Nawab Khwaja Muhammad Khan vs Nawab Husaini Begam Case deals with consideration and Doctrine of Privity. “Doctrine of Privity” is a conventional principle that is frequently used in contract law. The doctrine expresses that only contracting parties can set in motion legal proceedings for the enforcement of their rights and liabilities. And any third person who is not a party to the contract reserves no such right. In contrast, if any part/clause of the contract provides the status of the beneficiary to a third person then he receives the right to sue the contracting parties to enforce his legal rights and liabilities provided he is an intended beneficiary and not the incidental beneficiary.
Macnaghter, Collins, A.Wilson, A.Ali
The Indian Contract Act, 1872, The Transfer of Property Act, 1882
Khwaja Muhammad Khan(defendant) entered into a contract on 25th October 1877 with the father of Husaini Begum(plaintiff) for the marriage of his son Rustam Ali and the plaintiff. The contract expressed that after the marriage, the defendant would pay rupees 500 per month on perpetuity bases as kharch-i-padan, out of specific properties mentioned in the contract. The marriage took place on 2nd November 1877 however both Rustam Ali and Husaini Begum(plaintiff) were minors due to which plaintiff was welcomed in her matrimonial home in 1883 and the couple lived together till 1893 after which due to various differences plaintiff left her matrimonial home and started residing at her pre-nuptial home. And during this time the defendant discontinued the payment of rupees 500 as agreed earlier. The suit was bought in this respect, the subordinate judge provided the decision in favor of Khwaja Muhammad Khan(defendant) but the subsequent appeal was made to the High Court where the decision of the subordinate court was reversed and the court pronounced the decision in favor of Husaini begum (plaintiff). This led Khwaja Muhammad Khan to appeal before Privy Council.
- Whether the plaintiff is legally entitled to bring legal action against the defendant as she is not the party to the contract?
- Whether the right of the plaintiff to receive kharch-i-pandan is forfeited, as she has ceased to reside with her husband in her matrimonial home?
Contention taken by defendant
The defendant relied on the precedent of Tweddle v. Atkinson, which instituted the doctrine of privity which conveys that, a third person who is stranger to the contract i.e. not a party to the contract does not maintain or derive any rights to set in motion any legal action. Additionally, it was contented by the defendant that, as kharch-i-padan is equivalent to English pin-money, therefore the plaintiff is not entitled to kharch-i-padan as she has ceased to reside with her husband at her matrimonial home.
The contemporary situation in Mohammedan law is, among them the marriages are usually contracted for minors by their parents or guardians, and application of a common-law doctrine on a contract of such nature would result in grave injustice. Moreover, as per the contention of the defendant, the kharch-i-padan is similar to English pin-money to a certain degree has a different legal footing. The pin-money is spent by women at instance of husband in contrast husband has no control over the application and consumption of kharch-i-padan by wife additionally the agreement executed also did not mention the condition for forfeiture.
The decision, according to the court the principle laid down in Tweddle v. Atkinson was not applicable in this case. The court held that the contract which was executed created a charge on the immovable property and designated the plaintiff as the sole beneficiary under it, therefore even if she is not a party to the contract she is qualified to proceed with the legal actions for enforcement of her claim. Additionally, the charge created by the defendant which tied him to make regular payments, and the contract which was executed did not provide any reference to the condition that such payment would be rendered only if she resides with her husband at her matrimonial home. The only time provided in the agreement was regarding the commencement of payments. Therefore, the court gave a decision in favor of the plaintiff.