LAW OF CONTRACTS

VENKATA CHINNAYA RAU V.

SUBMITTED BY

Name

IN

MARCH, 2019

DECLARATION

I the undersigned solemnly declare that the project report on Venkata Chinnaya Raju
V. Venkataramaya Garu: A Legal Glossary is based on my work carried out during
the course of our study under the supervision of Dr. Tanaya Tarai. I assert the
statements made and conclusions drawn are an outcome of my research work.

I further certify that:

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1) The work contained in the report is original and has been done by me under the
general supervision of my supervisor.
2) The work has not been submitted to any other institution for any other degree/
diploma/certificate in this university or any other university of India or abroad.
3) We have followed the guidelines provided by the university in writing the report.
4) Whenever we have used materials( data, theoretical analysis and text) from other
sources, we have given due credit to them in the text of the report and giving their
details in the references.

INTRODUCTION

STATEMENT OF PROBLEM

The explanation behind doing this research is to comprehend the Use of Nuclear
Weapons with respect to International Humanitarian Law , the various conventions
relating to nuclear weapons an IHL also taking i into consideration the landmark
cases regarding the same.

HYPOTHESIS

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The study aims at deriving a link between the IHL and use of Nuclear weapons and
also bring forth the sanctions and laws in relation to the two aspects in the
international arena

RESEARCH METHODOLOGY

The plan of conducting a research is known as Research methodology. There are two
main types of doing research which are doctrinal and non-doctrinal. Doctrinal
research includes theoretical research and includes sources such as reports of
committees, acts made by legislature, judicial precedents and legal history. Non-
doctrinal has field work as its main constituent. This research is Doctrinal in nature
as it is based on data from books, previous reports and person’s own understanding.

OBJECTIVES OF RESEARCH:

The study aims to evaluate and analyse various aspects of IHL and sanctions
mentioned in it with regard to the use of Nuclear Weapons . It aims at deriving the
use of nuclear weapons with a humanitarian perspective giving various effects and
sanctions related to the same in the paradigm of International Law.

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 PRIVITY OF CONSIDERATION

According to Section 2(d) of Indian Contract Act,1872 “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.”1

Consideration may move from the promise or any other person.

There are different laws regarding privity of contract in different countries.

In England

1) Consideration must move from the promisee and the promisee only. If it be
furnished by any other person, the promisee becomes a stranger to the
consideration and therefore, cannot enforce the promise.
2) A contract cannot be enforced by a person who is not a party to it even though it
is made for his benefit. He is a stranger to the contract and can claim no rights
under it.

1
Section 2(d) of Indian Contract Act, 1872

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 In India

In India, the two propositions mentioned above are not at all applicable. Here, in view
of the clear language used in Section 2(d), it is not necessary that consideration should
be furnished by the promise. A promise is not enforceable if there is some
consideration for it and it is quite immaterial whether it moves from the promise or
any other person.2

EVOLUTION OF PRIVITY OF CONSIDERATION

ENGLISH LAW

In English Law consideration must move from the promise alone. In other words,
consideration must be given by the promise. It should not move from a third party.
So a stranger to the consideration cannot sue on the agreement.

CASES

Tweedle vs Atkinson

Facts

The son and daughter of the parties involved in this dispute were getting married. As
such, the father of the groom and father of the bride entered into an agreement that
they would both pay sums of money to the couple. Unfortunately, the father of the
bride died before he paid the money to the couple and the father of the son died before
he could sue on the agreement between the parties. As a result of this, the groom

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 brought a claim against the executor of the will for the payment that was previously
agreed between the fathers.

Issue

The primary issue for the court was whether or not the son could, as a third party to
the agreement, enforce the contract between the fathers, which was ultimately for the
benefit of him and his wife. It was argued that the intention of the agreement between
the fathers was for the couple to derive a benefit from the payment of the money.
Moreover, it was argued that preventing the son from being able to enforce the
contract would effectively ignore the intention of the fathers.

Held

The groom’s claim was rejected by the court. It was held that the groom was not a
part of the agreement between the fathers and he did not provide any consideration
for the promise made by the father of the bride. Also, as a stranger to the contract,
the son could not enforce it. On this basis, the court found in favor for the executor
of the will.

Firstly, the doctrine of privity of consideration was not applicable in England.3

Dutton vs poole

Facts

A son made a contract with his father for his father to not cut down an oak woodland.
As consideration for this, the son would make a payment to his sister of £1000 once
she had married. The money gained from the woodland would have been paid to the
sister. The father died before the sister was married and the son subsequently refused
to pay his sister the money as was previously agreed, at the time of her marriage. The

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 sister sued her brother for the amount that was originally promised between the father
and son.

Issue

The concept of privity of contract had not been fully established at this stage and
therefore this decision had significant importance to the broader subject. The court
had to understand whether the daughter could be considered to be privy to the contract
between the father and son regarding the payment. Within this, it was vital for the
court to establish whether the daughter had given consideration for the promise that
was made by the son, to his father, to pay the daughter the sum of money upon her
marriage.

Held

The court found in favor for the sister on the basis that the relationship between the
father and the daughter had made the sister a party to the agreement, even if she was
not included at the time the contract was agreed. The relationship between father and
daughter was found to extend the consideration that the father gave in the promise to
the children.4

Conclusion

The court in Dutton v. Poole5 did not consider this principle. In this case, a son made
a contract with his father to forbear him to cut down an oak woodland. The son in
return, would make a payment to his sister of £1000 once she had married. The father
died before the sister was married and the son subsequently refused to pay his sister
the money as was previously agreed, at the time of her marriage. The sister and her
husband sued her brother for the amount that was originally promised between the
father and son.

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5
Dutton v Poole (1678) 2 Lev 210, 83 ER 523

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 Here, the agreement was between the father and the son, the defendant had made a
promise to pay the amount to the plaintiff. The consideration for the promise is the
abstinence by the father to sell the wood. The court did not consider the plaintiff’s
privity to the contract nor interested in the consideration. The purport behind the
agreement was to provide the plaintiff a certain amount of money. The court held that
it was inequitable for the defendant to keep the wood also and deprive the plaintiff of
her share. Thus, the relationship between the father and the son had made the sister a
party to the agreement, even if she was not included at the time the contract was
agreed. The relationship between father and daughter was found to extend the
consideration that the father gave in the promise to the children.

Later, in 1861, the position in England changed in Tweddle v. Atkinson6. The court
of Queen’s Bench denied the principle and ruled that a beneficiary who is stranger to
the consideration cannot take advantage of it. Here, the plaintiff’s father and ‘G’
entered into an agreement to pay the plaintiff a certain sum of money in consideration
to plaintiff’s marriage to the daughter of ‘G.’‘G’ failed to do so and the plaintiff sued
his executors for the same. Thus, though the contract entered between his father and
‘G’ was for he is benefiting he remained stranger the contract and the contract denied
to give him rights to enforce the terms of the contracts.

Further in Dunlop Pneumatic Tyre v. Selfridge and Co. Ltd.,7 the fundamental
proposition in the English law, the Consideration must move from the promisee to the
promisor only. If any other person furnishes the consideration, the promisee becomes the
stranger and, therefore, cannot enforce the promise. This is the postulate of the doctrine
of privity of consideration.

6
Tweddle v Atkinson [1861] EWHC J57 (QB)

7
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1 (26 April 1915), [1915] AC 84

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 INDIA

This principle of the doctrine of privity of consideration is not applicable in India.

CASES

Venkata Chinnaya Rau v. Venkataramaya Garu8

1) The plaintiffs’ sister, by deed of gift on the 9th April 1877, made over certain landed
property to the defendant, her daughter. By the terms of the deed which was
registered, it was stipulated that an annuity of 653 rupees should be paid every year
to the plaintiffs as had hitherto been paid by the donor until a village could be given
them.

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Venkata Chinnaya Rau v. Vankataramaya Garu(1881) 1 I.J. 137(Mad.)

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2) The defendant on the same date executed in plaintiffs’ favour a Kararnama
promising to give effect to the stipulation of the deed of gift by paying the annuity
until she gave them a village. The annuity was not paid and the plaintiffs sued to
recover it,
3) Various pleas were set up, one of which was that the document in favour of plaintiffs
was executed under coercion. The Courts below have found, upon evidence
warranting the finding, that there was no coercion, but that the document was
executed and registered voluntarily by defendant.
4) The first question argued before us was whether the plaintiffs, who were strangers
to the consideration for the promise, have a right to sue. The document executed by
the defendant in favour of the plaintiffs was in these terms: “According to the terms
set forth in the 12th paragraph of the dead of gift of possession, & c., I hereby agree
to continue to carry out in your favour, perpetually and hereditarily, & c., the terms
stated in the said paragraph.”
5) There is great conflict in the cases on the question, but the rule deducible seems to
be that the plaintiff can only sue if the consideration moved directly from him
wholly or partly. In case of Dutton v. Poole, [2 Lev. 210, 1 Ventr. 318], Sir E. Poole
was about to fell timber on his estate to the value of £ 1.000 for the purpose of
giving that sum to his daughter Grisel as her marriage portion. The eldest son
interposed and promised Sir Edward that if he would refrain from felling the timber,
he (the son) would pay Grisel £ 1,000. Sir Edward agree to this, and gave up his
intention of felling the timber. On his death the son refused to fulfil his promise.
The daughter Grisel (joining her husband) sued, and it was held she might do so for
the son had the benefit of the timber and the daughter had lost her portion through
the promise of the son. There is also another similar case called Rockwood’s case
in which the father, at the request of the eldest son, and on his promise to pay an
annuity to each of the younger sons, refrained from charging the lands with the
annuity. In this case, when on the death of the father the eldest son who came into
the property refused to pay the annuity, it was held that the younger sons could sue.
In these cases the consideration moved indirectly from the plaintiff to the defendant.
In each case the action of the defendant operated to shut out the plaintiff from a

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 certain benefit and to substitute a future benefit dependent on the fulfilment by him
of his promise. On the other hand in Tweddle v. Atkinson [30 L.J.Q.B. 265] it was
held that the plaintiff could not sue. The case was this the parents of the plaintiff
and his wife agreed together after the marriage that each should pay a sum of money
to the husband, and that the latter should have full power to sue for the money. The
plaintiff in this case was held not to be a party to the consideration, and on this
ground not entitled to sue. The distinction between this and the preceding cases is
obvious. The plaintiff did not lose anything by the arrangement between the two
parents, nor was he worse off from the non-fulfilment of the promises than he would
have been if they had not been made, nor did the promises result in any present
benefit to the persons promising to the detriment of the plaintiff; so that there was
no consideration moving directly or indirectly from him to the defendants. It cannot
be doubted in the present case that the document A was executed by defendant in
pursuance of the donation deed B, and with a view that the defendant might take
the benefit of that deed.
6) Plaintiffs sister, the donor, expressly stipulated that the sum she had hitherto paid
should be continued to plaintiffs until they could be provided with a village, and it
appears that she only ceased to pay plaintiffs the annuity herself, because the source
from which it had been derived was now placed in the hands of defendant and
subject to her control. By the transfer effected by B therefore, defendant gained a
large estate and plaintiffs lost the yearly sum which the donor would otherwise have
paid them. It seems to me that the case is on the same footing
as Dutton v. Poole, and that a consideration indirectly moved from plaintiffs to the
defendant. If there was consideration moving from plaintiffs for the promise
contained in A, the agreement can be enforced by plaintiffs and the Courts below
were right in giving them a decree for the annual sum due and not paid.
7) As to the question whether the document A is sufficiently stamped it has already
been admitted in evidence as duly stamped, and this Court has no power to exclude
it as inadmissible, though, if it were thought the document had been wrongly
stamped, we might act under Section 50 of the Stamp Act of 1879. I think, however,

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 it was properly stamped as an agreement. It was executed when the Act of 1869 was
in force, and is not a bond within the definition of that Act.
8) I would dismiss this appeal with costs.
KINDERSLEY, J.– I agree that the second appeal ought to be dismissed with costs.
As to the consideration I should have had some doubt but for the very wide
definition of the term “consideration” in the Indian Contract Act, Section 2, which
is in these terms: “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.” It appears to me that the deed
of gift in favour of the defendant and the contemporaneous agreement between the
plaintiffs and the defendant may be regarded as one transaction, and that there was
sufficient consideration for the defendant’s promise within the meaning of the
Contract Act.9

Held
The Madras HC held that in this agreement between the defendant and plaintiff the
consideration has been furnished on behalf of the plaintiff (uncle ) by his own sister
(defendant’s mother). Although the plaintiff was stranger to the consideration but
since he was a party to the contract he could enforce the promise of the promisor,
since under Indian law, consideration may be given by the promisee or anyone on
his behalf – vide Section 2 (d) of ICA.
Thus, consideration furnished by the old lady constitutes sufficient consideration
for the plaintiff to sue the defendant on her promise. Held, the brother / uncle was
entitled to a decree for payment of the annual sum of money.

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ANALYSIS
In the case of Chinnaya v. Ramayya, the scenario of privity rule has been
relaxed. In this case mother by deed of gift, made over certain landed
property to the daughter, Ramayya . As per the terms of the deed it was stipulated
that anannuity of Rs 653 should be paid every year to the Plaintiff, who was the
mother's sister Chinnaya. The defendant Ramayya on the same day
executed in plaintiff's favour an agreement promising to give effect to the

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stipulation but Ramayya later on did not pay anannuity .So, Chinnaya sued to
recover it from Ramayya. The defendant, Ramayya tried to defend herself on the
ground that the promise had furnished no consideration. But the court
allowed the Plaintiff to recover the annuity, as, consideration given by "any
other person" is equally effective. Thus in this case, Privity of contract has
been abolished in case of the beneficiary as the contract was made for her benefit.
Similarly in the case of Khwaja Muhammad Khan v. Hussain Begum Privity of
Contract has been tranquil to a greater extent. It was held that the respondent,
although no party to the agreement was clearly entitled to proceed in equity to
enforce her claim. Furthermore C o u r t o b s e r v e d t h a t i n I n d i a a n d
a m o n g Communities Circumstanced as the Mohammedans, among
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 arrangements entered into in connection with such contracts. Like
this in the case of Kshirod Behari Dutt v. Mangobinda Court observed that 'there
is nothing in the Indian Contract Act, which prevents the recognition of
rights in a third party to enforce a contract made by others, which contains
a provision for his benefit. Thus in the later period Indian Court reject the
judgments as was delivered in the case of Tweddle v.Atkinson and Dunlop v.
selfridge case.
There is great conflict in the cases on the question, but the rule deducible seems to
be that the plaintiff can only sue if the consideration moved directly from him
wholly or partly. In case of Dutton v. Poole, [2 Lev. 210, 1 Ventr. 318], Sir E. Poole
was about to fell timber on his estate to the value of £ 1.000 for the purpose of
giving that sum to his daughter Grisel as her marriage portion. The eldest son
interposed and promised Sir Edward that if he would refrain from felling the timber,
he (the son) would pay Grisel £ 1,000. Sir Edward agree to this, and gave up his
intention of felling the timber. On his death the son refused to fulfil his promise.
The daughter Grisel (joining her husband) sued, and it was held she might do so for
the son had the benefit of the timber and the daughter had lost her portion through
the promise of the son. There is also another similar case called Rockwood’s case

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in which the father, at the request of the eldest son, and on his promise to pay an
annuity to each of the younger sons, refrained from charging the lands with the
annuity. In this case, when on the death of the father the eldest son who came into
the property refused to pay the annuity, it was held that the younger sons could sue.
In these cases the consideration moved indirectly from the plaintiff to the defendant.
In each case the action of the defendant operated to shut out the plaintiff from a
certain benefit and to substitute a future benefit dependent on the fulfilment by him
of his promise. On the other hand in Tweddle v. Atkinson [30 L.J.Q.B. 265] it was
held that the plaintiff could not sue. The case was this the parents of the plaintiff
and his wife agreed together after the marriage that each should pay a sum of money
to the husband, and that the latter should have full power to sue for the money. The
plaintiff in this case was held not to be a party to the consideration, and on this
ground not entitled to sue. The distinction between this and the preceding cases is
obvious. The plaintiff did not lose anything by the arrangement between the two
parents, nor was he worse off from the non-fulfilment of the promises than he would
have been if they had not been made, nor did the promises result in any present
benefit to the persons promising to the detriment of the plaintiff; so that there was
no consideration moving directly or indirectly from him to the defendants. It cannot
be doubted in the present case that the document A was executed by defendant in
pursuance of the donation deed B, and with a view that the defendant might take
the benefit of that deed.
In the case of Chinnaya v. Ramayya, the scenario of privity rule has been
relaxed. In this case mother by deed of gift, made over certain landed
property to the daughter, Ramayya . As per the terms of the deed it was stipulated
that anannuity of Rs 653 should be paid every year to the Plaintiff, who was the
mother's sister Chinnaya. The defendant Ramayya on the same day
executed in plaintiff's favour an agreement promising to give effect to the
stipulation but Ramayya later on did not pay anannuity .So, Chinnaya sued to
recover it from Ramayya. The defendant, Ramayya tried to defend herself on the
ground that the promise had furnished no consideration. But the court
allowed the Plaintiff to recover the annuity, as, consideration given by "any

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 other person" is equally effective. Thus in this case, Privity of contract has
been abolished in case of the beneficiary as the contract was made for her benefit.
Similarly in the case of Khwaja Muhammad Khan v. Hussain Begum Privity of
Contract has been tranquil to a greater extent. It was held that the respondent,
although no party to the agreement was clearly entitled to proceed in equity to
enforce her claim. Furthermore C o u r t o b s e r v e d t h a t i n I n d i a a n d
a m o n g Communities Circumstanced as the Mohammedans, among
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 arrangements entered into in connection with such contracts. Like
this in the case of Kshirod Behari Dutt v. Mangobinda Court observed that 'there
is nothing in the Indian Contract Act, which prevents the recognition of
rights in a third party to enforce a contract made by others, which contains
a provision for his benefit. Thus in the later period Indian Court reject the
judgments as was delivered in the case of Tweddle v.Atkinson and Dunlop v.
selfridge case.

BIBLIOGRAPHY
Books
1) Myneni S.R., Contract- I General Principles( Asia Law House)( 2018)
2) Singh Avtar, Contract and Specific Relief( Eastern Book Company)( 12th Ed.)

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Online Sources

1) dullbonline.wordpress.com
2) www.lawteacher.net
3) lawtimesjournal.in
4) Asian Encyclopedia of Law
5) www.Indiakanoon.com

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