Supreme Court of India
RATTAN CHAND HIRA CHANDversusASKAR NAWAZ JUNG (DEAD) BY L.RS. AND ORS.
- Citation
- 1991 INSC 33
- Decided
- 12 February 1991
- Disposal
- Dismissed
- Bench
- P B SAWANT
Holding
The agreement is indivisible and void as it is opposed to public policy; consequently the plaintiff cannot recover the Rs 75,000 advance.
Summary
The Supreme Court examined a contract where the plaintiff advanced Rs 75,000 to a claimant of Nawab Salar Jung’s estate in return for a one‑anna share of the proceeds, with the understanding that the plaintiff would use his influence over government ministers to secure the claimant’s recognition as heir. The trial and High Courts held the agreement void as contrary to public policy because it was a "carrier" contract aimed at influencing public officials, and that the advance and share were inseparable parts of the same contract. On appeal, the Court considered whether the advance could be severed from the illegal portion and whether the plaintiff could recover the money under Sections 65, 69, 70 and 73 of the Indian Contract Act. The Court affirmed that the advance and the share formed a single, indivisible contract and that the agreement was indeed opposed to public policy, rendering it void. Consequently, the plaintiff could not recover the Rs 75,000 and the appeal was dismissed.
Issues considered
- Whether the advance of Rs 75,000 and the one‑anna share are severable parts of the contract
- Whether the agreement is void as opposed to public policy (champertous/carrier contract)
- Whether the plaintiff can recover the advance under Section 70 of the Indian Contract Act despite the agreement being void
Legislation cited
- Indian Contract Act, 1872s. 23, s. 65, s. 69, s. 70, s. 73(2)
- Indian Trusts Act, 1882s. 84
- Nawab Salar Jung Bahadur (Administration of Assets) Act, 1950
Subjects
champertypublic policycontract voidseverabilityinfluence peddlingcarrier contractIndian Contract Actestate successionillegal consideration
Judgment
RATTAN CHAND HIRA CHAND A
v.
ASKAR NAWAZ JUNG (DEAD) BY L.RS. AND ORS.
FEBRUARY 12, 1991
B
[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 c
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 Yar Jung agreed to return all
·~ amounts to be advanced by the plaintiff and in addition to give him one D
anna share in the amount that would be received by SajjkI Yar Jung
from the estate. Saijid Yar Jung borrowed a total sum of Rs. 75,000
·1 under the agreement.
The dispute was ultimately settled in the Civil Court by com-
-.., rromise between the various claimants. According to the plaintiff, the E
ms
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 F
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.
G
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.
H
327
328 SUPREME COURT REPORTS [ 1991] 1 S.C.R.
A ' 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
B
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
c 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,
D
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]
(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
F
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.
G 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 all contingencies and eventualities. [337E-F]
RATTAN CHAND v. ASKAR NAWAZ 329
(5) It is n!)t only necessary but obligatory on the courts to step in A
to fill the lacuna. When courts perform this function undoubtedly they
legislate judicially. But that is a kind of legislation which stands
implicitly delegated to them to further the object of the legislation and
to promote the goals of the society. [337F]
(6) So long as the courts keep themselves tethered to the ethos of B
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. [337G]
Ghurelal Parakh v. Mahadeodas Maiya & Ors., [1959] Suppl. 2
S.C.R. 406; Richardson v. Mellish, [1824] 2 Bing. 229; In re Mirams, C
[1891] 1 Q.B. 594, referred to.
(7) All courts are at one time or the other felt the need to bridge
~ the gap between what is and what is intended to be. The courts cannot
in such circumstances shirk from their duty and refuse to rill the gap. In
performing this duty they do not foist upon the society their value D
judgments. They respect and accept the prevailing values, and do what , -
is expected of them. [3380]
(8) The courts will fail in their duty if they do not rise to the
""" occasion but approve helplessly of an interpretation of a statute or a
Li '- document or an action of an individual which is certain to subvert the E
socieial goals and endanger the public good. [338E]
(9) The contract in the present case had been entered into with
the obvious purpose of influencing the authorities to procure a verdict
in favour of the late Nawab and was obviously a "carrier" contract. To
enforce such a contract although its tendencies to injure public weal are F
-.it1 "Y manifest is not only to abdicate one's public duty but to assist in the
· promotion of a pernicious practice of procuring decisions by influencing
authorities when they should abide by the law. To strike down such
contracts is not to invent a new head of public policy but to give effect to
its true implications. [338F-G]
G
In the matter of Mr. 'G', a Senior Advocate of the Supreme Co~rt,
[1955] 1 S.C.R. 490, referred to.
(10) A democratic society is founded on the rule of law and any
practice which seeks to subvert or circwnvent the law strikes at its very
root. When the Court discountenances such practice, it only safeguards H
330 SUPREME COURT REPORTS [1991] 1 S.C.R.
the foundation of the society. Even assuming that the Court finds a new_....
A
head of public policy to strike down such practice, its activism is not only
warranted but desired. [338G-H]
Per Fathima Beevi, J.
B (1) There is no doubt that the contract relating to the payment of
the amount is not severable from the agreement to promote the cause of ~
Sajjid Yar Jung by wielding the influence the plaintiff had. [339G] ''~,
· (2) Every agreement of which the object or consideration is
unlawful is void. The consideration or object of an agreement is unlaw-
ful when the court regards it as opposed tc public policy. [339G]
c
(3) Public Policy is a principle of judicial interpretation founded
on the current needs of the community. The law relating to public
policy cannot remain immutable. It must change with passage of,.._-
time. [339H-340A]
D (4) A bargain whereby one party is to assist another in recovering
, property and is to share in the proceeds of the action and such assis-
tance is by using the influence with the administration irrespective of
the fact that the persons intended to be influenced are not amenable to
such influence is against protection and promotion of public welfare. It
is opposed to public policy. [3408] ~
E
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 740
of 1978.
From the Judgment and Decree dated 18.3.1975 of the Andhra
Pradesh High Court in C.C.C.A. No. 106of1969.
F
G.A. Shah, V.J. Francis and N.M. Popli for the Appellant.
S.B. Bhasme, P.K. Pillai and Dilip Pillai forthe Respondents.
G The Judgment of the Court was delivered by
SAWANT, .T. Alth.:>ugh the leave granted by this Court is limite~
to the question whether the plaintiff is entitled to an amount of
Rs.75,000 which according to him he had actually advanced and the
respondents had received for the purpose of prosecuting their litiga-
H tion, and, therefore, the issue to be answered lies within a narrow
RATTAN CHAND v. ASKAR NAWAZ [SAWANT, J.] 331
compass, it is necessary to state the relevant facts briefly to understand
J , correctly the significance of the question to be answered. A
2. Nawab Salar Jung III, a celebrity of the erstwhile State of
Hyderabad expired on March 2, 1949 leaving behind him no issue but a
vast estate. As was expected, several persons came forward claiming
to be his heirs, and among them were Sajjid Yar Jung and Turab Yar B
... 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 (Administra-
tion 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 c
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 D
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 E
question of succession. The High Court, by its decision of September
23, 1952 held that the Commission was not the proper forum for
determining the question of succession and directed that the manage-
ment of the estate should remain with the Committee until the ques-
tion was settled by a Civil Court. The question was ultimately settled
~. by compromise between the various claimants including the Govern- F
~-~..Jment. The compromise was incorporated in a decree dated March 5,
' 1959 passed in a suit being Suit No. O.S. 13/58 which was filed by some
of the claimants. The present proceedings are an offshoot of the said
suit.
4. Sajjid Yar Jung who claimed to be one of the first cousins of G
the late Nawab Salar Jung did not have the wherewithal to establish his
claim to a share in the estate. He approached the plaintiff who was a
businessman of Bombay for financial help to enable him to establish
his claim. According to the plaintiff, he agreed to do so and Sajjid Yar
Jung agreed to return all amounts to be advanced to him from time to
time and also to give the plaintiff one anna share in the amount that H
332 SUPREME COURT REPORTS [1991] 1 S.C.K.
would be received by him from the estate. The agreement was
A executed in writing on June 27, 1952 which is the subject matter of the~
present proceedings. Pursuant to this agreement Sajjid Yar Jung and
his agents drew large amounts from the plaintiff from time to time,
totalling to about Rs.75,000. Sajjid Yar Jung expired before the
plaintiff received his share of the amount as per the agreement but
B after Sajjid Yar Jung successfully established his claim to the share in
the estate. According to the plaintiff, the amount due to Sajjid Yar ,.,
Jung from the estate was about Rs.60 lakhs and hence he claimed Rs.3~
lakhs as his share (calculated at one anna in a rupee) in addition to the T
return of the sums advanced by him which as stated above was
Rs. 75,000. The plaintiff, therefore, filed the present suit against the
heirs of Sajjid Yar Jung for accounts and for administration of his
c estate and for distribution of the amount among the plaintiff and the
defendants. He also joined the receiver of the estate of Nawab Salar
Jung Bahadur as one of the defendants to the suit.
~·
5. The heirs of the late Nawab Sajjid Yar Jung (hereinafter
D referred to as "Nawab") contested the suit and denied that the
plaintiff had advanced any amounts to the Nawab. They also raised
other contentions including the contentions that the suit was barred by
limitation and that the agreement of June 27, 1952 was unenforceable
in law as it was in the nature of a champerty deal which was opposed to
public policy and forb.idden by law.
E
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
F was that the plaintiff should wi~d his influence with Central and State
Ministers to have the Nawab recognised as the heir to the estate i~~r
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 ques-
tion was not enforceable. The Court also held that even the amounts
actually advanced by the plaintiff and received by the Nawab could not
G 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 appealr--
had abated against all the respondents on account of the failure of the
plaintiff-appellant to bring on record the heirs of one of the respon-
H dents, viz., Askar Nawab Jung who had died pending the appeal. On
RATIAN CHAND v. ASKAR NAWAZ [SAWANT, J.] 333
merits, the Bench also held that the agreement was against the public
A
policy. The Court further held that the agreement was one whole
agreement and hence the plaintiff was not entitled to recover even the
amount of Rs.75,000 which was actually advanced by him to the
Nawab for prosecuting the litigation. It is this decision which is chal-
lenged before us.
B
8. As stated earlier, leave has been granted only in respect of the
said amount of Rs.75,000 and, therefore, we are concerned in the
present appeal only with the question as to whether the conclusion
arrived at by the High Court, i.e., that the agreement is opposed to
public policy and the actual advance of Rs.75,000 was a part of the
whole agreement and was, therefore, also tainted by the vice of being
contrary to public policy is correct. c
9. That the amount of Rs. 75 ,000 was advanced by the plaintiff to
the Nawab for prosecuting his claim as a sharer in the estate, is not
disputed. In fact, the Nawab had to approach the plaintiff and had to
enter into the agreement in question for the express purpose of success- D
fully prosecuting his claim. The plaintiff cannot also contend that he
had agreed to and did advance the said amount of Rs.75,000 only
because he wanted and expected the Nawab to be successful in the
prosecution of his claim. The advance was not a friendly loan or with-
out consideration. The agreement itself stipulated that on the succesful
establishment of the claim, the Nawab would not only return the said E
advance but would.also pay to the plaintiff consideration for the said
advance. That consideratfon was agreed to be at the rate of one anna
in a rupee. It is, therefore, apparent on the face of the record that the
advance and the share in the estate, were a part of the same contract-
-
one as a consideration for the other. The two stand together and none
- -...--
.
can stand without the other. Hence, I am not impressed by the conten-
tion advanced by Shri Shah for the appellant that the amount of
Rs. 75,000 which was advanced by the appellant can be separated from
F
the other agreement or could be treated differently. I am in agreement
with the High Court that the agreement has to be treated as a whole
and the two parts, viz., the advance and the consideration for the same
cannot be separated from each other. .,. G
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 t~ the relevant H
334 SUPREME COURT REPORTS (1991] I S.C.R.
statutory provisions as well as the decisions of the Court; the agree-
A
ment 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 fraudu-
B lent; 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
c 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 th~
D 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
E 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
F 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
G Court1 [ 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 agreeme:n.t
was held unenforceable because it was agreement between a laWy-er
and his client and it amounted to professional misconduct. However,
H this Court has also observed there that if such an agreement had been
RATTAN CHAND v. ASKAR NAWAZ [SAWANT, J.] 335·
between a third party "it would have been legally enforceable and
A
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 con-
ceded. 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 B
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
en joyed by the members of a very close professional preserve so that
their integrity, dignity and honour may be placed 'lbove the breath of
scandal".
c
12. His second leg of the argument rested on the other provi-
sions 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 D
amount in question was admittedly advanced and an advantage of it
was tak"en 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 E
who has received any advantage under such agreement or contract, is
bound to restore it, or to make compensation for it, to the person from
whom he received it. Section 69 states that a person who is interested
in the payment of moneys which another is bound by law to pay, and
who therefore pays it, is entitled to be reimbursed by the other.
. . Section 70 declares that where a person lawfully does anything for F
~· ~ another person, or delivers anything to him, not intending to do so
gratuitously, and such other person en joys the benefit therefore, the
latter is bound to make compensation to the former in respect of, or to
restore, the thing so done or delivered. Part (ii) of Section 73 states
that when an obligation resembling those created by contract has been
incurred and has not been discharged, any person injured by the G
failure to discharge it, is entitled to receive the same compensation
-~ from the party in default as if such person had contracted to discharge
it and had broken his contract.
Shri Shah also referred us to the provisions of Section 84 of the
Indian Trusts Act, 1882 which reads as follows: H
336 SUPREME COURT REPORTS [ 1991] 1 S.C.R.
"84. Where the owner of property transfers it to another
A for an illegal purpose and such purpose is not carried into
execution, or the transferor is not as guilty as the trans-
feree, or the effect of permitting the transferee to retain the
property might be to defeat the provisions of any law, the
transferee must hold the property for the benefit of the
B transferor."
Relying on these statutory provisions as well as the judicial deci-
sions, 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 ...j
\
the said advance of Rs.75,000 under Section 70 of the Indian Contract
c 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
D Court held that the plaintiff-appellant was approached by the Nawab
because being a businessman of eminence, he was highly inpuencial.
He had an access to the ministers and other worthies in the Govern-
ment. 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
E 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
F investment to share the booty. There was no reason for t~e pl~inti.ff ~ ~::;
who was a total stranger to the Nawab to undertake the fmancmg 111 ...,,,-· \...._
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.
G 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
H would use his then prevailing influence with the worthies in the
RATTAN CHAND v. ASKAR NAWAZ [SAWANT, J.) 337
Government to secure the gains for the Nawab. The Court on this
A
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 detri-
mental to the health of body politic.
14. The High Court further repelled the contention that either B
the City Civil Court or it was evolving a new head of public policy by
referring to a decision of this Court in Ghurelal Parakh v. Mahadeodas
Maiya & Ors., AIR 1959 SC 781=(1959) Suppl. 2 SCR 406 and the
decisions of the English Court and to opinions of the jurists/experts in
treatises and essays on the subject of public policy. The Court also
pointed out that this was by no means a new head of public policy and
it can come under the head "agreements tending to injure the public"
c
as mentioned at page 325 of Anson's Law of Contract (23rd ed).
15. I am in respectful agreement with the conclusion arrived at
by the High Court. It cannot be disputed that a contract which has a
tendency to injure public interests or public welfare is one against D
public policy. 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 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 needs of the society. What those needs are would depend E
upon the consensus value-judgments of the enlightened section of the ·
society. These values may sometimes get incorporated in the legisla-
tion, but sometimes they may not. 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 all contingencies and eventualities. It is,
therefore, not only necessary but obligatory on the courts to step in to F
- ·~, fill the lacuna. When courts perform this function undoubtedly they
legislate judicially. But that is a kind of legislation which stands
implicitly delegated to them to further the object of the legislation and
to promote the goals of the society. Or to put it negatively, to prevent
the frustration of the legislation or perversion of the goals and values
of the society. So long as the courts keep themselves tethered to the G
-· 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 H
338 SUPREME COURT REPORTS ( 1991] l S.C.R.
dangerous to ride" and as observed by Cave, J. in re Mirams, (1891] 1
A
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 interpre-
.tets· 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
· Coriunon Law' [ 1928] 42 Harv. L. Rev. 76, 91]:
"Some judges appear to have thought it [the unruly horse
of public policy l 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 com-
munity.''
All courts are at one time or the other felt the need to bridge the gap
between what is and what is intended to be. The courts cannot in such
f) circumstances shirk from their duty and refuse to fill the gap. In
·.performing this duty they do not foist upon. the society their value-
judgments. They respect and accept the prevailing values, and do what
is expected of them. The courts will, on the other hand, fail in their
duty if they do not rise to the occasion but approve helplessly of an
interpretation of a statute or a document or of an action of an indi-
. vidual which is certain to subvert the societal goals and endanger the
·public good.
16. The contract such as the present one which is found by the
City Civil Court as well as the High Court to have been entered into
with the obvious purpose of influencing the authorities to procure a
F verdict in favour of the late Nawab was obviously a "carrier" contract. ~
to enforce such a contract although its tendencies to injure public -....,,----
. weal is manifest is not only to abdicate one's public duty but to assist in /--
the· promotion of · a pernicious practiCe of procuring decisions by l -._.
Influencing authorities when they should abide by the law. To strike
down such contracts is not to invent a new head of public policy but to
C . give effect to its true implications. A democratic society is founded on
:·.. the rule of law and any practice which seeks to subvert or circumvent
the law sttikes at its very root. When the Court discountenances such ·~
Jftactice, it only safeguards the foundation of the society. Even assum- /
.fbg, ·therefore, that the Court finds a new head of public policy to
Utike ·do~n such practice, its activism is not only warranted but
H· desired .
. '.
RATIAN CHAND v. ASKAR NAWAZ [FATHIMA BEEVI, J.] 339
The appeal is, therefore, dismissed. In the circumstances of the
A
case, there will be no order as to costs.
I
FATHIMA BEEVI, J. I have had the advaptage of perusing the
judgment prepared by my learned brother, Sawant, J. I agree with h.im
that the appeal must fail. I wish to say a few words. The only point that
arises for decision in the appeal is whether an amount of Rs.75,000
which the plaintiff claims to have advanced, is recoverable from 'the
respondents. The relevant facts have been stated by my learned brother
and it is not necessary to repeat the same. The City Civil Court found
that the agreement on the basis of which the plaintiff claimed relief
was opposed to public policy. The object of the agreement 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 c
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 D
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. E~
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 influ-
ence. The High Court affirmed that the object of agreement was to
influence the Central and State Ministers and to advance and expand F
all amounts necessary in that connection.
In the face of the concurrent findings with which we agree, I have
no doubt in our mind that the contract relating to the payment of the
amount is not severabl~ from the agreement to promote the cause of
Sajjid Yar Jung by wielding the influence the plaintiff had. Every G
agreement of which the object or consideration is unlawful is void. The
consideration or object of an agreement is unlawful when the court
regards it as opposed to public policy. If anything is done against the
public law or public policy that would be illegal in as much as the
interest of the public would suffer in case a contract against public
policy is permitted to stand. Public policy is a principle of judicial H
340 SUPREME COURT REPORTS [ 1991] 1 S.C.R.
A interpretation founded on the current needs of the community. The
law relating to public policy cannot remain immutable. It must change
with passage of time. A bargain whereby one party is to assist another
in recovering property and is to share in the proceeds of the action and
such assistance is by using the influence with the administration,
B
irrespective of the fact that the persons intended to be influenced are
not amenable to such influence is against protection and promotion of
public welfare. It is opposed to public policy. In this view, we would
hold that the plaintiff cannot enforce the agreement to recover the y--·
amount from the respondents.
ORDER
c
The appeal is, therefore, dismissed with no order as to costs.
R.S.S. Appeal dismissed.
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