1. This is an appeal on behalf of the defendants 1st party to an action for recovery of a sum of Rs. 1300/- with interest and costs amounting to Rs. 1,494/- in the following circumstances. The defendant 2nd party to the action, namely, Messers Banwari Lal Shri Ram, Kirana Merchants and Commission Agents, who were the commission agents of the plaintiff at Delhi, remitted a sum of Rs. 1300/- in Government currency notes in an insured cover on 8-11-1948, to the-plaintiff by his Darbhanga address. The insured, cover reached Darbhanga post office on 11th November, and the post office sent an intimation to the plaintiff on 12th November to take delivery of the insured cover. The plaintiff, therefore, went to the post office on 15-11-1948 for taking delivery of the insured letter, but he was informed that the letter in question was missing. Notice under Section 80 of the CPC was served on the Dominion of India, defendant 1, as also on the Post Master General, Bihar, defendant 2 by the plaintiff. As no payment was made in spite of service of notices, the suit had to be brought. Defendant 1, the Dominion of India, filed a written statement stating that the plaintiff had no cause of action and had no right to sue defendant 1, and that the suit, as framed, was not maintainable.
2. Defendant 2, the Post Master General, Bihar, filed another written statement alleging that the plaintiff had no valid cause of action against the department and that the claim of the plaintiff' was barred by limitation under cl. 130 of the Post and Telegraph Guide. It was further alleged that the department did not owe any liability to pay any compensation to the addressee of the insured letter under Section 33 of the Indian Post Office Act read with cl. 130 of the Post and Telegraph Guide.
3. Both the Courts below considered the matter, and decreed the suit in a modified form. The appellate Court held that cl. 130(d) of the Post and Telegraph Guide did not bar the suit. It was also held that the post office acknowledged the right of the plaintiff-addressee to receive the insured letter containing the money and, in the letter of reply to the notice, the Superintendent of Post Offices, Tirhoot Division, did not deny the right of the plaintiff to receive compensation. The Court below was of the opinion that Section 33 of the Indian Post Office Act had no application inasmuch as the conduct of the department showed that the plaintiff was entitled to; receive compensation for the loss of the insured letter.
4. During the pendency of this appeal, an application under O. 1, R. 10 of the CPC has been filed on behalf of defendant 3 (defendant 2nd party) for his transposition to the category of the plaintiff. This petition, perhaps, was in answer to one or the grounds mentioned in the memorandum of appeal to the effect that the plaintiff had no right of suit and it was defendant 3 alone who could have brought the suit.
5. Mr. Sinha, learned Government Advocate, on behalf of the appellants, has submitted that the plaintiff's suit must be dismissed inasmuch as the plaintiff had no right of suit because he was not a party to the contract, and it is said that a person who is no party to a contract has no right to sue for the enforcement of the contract; and, secondly, that the application made by defendant 3 for his transposition should be dismissed on the ground that defendant 3 had not given any notice under Section 80 of the CPC, the provisions of which are imperative and mandatory, and in the absence of notice under S. 80, no suit can be maintainable by defendant 3, and defendant 3, without notice under S. 80, cannot be allowed to join as co-plaintiff.
6. Generally speaking, the proposition that a person who is not a party to a contract has no right to bring a suit under the contract must be accepted, but in suitable cases, the present one being one of them, this general rule must give way. There is divergence of opinion on the point, whether a person not party to a contract can sue, but the unanimous judicial opinion is that such a person can sue in exceptional circumstances, and I would like to consider some of these cases.
7. Before I deal with the cases, it must be mentioned that the principle enunciated in — Tweddle v. Atkinson’, (1861) 1 B. & S. 393 (A), which was to the effect that a person not a party to a contract has no right to sue on the contract, was applied in this country also. As I shall show presently, even in England the principle enunciated in the aforesaid case of ‘Tweddle v. Atkinson (A)’, has undergone a great change, and the strict view taken in that case has been very greatly mellowed down by engrafting exceptions on the principle stated in (1861) 1 B. & S. 393 (A).
8. In — ‘Subbu Chetti v. Arunachalam Chettiar’, AIR 1930 Mad 382 (FB) (B), it was laid down that, if a person transfers property to another and stipulates for payment of money by the purchaser to some third person, a suit to enforce that stipulation by the third party does not lie, although this case also recognised the exceptions and some of those exceptions were considered in this case.
9. One of them was — ‘Shuppu Ammal v. Subramaniair’, 33 Mad 238 (C), in which there was a deed of partition whereby a provision had been made for the plaintiff's maintenance, and although the plaintiff was not a party to the document, it was field that she was entitled to sue. This exception was on the principle that the plaintiff in that case was the actual beneficiary.
10. Another exception was in favour of a marriage settlement — ‘Khwaja Muhammad Khan v. Hussaini Begam’ 37 Ind App 152 (PC) (D), where the Privy Council held that the plaintiff, who, by way of marriage settlement, had been given certain annuity as Kharch-i-pandan, was held entitled to sue although she was not a party to a contract. Still another exception mentioned in the case was — ‘Tswararn Pillai v. S.V Taragan’, AIR 1914 Mad 701 (E), which, again, was a case of marriage settlement.
11. Another exception noticed in that case is to be found in the case of — ‘Deb Narain Dutt v. Ram Sadhan Mandat. AIR 1914 Cal 129 (F), where a transferee of a debtor's liability had acknowledged his obligation to the creditor for the debt under the provisions of the registered instrument conveying to him all the moveable and immoveable properties of the original debtor and the acknowledgment was communicated to the creditor and accepted by him, and although it was held that the arrangement between the creditor and the transferee did not amount to a novation of the contract within the meaning of Section 62 of the Contract Act, it was observed that the obligation undertaken by the transferee was for the benefit of the creditor and therefore, the creditor was entitled to sue the transferee on the registered instrument, although he was no party to the contract itself.
12. In AIR 1930 Mad 382 (FB) (B), it was, therefore, held, upon a review of the authorities, that “a person not a party to a contract cannot sue on the contract though a benefit is secured to him and unless the case falls within the exceptions in the cases above referred to the plaintiff has no cause or action, it is no answer to say that all the parties are before the Court”, and in that case the suit was held to be not maintainable.
13. The next case to which I should refer is that of — ‘Khirod Behari v. Mangobinda’, AIR 1934 Cal 682 (G). In this case, the plaintiff was an usufructuary mortgagee of the zamindar, defendant 7. Defendants 1 to 6 were the zamindar's tenants of the jama in suit. The Pandas, defendants 8 to 17, held the land in darmokarrari lease under defendants 1 to 6 by a kabuliyat wherein it was stipulated that defendants 8 to 17 would pay the mokarrari rental due to defendants 1 to 6 directer the zamindar and would indemnify defendants 1 to 6 against any claim made by him. The further stipulation was that
“As security for the due discharge of my liabilities for the said jama and the said trust (barat as described above in the present kabuliyat, I do hereby create a charge (pratibandhak) upon my mokarrari interest in the mouzas of Jharia and Shyampur, both in my khas possession.”
14. The kabuliyat was acted upon by all the parties interested in respect of former payments of rent. That is to say, the Pandas used to pay the zamindar's rent direct, and the arrangement had been accepted by him. The only question was whether the plaintiff was entitled to sue.
15. His Lordship, Lort-Williams, J., after an exhaustive review of both English and Indian cases on the point, held that the plaintiff, though not party to the contract, was entitled to sue. His Lordship enumerated a number of English case after (1861) 1 B. & S. 393 (A), where the view taken was not in conformity with the principle enunciated in ‘Tweddle's case (A)’, but was held that the plaintiff, though not party to the contract, was entitled to sue, and His Lordship described the principle enunciated in the English cases as having been based upon fictions’.
16. His Lordship referred to — ‘Dutton v. Poole. (1860-97) 83 ER 523 (H):— Tomlinson v. Gill. (1756) 27 ER 221 (T); — ‘Gregory v. Williams’. (1817) 36 ER 224 (J); — ‘Gandy v. Gandy’, (1885) 30 Ch D 57 (K) and — ‘Fletcher v. Fletcher. (1844) 67 ER 564 (L), as the cases where the plaintiff was held entitled to sue although no party to the contract. His Lordship observed as follows:
“Clearly, the concept of a trust was used in this case only for the purpose of enabling a third party, who was one of a class benefited by the contract to recover damages in a common law action for its breach.”
and further that
“In the ordinary sense of the term, there was no trust in any of the cases now under discussion. The concept of trust was being used as a mere device for the recognition and enforcement of the right of a third party beneficiary created by a contract to which he was not a party.”
17. In the end, after reviewing some of the Indian cases also, his Lordship held:
“If that case AIR 1914 Cal 129 (F), can be explained, and it is felt desirable to explain it, by pretending that there was something in it in the nature of a trust or agency, then, in my opinion, in the present case the facts constituted a trust or agency just as much as in that case, or in the English cases, to which I have referred.
However, I prefer to base my decision on a frank recognition that these are fictions and that in India no necessity arises for resorting to them.
In the present case all the parties were before the Courts below and are before us, and neither common sense nor convenience, equity nor good conscience require me to force the parties into further and unnecessary litigation.”
18. Ghose, J. agreed and observed that,
“though ordinarily only a person who is a party to the contract can sue on it, where a contract is made for the benefit of a third person, there may be an equity in the third person to sue upon the contract.”
19. In — ‘National Petroleum Co. Ltd. v. Popatlal Mulji’, AIR 1936 Bom 344 (M), a different view was taken by Beaumont, C.J and Rangnekar, J. In that case, A and B entered into a contract in which A agreed to identify B against all his debts, and it was held that a creditor of B could not sue on that contract; but their Lordships also recognised the exceptions, namely, where a person has been allowed to sue on a contract, to which he is not a party, on the ground that he claims through the party to the contract, or that he is in the position of “a ‘cestui que trust’ or that he is a principal suing through an agent, or that he claims under a family settlement.
20. This case differed from the Calcutta case just referred to. It appears that their Lordships were not totally opposed to the principle enunciated in the Calcutta “case, but Beaumont, C.J, with whom Rangnekar, J. agreed, observed that
“if the rule is to be introduced into this country that any person may sue upon a contract if he takes a benefit under it, although a stranger to such contract. I think that such rule must be introduced by the Legislature, and not by the Courts. From the point of view of practical convenience there seems to me to be quite as much to be said against the introduction of such a rule, as in favour of it.”
21. In — ‘Tang Bahadur v. Rana Uma Nath Baksh Singh’, AIR 1937 Oudh 99 (N), their Lordships construed the document as being a document in favour of the plaintiff creating a trust in his favour and, therefore, the plaintiff's case came under one of the exceptions to the general rule that a stranger to a contract cannot sue although all the parties to the contract are parties to the suit.
22. There is no provision anywhere in law that a person who takes a benefit under a contract, although he is not a party to the contract, cannot sue and, therefore, if the Courts consider that it would be in aid of justice to adjudicate between the parties to the suit, although the plaintiff is not a party to the contract, the Courts are not legislating but they are only giving effect to the common place saying that Courts exist for doing justice between the suitors before them.
23. In my judgment, therefore, it is not necessary for the Legislature to intervene for the purpose of enabling the plaintiff, not party to a contract, to sue on the contract, as was the view expressed by Beaumont, C.J in the Bombay case. In the) present case, however, the matter could be brought even under the well recognised exceptions already discussed.
24. Here, defendant 3 sent an insured letter containing certain Government currency notes to the plaintiff, the addressee, to be delivered over to the plaintiff by the post office. The Indian Post Office Act (6 of 1898) by S. 18(2) provides that
“Save as provided by any rules that may be made under sub-s. (1), the sender shall not be en-tided to recall a postal article in course of transmission by post.”
25. No rules have been brought to my notice made by the Central Government under sub-s. (1) of S. 18 by which the sender may be entitled to recall a postal article in course of transmission. I, therefore, take it that, under the Indian Post Office Act, no sender of any postal article is entided to recall a postal article in course of transmission. The postal article, therefore, must be delivered to the addressee.
26. Section 32(3), which is to be found in Chap. VI of the Act, dealing with “Registration, Insurance and Value-payable Post”, provides that
“Postal articles made over to the Post Office for the purpose of being insured shall be delivered, when insured, at such places and times and in such manner as the Director General, may, by order, from time to time appoint.”
27. This provision therefore casts a duty upon the post office to deliver the insured article, and the manner, place and time of the delivery is to be determined the Director General of Post Offices. Some stress was laid upon the provisions of S. 33 which prescribe that subject to such conditions and restrictions as the Central Government may, by rule prescribe, the Central Government shall be liable to pay compensation, not exceeding the amount for which a postal article has been insured, to the sender thereof for the loss of the postal article or its contents, or for any damage caused to it in course of transmission by post, in support of the argument that only the sender is entitled to compensation or damage, as the case might be, and not the addressee.
28. This section, it is true, speaks of the sender and it does not speak of the addressee. The mere omission of the word ‘addressee’, in my opinion, in this section is not enough to disentitle an addressee to get redress in respect of an insured article not delivered to him. The fact that certain Government currency notes were despatched in an insured cover for delivery to the plaintiff is enough to show that the plaintiff had beneficial interest in the insured article; it was for his benefit that the sender had entrusted to the post office the insured cover in question for being delivered to him.
29. If that is not delivered, the plaintiff loses the benefit to which he was entitled. In the present case, however, the post office had sent an intimation to the addressee, as required by the rules, acknowledging the liability or the post office to deliver the insured article to the addressee. In these circumstances, in my opinion, it is a clear case where the plaintiff was entitled to sue whether his case is covered by the exception mentioned in AIR 1930 Mad 382 (FB) (B) or AIR 1934 Cal 682 (G) or AIR 1936 Bom 344 (M).
30. In any view of the matter, in my opinion, the plaintiff in this case must be held entitled to sue the defendants 1st party. In the view which I have taken, it is not necessary to hold whether the Madras or the Bombay or the Lucknow view is correct or the Calcutta view is correct. All these Courts agree that, although the plaintiff may not be a party to the contract, he is entitled to sue if his case is brought within one of the well recognised exceptions mentioned in those cases.
31. The application made by defendant 3 for his being transposed to the category of plaintiff need not, therefore, be seriously considered. It is debatable if he can be transposed to the category of plaintiff inasmuch as he had not served any Mineral Development Co. Ltd. v. State of Bihar (Das G.J) Patna notice under Section 80 of the CPC. As in this case it is not necessary to decide this matter, I would pass no orders upon the application. In the result, the appeal is dismissed with costs to the plaintiff-respondent.
V.S.B
32. Appeal dismissed.