D.N Mitter, J.:— The plaintiff whose suit for contribution has been dismissed by the Subordinate Judge of Murshidabad has preferred this appeal. The facts on which his right of contribution is founded lie within a narrow compass and may be briefly stated: Estate No. 199 of the Murshidabad Collectorate belongs to a lady Daiba Kumari and to the Nawab Bahadur of Murshidabad in the shares of 12 annas and 4 annas respectively. On September 2, 1907, the Nawab Bahadur granted a patni lease in respect of the 4 annas share of his said zemindâri to Daiba Kumari; the proprietress of 12 annas share. On April 29, 1905, Daiba Kumari granted a darpatni to Tarini Dhar in respect of 4 annas share of the zemindâri. On August 9, 1905, Tarini Dhar created a sepatni in favour of Adhar Chandra Mandal, the plaintiff, of some mouzâs comprised in his darpatni and he granted sepatni of the remaining mouzâs to defendants Nos. 4 to 11. On February 20, 1923, Tarini sold the darpatni interest to Nirod Barani (the second defendant) as benâmdar for her husband Dole Gobinda who is the first defendant to the suit. From 1332 B.S onwards the darpatnidârs used to pay the superior (patni) rent to the zemindâr under the terms of the darpatni kabuliyat which regulate the rights between the patnidâr and darpatnidâr which detailed reference will be made hereafter. The patni rents for 1335 to 1336 B.S fell into arrears and proceedings under Regulation VIII of 1819 were taken to sell the property on Baisâkh 1, 1336. In order to avert the sale the plaintiff had to pay Rs. 1,173-9-6. The patni rents for 1336 and 1337 B.S fell due and two other ashtam proceedings were taken for the sale of the patni under the regulation and in order to avoid the sale the plaintiff sepatnidâr had to pay a further sum of Rs. 2,602-10-0 to the zemindâr. The plaintiff sued for recovery of the aggregate sum of Rs. 3,776-3-6 p. and as neither be patnidâr nor the darpatnidar paid the said sum on demand by the plaintiff, the plaintiff has impleaded in the suit both the patnidâr and the darpatnidar and has sought for relief in the first instance against the darpatnidâr (Nirod Barani, D. 2 and her husband D. 1) and in the alternative against the patnidars (Daiba Kumari's) adopted son who is defendant No. 3 to the suit. The case made in the plaint is that defendant No. 1 remained bound to pay to the zemindâr the Nawab Bahadur the patni rent payable by Daiba Kumari Bibi according to the terms of the darpatni kabuliyat executed by Tarini Dhar and actually made amicable payments. The gist of the action is stated in para. 7 of the plaint where it is stated that defendants Nos. 1 and 2 were bound by law to pay the rentals aggregating to Rs. 3,776-3-6 p. and as they did not pay the plaintiff was forced to pay alone the entire sum and hence the suit in which this appeal arises.
The defence of defendant No. 1 to the suit is that he had nothing to do with the patni which had been purchased by the defendant No. 2 with her own money and that the suit against him should be dismissed and costs awarded. The defence of the second defendant Nirod Barani is that she purchased the patni with her own money, that the payments made by plaintiffs were voluntary payments and that the defendant was not bound to pay the amount of patni rent to the zemindâr and further that the plaintiff was not bound and had no right in law to pay the amount under the Regulation.
Defendant No. 3 stated in his defence that he was the adopted son of Daiba Kumari and pleaded that he had sold away on the basis of a registered deed of sale the 4 annas patni interest which he owned in the mehals in touzi No. 199 to defendant No. 6 Serowgi on Mâgh 20, 1335, to the full knowledge of the plaintiff and that he was not liable.
On these pleadings several issues were framed and arose for decision. It is necessary to state only two issues for the purposes of the present appeal. They are issues 5 and 6. Issue No. 5 is as follows:—
Were defendants 1 and 2 bound to pay the money which was paid by plaintiff?
Issue No. 6 is in these terms: Can the plaintiff recover the amounts claimed? If so from whom?
The conclusion of the Subordinate Judge on issue No. 5 was that the patnidâr was the person bound to pay the rent to his superior landlord and that although by the terms of the darpatni pâttâ the darpatnidâr was bound to pay the rent payable by the patnidâr to the zemindâr but as the Nawab Bahadur of Moorshidabad could not sue defendant No. 1 or 2 for the patni rent as he was no party to the contract between the patnidâr and darpatnidâr, the defendant No. 1 or 2 was not bound by law to pay to the zemindâr; and in support of his view he relied on a decision of Page, J. (as he then was) and Cuming, J. in the case of Jiban Krishna Mullik v. Nirupama Gupta. The Subordinate Judge dismissed the suit against defendants Nos. 1 and 2 on this ground.
He dismissed the suit against the patnidâr defendant No. 3 on the ground that Daiba Kumari (predecessor of defendant No. 3) sold her paint rights to Jay Chand Serowgi defendant No. 6 in 1335 B.S, the patni rent for the period in question: was not payable by her.
This appeal has consequently been brought by the plaintiff and on his behalf it has been contended by Dr. Mukherji that the Subordinate Judge has gone wrong on both the points. He contends that it should have been held that s. 69 of the Indian Contract Act applied to the present case and that the darpatnidâr was “bound by law” to pay the patni rent to the Nawab Bahadur by reason of the terms of the darpatni kabuliyat and that the zemindâr (Nawab Bahadur) could enforce the covenant in the darpatni kabuliyat against the darpatnidâr although he was no party to the same and that the view of Mr. Justice Page in Nirupama's case has been dissented from in later decision of this Court in particular by Mr. Justice Lort-Williams and Mr. Justice M.C Ghose in the case Kshirodebihari Datta v. Mangobinda Panda. Dr. Mukherji has argued further that even if the decision of Mr. Justice Page on which the trial Court has relied be held to be right it does not affect plaintiff's right to contribution as defendants No. 1 or 2 (darpatnidâr) were bound by law to pay under the darpatni kabuliyat and a suit could lie at the instance of the patnidâr and he has relied in support of this contention on certain observations of the learned Judges of the Bombay High Court in the case of Somashastri Vishwanatha Shastri Kashikar v. Swamirao Kashinath Nadgir where it is said that “bound by law” does not mean bound by law to the plaintiff, but that the defendant at the suit of any person “might be compelled to pay.”
It becomes necessary to examine the two contentions respectively a little carefully. More particularly the first of the above contentions as the decisions of this Court seem to be in conflict.
Taking the first ground contended for that a suit would lie at the instance of the Nawab Bahadur for recovery of the patni rent from the darpatnidâr it appears to us that this contention is opposed to the general rule that no rights can be acquired by third parties under a contract unless by the creation of a trust, and the question whether a trust was created in favour of the Nawab Bahadur would depend on the construction of the darpatni pâttâ in the present case (Ex. 3) page 1; Part II, executed by Daiba Kumari in favour of Tarini Prasad Dhar.
We propose in the first instance to discuss the English law relating to the general rule just indicated. Sir William Anson in his Principles of English Law of Contract, 17th Ed. (1929), pp. 279-80, expounds the English law on the subject as follows:—
(a) It was at one time thought that if the person who was to take a benefit under the contract was nearly related by blood to the promisee a right of action would vest in him. The case of Tweddle v. Atkinson is conclusive against this view.
(b) Equity judges have used language, sometimes very explicit to the effect that “where a sum is payable by A for the benefit of B, B can claim under the contract as if it had been made with himself…………..”
The impression that in any such case a third party who is to be benefited acquires equitable rights ex contractu arises, as was explained by Jessel M.R in the case of the Empress Engineering Company from the fact that an agreement between two parties might well be so framed as to make one of them trustee for a third……………. Whether a trust has or has not in any particular case been created must be a matter of construction, as may be seen by reference to the cases of Murray v. Flavell and the Rotherham Alum.
In the case last cited Lord Justice Lindley put the matter very tersely thus:—
But an agreement between A and B that B shall pay C gives C no right of action against B. I cannot see that there is in such a case any difference between equity and common law, it is a mere question of contract. It is said that Mr. Peace has an equity against the company because the company has had the benefit of his labour. What does that mean. If I order a coat and receive it, I get the benefit of the labour of the cloth manufacturer, but does any one dream that I am under any liability to him. It is a mere fallacy to say that because a person gets the benefit of work done for somebody else he is liable to pay the person who did the work.
Professor Langdell has put the English Common Law view in the following clear and vigorous language:—
A person for whose benefit a contract is made if he is a stranger to the consideration cannot maintain an action on it. This latter proposition is so plain upon its face that it is difficult to make it plainer by argument. A binding promise vests in the promisee and in him alone, a right to compel performance of the promise, and it is by virtue of this right that an action is maintained upon the promise. In the case of a promise made to one person for the benefit of another there is no doubt that the promisee can maintain an action, not only in his own name, but for his own benefit. If therefore the person for whose benefit the promise was made could also sue on it, the consequence would be that the promisor would be liable to two actions. In truth a binding promise to A to pay 100 to B confers no right upon B in law or equity. It confers an authority upon the promisor to pay the money to B, but that authority may be revoked by A at any moment (see Langdell on Contract, Art. 62).
In Leake on Contract, 8th Ed. pp. 306-7, it is said:—
A contract can create no right or liability in a person who is not a party to it; unless he can claim or be charged through a party, as in the case of a cestui que trust claiming through a trustee; or a principal claiming or being charged through an agent.
From the statement of the law in the leading text books we now turn to the leading English decisions on the subject.
In the case of Touche v. Metropolitan Railway Warehousing Company Lord Hatherley L.C uses language to suggest that in equity where a sum is payable by A.B for the benefit of C.D, C.D can claim under the contract as if it had been made with himself. In the case of Empress Engineering Company, Sir George Jessel, Master of the Rolls was of opinion that the principle laid down in the case of Touche v. Metropolitan can be justified on the ground that an agreement between the two parties might be so framed as to make one of them a trustee for a third. In the case of Les Afféteurs Réunis Société Anonyme v. Leopold Walford (London), Limited where the charterer sued the shipowner for the amount of the broker's commission as trustee for the broker the claim was allowed as against the shipowners on the footing of a trust. This is manifest from the speeches of some of their Lordships to which reference will presently be made. Lord Chancellor Birkenhead said:—
My Lords, so far as I am aware, that case has not before engaged the attention of this House, and I think it right to say plainly that I agree with that decision and I agree with the reasoning, shortly as it is expressed, upon which the decision was founded. In this connection I, would refer to the well-known case of In re Empress Engineering Company. In the judgment of Sir George Jessel M.R, the principle is examined, which, in my view, underlies and is the explanation of the decision in Robertson v. Wait. The Master of the Rolls uses this language: “So, again, it is quite possible that one of the parties to the agreement may be the nominee or trustee of the third person. As Lord Justice James suggested to me in the course of the argument, a married woman may nominate somebody to contract on her behalf, but then the person makes the contract really as trustee for somebody else, and it is because he contracts in that character that the cestui que trust can take the benefit of the contract”.
It appears to me plain that for convenience, and under long-established practice, the broker in such cases, in effect, nominates the charterer to contract on his behalf, influenced probably by the circumstance that there is always a contract between charterer and owner in which this stipulation, which is to enure to the benefit of the broker, may very conveniently be inserted. In these cases the broker, on ultimate analysis, appoints the charterer to contract on his behalf. I agree therefore with the conclusion arrived at by all the learned Judges in Robertson v. Wait that in such cases charterers can sue as trustees on behalf of the broker.
Lord Wrenbury observed in the same case:—
We have here to do with a contract between two parties reserving a benefit to a third. The two parties are the shipowners and the charterers the third party is the broker of one of them, who is to be remunerated in respect of a contract which is being made for the hire of a ship. The particular form of contract in question is of course prepared by, or is under the eyes of, the broker who is negotiating the matter. It is sent to the principals for signature, and they sign it, and there is contained in it a clause which reserves a benefit to the broker. Under those circumstances an action is brought by the broker against the shipowner for the commission which is expressed to be payable to him under the contract between the shipowner and the charterer—a contract to which he himself, I agree, was not a party. By agreement between the parties the record is to be treated as if the charterer were joined as a plaintiff in the action. The case is one in which an action can be brought on behalf of a person to whom a benefit is reserved, although he is not a party to it. That is the subject of the decision in Robertson v. Wait.
And again Lord Wrenbury remarked:—
Directly it is conceded that the broker, although not a party to the contract, can sue on the contract, inasmuch as he can sue by the charterer as trustee for him, it appears to me that the case really is over.
In Gandy v. Gandy the rule of the common law and the exceptions to the rule have been stated by Lord Justice Cotton thus:—
Now, of course, as a general rule, a contract cannot be enforced except by a party to the contract; and either of two persons contracting together can sue the other, if the other is guilty of a breach of or does not perform the obligations of that contract. But a third person—a person who is not a party to the contract—cannot do so. That rule, however, is subject to this exception: if the contract, although in form it is with A, is intended to secure a benefit to B, so that B is entitled to say he has a beneficial right as cestui que trust under that contract; then B would, in a Court of equity, be allowed to insist upon and enforce the contract. That, in my opinion, is the way in which the law may be stated.
It seems to us that the reason for the rule that none but those in privity with the consideration can maintain an action on the promise is found in the original conception underlying assumpsit.
This remedy of assumpsit was founded on the notion of giving redress for damages incurred by the non-fulfilment of a deceitful promise. Only the person who suffered the damage in question could therefore bring a suit upon breach of the promise. This rule was clearly a procedural one and was peculiar to the action of assumpsit. The statement of the rule that the stranger to the consideration cannot maintain assumpsit does imply according to English Courts that the promisor owes no legal duty to the person for whose benefit the contract is made. Thus Lindley, J. in the case of Rotherham Alum once said that if an agreement is made between A and B that B shall pay a sum of money to C the inability of C to sue is not due to any defect of remedy “It is” said he “a mere question of contract”. The remedy by the action of assumpsit is as broad as the limits of contractual liability. If it were otherwise then one would have expected that the English Courts should have recognised the right of a stranger to sue upon a contract made for his benefit now that forms of action have been abolished by the Judicature Acts. English Courts have refused to sanction the actions, generally although exceptions have been introduced to the general rule by introducing the theory of trust, agency, etc. In Dunlop Pneumatic Tyre Company, Limited v. Selfridge and Company, Limited Lord Haldane L.C said:—
My Lords, in the law of England certain principles are fundamental. One is that only a person who is a party to a contract can sue on it. Our law knows nothing of a jus quaesitum tertio arising by way of contract, such a right may be conferred by way of property, as, for example, under a trust.
The rule deducible from the authorities above cited is that it is a general principle both at Common Law and at equity that a stranger to the contract cannot sue on it although the stranger takes benefit under it. There are, however, several apparent exceptions from this principle. At one time it was considered that the nearness of relationship of one party to the contract with the party to be benefited by it gave the latter the benefit of the considerations and the right to sue on it. The Physician's case was a leading authority on this point. There A made a promise to his physician, that, if he would effect a certain cure, he would pay a sum of money to the Physician's daughter and it was held that she might sue. Dutton and Uxor v. Pool was another case of this type illustrating the exception from the general principle on the ground of nearness of relationship. There in assumpsit the plaintiffs who were husband and wife declared that the wife's father being seised of land which had subsequently descended to the defendant was about to fell £1,000 worth of timber to raise a portion for his said daughter; and the defendant promised the father that, if he would forbear to fell the timber, he would pay the daughter £1,000. It was he;Ld negativing the contention that the father alone could have brought the action that the husband and wife could sue on the ground of nearness of relationship. This last case was approved of by Lord Mansfield, C.J a century after in Martyn v. Hind, but these two cases were in the year 1861 considered and deliberately disapproved in Tweddle v. Atkinson, and can no longer be considered law.
Another exception to the general principle is illustrated by cases where A having as a trustee for B, contracted with C, B was held entitled to sue both C and A for the performance of the contract: the case of Touche v. Metropolitan Railway Warehousing Company already referred to is a case of this sort. So too in Murray v. Flavell, where a widow who was the cestui que trust of a trust created by partnership articles was allowed to sue upon them.
There are cases of agency which may be considered as furnishing another apparent exception from the rule: see Hook v. Kinnear.
In some of the American States there was some early recognition of the right of the third person to sue. See the leading case of Lawrence v. Fox. Mr. Street in his treatise on “The Foundations of Legal Liability,” Vol. 2, page 157, points out that in the State of New York the right of the third person to sue on a contract made for his benefit was by this leading case fully established. The American doctrine laid down in the leading case is not binding on us and we are bound to follow the principle laid down by the Courts of equity in England unless there are overriding authorities in Indian Courts which prevent us from doing so.
I am not unmindful also of the fact that in several other foreign countries like Germany and Italy the view is taken that, in a contract between A and B for the benefit of C, C can bring an action against the person by whom the benefit is to be conferred and there is an interesting article by an American writer in the Harvard Law Review, Vol. 15, p. 43, showing the comparative statement of the law in different states including Japan, but we are not troubled with either the Roman law or the law of other foreign nations but we have to determine the matter by rules of equity as obtain in England. We now turn to the Indian decisions.
The question of the applicability of the rule laid down in Tweddle v. Atkinson to India where rights of parties have to be determined by equity, justice and good conscience came up for consideration by their Lordships of the Judicial Committee in Khwaja Muhammad Khan v. Husaini Begam: there on October 25, 1877, the appellant executed an agreement with the respondent's father that in consideration of the respondent's marriage with his son (both being minors at the time) he would pay to the respondent Rs. 500 a month in perpetuity for her betel leaf expenses from the date of her reception and charged certain properties with the payment with power to respondent to enforce it; it was held in a suit in 1901 by the respondent to recover arrears of this annuity from 1896, when husband and wife separated, that the respondent No. 1, although no party to agreement was clearly entitled to enforce her claim and Mr. Ameer Ali who delivered the judgment of the Judicial Committee referred to the case of Tweddle v. Atkinson and observed as follows:
First, it is contended, on the authority of Tweddle v. Atkinson that as the plaintiff was no party to the agreement, she cannot take advantage of its provisions. With reference to this it is enough to say that the case relied upon was an action of assumpsit and that the rule of common law, on the basis of which it was dismissed, is not, in their lordship's opinion, applicable to the facts and circumstances of the present case. Here the agreement executed by the defendant specifically charges immovable property for the allowance which he binds himself to pay to the plaintiff. She is the only person beneficially entitled under it. In their Lordships' judgment, although no party to the document, she is clearly entitled to proceed in equity to enforce her claim.
And then their Lordships proceed to state:—
Their Lordships desire to observe that in India and among communities circumstanced as the Mahomedans, amongst whom marriages are contracted for minors by parents and guardians, it might occasion serious injustice if the common law doctrine was applied to agreements or arrangments entered into in connection with such contracts.
The next case to be considered is Debnarayan Dutt v. Chunilal Ghose which contains the weighty opinion of Sir Lawrence Jenkins, C.J and it is necessary to quote at some length the observations of the learned Chief Justice (with whom Asutosh Mookerjee, J. concurred) for this decision has been the subject of consideration in two later judgments of this Court and has been held to lay down the rule of equity somewhat too broadly. There the fac shortly put were these: In 1899 defendants Nos. 1 to 4 borrowed from plaintiff Rs. 300; on August 18, 1903, defendants Nos. 1 to 4 executed a registered instrument of transfer of all their property moveable and immovable to defendant No. 5 for Rs. 2,000 Rs. 2,000 was not paid in cash and it was stated the kabálá that out of the consideration money the sum of Rs. 330 due to plaintiff should be paid by defendant No. 5. On the same day there was an arrangement between plaintiff and defendant No. 5 by which liability of defendant No. 5 was acknowledged and accepted and the páttá, the title deed of one of the properties, was handed over to defendant No. 5. This money not having been paid by defendant No. 5 a suit was brought by plaintiff against defendants Nos. 1 to 4 as also against defendant No. 5. Both Courts dismissed the suit. In allowing the appeal Sir Lawrence Jenkins uses the following language with regard to the applicability of Tweddle v. Atkinson to the facts aforesaid:—
If we were governed by Tweddle v. Atkinson there might possibly be a difficulty in our way, but it has to be borne in mind that Tweddle v. Atkinson was a decision on a form of action peculiar to the Common Law Courts in England and that the case was influenced by the rules that no action in assumpsit could be maintained upon a promise unless consideration moved from the party to whom it was made. Here we have a definition of consideration which is wider than the requirement of the English law: [Section 2(d) of the Contract Act]. And it has been laid down by Sir Barnes Peacock in a Full Bench decision of this Court in relation to Courts in the mofussil [Rambux Chittangeo's case] that in those Courts the rights of parties are to be determined according to the general principles of equity and justice, without any distinction, as in England, between that partial justice which is administered in the Courts of law and the more full and complete justice for which it is frequently necessary to seek the assistance of a Court of equity. The rules and the fictions which have been in many cases adopted by the common law Courts in England for the purpose of obtaining jurisdiction in cases which would otherwise have been cognizable only by the Courts of equity, are not necessary to be followed in this country where the aim is to do complete justice in one suit. More than that we now have ample authority for saying that the administration of justice in these Courts is not to be in any way hampered by the doctrine laid down in Tweddle v. Atkinson. That I take to be the result of the decision of the Privy Council in the recent case Khwaja Muhammad Khan v. Husaini Begam. In the report of that case in 14 Cal. Weekly Notes 868 there is an interlocutory remark of Lord Macnaghten which indicates the limits imposed on a Court of common law. He there says “Supposing she (that is the plaintiff) were an English woman, it is true she could not bring an action in the King's Bench Division, but could she not bring a suit in equity?” The answer of the learned counsel was “yes”. It is possible that this distinction can be explained by the history of the action of assumpsit which was a development of the writ of trespass. In the old writ in indebitatus assumpsit it was alleged that the defendant “not regarding his said promise and undertaking but contriving and fraudulently intending craftily and subtilly to deceive and defraud”, had not paid and so forth. The breach of contract was charged as deceit and it was only the person deceived who could sue. The bar then in the way of an action by the person not a direct party to the contract, was probably one of procedure and not of substance. In India we are free from these trammels and are guided in matters of procedure by the rule of justice, equity and good conscience.
With regard to the observation of Sir Lawrence Jenkins, C.J that the decision in Tweddle v. Atkinson was influenced by the rule that no action in assumpsit could be maintained upon a promise unless consideration moves from the party to whom it was made, it seems the learned Chief Justice was of opinion that the remedy by action of assumpsit is not as broad as the limits of contractual liability, but, as against this view, Lindley, J. uses language in Rotherham Alum Co. which has already been quoted before and which goes to show that inability of the stranger to sue is due not to any defect of remedy but is a mere question of contract.
Then again Sir Lawrence Jenkins, C.J remarks at p. 146:—
The bar then in the way of an action by the person not a direct party to the contract was probably one of procedure and not of substance.
Here again the view of Sir Lawrence Jenkins conflicts with the view of Lindley, J. who regards the bar to action as a matter of substance and not of form or procedure.
Then the learned Chief Justice observes:—
The case with which we are now dealing finds a close parallel in Gregory v. Williams and also in the more recent cases of Touche v. Metropolitan Railway Warehousing Company and Gandy v. Gandy. There is a valuable exposition of the law by Lord Hatherley in the first of these last two cases which was adopted by Lord Justice Cotton in the second. The Lord Chancellor said “The case comes within the authority that where a sum is payable by A.B for the benefit of C.D, C.D can claim under the contract as if it had been made with himself.” That appears to me be a principle which is of distinct use in the consideration of this case. It appears to me that we have, therefore, in the circumstances of this case, a condition of affairs in which it would be right to hold that the plaintiff is entitled to enforce his claim in this suit.
Lord Hatherley's observations must in our opinion be taken with reference to the context in which they appear and if they are so taken then the following criticism by Mr. Justice Page (as he then was) in Jiban Krishna Mullik v. Nirupama Gupta of Sir Lawrence Jenkins' view in Debnarayan's case seems justified:—
But these observations of Lord Hatherley must be taken with reference to the context in which they appear, and in Touche's case, it is clear that Walker was treated as holding the sum which he received from the company under the agreement between himself and the company as a trustee for the plaintiff. Lord Hatherley's observations in Touche's case were considered in In re Empress Engineering Company. In that case Jones and Pride were solicitors who claimed in the liquidation of the company for work done upon instructions received by one of the promoters.
Referring to Touche v. Metropolitan Railway Warehousing Company Jessel M.R observed that in that case the Lord Chancellor finds, as a fact, that Walker was to receive the money as a trustee for the plaintiffs. If you can make out that Jones and Pride are cestuis que trust that alters the case. It appears to me that they are not. The promoters were liable to Jones and Pride who are simply their creditors. A being liable to B, C agrees with A to pay B. That does not make B a cestui que trust.
In Jiban Krishna Mullik's case the facts were similar to those in the present case. There A, a patnidâr created a darpatni in favour of B for Rs. 244 per annum. B created a sepatni by an instrument in favour of C for Rs. 344 per annum, out of which Rs. 244 was to be paid to A for the darpatni rent, and Rs. 100 was to be paid to B the darpatnidâr. C paid the Rs. 244 to A for some time and then fell in arrear. A sued C for rent and in this state of facts it was held that (i) mere payment of sum of money by C to A could not be made the foundation of a legal obligation on the part of C to pay to A a like sum in like circumstances in the future. Moreover, there was no consideration passing to C from A to bind any such agreement; and (ii) it was further held that as the instrument creating the sepatni was not executed for the purpose of conferring a benefit upon A, A was not entitled to sue C upon the agreement thereto contained either at law or in equity. In the case of Krishna Lal Sadhu v. Pramila Bala Dasi Sir George Rankin Chief Justice (as he then was) subjected the statement of the law by Sir Lawrence Jenkins in Debnarayan Dutt's case to considerable criticism and used language which would seem to suggest that the proposition formulated by Sir Lawrence Jenkins in that case was too wide. Sir George Rankin observed at p. 1326 of the Report:—
Not only, however, is there nothing in s. 2 to encourage the idea that contracts can be enforced by a person who is not a party to the contract, but this notion is rigidly excluded by the definition of “promisor” and “promisee”. The decision of Tweddle v. Atkinson was a decision at law and was unaffected by the rules of equity. For this reason the Judicial Committee in Khwaja Muhammad Khan v. Husaini Begam regarded it as inapplicable to the facts of the case before them where the agreement included a specific charge on immovable property. In my judgment, it is erroneous on the basis of that case or on the observations of Jenkins, C.J in Debnarayan Dutt v. Chunilal Ghose to suppose that in India persons who are not parties to a contract can be admitted to sue thereon, except where there is an obligation in equity amounting to a trust arising out of the contract. I say nothing as to whether special rules of law may be applicable to communities among whom marriages are contracted for minors by parents and guardians. But putting aside such casts I see no reason to think that law in India contains a series of exceptions to the principle that a contract can only be sued upon as such by a party thereto. A trust may be founded on the contract and is capable of being enforced by a party to the trust in appropriate proceedings as was pointed out in Page v. Cox.
To hark back to such cases as Dutton v. Poole and Bourne v. Mason is, in my judgment, a clear mistake, and the mistake is not cured by the circumstance that, under the contract Act, the definition of “consideration” is wider than in English law.
The next case to be considered is the decision of Lort-Williams, J. in the more recent case of Khirodbihari Datta v. Mangobinda Panda where the facts were similar to the facts of the case in Jiban Krishna Mullik v. Nirupama Gupta and it was held that right of action lay in a third person under a contract between two persons which if performed will benefit such third person. Lort-Williams, J. came to the conclusion directly opposed to the view taken by Mr. Justice Page in Jiban Krishna Mullik's case and the view taken by Sir George Rankin in Krishna Lal Sadhu's case, as these cases seemed to be in conflict with Debnarayan's case which he proposed to follow. Lort-Williams, J. did not follow the constitutional principle of referring the matter to a Full Bench when he dissented from two decisions of this Court, in Jiban Krishna Mullik's case and Krishna Lal Sadhu's case just referred to, for that is the proper procedure to take as the Courts of India have been reminded by their Lordships of the Judicial Committee of the Privy Council in the case of Bindeshwari Prasad Singh v. Kesho Prasad Singh. In that case Sir John Edge observed as follows on the question of the proper procedure in case of conflict:—
Previous to that amendment in 1907 sub-ss. (2) and (3) had been variously construed by different Benches of the High Court at Calcutta, none of which seem to have considered themselves bound by any previous decision on the subject by a Bench of that Court, and had not followed the constitutional principle of referring the question on which they differed from a previous decision of their own Court to a Full Bench to decide what, so far as the High Court was concerned, would be a binding decision on all the Benches of that Court. If such a question has been referred to a Full Bench, the Chief Justice would no doubt have appointed a Full Bench to consider such an important reference and to decide the question referred.
An independent examination of English cases as also the decisions of the Judicial Committee shows that the view taken by Mr. Justice Page in Jiban v. Nirupama and of Sir George Rankin, C.J in Krishna Lal Sadhu v. Pramila Bala Dasi is the right view to take and it follows therefrom that a stranger to a contract cannot take the benefit of a contract between two other persons reserving a benefit to a stranger unless from the terms of the contract it is clear that a trust for the stranger was intended. This view also receives support from the high authority of their Lordships of the Judicial Committee in, the case of Nathu Khan v. Burtonath Singh cited before us by Mr. Ramaprasad Mookerjee, the learned advocate for the darpatnidâr respondent. The facts in that case were that after a sale of certain properties the vendor sold another item of property to a third person and it was agreed between them that the latter should discharge the incumbrance on the property which the vendor had sold to the first purchaser free from incumbrance. It was held that suit by the first purchaser against the second purchaser for; recovery of the amount of the incumbrance was misconceived, the former being no party to the latter's purchase and no trust having been created in his favour. Lord Buckmaster said:—
The plaint was a clumsy document, and the suit as against Bindeshri was misconceived, for the plaintiffs were no parties to the deed of September 7, 1904, and no trust was thereby created in their favour.
A Full Bench of the Madras High Court in Subbu Chetti v. Arunachalam Chettiar after review of the cases English and Indian have reached the same conclusion as we have reached in the present case. The case states the general rule in the manner we have done but states four exceptions to the rule, one of which is that “Where a contract between A and B creates a trust in favour of C”. The question whether a trust was created or not in the present case depends on the construction of the terms of the contract between two parties. In the present case it appears from the darpatni kabuliyat (see p. 7, pt. II) that the darpatni rent was to be paid into the sheristâ of the Nawab Bahadur of Murshidabad in the name of the patnidâr and receipts taken from the zemindar and then at p. 8, 1, 5, it is stated—
If you fail to pay the assigned darpatni rent according to kists you shall remain bound to pay what will fall due to the Nawab Bahadur on account of interest for default kists, in terms of our patni kabuliyat.
From these two clauses in the kabuliyat it is apparent that no trust was intended to be created in favour of the zemindâr, the Nawab Bahadur, so as to entitle the Nawab Bahadur to sue the darpatnidâr. On the other hand it seems to us that this stipulation was for the protection of the interest of the darpatnidâr. We are therefore of opinion that the darpatnidâr was not bound by law to pay the patni rent to the zemindâr.
It is next argued that although the darpatnidâr might be held not liable to pay the patni rent to the Nawab Bahabur still he would be bound to pay to the patnidâr under the contract between him and the patnidâr; and it is argued that for the purposes of s. 69 of the Indian Contract Act it is not necessary for the plaintiff to establish that money was payable to the zemindâr in the sense that a right of action should lie in the zemindâr. Reliance is placed on a decision of the Bombay High Court in the case of Somashastri Vishwanathshastri Kashikar…(Original Plaintiff), v. Swamirao Kashinath Nadgir…(Original Defendant), .*. The following observations made in that case no doubt support the contention of the appellant:—
Then the only question is whether the defendant is bound by law to pay that judi. Taking each step in order, I think, it is very clear that he is “bound by law” does not mean bound by law to the plaintiff, but that the defendant at the suit of any person might be compelled to pay. Here we should have to begin with the original donor Krishnaji against whom, it is conceded, the plaintiff might bring a suit to recover this judi upon the covenants of the deed of 1878. Krishnaji in turn, it is conceded, might reimburse himself from Bisto according to the tenor of the deed of 1902 and the understanding and resultant contract of the parties.
Then it becomes merely a question of fact whether Bisto in turn could compel the defendant Swamirao to reimburse him, and that is the question which I have already answered in anticipation by indicating that in our opinion notwithstanding the inartificial character of the deed of 1905 its real intention.—that intention being well understood.—was that the defendant undertook Bisto's obligation to pay the judi on plaintiff's land.
Thus by three stages the plaintiff could put the law in motion in such a way that the result would show that the defendant was bound in law to pay the money in the payment of which the plaintiff was interested and which the plaintiff had thus in the first instance had to pay. On that view we think that we find solid ground for doing what we do not doubt is justice in the case, i.e, compelling the defendant to carry out the original donor's obligations to pay the judi on the plaintiff's land.
Accepting the view taken in the Bombay case the question still remains whether the plaintiff, the sepatnidâr, can take advantage of his right to contribution which is founded on principles of equity, seeing that he himself was in default in the payment of sepatni rent to the darpatnidâr. The facts show that a suit had to be instituted for realisation of the sepatni rent of the material period. Being himself in default at the time when the patni was advertised for sale he cannot get any relief in equity. We are, therefore of opinion that the suit has been rightly dismissed as against the darpatnidârs, e.g, defendants Nos. 1 and 2.
In the case before Lort-Williams, J. all the parties were present before the Court and that circumstance made it possible for the learned Judge to give relief in the appeal before him instead of driving the parties to a separate suit. In the present case the zemindâr Nawab Bahadur of Murshidabad is not a party to the present proceedings, and even if the decision of Lort-Williams, J. is right, the present case can be distinguished therefrom.
The question next arises whether plaintiff is not entitled to a decree against the patnidâr, Daiba Kumari, or rather against defendant No. 3 who is her adopted son.
There can be no question that the patnidâr was liable to pay the zemindâr's patni rent and he was therefore bound by law to pay the same, but defendant No. 3 seeks to evade the liability in the suit on the ground that the interest of the patnidâr had been transferred to another defendant in the suit, namely, Jay Chand Serowgi, towards the end of 1335 B.S Serowgi is defendant in another capacity and no relief has been asked against him on the footing of his being the transferee of the patni interest? The patnidâr defendant No. 3 does not produce the sale deed neither has the transferee got his name registered in the zemindâr's sheristâ and under s. 13 of the Patni Regulation the zemindâr is not bound to recognise the patnidâr's transferee until certain conditions are fulfilled. In the case of Krishna Chandra Dutta Chowdhury v. Dina Nath Biswas to the decision of which I was a party it was held that until registration of the name of a purchaser of a patni tenure is effected in the landlord's sheristâ the transfer does not affect the zemindâr's right and, in spite of the transfer, the landlord may ignore the transferee and may continue to hold the recorded tenant responsible for the rent and other obligations imposed upon the tenure. In the present case, as a matter of fact, the proceedings under the Patni Regulations were issued against Daiba Kumari and receipt, Ext. 1A (part II, page 47), shows that the present plaintiff paid the patni rent for Agrahdyan, 1336, as also for the other period in question. In these circumstances, the Subordinate Judge was not right in dismissing the suit against the patnidâr defendant No. 3 on the ground that the plaintiff himself admitted in his deposition that Daiba Kumari, predecessor of defendant No. 3, sold her patni right to Jay Chand Serowgi in 1335 B.S
The result is that the appeal must be allowed and a decree for the amount claimed will be passed against defendant No. 3. The appeal is dismissed as against the darpatnidâr defendants Nos. 1 and 2 with costs. It is allowed as against defendant No. 3 and the suit is decreed against him with costs of the trial Court. But the appellant is not entitled to any costs of this appeal as against defendant No. 3.
Patterson, J.:— I agree.
A.A
Appeal allowed.