TaxTMI 
TaxTMI 
TaxTMI 
1991 (2) TMI 399
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....nd Turab Yar Jung who claimed to be his first cousins. The Nizam by a notification of May 9, 1949, appointed a Committee to administer the estate of the late Nawab Salar Jung. On the merger of the Hyderabad State, the Central Government by the Nawab Salar Jung Bahadur (Administration of Assets) Act 1950, continued the Committee and also provided that no suit or other legal proceeding for the enforcement of any right or remedy in respect of any asset, shall be instituted in any court by any person other than the Committee except with the previous consent of the Central Government. 3. In the meanwhile, on May 31, 1949, the Nizam had already appointed a Commission to enquire into the question of succession to the estate, and one of the questions referred to the Commission was whether the Jagir of the late Nawab Salar Jung escheated to the Government and another was the ascertainment of his heirs. The Commission was unable to proceed with the inquiry as some of the claimants filed a writ petition in the High Court of Andhra Pradesh challenging the jurisdiction of the Commission to enquire into the question of succession. The High Court, by its decision of September 23, 1952 held that ....
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....52 was unenforceable in law as it was in the nature of a champerty deal which was opposed to public policy and forbidden by law. 6. The City Civil Court where the suit was filed found that the agreement was genuine, that it was admissible in evidence, that the amounts were advanced by the plaintiff to the Nawab and that the suit was not barred by limitation. However, the Court 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 recognised as the heir to the estate in return for his being given one anna share in the amount to be received by the Nawab. The Court, therefore, held that the agreement in question was not enforceable. The Court also held that even the amounts actually advanced by the plaintiff and received by the Nawab could not be recovered by the plaintiff. Accordingly, the Court dismissed the suit with costs. The plaintiff preferred an appeal to the High Court. 7. The Division Bench of the High Court held that the appeal had abated against all the respondents on account of the failure of the plaintiff-appellant to bring on record the h....
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....stion 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....
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....ction 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". 12. His second leg of the argument rested on the other provisions of the Indian Contract Act to which I have made reference above. He contended that even assuming that it was an agreement to receive consideration a share in the claim that was to be established by the Nawab, it was not against public policy. He contended that the amount in question was admittedly advanced and an advantage of it was taken by the Nawab to establish his claim. He had, therefore, to return the same to the appellant. In this connection, he referred to us to the other provisions of the Indian Contract Act to which I have made a reference earlier. Section 65 states that when an agreement is discovered to be void or when a contract becomes void, any person who has received any advantage under such ....
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.... 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 highscale. 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 pl....
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.... society. So long as the courts keep themselves tethered to the ethos of the society and do not travel off its course, so long as they attempt to furnish the felt necessities of the time and do not refurbish them, their role in this respect has to be welcomed. It is true that as observed by Burrough, J. in Richardson v. Mellish, [ 1824] 2 Bing. 229 at 252 public policy is "an unruly horse and dangerous to ride" and as observed by Cave, J. in re Mirams, [189] 1 QB 594 at 595 it is "a branch of the law, however, which certainly should not be extended, as judges are more to be trusted as interpreters of the law than as expounders of what is called public policy". But as observed by Prof. Winfield in his article 'Public Policy in the English Common Law' [1928]42 Harv. L. Rev. 76, 91]: "Some judges appear to have thought it [the unruly horse of public policy] more like a tiger, and refused to mount it at all perhaps because they feared the fate of the young lady of Riga. Others have regarded it like Balaam's ass which would carry its rider nowhere. But none, at any rate at the present day, has looked upon it as a Pegasus that might soar beyond the momentary needs of the community." A....
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....ement according to the trial court was that the plaintiff should wield his influence with Central and State Ministers to have Sajjid Yar Jung recognised as the heir of late Nawab Salar Jung in return for his being given one anna share in the assets to be received by Sajjid Yar Jung from the estate of late Nawab Salar Jung. The High Court has confirmed that under the agreement the plaintiff was to promote the cause of Sajjid Yar Jung in his being recognised as heir of the Nawab Salar Jung and for the help thus rendered to receive a share of one anna in a rupee out of the assets obtained. The plaintiff appears to have advanced an amount of Rs.75,000 in promoting the cause of Sajjid Yar Jung as agreed upon. The help in promoting the cause was much more than mere financing. On the evidence the High Court found that the help Sajjid Yar Jung wanted from the plaintiff was to bring to bear his influence with the Central and State Ministers and the request for financial help was secondary to the request to represent the cause with the use of influence. The High Court affirmed that the object of agreement was to influence the Central and State Ministers and to advance and expand all amounts....