Chinnaya v Ramayya (1882)

Contract I · Consideration & Privity

Facts.

An old lady gifted land to her daughter by a registered deed, on condition that the daughter pay an annuity to the lady’s sister. The daughter took the land but refused to pay the sister.

Issue.

Can the sister enforce the promise, though the consideration (the gift) moved from the mother, not from the sister?

Held.

The sister could sue. Under s.2(d) consideration may move from “any other person”, so a stranger to the consideration may enforce the promise; and a beneficiary of such a family arrangement is an exception to privity.

Why it matters.

It is the leading Indian authority distinguishing privity of consideration (not required) from privity of contract, and the model answer to gift-deed annuity problems.

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