LexRATTAN CHAND HIRA CHAND versus ASKAR NAWAZ JUNG (DEAD) BY L.RS. AND ORS.
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RATTAN CHAND HIRA CHAND
v.
ASKAR NAWAZ JUNG (DEAD) BY L.RS. AND ORS.
FEBRUARY 12, 1991
[P.B. SAWANT AND M. FATHIMA BEEVI, JJ.]
Indian Contract Act-Sections 23, 65, 69, 70 and 73(2)-Contract
-- ~hereby one party is to assist another in recovering property and shar-
ing proceeds by using influence-Whether opposed to 'public policy'.
Nawab Salar Jung III expired on March 2, 1949 leaving behind
him no issue but a vast estate. Several persons came forward claiming
to be his heirs. One of the claimants, Sajjid Var Jung, did not have the
wherewithal to establish bis claim to a share in the estate. He
approached the plaintiff for fmancial help. An agreement was executed
- --------------{ between them according to which Sajjid Y ar Jung agreed to return all
·~
amounts to be advanced by the plaintiff and in addition to give him one
anna share in the amount that would be received by SajjkI Y ar Jung
from the estate. Saijid Y ar Jung borrowed a total sum of Rs. 75,000
· 1
under the agreement.
ms
The dispute was ultimately settled in the Civil Court by com-
-.., rromise between the various claimants. According to the plaintiff, the
amount due to Sajjid Yar Jung was about Rs.60 Lakhs and hence the
plaintiff claimed Rs.3 lakhs as one anna share in addition to the sum
advanced, i.e. Rs. 75,000. The plaintiff filed the present suit for the
recovery of the total amount. The City Civil Court inter alia found that the
agreement was opposed to public policy as the object of the agreement
was that the plaintiff should wield his influence with Central and State
Ministers to have the Nawab recogn~ as the heir to the estate in
~turn
for his being given one anna share in the amount to be received
by the Nawab. The Court, therefore, held that the agreement in ques..
tion was not enforceable, and even the amounts actually advanced could
not be recovered by the plaintiff.
In the appeal, the Division Bench of the High Court held that the
agreement was one whole agreement and hence the plaintiff was not
__ _ "'I' entitled to recover even the amount of Rs. 75,• which was actually
advanced. The Division Bench also held that the agreement was agaimt
public policy.
327
A
B
c
D
E
F
G
H
A
B
c
D
328
SUPREME COURT REPORTS
[ 1991] 1 S.C.R.
'
This Court granted special leave only in respect of the said
amount of Rs. 75,000.
Before this Court it was contended on behalf of the plaintiff that
(i) the amount of Rs. 75,000 could be separated from the other agree-
ment or could be treated differently; (ii) if the champertous nature of
the agreement was ignored which it was legitimate to do so in this
country, there was no other ground of public policy on which the agree- 'Y--
ment could be struck down; (iii) assuming that the agreement was a
champertous one, it was neither immoral nor against public policy, and
even de hors the agreement, the appellant was entitled to the said
advance of Rs. 75,000 under section 70 of the Indian Contract Act. It
was further urged that both the City Civil Court as well as the High
Court had 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 was not void.
Dismissing the appeal, this Court,
HELD: Per Sawant, J.
(1) It is apparent on the face of the record that the advance and
the share in the estate were parts of the same contract--One as a consi-
E · deration for the other. The two stand together and none can stand
without the other. [333F]
F
G
(2) A contract which has a tendency to injure public interests or
public welfare is one against public policy. [337D]
(3) What constitutes an injury to public interests or welfare
would depend upon the times and climes. The social milieu in which the
_,,_,_
contract is sought to be enforced would decide the factum, the nature ---y-' 1
and the degree of the injury. It is contrary to the concept of public
policy to contend that it is immutable, since it must vary with the
varying n~ds of the society. What those needs are would depend upon
the consensus value-judgments of the enlightened section of the society.
These values may sometimes get incorporated in the legislation, but
sometimes they may not. [337E]
( 4) The legislature often fails to keep pace with the changing
needs and values nor is it realistic to expect that it will have provided for
H
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