Indian Kanoon - Search engine for Indian Law

(1) Whether the contract of 7-7-1948 can be said to be a champertous agreement?

(2) Whether the respondent No. 2 colluded with his father in order to defeat the appellant's claim to the house in question? He also urged that the agreement was neither onerous nor unconscionable and that the property was not the self-acquired property of Lala Ram Dube, respondent No. 3, but it was ancestral property and a decree for partition was inevitable.

6. Now, it may be observed, at the outset, that the law regarding 'maintenance and champerty that had been introduced in 1938 in the former territory known as C. P. and Berar is somewhat different from that prevailing in other parts of India. This law must be taken to be in force in the Mahakoshal area of the new State of Madhya Pradesh.

The provisions of Sections 19-B and 19-C added in the Indian Contract Act by the C. P. and Berar Indian Contract (Amendment) Act, 1938 (XV of 1938) will be reproduced and discussed later. But to understand the real significance of the amendment it seems necessary to have a clear grasp of the main and salient features of the English law of maintenance and champerty and to understand the reasons which prevailed in the Courts in India to lay down that the English law could not be made applicable to the conditions in India.

"Every champerty is maintenance, but every maintenance is not champerty, for champerty is but a species of maintenance, which is the genus. It was an offence against the Common Law."

The Lord Chancellor expressed the opinion in that case that the offence of maintenance was irrespective of the rights or wrongs of the particular suit and a writ might be obtained to restrain the maintainer from going on with the maintenance. In fact, the promotion of suits and defences by one who has nothing to do with them was regarded by the Common Law as against public Policy, as it may lead to grave abuses.

10. The law in England on this point still remains the same. As pointed out in Halsbury :

"The Courts will not enforce, or act upon, an agreement which amounts to maintenance and champerty."

(Simonds Edn. ; Vol. I; Pt. 7; Sec. 83 P. 41). It is pointed out in para 82 that where a person assists a poor stranger his action is justified if he had a bona fide belief in the justice of his cause, but a mercenary bargain takes the case out of the exception. Then it is laid down that an agreement to supply funds or legal assistance for litigation in return for a share in the proceeds is champertous and that unlike other kinds of maintenance, champerty is not excused even by blood-relationship (See 84, P. 42). It will be manifest that the law regarding champertous agreement is very strict in England.