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The Nair Service Society Vs. Krishna Pillai Kunjukrishna Pillai and ors. - Court Judgment

LegalCrystal Citation
SubjectLimitation
CourtKerala High Court
Decided On
Case NumberA.S. No. 1140 of 1959
Judge
Reported inAIR1964Ker265
ActsLimitation Act, 1908 - Articles 113, 115 and 120
AppellantThe Nair Service Society
RespondentKrishna Pillai Kunjukrishna Pillai and ors.
Appellant Advocate K. Velayudhan Nair and; V.S. Moothathu, Advs.
Respondent Advocate T.S. Krishnamoorthy, Iyer and; P. Krishnamoorthy, Advs. for Respondents 7 and 8
DispositionAppeal dismissed
Cases ReferredWisconsin and M. R. Co. v. Powers
Excerpt:
.....ground of limitation - promise became enforceable as soon as construction began on faith of that promise - suit instituted as soon as promise became enforceable and could not have been dismissed on ground that it was premature - period of limitation will and should run from date of beginning of construction - suit barred by limitation - no infirmity in order passed by court below - appeal liable to be dismissed. - - ilr 14 cal 64 has been accepted as good law in abdul aziz v. ' according to broom's legal maxims consideration could not be better defined than it has been defined in the indian contract act, 1872. when at the desire of the promisor, the promisee or any other person, has done or promises to do or abstain from doing something, such act or abstinence or promise is called..........brings it about that qualifications, taken once for granted, are disregarded or forgotten. the doctrine of consideration has not escaped the common lot. as far back as 1881, judge holms in his lectures on the common law (p. 292) separated the detriment, which is merely a consequence of the promise from the detriment which is in truth the motive or in document, and yet added that the courts 'have gone far in obliterating this distinction'. the tendency toward of facement has not lessened with the years. on the contrary, there has grown up of recent days a doctrine that a substitute for consideration or an exception to its ordinary requirements can be found in what is styled a 'promissory estoppel'. williston, contracts, sections 139, 116. whether the exception has made its way in this.....
Judgment:

1. This is an appeal by the plaintiff -- the Nair Service Society -- against the decision of the District Court of Quilon in O. S. No. 156 of 1953. The suit was for a subscription of Rs. 10,000/- allesed to have been promised by the 1st defendant to the Society for the starting of a first grade college in central Travancore. The 1st defendant died during the course of the trial and his legal representatives were brought on record as defendants 2 to 10 by the order dated 26-11-1957 on C. M. P. No. 1912 of 1957.

2. All the issues in the case except issue No. 2 -- Is the suit barred by limitation? -- were decided in favour of the Society. On that issue the conclusion of the court below was that the suit was barred by limitation and in the light of that conclusion the suit was dismissed with the direction that the parties should bear their respective costs.

3. We are in entire agreement with the court below in its conclusion that the 1st defendant did promise a sum of Rs. 10,000/- for the starting of a first grade college in central Travancore and that the N. S. S. Hindu College at Changancherry was started on the strength of that promise and of similar promises by other persons. The 1st defendant had divergent contentions for exonarating himself from the liability: first that he never promised; and secondly that his promise was conditional on the college being started in Quilon. We entertain no doubt that the lower Court was right in rejecting both these contentions on the evidence on record.

4. That such promises become enforceable as soon as any definite step is taken in furtherance of the object on the faith of the promise should now be taken as settled law in this country. The earliest case on the subject is Kedar Nath v. Gorie Mahomed, ILR 14 Cal 64. This case was the subject of a comment by Sir Frederick Pollock in the 3rd edition of his Indian Contract Act. He said :

'It would seem to follow that in the opinion of the Calcutta High Court every promise of a subscription to a public or charitable object becomes a legal promise, and enforceable by the promoters, as soon as any definite steps have been taken by them in furtherance of the object and on the faith of the promised subscriptions. Such iscertainly not the general understanding of the profession in England.'

There was a foot-note to this observation. The foot-note read:

'There is some American authority (seemingly not in any of the Courts whose decisions carry most weight out-side their own jurisdiction) in favour of this view.'

(5) Both the decision of the Calcutta High Court and the comment of Sir Frederick Pollock came up for consideration in Perumal Mudaliar v. Sendauatha Mudaliar, AIR 1918 Mad 311. The Court said:

'Notwithstanding the adverse criticism of Sir Frederick Pollock on ILR 14 Cal 64, we are not prepared to differ from the statement of the law therein contained. The fact that a similar promise in England may not be enforced by the Courts of law is not conclusive of the question, as definition of consideration in the Indian Contract Act is wider and more comprehensive than is accepted in the English Courts. ILR 14 Cal 64 has been accepted as good law in Abdul Aziz v. Masum Ali, AIR 1914 All 22 and we are prepared to follow these rulings.' According to Broom's Legal Maxims consideration could not be better defined than it has been defined in the Indian Contract Act, 1872. 'When at the desire of the promisor, the promisee or any other person, has done or promises to do or abstain from doing something, such act or abstinence or promise is called a consideration for the promise'. (10th edition, page 510)

6. The question again came up for consideration in District Board of Ramnad v. Mahomed Ibrahim Sahib, AIR 1933 Mad 524. The Court said:

'It follows from the decision of the Calcutta High Court in ILR 14 Cal 64 that a promise to pay a subscription becomes enforceable as soon as any definite steps have been taken in furtherance of the object and on the faith of the promised subscription. This decision has been followed by this Court in AIR 1918 Mad 311' and decided the appeal on that basis. Two decisions of the Travancore High Court adopting the same view are: Ananthan Pillai v. Krishna Pillai, 17 Trav. LJ 141 and Thrivikraman Namburi v. Uthuppu, 27 Trav. LJ 673.

7. An American case of interest is: Allegheny College v. National Chautauqua County Bank of Jamestown, 57 A. L. R. 980, a decision of the Court of Appeals of the State of New York. In that case Cardozo C. J. dealt with the matter as follows:

'The law of charitable subscriptions has been a prolific source of controversy in this state and elsewhere. We have, held that a promise of that order is unenforceable like any other if made without consideration.......

On the other hand, though professing to apply to such subscriptions the general law of contract, we have found consideration present where the general law of contract, at least as then declared, would have said that it was absent..........

A classic form of statement identifies consideration with detriment to the promisee sustained by virtue of the promise: 124 N. Y. 538. So compendious a formula is little more than a half-truth. There Is need of many a supplementary gloss before the outline can be so filled in as to depict the classic doctrine. The promise and the consideration must purport to be the motive each for the ether, in whole or at least in part. It is notenough that the promise induces the detriment or the the detriment induces the promise if the other half wanting. Wisconsin and M. R. Co. v. Powers, (1903) 191 US 379. If A promises B to make him a gin, consideration may be lacking, though B has renounced other of port unities for betterment in the faith that the promise will be kept.

The half-truths of one generation tend at time to pe petuate themselves in the law as the whole truth of another, when constant repetition brings it about that qualifications, taken once for granted, are disregarded or forgotten. The doctrine of consideration has not escaped the common lot. As far back as 1881, Judge Holms in his lectures on the Common Law (P. 292) separated the detriment, which is merely a consequence of the promise from the detriment which is in truth the motive or in document, and yet added that the courts 'have gone far in obliterating this distinction'. The tendency toward of facement has not lessened with the years. On the contrary, there has grown up of recent days a doctrine that a substitute for consideration or an exception to its ordinary requirements can be found in what is styled a 'promissory estoppel'. Williston, Contracts, Sections 139, 116. Whether the exception has made its way in this State to such an extent as to permit us to say that the general law of consideration has been modified accordingly, we do not now attempt to say. Cases such as 234 N. Y. 479 and 221 N. Y. 431 may be signposts on the road. Certain, at least, it is that we have adopted the doctrine of promissory estoppel as the equivalent of consideration in connection with our law of charitable subscriptions. So long as those decisions stand, the question is not merely whether the enforcement of a charitable subscription can be squared with the doctrine of consideration in all its ancient rigor. The question may also be whether it can be squared with the doctrine of consideration as qualified by the doctrine of promissory estoppel. We have said that the cases in this State have re-cognized this exception, if exception it is thought to be. Thus, in 12 N. Y. 18 the subscription was made without request, express or implied, that the church do anything on the faith of it. Later, the church did incur expense to the knowledge of the promisor, and in the reasonable belief that the promise would be kept. We held the promise binding, though consideration there was none except upon the theory of a promissory estoppel. In 74 N. Y. 72 a situation substantially the same became the basis for a like ruling. So in 103 N. Y. 600 and (1901) 167 N. Y. 96 the moulds of consideration as fixed by the old doctrine were subject to a like expansion. Very likely, conceptions of public policy have shaped, more or less subconsciously, the rulings thus made. Judges have been affected by the thought that defences of that character are breaches of faith towards the public, and especially towards those engaged in the same enterprise, and an unwarrantable disappointment of the reasonable expectations of those interested'. W. F. Alien J. in 12 N. Y. 18; and of 97 Vt. 495 and cases there cited. The result speaks for itself irrespective of the motive. Decisions which have stood so long, and which are supported by so many considerations of public policy and reason, will not be overruled to save the symmetry of a concept which itself came into our law, not so much from any reasoned conviction, of its justice, as from historical accidents of practice and procedure. (8 Holdsworth, History of English Law, 7 et. seq.) The concept survives as one of the distinctive features of our legal system. We have no thought to suggest that it is obsolete or on the way to be abandoned. As in the case of other concepts, however, the pressure of exceptions has led to irregularities of form.'

8. 'Promissory estoppel' is perhaps only a new approach to an old conclusion. American Jurisprudence deals with the doctrine as follows:

'The doctrine of 'promissory estoppel' is by no means new, although the name has been adopted only in comparatively recent years. According to that doctrine an estoppel may arise from the making of a promise, even though without consideration, if it was intended that the promise should be relied upon and in fact it was 'elied upon, and a refusal to enforce it would be virtually to sanction the perpetration of fraud or would result in other injunction. Promissory estoppel is sometimes spoken of as a species of consideration or as a substitute for, or the equivalent of, consideration; but the basis of the doctrine is not so much one of contract with a substitute for consideration, as an application of the general principle of estoppel, since the estoppel may arise although the change opposition of the promisee was not in any way an inducement to the promise and was not regarded by the, parties as any consideration therefor.' (Volume 19, page 657)

'A number of courts have upheld the validity of charitable subscriptions on the theory of promissory estoppel holding that while a mere promise to contribute Is unenforceable for want of consideration, if money has been expended or liabilities have been incurred in reliance on the promise so that nonfulfilment will cause injury to the payee, the donor is estopped to assert the lack of consideration, and the promise will be enforced.' (Volume 19, page 659)

9. We entertain no doubt that the lower Court was right in saying that the 1st defendant's promise to pay Us. 10,000/- became enforceable as soon as definite steps were taken on the faith of that promise for the starting of a first grade college at Changanacherry. In paragraph 8 of the judgment under appeal the lower Court says -- quite categorically:

'There is no dispute in this case that on the faith of the promised subscriptions, the construction of the college buildings was begun in 1122.'

This statement is not challenged in the Memorandum of Appeal and we must proceed on that basis.

10. The contention seems to have been not that the construction did not begin in 1122; but that the material date was not the date on which the construction began but the date on which it was completed. This is clear from paragraph 6 of the grounds of appeal:

'It should have been found that in any event Article 120 of the Limitation Act applies to the case and that the right of suit accrued only on the completion of the collage. Even on the date of suit the construction was not complete.'

11. The promise became enforceable as soon as the construction began on the faith of that promise and a suit instituted as soon as the promise became enforceable could not possibly have been dismissed on the ground that it was premature. It must follow that the period of limitation will and should run from the date of the beginning of the construction.

12. Three articles of the Indian Limitation Act, 1908, were discussed at the bar : Articles 113, 115 and 120. Article 113 deals with suits 'for specific performance of a contract'. What we have before us is not a suit for the specific performance of any contract. This will be abundantly clear by a mere perusal of Sections 12 and 21 of the Specific Relief Act, 1877. Article 115 deals with suits 'for compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided'. The suit before us is not a suit for compensation for the breach of any contract. It is a suit for the enforcement of a promise which became enforceable in 1122 when the construction of the college commenced on the faith of that promise.

13. There is no specific article governing the suit before us and in view of that the only article that can apply is the residuary article suggested by counsel for the appellant, namely, Article 120 of the Indian Limitation Act, 1908. It is immaterial in this case, however, whether it is Article 113 (three years), Article 115 (three years) or Article 120 (six years) that applies to the case, because the construction work began in 1122 and the suit was instituted only on 22-4-1129 (742-1953).

14. In the light of what is stated above the appeal should fail and be dismissed. We do so; but without any order as to costs.


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