ingredients must co-

exist, namely (1) both the funds must belong exclusively to the same customer and the lending to the customer should have been made partly on the

strength of the deposit of funds of the customer with the bank. In this case that rule cannot be invoked because even treating the first defendant

(Alagappa Chettiar) as a banker he was fully aware that the money due under the deposit arrangement was not money which belonged to

Theivarayan Chettiar, the husband of Annapoorani. The deposit receipt itself as well as the correspondence that passed between Kasinathan

Chettiar the father of Annapoorani and the firs| defendant at the time when the deposit was made and shortly before the receipt was executed

amply show the knowledge of the first defendant of the ownership of the money. Certainly it would be too much for counsel to argue that a banker,

knowing that though the deposit receipt stood in the name of a particular individual, the ownership of the money vested in another, could still

exercise what Mr. Ramamurthy calls the right of adjustment or lien for money due to him from his customer. That would be doing violence to

equity in this case especially because it was well known to people like the first defendant that ladies belonging to the Nattukottai Chettiar families

usually have Stridhanam funds which are kept by firms having custody of them for improvement and the decisions of this Court have even gone to

the length of holding that such moneys in deposit with Nattukottai Chettiar firms could give rise to the relationship of trustee between that firm and

the lady who is the owner of the money.

Lastly Mr. Ramamurthy contended that Annapoorani being not a party to the contract and being really a third party to the contract this case falls

under the ruling in Thirumulu Subbu Chetti Vs. Arunachalam Chettiar, . That leading case dealt with the rights of a beneficiary under a contract to

sue for such benefit in his or her own name. The headnote to the case reproduces correctly the rule laid down there:

Where on a contract between A and B, B agrees to pay a sum of money to Cand no more circumstances appear, C being a stranger to the

contract, cannot sue B for the money, though all the parties to the contract are parties to the suit. This is a general rule, though some exceptions to

the rule arise under the following circumstances.

The four exceptions to the rule are thereafter set down which it is not necessary for our purpose to notice. This is not a case where

Annapoorani is trying to recover money as though it is a benefit conferred upon her under a contract, Really this is a case where the owner of

property is seeking to recover that property from the person in possession of it. A deposit transaction is really a transaction whereby one person

keeps in deposit the property or money of another for a consideration and it implies a promise to repay whenever called upon. Mr. Ramamurthy

attempted to show by reference to some authorities that in the case of people in whose name property is put nominally the law places certain

restrictions upon the real owner suing for recovery of such property. But it is well known that except in the case of some branches of the law like

Negotiable Instruments Act or purchases in Court sales the law has never frowned upon real owners filing suits in their own names for recovery of

their property. Deva Rau v. Venkatesa Acharijar 1 M.H.C.R. 452, was a case where a suit was laid for recovery of money on a bond. Dujai v.

Shiam Lal I.L.R.(1915) All. 122, was a case where the suit was laid for recovery of money due on a mortgage deed. In both these cases though

the deed stood in the name of one individual the real owner came forward with the suit for recovery of the money and were allowed to sue in their

own name. It is therefore too late in the day now to say in a deposit transaction the real owner could not maintain a suit in her own name.

Especially so in this case where the nominal owner is also made a party to the suit. The presence of the maraldar is really unnecessary as even

under the decisions of this Court he has no more right to receive the money though of course he has some control over the operation of the

account. That question does not arise here because the account has not been operated upon at any time either by Kasinathan or by the husband of

Annapoorani. Ever since the date of deposit once in every six months'' interest has been cauculated, added up to the principal and the money has

always stood to the credit of the deposit account without any drawings made therefrom. Mr. Narayanaswami Iyer made a point that the account

books of the Palladam Firm had not been produced after 1922. Of course on this circumstance he is entitled to ask us to assume that the entry in

the account books produced before that date was repeated in the subsequent books kept by that firm. That shows that the amount was retained

by the firm for the purpose of improvement knowing full well that the money belonged to Annapoorani Achi as her stridhanam amount. In our

opinion the case does not fall within the rule of law laid down in Subbu Chetti v. Arunachalam Chettiar ILR (1930) Mad 420 . and we hold this

suit by Annapoorani Achi in the presence of her husband to whose order the deposit amount was payable was valid and competent. What

surprises us is that the learned Subordinate Judge thought of dismissing the suit altogether even on his finding that Annapoorani Achi could not

maintain it as a plaintiff. He obviously overlooked that the only two parties who could have maintained that suit were either Annapoorani Achi or

her husband and both of them were before the Court. But the husband went into the box and deposed on oath that the money did not belong to

him and that he had no objection to the decree being passed in favour of his wife. In these circumstances it should have been clear to the learned

Subordinate Judge that even though he took the view that the suit could not have been instituted by Annapoorani Achi in her own name, the other

circumstance, namely, the presence of the person who could have instituted the suit as a party defendant, and his willingness on oath to a decree

being passed in favour of his wife which would be sufficient discharge in law for the debtor to pay the debt to the plaintiff presented no obstacle to

a decree being granted to Annapoorani Achi.

The decree of the learned Subordinate Judge dismissing O.S. No. 7 of 1952 is therefore clearly wrong. It is hereby set aside. There will be a

decree in that suit in the terms of the prayer in paragraph 14 of the plaint. The costs of the plaintiff in that suit would be paid by defendants 1 and 2

personally. Costs of the appeal also will be similarly paid by respondents 1 and 2. In view of our finding that the case set up by first defendant in

O.S. No. 7 of 1952 (plaintiff in O.S. No. 20 of 1952) regarding the arrangement between himself and Annapoorani, which according to him

amounted to a contract of guarantee and an agreement for adjustment, is not true the finding of the learned Subordinate Judge on this point is

correct. A.S. No. 569 of 1956 is dismissed. No costs in this appeal. The Court-fee due on the appeal memorandum in A.S. No. 154 of 1956 will

be paid by respondents 1 and 2.