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    A Summary of Chinnaya VS Ramayya Case

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    Varsha Khandelwal
    The case of Chinnaya vs Ramayya addressed whether consideration in a contract needs to come directly from the promisee. The case involved an old lady A who deeded property to her daughter R on the condition that R pay an annual annuity to A's sister, the plaintiff C. R later refused payment, arguing no consideration came from C. The court ruled that under contract law, consideration can come from a third party, not just the promisee. As A's transfer of property to R was conditioned on the annuity payments to C, there was valid consideration even though it came from A and not C. The plaintiff C could thus enforce the contract against the defendant R.

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    A Summary of Chinnaya VS Ramayya Case

    Uploaded by

    Varsha Khandelwal
    414 views3 pages
    The case of Chinnaya vs Ramayya addressed whether consideration in a contract needs to come directly from the promisee. The case involved an old lady A who deeded property to her daughter R on the condition that R pay an annual annuity to A's sister, the plaintiff C. R later refused payment, arguing no consideration came from C. The court ruled that under contract law, consideration can come from a third party, not just the promisee. As A's transfer of property to R was conditioned on the annuity payments to C, there was valid consideration even though it came from A and not C. The plaintiff C could thus enforce the contract against the defendant R.

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    law of contracts case analysis

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    A SUMMARY OF CHINNAYA VS RAMAYYA CASE

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    The case of Chinnaya vs Ramayya addressed whether consideration in a contract needs to come directly from the promisee. The case involved an old lady A who deeded property to her daughter R on the condition that R pay an annual annuity to A's sister, the plaintiff C. R later refused payment, arguing no consideration came from C. The court ruled that under contract law, consideration can come from a third party, not just the promisee. As A's transfer of property to R was conditioned on the annuity payments to C, there was valid consideration even though it came from A and not C. The plaintiff C could thus enforce the contract against the defendant R.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    414 views3 pages

    A Summary of Chinnaya VS Ramayya Case

    Uploaded by

    Varsha Khandelwal
    The case of Chinnaya vs Ramayya addressed whether consideration in a contract needs to come directly from the promisee. The case involved an old lady A who deeded property to her daughter R on the condition that R pay an annual annuity to A's sister, the plaintiff C. R later refused payment, arguing no consideration came from C. The court ruled that under contract law, consideration can come from a third party, not just the promisee. As A's transfer of property to R was conditioned on the annuity payments to C, there was valid consideration even though it came from A and not C. The plaintiff C could thus enforce the contract against the defendant R.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    A SUMMARY OF CHINNAYA VS

    RAMAYYA CASE (1882)


    by Ruchi GandhiPosted onSeptember 29, 2022

    Case name & citation: Chinnaya vs Ramayya ILR (1876-82) 4 Mad 137

    Jurisdiction: Madras High Court

    Year of the case: 1882

    The bench of judges: Innes J, Kindersley J

    What is the case about?


    Many a time, confusion may arise as to what constitutes a valid consideration in a
    contract. More specifically, can consideration move from a third party or not? The
    case of Chinnaya vs Ramayya is a good illustration of this point.

    Facts of the case (Chinnaya vs Ramayya)


    An old lady, A, before her death, granted a certain piece of property to her
    daughter R (the defendant). The property was transferred by a deed of gift. But the
    transfer was made subject to a direction given by A. A directed that R should pay
    an annuity to A’s sister (the plaintiff).

    Thus, the terms of the deed stated that in return for such transfer, R will be paying
    an annuity amount of Rs. 653 to A’s sister, C.

    On the same day, an agreement was entered into between R and C whereby R
    agreed to pay C the sum as directed by her mother, A. The agreement was executed
    in writing by R in favour of C.

    However, after A died, the sum so stipulated was not paid by R (the defendant).
    She declined to fulfill her promise saying that no consideration had moved from
    her mother’s sister. C (the plaintiff) thus sued R to recover the amount.

    R contended that she was not under an obligation to pay money to C since no
    consideration was moved from C to her. Moreover, she argued that the plaintiff
    had no right to compel her (the defendant) to pay the amount.

    On the other hand, as regards the transfer of property was concerned, C contended
    that the consideration for getting the property was a promise to pay the amount
    annually to the plaintiff.
    Issue raised
    Whether the plaintiff can bring a lawsuit against the defendant?

    Is the defendant bound to fulfill the promise in a contract (with the plaintiff) where
    the consideration for such promise has been furnished by the defendant’s mother
    (sister of the plaintiff)?

    Relevant provisions
    If Section 2(d) of the Indian Contract Act, 1872 is analyzed, it says that there are
    certain features that are essential for consideration to become valid and to be
    acceptable legally. One such feature is that consideration may move from the
    promisee himself or from any other person. In other words, the act which is to
    constitute consideration may be done either by the promisee himself or by any
    other person.

    “Any other person” is a person other than the promisee and is technically referred
    to as a stranger to consideration. When consideration moves from “any other
    person”, this is sometimes also called the doctrine of constructive consideration.

    It signifies that as long as there is a consideration for a promise, it is immaterial as


    to who has furnished it. A promise will become enforceable if there is some
    consideration for it. The consideration can even legitimately move from a third
    party and it is an accepted principle of law in India.

    Judgement of the Court in Chinnaya vs Ramayya


    By citing the words “the promisee or any other person” in Section 2(d) of the
    Indian Contract Act, 1872, the Madras High Court held that consideration need not
    necessarily move from the promisee only. It may move from any other person.
    Hence, C was entitled to maintain the suit and to recover the amount.

    The consideration furnished by C’s sister (the defendant’s mother) was enough to
    enforce the contract between C and R. It constituted sufficient consideration for the
    plaintiff to sue the defendant on her promise.

    Although consideration was not moved from C, she was a party to the contract and
    hence, was allowed to sue R.

    In other words, the defendant was obligated to pay the amount promised in the
    contract as the consideration for the same was given to her by the plaintiff’s sister,
    i.e., the defendant’s mother.
    Thus, the agreement of annuity between C and R was enforceable even though the
    consideration had moved from a third party (R’s mother).

    Conclusion
    The case of Chinnaya vs Ramayya emphasized the rule of consideration under the
    contract law. According to it, it does not matter who furnishes the consideration.
    The consideration shall be valid whether it is moved by the promisee himself or
    any other person.

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