JNAN CHANDRA MUKHERJEE Vs. MANORANJAN MITRA

JUDGEMENT

(1.) This appeal is on behalf of the plaintiff and it arises out of a suit commenced by him to recover a sum of Rs. 5000 alleged to be due as principal and interest on two hundis executed by the defendants in his favour. The material facts are not in controversy and may be shortly stated as follows: Defendants 1 and 2, who are two brothers took a loan of Rs. 2500 only from the plaintiff and executed two hundis in respect of the same-one on 12 August 1924, and the other on 14 August, following. Defendants 3 and 4 also signed both the hundis as co- debtors along with defendants 1 and 2 though, it is said, that they were only sureties for the latter. On 8 August 1927, a sum of Rs. 5 was paid towards interest due on the hundis. This amount was paid by all the four defendants and the endorsements were signed by them all. There were two other subsequent payments of interest one of Rs. 10 and the other of Rs. 5 on 20 April 1930 and 18 April 1933, respectively, but on both these occasions the payments were made by defendants 1 to 3 only and not by defendant 4. On 20 June 1932, defendants 1 and 2 executed a kobala in respect of certain properties in favour of defendant 4 who was an officer as well as a relation of theirs and as consideration for the same defendant 4 undertook to pay the debts due to the plaintiff as well as to another creditor named Prokash Chandra Nag Choudhury whose names were specifically mentioned in the schedule to the conveyance. It was recited in the document that defendant 4 had stood surety in respect of both these loans and he had given hopes to defendants 1 and 2 that he would be able to induce the creditors to abandon their claim for interest and give full acquaintance to the debtors on receipt of the principal sums only. The value of the properties was stated in the kobala to be Rs. 3000 and that was exactly the principal amount advanced by these creditors. As no money was paid by any of the defendants, the plaintiff instituted the present suit on 19 June 1935 and the claim was laid at Rs. 5000 which was the principal and interest due on the two hundis. As against defendant 4, the claim was based not only on the hundis but on his express undertaking to pay the dues of the plaintiff as contained in the conveyance mentioned aforesaid.

(2.) The first three defendants did not contest the suit and it was contested by defendant 4 alone. Defendant 4 denied any personal liability on the hundis and contended inter alia that the suit against him was barred by limitation. It was further alleged that no liability could be imposed on him on the basis of the kobala that was executed by defendants 1 and 2 in his favour. The Subordinate Judge who tried the suit passed a decree against the first three defendants and dismissed the suit against defendant 4. It was held by the Subordinate Judge that the suit was barred by limitation as against defendant 4 who did not join in the last two payments of interest, and as the plaintiff was not a party to the contract contained in the kobala executed by defendants 1 and 2 in favour of defendant 4, he could not enforce it against the latter. This view was affirmed in appeal by the Additional District Judge of Dacca. It is against this decision that the plaintiff has come up on appeal to this Court. Dr. Roy who appears for the appellant has taken two points in support of the appeal. He has con-tended, in the first place, that as under the terms of the kobala executed by defendants 1 and 2 in favour of defendant 4 the latter was made a trustee for payment of the debt due to the plaintiff, it was competent to the latter to sue defendant 4 for enforcement of that obligation even though he was not a party to the document which created it. The second point taken is that the Courts below erred in law in holding that the plaintiff's suit was barred by limitation as against defendant 4.

(3.) So far as the first point is concerned, the law seems to be fairly well settled. A stranger to a contract which reserves a benefit for him cannot sue upon it either in English or in Indian law even though in India the consideration need not move from the promisee. There are two well-recognised exceptions to this doctrine. The first is where a contract between two parties is so framed as to make one of them a trustee for a third; in such cases the latter may sue to enforce the trust in his favour and no objection can be taken to his being a stranger to the contract. The other exception covers those cases where the promisor, between whom and the stranger no privity exists, creates privity by his conduct and by acknowledgment or otherwise constitutes himself an agent of the third party. There are numerous authorities, both English and Indian, which have laid down these propositions of law and reference may be made, among others, to the decisions in In re Empress Engineering Co. (1881) 16 Ch. D. 125, Lloyds V/s. Harper (1881) 16 Ch. D. 2902, Gandi V/s. Gandi (1885) 30 Ch. D. 57, Dunlop Pneutnatic Tyre Co. V/s. Selfridge (1915) 1915 A.C. 847, Jiban V/s. Nirupama ( 26) 13 A.I.R. 1926 Cal. 1009, Krishna Lal Sadhu V/s. Pramila Bala Dasi , Adhar Chandra V/s. Dalgobinda , District Board Malda v. Chandraketu , and Ramaswami V/s. Krishna and Sons . There are a number of eases in India where under marriage settlements or in connexion with family arrangements or otherwise a charge is created on specific immovable property for the benefit of a third person or provisions are made for the maintenance or marriage expenses of female members. In such cases the beneficiaries, though not parties to the contract, are entitled to sue : vide Khwaja Muhammad Khan V/s. Husaini Begum ( 10) 32 All. 410, Suppu Ammal V/s. Subramaniam ( 10) 33 Mad. 238. Sundara Raja V/s. Lakshmiammal ( 14) 1 A.I.R. 1914 Mad. 95, A Full Bench of the Madras High Court, vide Subbu Chetti V/s. Arunachalam ( 30) 17 A.I.R. 1930 Mad. 382, has placed these cases under different categories and treated them as additional exceptions under the Indian law to the general doctrine. In our opinion, they do really come under the first exception and the third parties are allowed to sue entirely on the footing that the instruments created a trust in their favour. This would be clear from the latest pronouncement of the Judicial Committee which is to be found in Uma Nath V/s. Jang Bahadur .