Chinnaya v. Ramayya
Rule established
Under Indian law (Section 2(d) ICA), consideration may proceed from the promisee or 'any other person'; a stranger to consideration (but not to the contract) can enforce the agreement.
Facts
- An elderly lady (A) made a gift of certain property to her daughter (Ramayya/defendant) by a registered gift deed dated 9 April 1877
- The gift deed contained a condition: the daughter was to pay an annuity of Rs. 653 to A's brother, Chinnaya (plaintiff)
- On the same day, the daughter executed a separate agreement in favour of Chinnaya promising to pay the annuity
- The daughter later refused to pay the annuity to Chinnaya
- Chinnaya sued to enforce the promise
- The daughter contended: Chinnaya had furnished no consideration to her; therefore no enforceable contract existed between them
Issues
- Whether consideration must move from the promisee himself, or can it be furnished by a third party (stranger to consideration)?
- Whether Chinnaya, who provided no personal consideration to the defendant, could enforce the defendant's promise to pay the annuity?
Held
- The Madras High Court held in favour of Chinnaya; the promise was enforceable
- Under Section 2(d) of the Indian Contract Act, consideration is defined as: "When, at the desire of the promisor, the promisee or any other person has done or abstained from doing... something, such act or abstinence or promise is called a consideration"
- The words "any other person" explicitly permit consideration to move from someone other than the promisee
- Here, the mother's transfer of property (the gift deed) constituted consideration for the daughter's promise to pay the annuity, even though the consideration moved from the mother, not from Chinnaya
- The gift deed and the annuity agreement were one transaction, simultaneous and interdependent
Ratio Decidendi
Under Indian contract law, consideration need not move from the promisee. Section 2(d) of the Indian Contract Act, 1872 expressly provides that consideration may be furnished by the promisee "or any other person." Where a third party furnishes consideration at the desire of the promisor, the promisee (even though a stranger to consideration) can enforce the contract, provided he is a party to the agreement.
How to use it in an exam
- Part A: "Consideration need not move from the promisee" (Chinnaya is the anchor case).
- Part B: Distinguish Indian position (Section 2(d), "any other person") from English position (Tweddle v. Atkinson, consideration must move from promisee).
- Problem questions: Where A provides consideration but B seeks to enforce, apply Chinnaya.
- Key distinction: Stranger to consideration ≠ stranger to contract. Indian law allows the former to sue; English law does not.
- Deploy alongside: Tweddle v. Atkinson [1861] (English contrast); Dutton v. Poole [1678] (historical exception).
Source
Source: ILR (1882) 4 Mad 137
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.