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1948 Supreme(Nagpur) 156

HIGH COURT OF NAGPUR
Sen
PANNALAL AND ANOTHER – Appellant
Versus
THANSINGH AND ANOTHER – Respondent
Second Appeal No. 679 of 1944
Decided on : 20-12-1948

Advocates Appeared:
D T Mangalmoorti, M Adhikari, Advocates

The judgment establishes the principles of champertous agreements, maintenance, and the discretionary power of the Court to refuse specific performance based on unfair advantage.

Headnote:

specific performance - suit for specific performance - Indian Contract Act, 1872 - section 19-C - section 23 - Central Provinces Indian Contract (Amendment) Act, 1938 - champertous agreement - maintenance - unfair advantage - specific performance refused

Fact of the Case:

The plaintiffs appealed for specific performance of an agreement, which was decreed by the trial Court but reversed on appeal. The dispute arose from an agreement between the plaintiffs and respondents regarding the recovery of property from a deceased's estate.

Finding of the Court:

The lower appellate Court found the agreement to be champertous, unconscionable, and extortionate, leading to an unfair advantage for the plaintiffs. Therefore, specific performance was refused.

Issues: The main issue was whether the plaintiffs were entitled to specific performance of the agreement. The Court also considered the nature of the agreement, its validity, and the compensation received by the plaintiffs.

Ratio Decidendi: The Court held that under the Indian Contract Act, a champertous agreement is void if it is extortionate, unconscionable, or inequitable. The Court also exercised discretion under the Specific Relief Act to refuse specific performance due to unfair advantage.

Final Decision: The appeal for specific performance was dismissed, and the plaintiffs were ordered to pay costs.

JUDGMENT

Sen, J—This is a plaintiff's appeal and arises out of a suit for specific performance. The claim of the plaintiffs for specific performance was decreed by the trial Court, but on appeal it was reversed and the suit of the plaintiffs was dismissed. Hence this second appeal by the plaintiffs.

2. The question for decision in this appeal is whether the plaintiffs are entitled to specific performance of the agreement (Exhibit P-2), dated 29-10-1942.

3. On this question the Courts below have reached different conclusions. The trial Court held that the plaintiffs were so entitled, but the lower appellate Court took a contrary view. The point for decision in this appeal is which view is correct.

4. In order to decide the question involved in this appeal, it is necessary to set out briefly the following facts.

5. Mangal and Appaji were brothers. Dulichand and Hiralal are the sons of Mangal. Appaji died in 1933, leaving behind him two widows, Mst. Sarja and Mst. Sattu. Thansingh (respondent no. 1) is the son of Appaji, born of Sarja, Chindu is Appaji's son by his second wife Sattu.

6. On the death of Appaji, his brother Mangal, his wife Sattu and son Chindu took possession of the estate and did not allow Sarja and Thansingh their legitimate share in the property of Appaji. According to the plaintiffs their share was half, while according to the defendants it was l/3rd. But that question is not material for the purpose of the disposal of this appeal.

7. Sarja and Thansingh, respondent, had no funds to file a suit for the recovery of the estate left by Appaji. They entered into an agreement (Exhibit P-1) with the appellants Pannalal and Dhannalal on 17-3-1940. The appellants agreed to finance the litigation and the respondents in consideration thereof agreed that from the property recovered as a result of the litigation, the appellants were to deduct the expenses incurred by them in the litigation and the balance of the property was to be distributed half and half.

8. The respondents filed an application (Miscellaneous Judicial Case No. 12 of 1940) for permission to sue in forma pauperis for partition of the estate left by Appaji. Certified copies of the proceedings of the miscellaneous judicial case have not been filed in the case. The lower appellate Court referred to the register of miscellaneous judicial cases and stated the facts which were not disputed before it in appeal. The procedure was irregular, but as it has not been objected to and as it has not resulted in any prejudice to the appellants, the statement of facts made by the lower appellate Court on the basis of the register-entry of the miscellaneous judicial case may be accepted as true. The application for permission to sue in forma pauperis was made on 30-3-1940; Mangal, his sons Dulichand and Hiralal, Sattu, widow of Appaji, and their son Chindu, were made non-applicants in the case; there were two hearings, on 12-6-1940 and 27-7-1940; and on 5-10-1940 the application was dismissed in default.

9. It appears that there was a compromise between the respondents and the non-applicants in the miscellaneous judicial case, and the respondents obtained tenancy lands in Chhindbari and Chichband, two houses, cattle, grain, and standing crops, and Rs. 500. These details are not stated in the pleadings but appear from the evidence of Pannalal, plaintiff no. 1, and Thansingh, defendant no. 1. It is admitted by the parties that the appellants were paid Rs. 500 and were given a she-buffalo. According to the respondents, this was in full discharge of their liability under the agreement (Exhibit P-1) dated 17-3-1940; while according to the appellants, this was merely in payment of the costs they had incurred but was not in fulfilment of the agreement to convey half the estate to them on recovery of the property as a result of the litigation. The plaintiffs pleaded that there was another agreement (Exhibit P-2), on 29-10-1942, under which the respondents agreed to convey their land at mou





























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