JUDGMENT Panckridge, J. - This suit raises a question which is constantly engaging the attention of the Courts in India and which has been the subject of various conflicting decisions. Sitting singly as a Judge on the Original Side I am conscious that my decision will bind nobody. This being so, I feel justified in abstaining from an exhaustive examination of the various cases which the diligence of learned Counsel has placed before me, and in confining myself to expressing my opinion as to the line of authorities to be preferred in the present case. 2. The Plaintiff in the months of July and August, 1939, supplied 20 drums of cocoanut oil to a firm carrying on business under the name and style of J.B. Dutt & Co. at No. 2, Ram Krishna Lane. The value of the oil supplied was Rs. 959-13-0. The drums and containers in which the oil was delivered are valued by the Plaintiff at Rs. 186. It has also been satisfactorily proved by the Plaintiff that the firm of J.B. Dutt & Co. agreed to pay interest on the price of the oil, and on their debts to the Plaintiff generally, at the rate of 12 per cent. per annum. The price of the oil did not include the drums and cylinders, and it was the duty of J.B. Dutt & Co. to return them as soon as their contents were consumed, which in the ordinary course of events would be in about a month's time after the Plaintiff had delivered them. 3. The firm of J.B. Dutt & Co. is no longer in existence, because at the beginning of 1940 two ladies who had an interest as partners in the firm instituted a suit for dissolution against the other partners. 4. By an order made on February 15th, a receiver of the firm was appointed, who was directed to sell the business of J.B. Dutt & Co. with all its assets including goodwill, stock-in-trade, outstandings, and book debts, by public auction. 5. The order also directed that as part of the consideration for the sale the purchaser should undertake to pay and discharge the debts of the business as appearing in the books of the firm and indemnify the parties in the partnership suit against such debts.
with all its assets including goodwill, stock-in-trade, outstandings, and book debts, by public auction. 5. The order also directed that as part of the consideration for the sale the purchaser should undertake to pay and discharge the debts of the business as appearing in the books of the firm and indemnify the parties in the partnership suit against such debts. The order also directed that until such debts were paid the same should be a charge on the business of J.B. Dutt & Co. 6. In pursuance of that order the receiver proceeded to sell the business and its assets in terms of certain conditions of sale. Condition No. 2 contains the following passage:-- The purchaser shall indemnify the parties to this suit against such debts, and until such debts are paid the same shall be a charge on the said business. 7. On June 16th, the ninth Defendant, Radhika Mohan Saha, purchased the business in accordance with the conditions of sale I have mentioned. 8. The first eight Defendants are the partners of the now dissolved firm of J.B. Dutt & Co. Only two of them have entered appearance and filed written statements, and in my opinion none of them have any defence to the suit. They are clearly liable for the price of the oil. I hold they are also liable for the drums which should have been returned prior to the institution of the partnership suit. The agreement for interest has been satisfactorily proved, and the Plaintiff's claim on account of these items is Rs. 1,371. I pass a decree for that amount against the first eight Defendants with costs and interest on decree at 3 per cent. 9. The difficulty arises with regard to Defendant No. 9. He has taken the point that the Plaintiff has no cause of action against him, because he has never contracted with the Plaintiff to satisfy the debts owing to the Plaintiff by the firm of J.B. Dutt & Co. 10. It is true that in terms of the conditions of sale he has undertaken vis-a vis J.B. Dutt & Co., as represented by the receiver, to satisfy those debts. But he argues that the Plaintiff has only recourse to the members of J.B. Dutt & Co. for the price of the goods delivered by him, though under the conditions of sale, if J.B. Dutt & Co.
But he argues that the Plaintiff has only recourse to the members of J.B. Dutt & Co. for the price of the goods delivered by him, though under the conditions of sale, if J.B. Dutt & Co. are compelled to pay for the Plaintiff's claim, they have a right of indemnity against him. 11. The question how far a stranger to a contract can compel the performance of any promise beneficial to him contained in the contract has been the subject of controversy in British Indian Courts. 12. In the present case nothing turns upon the definition of " consideration " in the Indian Contract Act. That definition is only important in cases, where the Plaintiff is the promisee but the consideration for the promise has been given by a third party. It has been held that the definition has the effect of making the rule in Tweddle v. Atkinson 1 B. & S. 393: s.c. 121 E.R. 762 (1861).inapplicable to India, but in the present case no promise has been made to the Plaintiff to pay the debt which it is now sought to recover from the ninth Defendant. 13. The present tendency of the decisions has been for this High Court to favour Plaintiffs who seek to enforce a promise made to third parties for their benefit. The most striking example of this tendency is Kshirodebihari Datta v. Mangobinda Panda ILR 61 Cal. 841: s.c. 38 C.W.N. 682 (1934). There it was held that a zemindar could sue upon a contract made between the mokarraridar and the darmokarraridar, whereby the latter undertook to pay the mokarrari rent direct to the zemindar. The Court purported to be guided by the decision in Deb Narayan Dutt v. Chunilal Ghose ILR 41 Cal. 137: s.c. 17 C.W.N. 1143 (1913). In my opinion the decision went considerably beyond what was stated in the earlier case but of course it by no means follows from that that the latter decision is erroneous. 14. Doubts have been thrown on the soundness of this decision in this Court [see Malda District Board v. Chandra Ketu Narayan Singh ILR [1937] 2 Cal. 698: s.c. 41 C.W.N. 1008 (1937)]. However, the Court there decided in favour of the Plaintiff, who was a stranger to the contract on which he was suing, upon other grounds.
14. Doubts have been thrown on the soundness of this decision in this Court [see Malda District Board v. Chandra Ketu Narayan Singh ILR [1937] 2 Cal. 698: s.c. 41 C.W.N. 1008 (1937)]. However, the Court there decided in favour of the Plaintiff, who was a stranger to the contract on which he was suing, upon other grounds. The Madras High Court on the other hand has been disposed to set its face against the claims of strangers to contracts to enforce stipulations contained therein. I need only refer to Akella Suryanarayana Rao Panturu Goru v. Dwarampudi Basivireddi ILR 65 Mad. 436 (1931). and Subbu Chetti v. Arunachalam Chettiar ILR 53 Mad. 270 (1929). 15. Now with regard to the present case, if the conditions of sale contained nothing more than a covenant by the purchaser of the business to pay the debts of the business, I should be disposed to hold that a creditor of the business could not enforce that covenant as against the purchaser, but in my opinion the situation is affected by the fact that under the conditions of sale until such debts are paid the same are a charge on the business. I cannot, as Mr. Banerjee asked me to do, construe that clause as meaning that if the partners are compelled to pay they have a charge on the business in respect of the indemnity to which they are entitled as against the purchaser. It seems to me that unless the creditors can enforce the charge against the property in the hands of the purchaser, by bringing a suit against the purchaser, the charge is of no value whatever. In my opinion, the effect of the clause creating the charge gives the creditors an equitable right as against the purchaser and the assets of the business in his hands, and I think that this fact brings the case within the general principles laid down in Gregory v. Williams 3 Merrivale 582 (1829). 16. In the case which has been strongly relied on by the contesting Defendant Jamnadas v. Pundit Ram Autar Pande L.R. 39 IndAp 7 : s.c. 16 C.W.N. 97 (1912) there were no words which gave the Plaintiff anything in the nature of a charge upon the sum of money which the mortgagor had left with the purchaser of the mortgaged premises for the purpose of paying off the mortgage.
As I have said, unless a suit of this sort is open to the Plaintiff and to other creditors, I cannot see that a charge in their favour can possibly be enforced, and I hold that in these circumstances they have an equitable right as against the assets of the business of which the contesting Defendant is in possession by virtue of the sale by the receiver. It is true, as Mr. Banerjee has pointed out, that he has only undertaken to pay the debts as appearing in the books and it is agreed that a debt of Rs. 717 is all that is shown in the books. There will therefore be a decree against the Defendant for that sum with interest at three per cent. and costs. I hold also that the Plaintiff is entitled to a charge in terms of (c) of the prayers of the plaint and for a direction for sale in terms of prayer (d).