Chinnaya v Ramayya ILR (1882)4 Mad 137

 FACTS
On 9th April, 1877, Raja Suraneni Lakshmi Venkata Rau, an old
woman, by gift of deed, made over certain landed property, in the
Zamindari of Milavaram to Venkata Ramayya Garu, her daughter
(the defendant). By the terms of the deed, which was registered, it
was stipulated that an annuity of Rs. 653 should be paid every year
to Venkata Chinnaya (the plaintiff), who was the sister of the old
woman. The defendant on the same day executed in plaintiff’s
favour an agreement (Iqrarnama) promising to give effect to the
stipulation. The annuity was, after the death of her mother,
however, not paid and the plaintiff sued to recover it.

 ISSUES
Whether the plaintiff, who is a stranger to the contract, can bring
an action against the defendant for the amount promised in a
contract where the consideration for such promise has been
furnished by the mother of the defendant (plaintiff’s sister)?

 JUDGEMENT
On 22nd October, 1882, the Madras High Court held that in this
agreement between the defendant and plaintiff, the consideration
has been furnished on behalf of the plaintiff by her own sister
(defendant’s mother).
INNES J observed that prior to the creation of the contract in
question; the plaintiff had been receiving a sum of money out of
her sister’s estate. When the lady transferred the same to her
daughter, the defendant, the contract stipulated that the same
arrangement be continued by her. When the plaintiff’s sister
transferred the property to the defendant, the plaintiff suffered a
loss of annuity that she had been receiving so far. It was held that
 such loss formed the consideration for the promise. Hence, the
plaintiff was deemed to have given the consideration.

Kindersley J also arrived at the same conclusion but his reasoning

was different. The deed of gift and the defendant’s agreement to
pay the annuity to the plaintiff were executed at the same time.
Thus, they could be considered parts of the same transaction. The
defendant’s promise to pay the plaintiff was the consideration for
the defendant’s mother to transfer the property to the defendant.
Hence, the defendant’s failure to pay the same would amount to
breach of contract and would entitle the plaintiff to sue her for the
recovery of the same.

The court held that the sister was entitled to a decree for payment
of the annual sum of money.

 ANALYSIS
 Although the plaintiff was stranger to the consideration but
since she was a party to the contract she could enforce the
promise to the promisor, since under the Indian Contract Act,
1971, consideration may be given by the promisee or anyone on
her behalf – vide Section 2(d) of Indian Contract Act, 1872
which says,
When, at the desire of the promisor, the promisee or any
other person has done or abstained from doing, or does or
abstains from doing, or promises to do or to abstain from
doing, something, such act or abstinence or promise is called
a consideration for the promise.

 The defendant’s promise to pay the plaintiff was the

consideration for the defendant’s mother to transfer the property
to the defendant. Consideration furnished by the old lady
constitutes sufficient consideration for the plaintiff to sue the
defendant on her promise.
 The judgement was fair and just.