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Judgment
John Wallis, C.J.—This appeal raises a question of some difficulty. In 1904 the plaintiff, jenmi, who was entitled to redeem in 1905 a kanom
granted by him to the 2nd defendant in 1893, executed a melcharth in favour of the 1st defendant by which the latter became entitled to redeem the
2nd defendant on the expiry of his kanom and to hold the lands himself on a fresh kanom. The kanom debt payable to the 2nd defendant on
redemption was subject to reduction by the amount of the arrears of rent due from the 2nd defendant to the plaintiff under the kanom even though
a suit for the arrears had become barred, and the 1st defendant was required on redemption to deduct this amount from the kanom debt and pay it
over to the plaintiff, or in other words to collect the arrears due to the plaintiff. He did nothing till 1909 when he assigned his rights under the
melcharth to the kanomdar, the 2nd defendant, stipulating at the same time that the 2nd defendant should pay the plaintiff the arrears of rent due
under the kanom which he had bound himself to collect and pay on redeeming the 2nd defendant.
One of the questions argued before us is Whether the plaintiff is entitled to sue on this contract made between the 1st defendant and 2nd
defendant. As regards this I agree with Abdur Rahim, J. that he cannot, and that the question is concluded by the recent decision of the Privy
Council in Jamna Das v. Ram Autar Pande (1911) ILR 34 A. 63. (P.C.) where Lord Macnaghten delivering their Lordships'' judgment held that a
purchaser''s contract with his vendor to pay off a mortgage on the property sold could not be enforced by the mortgagee. ""The mortgagee has no
right to avail himself of . that. He was no party to the sale. The purchaser entered into no contract with him and the purchaser is not personally
bound to pay off the mortgage debt."" This, in my opinion, recognises the general applicability in India of the common law rule that the parties to a
contract are the proper parties to sue on it, which was also the rule in equity except in so far as equity made an exception as explained in Gandy v.
Gandy (1885) L.R. 80 Ch. D. 57 in cases where the contract was made for the benefit of a third party and in such circumstances as to give rise to
a trust in his favour which is not the case here. In the earlier case of Kwaja Muhammad Khan v. Husaini Begman ILR (1910) All. 410 their
Lordships held that this common law rule was not applicable to the facts and circumstances of that case in which the agreement executed by the
defendant had specifically charged Immovable property for the allowance which he had bound himself to pay to the plaintiff then a minor in
contemplation of her marriage. Their Lordships observed that, although no party to the document, she was clearly entitled in equity to proceed to
enforce her claim, and observed that in India, where marriages are contracted for minors by parents and guardians, it might occasion serious
injustice if the common law doctrine was applied to agreements or arrangements entered into in connection with such contracts. It is clear however
from the later case that their Lordships did not intend to lay down that the common law rule had no application to India. In Tweddle v. Atkinson
(1861) 1 Band 393, to which their Lordships referred, reliance had been placed on certain old cases in which persons not parties to the contract
had been allowed to maintain an action in assumpsit apparently, as observed by Crompton, J. on the ground that the action of assumpsit was in its
origin an action of trespass on the case. In Gandy v. Gandy (1885) L.R. 30 Ch. D. 57 Bowen, L.J. considered that it would be mere pedantry
now to go through the history of that idea; and this is probably why their Lordships in the case we are considering disposed of the case of Tweddle
v. Atkinson (1861) 1 B & S. 593 with the remark that it was an action of assumpsit; but, as I have already said, they did not mean by this that the
common law rule on the basis of which that action was dismissed was generally inapplicable in India.
This however does not appear to me to dispose of the present case. The assignment by the 1st defendant of his right under the melcharth to the
2nd defendant has been recognised by the plaintiff who by the notice Exhibit B, dated 8th January 1912 demanded payment of the arrears from
the 2nd defendant by reason of the assignment and has also framed the present suit upon it; and, even if it could be said that the melcharth
contained an implied covenant against assignment to the 2nd defendant, I do not think the validity of the assignment can now be questioned. I think
however that by reason of this assignment the 2nd defendant became bound to redeem the old kanom and to hold the demised lands for a further
term for the old kanom debt less the amount of arrears which were due at the date of redemption, and that the plaintiff jenmi when he came to
know of the assignment, which was apparently shortly before he served the notice Exhibit B on the 2nd defendant, became entitled to insist on his
so redeeming the old kanom and to treat the arrears as money in the 2nd defendant''s hands had and received to the plaintiff''s use and to recover it
under Article 62 and I think he must be taken to have exercised this right when he demanded payment of the arrears from the 2nd defendant by
Exhibit B on the basis of the assignment. I do not think we are bound to treat the redemption as having taken place on the date of the assignment
by the 1st defendant to the 2nd defendant seeing that the arrears were not paid over to the plaintiff as they should have been. Even if we were, I
should be prepared to hold that under Article 62 read with Section 18 of the Limitation Act time would not run against the plaintiff so long as he
was kept in the dark as to the manner in which his rihgts had been affected by the assignment of the 1st defendant''s melcharth rights to the 2nd
defendant.
In this view of the case I do not think it necessary to decide the question which has been raised whether under the Malabar Law the jenmi has a
charge on the amount of the kanom debt for arrears of revenue or merely a right to take credit for the amount of such arrears when the account is
taken aa between the mortgagor and the mortgagee.
A charge may be realised at any time u/s 100 of the Transfer of Property Act, and one test would appear to be whether under the Malabar
custom barred arrears can be recovered at any time by enforcing the charge, If not I should as at present advised be disposed to hold that there
cannot strictly speaking be said to be a charge. In the result, the Letters Patent Appeal will be dismissed with costs.
Bakewell, J.
The plaint recites a kanom deed, dated the 6th July 1893 granted by the plaintiff to the 2nd defendant, and a melcharth, dated the 28th January
1904 to the 1st defendant, and alleges that under the provisions of the melcharth the 1st defendant was bound to redeem the 2nd defendant on the
expiration of the term of the kanom in 1905 and to pay to the plaintiff the arrears of rent due by the 2nd defendant for the years 1896 to 1905. The
plaint also recites an assignment of the melcharth, dated the 6th July 1909 by the 1st defendant to the 2nd defendant and an agreement therein
contained that the latter would pay the arrears of rent to the plaintiff.
The cause of action is stated to have arisen on the date of the melcharth and the plaint prays for payment of the arrears of rent from 1896 to
1905 and from 1910 to 1913 and for sale of the defendants'' kanom right.
The suit is therefore to enforce payment of moneys due to the plaintiff under the provisions of the melcharth. The plaintiff''s remedy for rent for
the earlier period is barred, but in a suit for redemption he would be entitled to have it credited to him in taking an account as between the
mortgagee in possession and the mortgagor. In such a suit the mortgagor is entitled to be credited with any moneys received or due by the
mortgagee, including rent, as on the dates on which they were received or fell due; and I do not think that it is correct to say that these moneys are
a charge on the mortgage moneys, or that the learned Judges in the case of Kanna Picharodi v. Kombi Achen ILR (1885) Mad. 381 intended to
hold that any kind of charge is created by non-payment of rent. I do not think that the sum due for rent can be said to be money had and received
by the mortgagee for the use of the mortgagor; he was bound to pay this sum but he never in fact received it on account of the mortgagor. At the
date of the melcharth the plaintiff was therefore entitled to have an account taken of the amount due to the 2nd defendant under his kanom, in
which the arrears of rent would be credited to the plaintiff, and to redeem this defendant by payment of the balance, but there was no specific sum
due and payable by the defendant to the plaintiff.
It appears from the recitals of the melcharth that the plaintiff had disputes with the 2nd defendant and was anxious to redeem him and compel
him to give up possession of the land, and also to obtain payment of arrears of rent, and the bargain . between the plaintiff and the 1st defendant as
evidenced by this document was that on the expiry of the term granted by the kanom the 1st defendant should redeem the 2nd defendant by
payment of the balance due to the latter and take possession of the land, and that the 1st defendant should then pay to the plaintiff the arrears of
rent which would have been credited to him in the account.
The document contains a demise of the land to the 1st defendant ""for a period of 12 years commencing from the date of recovering possession
of the said properties"", but provides that the 1st defendant shall pay rent from 1905, when the kanom term expired, ""even in ease there is delay in
getting possession of the properties"". The last provision appears to have been inserted for the purpose of ensuring prompt performance of the 1st
defendant''s obligation to redeem the mortgagee.
In my opinion the demise under this document was not intended to take effect until this obligation had been fulfilled, and that since this has not
been done the term of 12 years contemplated by the melcharth has not yet come into existence, and the assignment of the benefit of the document
was in breach of its terms and passed nothing to the 2nd defendant.
The relations between the plaintiff and the 2nd defendant therefore fall to be determined, in acordance with the provisions of the kanom, and
the plaintiff is not entitled to any remedy under the melcharth as against the 2nd defendant.
Assuming that on the true construction of the melcharth a leasehold interest was created in favour of the 1st defendant immediately upon the
determination of the term granted by the kanom to the 2nd defendant, and that the assignment of the melcharth to the 2nd defendant, imposed
upon him an obligation to take an account of the amount due under his kanom and to redeem himself, the result would be that he would hold the
term granted by the melcharth as security for the balance found to be due to him. The obligation to pay a certain item taken into the account in
ascertaining the balance would arise not from the redemption but from the personal liability undertaken by the 1st defendant under his melcharth.
The 1st defendant''s obligation to pay a sum of money determined by the arrears of rent due under the previous demise in fact formed part of
the consideration for the grant of the new lease; this sum was not rent due under the latter, and the agreement to pay it cannot be said to run with
the land so as to be binding upon an assignee.
The sum agreed to be paid might possibly be a charge upon the interest (if any) of the 1st defendant in the land, as unpaid purchase money, but
this point has not been taken either in the plaint or the arguments.
I respectfully agree with the learned Chief Justice that a contract cannot be enforced by a person not party to it, and I think that the provisions
of the melcharth that the 1st defendant shall redeem the kanomdar and pay a certain sum to the plaintiff are personal covenants and cannot be
enforced against the 2nd defendant. The same reasoning applies to the provisions of the assignment to the 2nd defendant.
The plaintiff appears to have acquiesced in the assignment of the melcharth to the 2nd defendant but it has not been shown that the latter has by
conduct or otherwise agreed to be bound by its terms; on the contrary the assignment appears to have been obtained by him with the view of
preventing the provisions of the melcharth from coming into force an thus postponing the redemption of his mortgage.
The Lower Appellate Court refused relief against the 1st defendant; and there is no appeal from that order by the plaintiff.
For these reasons I think that this appeal should be allowed the decrees of the lower courts set aside and the plaintiff''s suit in respect of rent
for the period from 1895 to 1905 dismissed.
Kumaraswami Sastri, J.
The suit out of which this appeal arises was filed by the plaintiff (the jenmi) to recover arrears of rent. The 2nd defendant obtained a kanom
from the jenmi under Exhibit III on the 6th July 1893 whereby he was entitled to be in possession of the properties demised for 12 years (i. e., till
6th July 1905). On the 28th January 1904 the jenmi granted a melcharth to the 1st defendant by Exhibit I, the material portion of which runs as
follows:--""On the expiry of the term of the demise you shall either directly or by suit pay to Gopala Menon and another the kanomdars under
Exihibit III) the balance kanom after setting off the arrears of purapad and interest against the kanom and obtain possession of the properties. And
you shall hold the properties on paying properly the purapad due from 1081 (1905--1906). You should then pay to the Edom the value of the
purapad which you get set off against the kanom and obtain receipt therefor....It is stipulated that you should pay the whole of the purapad from
1081 (1905-1906) even in case there is delay in getting possession of the properties.
The 1st defendant did not redeem the kanom of the 2nd defendant when it became redeemable on the 6th July 1905 but assigned his rights
under the melcharth deed Exhibit I to the kanomdar by the deed of assignment Exhibit II, dated the 6th July 1909. The material portion of the
document runs as follows: ""I have this day received in cash from you Rs. 600 made up of the renewal fee of Es. 400 due to me in accordance with
the said melcharth and interest thereon and Rs. 56 being the value of paddy consisting of the michavaram paid by me to the jenmi from 1081
(1905-19.06) to 1084 (1908-1909) with interest thereon and I have hereby assigned to you all the rights belonging to me under the said
melcharth....You should directly pay to the jenmi the arrears of michavaram etc., payable to the jenmi from 1071 (1895-1896) to 1080 (1904-
1905) inclusive. If you do not do so, you shall be liable for the damages arising therefrom.
Although the jenmi might have repudiated the melcharth owing to the melcharthdar''s failure to redeem the prior kanom as expressly stipulated
in the melcharth, he did not choose to do so; but on the contrary sent the notice Exhibit B to the assignee of the melcharth demanding arrears of
rent ""as he held in himself the entire rights of the prior tenant and the melcharthdar."" In his plaint the jenmi recognises both the melcharth and the
assignment as valid and subsisting transactions at the date of suit and he obtained a decree against the 2nd defendant. The melcharth provides for
rent being paid to the jenmi even if the melcharthdar delayed in redeeming the kanom and there is nothing so far as I can see to prevent (in the
absence of any objection raised by the jenmi) the kanomdar and melcharthdar from agreeing between themselves that the kanomdar is to remain in
possession so long as the rights of the jenmi to the rent reserved by the melcharth and his right to recover arrears of rent on the kanom are not
affected. I do not think that the melcharth was at the date of the assignment invalid and inoperative by reason of the failure of the grantee to radeeb
the kanom.
The rights of the parties must be dealt with on the footing that the 2nd defendant remains liable for all the legal consequences that would flow
from his being both the kanomdar and the assignee of the melcharth.
I am of opinion that the effect of the assignment of the melcharthdar''s rights to the kanomdar was to extinguish the kanom at least from the
date the jenmi assented to the assignment. The kanomdar then became entitled to use the melcharth as a shield against any attempts which the
jenmi might make to recover possession of the land. If the melcharthdar instead of assigning the melcharth had acted according to its terms and
redeemed the kanom the jenmi would under the terms of Exhibit I have been entitled to recover the sum which would be in the melcharthdar''s
hands as arrears of rent which had been set off against the kanom amount. There can be little doubt that the effect of the assignment of the
melkanom to the kanomdar was to allow the kanomdar to remain in possession for the period provided in the melkanom and the question is
whether the kanomdar can be heard to say that he is under no obligation to pay the jenmi arrears of rent on the kanom Which the kanomdar bound
himself to pay the jenmi under Exhibit II. I do not think it is open to the kanomdar to claim the advantages which he got by reason of the
assignment of the melcharth without performing the obligations imposed by the melcharth. In Kulandavelu Padayachi v. Kamatchi Aiyar (1912)
M.W.N 409 it was held that a person who though not a party to a contract, takes benefits under it, is bound to pay money due under the contract.
The case was one where by a partition deed between two brothers, lands were given to a female member for her maintenance on condition that
she paid a certain sum of money to each of the brothers. She took possession and was sued by one of the brothers for the amount payable. The
lower Court dismissed the suit on the ground that she was no party to the contract but in revision Sundara Aiyar, J. held that though not a party to
the contract she took a benefit under it and was subject to the burden imposed on her by the document. I might in this connection refer to Irving v.
Tudball (1902) 2 Q.B. 129. It was a case where a common vendor of various plots of land agreed to pay the purchaser of one plot, one half of
the cost of erecting a party wall which was partly built on a portion of an adjacent plot and then sold the adjacent plot to another person with
covenant that the second purchaser should pay to the first purchaser the sums which the vendor had agreed to pay in respect of the building of the
party wall. In a suit by the first purchaser against the second, objection was taken that there was no privity of contract but a decree was passed on
the ground that ""sufficient had taken place to constitute privity of contract where the second purchaser in fact used the wall that had already been
built upon by his neighbour and that consequently at that stage there was sufficient for the Court to hold that an action at common law as upon an
implied contract would arise from such a use of the wall."" Channell, J. observed that ""very little will create that privity of contract where it is so
convenient for all parties that the matter should be carried out between two parties really interested in it.
It has been contended on the authority of Tweddle v. Atkinson (1861) 1 B.& S 393 that no stranger to the consideration can enforce
performance of a contract though made for his benefit. That the rule laid down in Tweddle v. Atkinson (1861) 1 B. & S. 393 has exceptions and is
not of universal application in India is clear from the following observations by their Lordships of the Privy Council in Khwaja Muhammad Khan v.
Husaini Begam ILR (1910) All. 410 ""First, it is contended, on the authority of Tweddlc v. Atkinson (1861) I. B. 899. that as the plaintiff was no
party to the agreement she cannot take advantage of its provisions. With reference to this it is enough to say that the case relied upon was an action
of assumpsit and that the rule of common law on the basis of which it was dismissed is not, in their Lordships'' opinion applicable to the facts and
circumstances of the present case."" Their Lordships were of opinion that the fact that the payment was charged on the Immovable property and
that the plaintiff was beneficially entitled to it gave her the right to sue on contract to which she was not a party.
In Suppu Ammal v. Subramanyan ILR (1909) Mad 238. it was held on the authority of Rukamabai v. Govind (1901) 6 Bom L.R. 421 and
Husaini Begam v. Khwaja Muhammad Khan I.L.R (1906) All 151 which was confirmed by the Privy Council in Khwaja Muhammad Khan v.
Husaini Begam 20 M.L.J. 614 that a person who is no party to a document but in whose favour a charge is created by it was entitled to file a suit
to enforce its terms either as actual beneficiary or charge-holder. If the decision in Tweddle v. Atkinson (1861) 1 B. & S. 393 is to be followed, as
a rule of general application it is difficult to see how the fact that a charge has been created makes any difference so far as the person not a party to
the contract is concerned. In Arumuga Gounden Vs. Chinnammal, it was held that a person could sue on an agreement to which she was no party,
whereby two persons agreed to give her a certain quantity of paddy for her maintenance. Sundara Aiyar, J. referring to Khwaja Muhammad Khan
v. Husaini Begam 20 M.L.J. 614 observed that ''the rule that a person not a party to the contract cannot sue to enforce any rights created by it is
one which would require considerable modification in this country."" He thought that if the rule was subject to exceptions one very proper exception
was where co-parceners agreed to provide for maintenance of female members of the family. In Kulandavelu Padayachi v. Kamakshi Aiyer
(1912) M.W.N. 409 the same learned Judge held that a person who is not a party to a contract but who takes a benefit under it was subject to the
burden imposed.
Though Dutton v. Poole (1688) 2 Lev. 210 affirmed on error in the Exchequer Chamber T. Raym. 302, was dissented from in Tweddle v.
Atkinson (1861) I. B & S. 993 it was followed in Chinnaya Rau v. Ramayya ILR (1881) Mad. 137 and as pointed out by Pollock in his
commentaries to the Contract Act, Button v. Poole (1688) 2 Lev. 210. is having regard to ''consideration'' in Section 2 Clause (d) of the Contract
Act good law in India, where consideration need not move from the promisee.
All that was decided in Jamnadas v. Ram Autar Pande I.L.R.(1911) All. 63 was that a purchaser of property subject to a mortgage was not
personally liable to pay the sum due on the mortgage to the mortgagee so as to entitle him to a personal decree should the sale proceeds of the
mortgaged property be insufficient. It was not alleged that the mortgagee was in any way prejudiced by the transfer or that any exceptional
circumstances existed.
If as pointed out by their Lordships of the Privy Council in Kwaja Muhammad Khan v. Husaini Begam ILR (1910) All. 410 and by Sundara
Aiyar, J. in Arumuga Gounden Vs. Chinnammal, , the rule in Tweddle v. Atkinson (1861) I.B. and Section 393 is not of universal application and
is subject to exceptions in India, I think the jenmi, situated as the plaintiff in the present case is, is entitled to sue on the contract between the
kanomdar and melkanomdar.
Even assuming that the jenmi cannot enforce the contract evidenced by Exhibit I against the kanomdar. I think that an action for money had
and received would lie. This aspect of the case has been fully dealt with by the Chief Justice in his judgment which I have had the advantage of
perusing and I entirely agree with his observations on the point.
Whether the claim of the jenmi is based on his right to sue on the arrangements evidenced by Exhibits I and II or on the ground that the kanom
must be deemed to have been redeemed when the assignment of the melcharth to the kanomdar was assented to by the jenmi it is not barred. In
the former case he would have 6 years within which to file the suit as Exhibits I and II are registered documents and in the latter he would have
three years from the date of his assent. It is unnecessary to deal with the contention of the respondents that the jenmi has a charge on the kanom
amount in respect ofrent due to him from the kanomdar.
I am of opinion that the decision of Phillips, J. is right and would dismiss the Letters Patent Appeal with costs.