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Dwarka Nath Ash Vs. Priya Nath Malki and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in36Ind.Cas.792
AppellantDwarka Nath Ash
RespondentPriya Nath Malki and ors.
Cases ReferredGregory v. Williams
Excerpt:
contract, privity of - enforcement by person interested not a party--vendor and purchaser--retention of purchase-money for payment to vendor's creditor--rights of creditor--novation--trust--contract act (ix of 1872), section 62. - .....in favour of his vendors expressly undertaking to pay to the plaintiff his dues out of the consideration money retained in his hands. the plaintiff instituted this suit on the 4th january 1916 against his debtors as also the third defendant. the small cause court judge has degreed the suit against all the defendants.2. on behalf of the third defendant it is urged in this court that there was an interpolation in the deed of agreement executed by him and that in fact the recital as to the debt due to the plaintiff from the first two defendants was inserted. with out his knowledge after the execution but before the registration of the document. this defence has not bean bilieved by the court below and upon the findings of the small cause court judge it is impossible for us to.....
Judgment:

1. The decision of this Rule turns upon an interesting point of law, involved in the question whether or rot the third defendant was liable for the debt due to the plaintiff from the first two defendants. It appears that the first two defendants borrowed a sum of money from the plaintiff on a promissory note executed on the 6th January 1913 They transferred their properties to the third defendant on the 31st January 1913 and on that very date the third defendant executed an agreement in favour of his vendors expressly undertaking to pay to the plaintiff his dues out of the consideration money retained in his hands. The plaintiff instituted this suit on the 4th January 1916 against his debtors as also the third defendant. The Small Cause Court Judge has degreed the suit against all the defendants.

2. On behalf of the third defendant it is urged in this Court that there was an interpolation in the deed of agreement executed by him and that in fact the recital as to the debt due to the plaintiff from the first two defendants was inserted. With out his knowledge after the execution but before the registration of the document. This defence has not bean bilieved by the Court below and upon the findings of the Small Cause Court Judge it is impossible for us to examine this question of fact. We most consequently proceed on the assumption that the third defendant did undertake to pay the plaintiff his dues out of the consideration money in his hands. The question is, whether the plaintiff is entitled to enforce the agreement made between the third defendant and his vendors.

3. On behalf of the plaintiff reliance is placed upon the decision in Deb Naiain Duttv. OhuniLnl Ghose(Ram Sadhan Handed) 20 Ind. Cas. 630 : 41 C. 137 : 17 C.W.N. 1143 : 18 C.L.J. 603, which is an authority for the proposition that the rule enunciated in Tmeddle v. Atkin-son (1861)1 B. & S. 393 : 30 L.J.Q. B. 265 : 8 Jur. (N.S.) 332 : 4 L.T. 468 : 9 W.R. 781 : 121 E.R. 762 : 124 R.R. 610, is not applicable in this country and that an agreement may in certain circumstances be enforced by a stranger thereto that is in what may be briefly described as cases of trust, quasi-contract, or near relationship see Jahandar Bakah Malliok v. Ram Lal Hazra 5 Ind. Cas. 565 : 11 C.L.J. 364 : at P. 368 : 14 C.W.N. 470 : 37 C. 449, The third defendant however seeks to distinguish that case on the ground that there the arrangement between the debtor transferor and the transferee was communicated to the creditor whereas there is nothing to show that in the present case the arrangement between the first two defendants and the third defendant was ever brought to the notice of the plaintiffs by either of them. In our opinion the distinction mentioned is not material and the principle which under-lies the decision in Deb Narain Dutt v. Chuni Lal Ghose : Ram Sadhan Mandal 20 Ind. Cas. 630 : 41 C. 137 : 17 C.W.N. 1143 : 18 C.L.J. 603, applies equally to the present case. In that case there was a contention that the plaintiff was entitled to succeed on the ground of novation of contract, and from this point of view, stress was laid upon the fact that the arrangement between the transferor and transferee bad been communicated to the creditor. This Court, however, held that notwithstanding such communication there was no novation of contract and that the suit must be deemed to have been instituted on the original debt. That this is the true view of the situation is clear from the decision in Gregory v. Williams (1817) 3 Mer. 582 : 17 R.R. 136 : Preface V : 36 E.R. 224, which was quoted with approval and followed in Deb Narain v. cliuni Lil Ghose : Rim Saihnn Mandal 20 Ind. Cas. 630 : 41 C. 137 : 17 C.W.N. 1143 : 18 C.L.J. 603, The circumstances in that litigation were as nearly as possible, identical with those of the case by fore us There P transferred his properties To W who It May Concern:, who retained the consideration money in his hands and agreed to apply the sum in satisfaction of a debt due to G from P and to appropriate the balance only in satisfaction of his own dues.

4. The arrangement was intended to be communicated to G, buy as a matter of fact was not brought to his notice. IF on the other hand, communicated to G an untrue version of what had happened and as the report says it was by a mere accident that G came to know of the arrangement between P and W.G along with instituted a suit to recover the debt from V. The claim was resisted on the ground that the consideration had not moved from G, who was a stranger to the agreement between P and W and was entitled to, no benefit the under. Sir William Grant, M.R., overruled this contention he conceded that the action might not have been maintainable in a Court of Law, because the engagement was made to P and not directly to G and the consideration was furnished by P. Bat he proceeded to hold that although, no party to the contract had an equitable right through the mediation F the agreement to P, as shown by a decision of Lord Hardwicke to the same effect. There had been no communication of the agreement bat wean P and W to G, and no sum communication was necessary because the claim was not based on novation of contract on the allegation that by mutual arrangement of all the parties, a new agreement as between IV and had been substituted in supersession of the original agreement between P and G, The decision was based on the ground that W was in essence a trustee of the money in his hands for the benefit of G, who could clearly enforce it whether or not the arrangement had been communicated to him by P or W.

5. We must hold, consequently, upon principle as also upon authority that the plaintiff is entitled to enforce his claim as against the third defendant The Rule is discharged with costs one gold mohur.


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