Samuel Pillai v. Anathan Pillai

Samuel Pillai v. Anathan Pillai

[Section 25(3) of Indian Contract Act, Consideration]

FACTS:

Administratrix of the deceased whose property was inherited by the defendant entered into an agreement with the latter to convey the title in the property without deducting the debt, which was barred by the limitation, for the promissory note paid by the plaintiff to the deceased; and in consideration thereof, defendant to sign the PN for paying the debt due to the plaintiff. When plaintiff sued the defendant for the PN due, defendant took the defence of absence of consideration and the suit being barred by limitation.

ISSUE:  Whether the PN signed by the defendant to pay off the debt to plaintiff, which was barred by limitation, was valid in the absence of consideration?

HELD:

U/s 25(3) of the Indian Contract Act (ICA), promise made in writing and signed by the person charged therewith to pay wholly or partly the debt of which the creditor might have enforced payment but for the law of limitation, is valid and subsisting contract though devoid of any consideration.

The promissory note thus signed by the defendant was valid and subsisting. The contention of the defendant that the note was signed under undue influence exercised by the Administratrix could not be upheld for the defendant, under his free will signed the note on account of the agreement with the Administratrix to convey the property without any deduction.

Further, the contract with the Administratrix was also valid and supported by the consideration as u/s 2(d), for she agreed to transfer share of assets inherited to the defendant without making any deductions on latter’s request. Hence, she needs to be credited for the part payment made by the plaintiff out of her own account by the defendant.

Author: Vishrut Kansal (National University of Juridical Sciences, Kolkata)