Doraswami Iyer vs Arunachala Ayyar Case deals with the point that for consideration to be valid, it has to move at the desire of the promisor and must have value in the eyes of law. Section 2(d) of the Indian Contracts Act says, when at the desire of the promisor, the promisee or any other person does or abstains from doing an act, such an act is called the consideration for the promise. Section 2(d) explicitly mentions ‘at the desire of the promisor’, thus an act, abstinence, or promise at the desire of the third party is not covered. However, the consideration from the promisee need not benefit the promisor and can move from the promisee as well as a third party.
- The defendant, who was a trustee in the temple, entered into a contract for the necessary repairs of the temple which was initially initiated by village common funds were now required more than work proceeded.
- A subscription list for the same was issued to raise money. The petitioner put himself down in that list for 125/-, and it is to recover the sum this particular suit was filed.
- The lower court decreed the suit and said it was a perfectly good contract and 125/- can be enforced as consideration. The petition was filed by the plaintiff in the High Court.
- Is there a valid consideration in this particular case?
The Honorable Judges present to hear this case was Justice Cornish. He was of the opinion that-
- It cannot be said that mere promise to subscribe a sum of money or the entry of such promised sum in a subscription list secures consideration.
- There must have been some request or demand by the promisor to the promisee to do something in consideration of the promised subscription.
There was no consideration in this contract.
The honorable court held that it was a bare promise unsupported by consideration. There is no evidence that there was any request by the subscriber to the plaintiffs to do any temple repairs or any undertaking to do anything by them when he put his name in that list for 125/-. Therefore, the suit ought to be dismissed, and the petition was allowed with costs as well.
This judgment puts forth the point that for a consideration to be valid, it has to move at the desire of the promisor and must have value in the eyes of law. It clarifies that the acts have to be done at the request of the promisor, even if there is no personal benefit to the promisor are considered as good consideration.