Mr. Das, a landowner, transferred his property to his daughter, Geeta, on the condition that she would pay - 20,000 annually to her maternal uncle,…

Under Section 2(d) of the Indian Contract Act,1872, consideration may move from the promisee or any other person. However, under the doctrine of privity of contract, only parties to a contract can sue upon it. An exception was recognized in Chinnayya vs. Ramayya, where an agreement made between two parties for the benefit of a third party was held enforceable, even though the third party was not directly a part of the agreement. In the present case, Mr. Das transferred his property to his daughter, Geeta, on the condition that she would pay - 20,000 annually to her maternal uncle, Mr. Gopal. Geeta accepted the property but failed to fulfil her obligation. Although Gopal was not a party to the original contract, the promise was clearly intended for his benefit, and consideration had moved from Das to Geeta on his behalf. Although the general rule is that a stranger to a contract cannot sue, Gopal falls within the recognized exception. Since consideration moved from Das and the contract was made expressly for Gopal’s benefit, he is entitled to enforce the promise. Hence, Geeta is legally bound to pay the annuity to Gopal.