Khwaja Muhammad Khan v. Husaini Begum
Rule established
Where a contract, though made between other parties, creates a specific charge or trust in favour of a third party who is a natural object of the promisor's bounty, that third party may enforce the provision, an exception to the privity rule.
Facts
- The defendant, as part of a family marriage arrangement, agreed to pay a specific maintenance allowance to his son's wife, charged against specific immovable property
- The wife was not a party to this specific agreement between her father-in-law and her husband's family
- She sought to enforce this maintenance provision when payment was not made
- The defendant argued she could not sue, being a stranger to the contract
Issue
- Whether a person who is not a party to a contract can enforce a specific provision of that contract made expressly for their benefit, particularly where a specific charge on property secures this benefit.
Held
- Where a contract creates a specific charge or trust in favour of a third party, and that third party is a natural object of the promisor's bounty (such as a family member the arrangement was specifically designed to benefit), the third party may enforce this specific provision
- This constitutes a recognised exception to the general privity rule
- The wife could enforce the maintenance charge despite not being a party to the underlying agreement
Ratio Decidendi
The privity rule admits an exception where a contract creates a specific trust or charge in favour of a third party who is a natural object of the promisor's bounty, permitting that third party to enforce the specific provision made for their benefit, even without being a party to the contract itself.
How to use it in an exam
- Part A: Recognised exception to privity: trust/charge in favour of third party who is a natural object of bounty.
- Part B: Pair with M.C. Chacko v State Bank of Travancore (1970) to show the general rule and this specific recognised exception operating together.
- Key line: "The Privy Council recognised an exception to privity where a specific charge or trust benefits a third party who is a natural object of the promisor's bounty."
Source
Source: (1910) 37 IA 152
This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.