Back
1999 Supreme(AP) 880
Andhra Pradesh High Court
Judges : J.CHELAMESWAR
Sri Khaja Moinuddin Khan (died) - Appellant
Versus
S.P.Ranga Rao - Respondent
Decided On : 10-01-99
Headnote:
Contract Act - Section 23 – Property - Appellant herein and respondent are owners of plaint schedule property - Appellant is manager of property - It appears that there were some legal proceedings pending against property, including proposals for acquisition of schedule land by A. P. Housing Board - For purpose of conducting said litigation, appellant approached first respondent-Plaintiff for a loan of Rs. 20,000. 00 - First respondent agreed to lend money on certain terms evidenced by Ex. A. 1, a registered agreement - It can be gathered from Ex. A. 1-agreement that various proceedings mentioned therein are pending against suit schedule property - Relevant portion of agreement for purpose of this case reads as follows whereas party of first part offered to party of second part due payment of a sum equivalent to 40% of total compensation that will be paid and be received for lands bearing Survey situate in Madannapeta village, from compensation first realised in respect of any of items of lands aforesaid from A. P. Housing Board in pursuance of award passed in said claim, in consideration of party of second part advancing to part of first part sum of it is also further stipulated in agreement as follows parties of first and second parts hereby agree that if for any reason proceedings for acquisition of lands aforesaid under Land Acquisition Act are dropped, lands shall be sold by private treaty and party of second part shall be paid out of amounts realised by sale or sales of any of said lands equivalent sum of value of Ac guntas in addition to refund of Rupees 20,000/- advanced by party of second part to party of first part as stated above – Held , Learned counsel for respondent argued, placing reliance on that even if agreement, Ex. A. 1, is void on account of its being opposed to public policy, respondent is still entitled to at least recover amount advanced by him - It was a case where appellant therein had advanced money under an agreement for purpose of conducting a suit and by said agreement a charge was created on probable decretal amount - Their Lordships held that financier was entitled for such a declaration - It must be noticed that financier was not claiming any undue benefit from litigation and was only trying to recover amount advanced under agreement - In circumstances, it cannot be said that agreement was champertous in nature and therefore, in my view, said decision cannot be invoked to support case of respondent herein - Learned counsel for respondent, however, argued that even if this Court comes to conclusion that agreement covered under Ex. A. 1 is champertous in nature, respondent is entitled to recover amount actually advanced by him, as that part of claim is severable from rest of terms of agreement under Ex. A - In view agreement is void ab initio and it cannot be looked into for any purpose - If suit is a simple suit for recovery of money, which was advanced, - Suit is admittedly barred by limitation - Appeal allowed
( 1 ) AGGRIEVED by the judgment and decree in O. S. No. 132 of 1982 dated 28-12-1983 on the file of the Addl. Chief Judge, City Civil Court-cum-I Addl. Special Judge for SPE and ACB Cases, Hyderabad, the first defendant preferred this appeal.
( 2 ) THE appellant herein and the respondent Nos. 2 to 5 are the owners of the plaint schedule property. The appellant is the manager of the property. It appears that there were some legal proceedings pending against the property, including proposals for acquisition of the schedule land by the A. P. Housing Board. For the purpose of conducting the said litigation, the appellant approached the first respondent-Plaintiff for a loan of Rs. 20,000. 00. The first respondent agreed to lend the money on certain terms evidenced by Ex. A. 1, a registered agreement. It can be gathered from Ex. A. 1-agreement that various proceedings mentioned therein are pending against the suit schedule property. The relevant portion of the agreement for the purpose of this case reads as follows :"whereas the party of the first part offered to the party of the second part the due payment of a sum equivalent to 40% (forty per cent) of the total compensation that will be paid and be received for the lands bearing Survey Nos. 47, 48, 49 (and extent of c. 15-24 guntas) situate in Madannapeta village, from the compensation first realised in respect of any of the items of the lands aforesaid from the A. P. Housing Board in pursuance of the award passed in the said claim, in consideration of the party of the second part advancing to the part of the first part the sum of Rs. . . . . . . . . . . . . . . . . . . . "it is also further stipulated in the agreement as follows :"the parties of the first and second parts hereby agree that if for any reason the proceedings for the acquisition of the lands aforesaid under the Land Acquisition Act are dropped, the lands shall be sold by private treaty and the party of the second part shall be paid out of the amounts realised by the sale or sales of any of the said lands the equivalent sum of. . . . of the value of Ac. 15-24 guntas in addition to the refund of Rupees 20,000/- (Rs. Twenty thousand only) advanced by the party of the second part to the party of the first part as stated above. "
( 3 ) COMPLAINING that the terms of the above-mentioned agreement have not been complied with by the appellant, the suit was instituted by the first respondent herein with the following prayer :to granta) a decree for Rs. 39. 249. 00 against the defendants with further interest at 12% per annum from 30-10-1981 till the date of payment and costs;b) a decree for rendition of compensation or sale proceeds of the plaint schedule lands and for payment of 40% of the same less interest of Rs. 23,042. 50 claimed above. c) for sale of the plaint schedule charged lands for realisation of the decretal amount and costs under preliminary and final mortgage decree and for personal decree against the defendants, if the plaint schedule lands do not exist or if the sale proceeds of the same are not sufficient to meet the decretal amount;d) for such other relief or reliefs as the Hon ble Court deems fit and proper under the circumstances of the case.
( 4 ) THE appellant and the other respondent Nos. 2 to 5, who are the defendants in the lower Court, contested the suit. The appellant admitted part payment to the extent of Rs. 2,000. 00 and denied the receipt of the balance of Rs. 18,000. 00. The other defendants denied any knowledge of the agreement, as they were not signatories to the agreement.
( 5 ) ON the above-mentioned pleadings, as many as 8 issues were framed.
( 6 ) THE trial Court decreed the suit in part holding that the first respondent is entitled to recover a sum of Rs. 15,570. 00 from the appellant herein and is also entitled to interest at 12% per annum w. e. f. various dates of payments, proved to have been made by the first respondent. The trial Court further directed the appellan
