TaxTMI 
TaxTMI 
1969 (7) TMI 112
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.... of guarantee in favour of the Kottayam Bank agreeing to pay the amounts due by the High Land Bank under the overdraft arrangement. By the last letter of guarantee dated 22nd January 1953 K.C. Chacko agreed to hold himself liable for the amounts due by the High Land Bank to the Kottayam Bank on the overdraft arrangement subject to a limit of Rs. 20,000. The Kottayam Bank Ltd. filed a suit in the court of the Subordinate Judge of Kottayam against the High Land Bank for a decree for the amount due in the account. To this suit were also impleaded K.C. Chacko the guarantor, M.C. Chacko Manager of the High Land Bank, and M.C. Joseph, Kuriakose Annamma and Chinnamma, the last three being the son, daughter and wife respectively of K.C. Chacko. ....
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....h special leave is preferred by M.C. Chacko against the decree of the High Court. Two questions 'arise in this appeal: (1) whether under Ex. D-1 a charge is created in favour of the Kottayam Bank to satisfy the debt arising under the letter of guarantee and (2) whether the charge assuming that a charge arises-is enfforceable by the Bank when it was not a party to the deed Ex.D-1. Ex.D-1 is called a deed of partition: in truth it is a deed. whereby K.C. Chacko gave the properties described in the Schedule A to M.C. Chacko and other properties described in Schs. B to F to M. C. Chacko: M.C. Joseph, Annamma and Chinnamma. In paragraph 17 it is recited: "I have no debts whatsoever. If in pursuance of the' letter given by ....
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....s as from this date and is to let them out and enjoy the rent. The respective donees will have possession and enjoyment after her death. Chinnamma is to have full rights and liberty to reside in any of the houses included in A, B or C schedule and so long as she so resides in any of the houses, the donees of the respective houses is to meet all her expenses. The rent collected by Chinnamma from the buildings given possession of to her is to be utilised by her for her private expenses as she pleases." In our judgment the various covenants in the deed. were intended to incorporate an arrangement binding between the members of the family for' satisfaction of the debt, if any, arising under the letter of guarantee. We are unable to agree....
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....en it arises, will be satisfied by M.C. Chacko out of the property allotted to him under the deed. The debt which M.C. Chacko was directed by the deed to satisfy was not in any sense a "family debt". It was a debt of K.C. Chacko; and K.C. Chacko was personally liable to pay that debt. After his death his sons, his daughter and his widow would be liable to satisfy the debt out of his estate in their hands. From the recitals in the deed Ext. D- 1 an intention to convert a personal debt into a secured debt in favour of the Bank, a third person, cannot be inferred. In Akalla Suryanarayana Rao & Others v. Dwarapudi Basivireddi & Others(I.L.R. 55 Med. 436.) the Madras High Court in construing a deed of partition of joint family property pursua....
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....ot subject to certain well recognised exceptions, enforce the terms of the contract: the recognised exceptions are that beneficiaries under the terms of the contract or where the contract is a part of the family arrangement may enforce the covenant. In Krishna Lal Sadhu v. Primila Bala Dasi(I.L.R. 55 Cal. 1315.) Rankin, C.J observed: "Clause (d) of section 2 of the Contract Act widens the definition of 'consideration' so as to enable a party to a contract to enforce the same in india in certain cases in which the English Law would regard the party as the recipient of a purely voluntary promise and would refuse to him a right of action on the ground of nudum pactum. Not only, however, is there nothing in s. 2 to encourage the idea....