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Showing contexts for: champertous in Rattan Chand Hira Chand vs Askar Nawaz Jung (Dead) By L.Rs. And Ors on 12 February, 1991Matching Fragments
10. The next question is whether the advance in question was opposed to public policy. On this question, Shri Shah took us through the law on the subject, and contended that both the City Civil Court as well as the High Court have created a new head of public policy to declare the agreement as void, although according to the relevant statutory Provisions as well as the decisions of the Court, the agreement is not void. In the first instance, he referred us to the provisions of Sections 23, 65, 69, 70 and Part (ii) of Section 73 of the Indian Contract Act. Section 23 states that the consideration or object of an agreement is lawful, unless it is forbidden by law; or is of such a nature that, if permitted, would defeat the provisions of any law, or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy. In each of these cases the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void. He then pointed out to us that the specific rule of English law against maintenance and champerty have not been adopted in India and a champertous agreement is not per se void in this country. He contended that before a champertous agreement is held to be void, it must be shown that it is against public policy or against justice, equity and good conscience. He contended in this connection that the Nawab admittedly did not have sufficient finance to prosecute his claim though, he had a valid claim as shown by the result of the litigation in that behalf. The plaintiff, therefore, did not do anything wrong in advancing the amount in question to him to enable him to establish his claim successfully since the Nawab could not have repaid the amount unless he got a share in the estate. It was a legitimate exercise to reduce the agreement to writing and to stipulate therein that the amount should be repaid along with a share in the estate when the Nawab's claim was established. The share in the estate being only one anna in a rupee could not also be said to be on the high side and conscionable. The High Court has given a finding in that behalf in favour of the appellant. The High Court has, however, held against the appellant only on the ground that the agreement was against public policy. He strenuously urged that if the champertous nature of the agreement is ignored which it is legitimate to do so in this country, there is no other ground of public policy on which the agreement can be struck down.
11. In this connection, he referred us to the decision of this Court in the matter of Mr. 'G', a Senior Advocate of the Supreme Court, [1955] 1 SCR 490 where it is reiterated that a champertous contract would be legally unobjectionable if no lawyer was involved and that the rigid English rules of Champerty and Maintenance do not apply in India. In that case, he pointed out to us that the agreement was held unenforceable because it was agreement between a lawyer and his client and it amounted to professional misconduct. However, this Court has also observed there that if such an agreement had been between a third party "it would have been legally enforceable and good. It may even be that it is good in law and enforceable as it stands though we do not so decide because the question does not arise; but that was argued and for the sake of argument even that can be conceded. It follows that there is nothing morally wrong, nothing to shock the conscience, nothing against public policy and public morals in such a transaction per se, that is to say, when a legal practitioner is not concerned. But that is not the question we have to consider. However much these agreements may be open to other men what we have to decide is whether they are permissible under the rigid rules of conduct enjoyed by the members of a very close professional preserve so that their integrity, dignity and honour may be placed above the breath of scandal".
Relying on these statutory provisions as well as the judicial decisions, he contended firstly that assuming that the agreement was a champertous one, it was neither immoral nor against public policy, and secondly even de hors the agreement, the appellant is entitled to the said advance of Rs.75,000 under Section 70 of the Indian Contract Act.
13. The High Court referred to the evidence on record in appeal which had an intimate bearing on the nature and the purpose of the agreement in question and came to the following conclusions. The Court held that the plaintiff- appellant was approached by the Nawab because being a businessman of eminence, he was highly influencial. He had an access to the ministers and other worthies in the Government. He was in a position to secure to the Nawab his claim by wielding his influence. The Nawab knew about it and the plaintiff was also confident about it. It'was immaterial that those whom he had approached were men of high repute and great integrity of character. The fact that because of his accessibility he could get things done through them or could make use of his other standing with them to deliver goods to the Nawab, was enough to taint the entire agreement with the vice of introducing corruption in public life. The High Court also found that the advance which was made was in the nature of an investment to share the booty. There was no reason for the plaintiff who was a total stranger to the Nawab to undertake the financing in question which was in those days on a considerably high- scale. No person who was not confident of delivering the goods would have embarked on financing on such a liberal scale. The plaintiff admittedly was a businessman who knew the value of each pie he was spending. He was doing it as a fruitful investment with sure returns. That is evident from the terms of the contract themselves since both the advance and the consideration for which the advances were made form part of one integral contract. On these facts which are on record, the High Court came to the conclusion that the parties had entered into the agreement in question with the avowed purpose that the plaintiff would use his then prevailing influence with the worthies in the Government to secure the gains for the Nawab. The Court On this evidence came to the conclusion that the agreement was nothing but one obviously made to lend services as a "go-between" or a "carrier" for commission. This being so, it was against public interest and detrimental to the health of body politic.