JUDGMENT
Dave, J.
1. This is a first appeal by the defendant against the judgment and decree of the Civil Judge, Churu, dated the 18th of December, 1951.
2. Both the parties in this case are resident of Sardarshahar in District Churu. Appellants Nos. 1 and 2 Suganchand and Premchand are real brothers and appellants Nos. 3 and 4 Dharamchand and Nemchand are their nephews.
3. It would be proper first to state briefly a few facts which are no longer in dispute between the parties and which have given rise to the present litigation. On the 29th June 1941, one Mt. Soovti widow of Hanumandas Oswal sold to her grandson (daughter’s son) Hansraj, who was minor at that time, one building railed Nohra situated at Sardarshahar for Rs. 3,000/- and executed a registered sale deed in his favour. The appellants’ house was situated just adjacent to that building and, therefore, on 9th of November 1941, they brought a suit for pre-emption against Mt. Soovti and Hansraj on the ground of vicinage, in the Court of District Judge, Ratangarh.
It may be mentioned here that at the time when the said suit was filed, appellants Nos. 3 and 4 were minors and, therefore, appellants Nos. 1 and 2 had brought the suit as their next friends
and also in their own right. That case was dismissed by the trial Court on 1st of April 1942. The present appellants then filed an appeal in the High Court of the former State of Bikaner, but that appeal was also dismissed. Thereafter they filed an appeal to the Judicial Committee of the former Bikaner State on 30th of December 1942. The Judicial Committee allowed the appeal and passed a decree for pre-emption in the appellants’ favour on 15th of August 1944.
Soovti and Hansraj then filed a suit against the appellants in the High Court of the former Binkaner State for setting aside the said decree on the ground of fraud. During the pendency of this suit, the parties came to a compromise whereby the appellants received from the plaintiff Rs. 20,000/- and they gave up their right of preemption and agreed not to execute the decree of the Judicial Committee which they had obtained In their favour. It is this compromise which has given rise to the present dispute between the parties.
4. The plaintiffs-respondents’ case in the trial Court was that after the appellants had lost their suit for pre-emption in the trial Court, they became respondent of their success in appeal and they were prepared to give up their claim. On 35th of June 1942 Premchand appellant told the respondents at Sardarshahar that they (the appellants) had no intention to file an appeal; but if the respondents were to bear all the expenses and fight out the case to the last and if they would be able to get a decree for pre-emption, then the appellants would pay them half the cost and thereafter they would share the property half and half on the respondents’ further paying half the cost of the property.
The plaint proceeds to say that appellant No. 2 further stated to the respondents that appellant Suganchand, who was manager of their family was at Calcutta and that such a contract could be completed only on his approval. The respondents then wrote a letter to Suganchand appellant. He accepted this proposal and thereafter the respondents arranged to file an appeal in the High Court of Bikaner in the appellants’ name. According to the respondents, they gave Rs. 1200/-to a Mukhtar Kazi Nizammudin who was entrusted with the conduct of the case. They spent Rs. 1012/12/- on court-fees, vakil’s fees and other expenses. Thus, they spent in all Rs. 2212/12/- towards the expenses of both the appeals.
The respondents added Rs. 685/2/6 for interest at 6 per cent, per annum on the said amount and claimed half of it i.e. Rs. 1448/15 from the appellants. It was further averred that the respondents had given to the appellants Rs. 1700/-being half the cost of the property on Bhadwa Sud 12 Samwat 2001. It was claimed that they were entitled to recover this amount together with interest thereon amounting to Rs. 488/10/6. Then it was claimed that the respondents were entitled to get from the appellants Rs. 10,000 being half share of Rs. 20,000/- which the appellants had received for abandoning the claim of pre-emption. The respondents also claimed Rs. 1696-15-9 interest on this amount Thus they brought a total claim for Rs. 15,334/9/6.
5. The appellants denied having made any contract with the respondents about conducting the appeals in the pre-emption suit. Appellants Nos. 3 and 4 pleaded that they were minors at the time of the alleged contract and they were not bound by its terms. Appellants Nos. 1 and 2 pleaded that all the expenses in the appeals were incurred by themselves and the respondents were not entitled to get anything from them. The trial Court framed the following issues:
1. (a) Did the defendants after the dismissal of their suit for pre-emption make any contract with the plaintiffs to defray the expenses of the appeals and in case of success, did they make any agreement to have equal rights in the Nohra for half share each and to pay half costs each?
(b) Are the defendants members of the joint Hindu family and the defendant No. 1 is the Karta of the family? Was the agreement for the benefit of defendants Nos. 3 and 4?
2. How much amount was paid by the plaintiffs to meet the expenses of these litigations?
3. In case of the decision of the issues Nos. 1 and 2 in favour of the plaintiffs, are the plaintiffs not entitled to get half share of the costs and hall amount of the sum of Rs. 20,000/- received by the defendants.
4. Is the contract champertous and not enforceable in law?
5. Is the suit not within limitation? 6 To what reliefs, if any, are the plaintiffs entitled?
6. After recording the evidence of both parties, the Court decided all the issues in the plaintiffs’ favour and passed a decree for the entire claim with costs and interest pendente lite and future interest on the principal amount of Rs. 12,806/6/- at 6 per cent. per annum. It is against this decree that the present appeal has been filed.
7. Before proceeding to decide the points which have been raised in appeal, it may be mentioned here that besides oral evidence, the respondents had produced two documents Exs. P-13 and P-X to prove the contract between the parties which was alleged to have been broken by the appellants. Exhibit P-13 was a copy of the letter which the respondents are said to have written to the appellants after Premchand appellant opened the topic to the respondents. Exhibit P-X is the reply which the appellant Suganchand is said to have sent to the respondents in reply to Ex. P-13. Regarding Ex. P-13, it is contended by appellants’ learned counsel that it should not have been admitted in evidence because it was copy of a copy and the person who made that copy was not produced.
This contention seems to be correct. It appears from the statement of the respondent Surajmal P. W. 10 that this document was produced by him at a late stage and he had not made out this copy himself. According to him, his brother Balchand had kept a copy of the letter which they had written to appellant Suganchand at Calcutta, but that copy has not been produced in the Court. The witness proceeds to say that some petition-writer had made out a copy from that copy and Ex. P-13 is the copy made out by the said petition-writer.
Thus, it is apparent that in the first place. Ex. P-13 is a copy of copy and secondly the petition-writer who made out this copy has not been produced and hence it should not have been admitted in evidence. This does not however, mean that the respondents have not been able to prove the alleged contract because they have: been able to prove Ex. P-X which is the reply sent by the appellant Suganchand and this document embodies the condition of the contract.
Appellant Suganchand had denied the execution of Ex. P-X in the trial Court, but Us execution by appellant Suganchand is proved by the statements of P. W. C and P. W. 10. The execution of this document has not been challenged before us at the time of arguments. This document refers to a letter of the respondents and shows that appellant Suganchand had agreed that the respondents should proceed with the appeal at
their own expense and that if they would be successful, the appellants would pay them half the expenses and they would also divide the property half and half of the respondents paying half the sale-price.
8. There is therefore no doubt about the fact that both Suganchand and Premchand appellants had entered into the contract alleged by the respondents and their denial of it was not honest.
9. Learned counsel for the appellants has vehemently urged that even if it be assumed that there was such a contract between the parties, it was of a champertous nature, it was nothing but gambling in litigation and, therefore, it was void, being opposed to public policy. According to learned counsel, the respondents’ claim for Rs. 10,000/- was therefore not maintainable. It was further contended that the respondents had not been able to prove if they had given Rs. 1700/-to the appellants. He has also challenged the respondents’ claim for Rs. 1012/12/- which are said to have been defrayed towards the expenses of the two appeals. Learned counsel has also challenged the respondents’ right to receive interest. Learned counsel for the respondents has, on the other hand, tried to support the trial Court’s decree in toto. The points, which therefore arises for our determination in this appeal are as follows :
1. Does the contract alleged by the respondents amount to gambling in litigation; is it opposed to public policy and therefore void and unenforceable?
2. Did the respondents pay Rs. 1700/- to the appellants for half the price of the property which was sought to be pre-empted?
3. Did the respondents spend Rs. 1012/12/- towards the expenses of the appeals in the High Court and the Judicial Committee of the former Bikaner State?
4. Did the respondents pay Rs. 1200/- to Kazi Nizamuddin and they are entitled to realise the same from, the appellants?
5. Are the respondents entitled to receive interest on all or any of the said items?
10. Now, to begin with the first point, it is stressed by learned counsel for the appellants that the respondents had no right of pre-emption and, therefore, they were not parties to the suit which was filed by the appellants in the Court of the District Judge, Ratangarh. It was after the dismissal of the appellants’ case that the respondents entered into a bargain whereby they agreed to bear the expenses of the two appeals and to divide the property in case of success.
It is contended that this was obviously a champertous agreement, and the respondents were only gambling in litigation. Learned counsel for the respondents has, on the other hand, urged that the respondents had agreed to pay half the price of half the property to the appellants in case of their success. They were not taking any undue advantage and that the agreement was therefore not unlawful. We have given due consideration to the arguments of both the parties. It may be observed that the agreement between the parties was undoubtedly champertous in character. In Wharton’s Law Lexicon, champerty has been explained as meaning
“a bargain between a plaintiff or defendant In a suit and a third person, campum partire, to divide between them the land or other matter sued for in the event of the litigant being successful in the suit, whereupon the champertor is to carry on his party’s suit or action at his own expense.”
In the present case, the respondents, on their own showing, had agreed to bear all the expenses of the appeals and to divide the property half and half in case of success. The contract between the parties was therefore clearly one of champerty and there appears no room for any doubt on that point. We shall discuss at a later stage as to what was the effect of the respondents agreeing with the appellants that they would pay half the price of the property in the event of their success.
It may however be observed here in favour of the respondents that although agreements involving champerty are illegal according to English Law, all such contracts are not necessarily illegal in India and, therefore, the Courts cannot strike down every such contract simply because it is one of champerty. Champertous agreements in India have been held void only when they are considered opposed to public policy on account of their being extortionate and unconscionable or if they are made for improper objects as gambling in litigation or injuring or oppressing others by abetting and encouraging unrighteous suits.
In the case of Ram Cooniar Coondoo v. Chunder Canto Mookerjee, 4 Ind App 23 (PC) (A) their Lordships reviewed a number of decisions of the various High Courts in India and also two earlier decisions of the Privy Council and then they proceeded to observe as follows:
“The result of the authorities, then appears to be that the English laws of maintenance and champerty are not of force as specified laws in India; and the decisions to this effect appear to their Lordships to rest on sound principles…..”
“But whilst their Lordships hold that the specific English law of maintenance and champerty has not been introduced into India, it seems clear to them upon the authorities that contracts of this character ought under certain circumstances to be held to be invalid, as being against public policy. Some of the circumstances which would tend to render them so have been adverted to in the two judgments of this tribunal already cited.”
“Their Lordships think it may properly be inferred from the decisions above referred to, and especially those of this tribunal, that a fair agreement to supply funds to carry on a suit in consideration of having a share of the property, if recovered, ought not to be regarded as being, per se, opposed to public policy. Indeed, cases may be easily supposed in which it would be in furtherance of right and justice, and necessary to resist oppression, that a suitor who had a just title to property, and no means except the property itself, should be assisted in this manner.”
“But agreements of this kind ought to be carefully watched, and when found to be extortionate and unconscionable, so as to be inequitable against the party; or to be made, not with the bona fide object of assisting a claim believed to be just, and of obtaining a reasonable recompense therefor, but for improper objects, as for the purpose of gambling in litigation, or of injuring or oppressing others by abetting and encouraging unrighteous suits, so as to be contrary to public policy.–effect ought not to be given to them.”
11. In the next case Raja Mohkam Singh V. Raja Rup Singh, ILR 15 All 352 (PC) (B), the defendant had brought a suit which was dismissed by the trial Court and the High Court. He Wanted to file an appeal to the Privy Council, but had no means to bear the expenses and, therefore, he entered into an agreement with Raja Loke Indar Singh to finance the expenses of appeal. In return the defendant agreed to give 1/8th share of the property in dispute in case of success and also debts worth Rs. 64155/- to the plaintiff. The
defendant was successful in appeal and got possession of the estate. Thereafter the plaintiff, who had financed the appeal, brought a claim for enforcement of contract.
The trial Court dismissed his case, but on appeal, the High Court decreed the suit for Rs. 19,448/12/8 including interest on the amount which was spent by the plaintiff in litigation. The remaining claim was dismissed on the ground that there was a great disproportion between the liability incurred by the plaintiff under the contract and the reward which he was to obtain in the event of the defendant’s success. On appeal by the plaintiff, their Lordships affirmed the decision of the High Court. Their Lordships again stressed the above quoted observations in the case of Ram Coomar v. Chunder Canto (A) and the contract was not enforced in its terms since the reward which the plaintiff was to get under the contract was considered to be excessive and unconscionable.
Their Lordships of the Privy Council have consistently adhered to the views expressed in the above two cases in subsequent decisions in the cases of Vatsavaya Venkata Subhadrayyamma v. Poosanpati Venkatapati, AIR 1924 P C 162 (C); Ramanamma v. M. Viranna, AIR 1931 P C 100 (D) and Ram Samp v. Court of Wards, AIR 1940 PC 19 (E). From perusal of the above cases, it is clear that champertous agreements in India are not per se void. On the other hand, a fair agreement to supply funds to carry on a suit in consideration of having a share in the property, if recovered, has not been considered opposed to public policy.
There may be cases in which it may be just and proper to assist a suitor, who has a Just title to property and no other means except the property it-self, to prosecute his case; but as observed by their Lordships of the Privy Council, such agreements should be watched very carefully and they should not be enforced, being opposed to public policy if they fall in one of the categories mentioned below:
(1) if they are extortionate and unconscionable so as to be inequitable against the party, or
(2) if they are made not with the bona fide
object of assisting a claim believed to be just and
obtaining a reasonable recompense therefor, but
for improper objects as
(a) for the purpose of gambling in litigation, or
(b) of injuring or oppressing others by abet-ting and encouraging unrighteous suits.
12. Now, in the present case, it is clear that it does not come in category (1) referred above because the appellant has not stated nor does it appear from the circumstances of the case that they were in need of money in order to carry on Litigation and the respondents tried to extort money out of them. We have, therefore, to see if the agreement comes within category No. (2). After giving our earnest consideration to all the facts and circumstances of this case, we have come to the conclusion that it comes within the ambit of the category because the respondents had entered into an agreement with the appellants not with the bona fide object of assisting the appellants in their claim, but they just wanted to gamble in litigation and make a huge profit out of it, if for chance they happened to achieve success in appeal.
13. In the first place, it may be pointed out that the appellants had lost their claim for preemption in the trial Court and on the respondents’ own showing, the appellants had become respondents and since they were doubtful of their future success, they were not prepared to go in
appeal. It is clear from the plaint Itself that Premchand appellant happened to open this
topic to the respondents and as soon as he made a sporting offer of dividing the expenses and the property equally in the event of success in appeal, the respondents seized the opportunity and forwarded the proposal to Suganchand appellant for his acceptance at Calcutta.
From the respondents’ own evidence, it is clear that it was not Premchand who wrote to Suganchand. On the other hand, the respondents wrote a letter to Suganchand, though of course with Premchand’s consent. This further shows that Premchand was not anxious to file the appeal, and the respondents wanted to gamble in litigation just to make large profits for themselves, if possible. Secondly, it appears from the statement of the respondent Surajmal himself that the appellant Suganchand was a man of lacs and he was not in need of any money. The expenses required for filing an appeal could not be more than Rs. 2,000/- which the appellants could easily afford to spend themselves.
The appellants were, however, not prepared to take the risk of losing even that much money because they were very uncertain of their success. It cannot, therefore, be said that the respondents wanted to assist the appellants with money. On the other hand, it is clear that they thought of taking the risk of spending a few thousands in the hope that they might be able to get valuable property in the event of their success. Thirdly, respondent Surajmal has admitted in his statement that the property which was sought to be pre-empted was not near his house. He has also admitted that it was not of any use to him.
This shows that he was not interested in the building because of its usefulness to him, but because he considered it to be a valuable property available for a paltry amount. Similarly, it appears that although that property was near the appellants’ house, they were not in need of it, otherwise they would have certainly carried on the appeal at their own expense. Mt. Soovti had ostensibly sold the property to her grandson for Rs. 3,000/-, but it is obvious that the sale-deed was executed not with the real purpose of selling away the property, but to give it away to her grandson for a small amount.
It appears that Mt. Soovti was afraid of making a gift to her grandson since its validity was likely to be challenged by near relatives of her husband and, therefore, instead of making a gift, she gave it a colour of sale. The respondents have tried to show that the value of this property suddenly increased after the sale, but we are not prepared to believe that the value of the property would rise suddenly from Rs. 3,000/- to more than Rs. 25,000/- within such a short period.
If the property were really sold for its full value, it is doubtful if the appellants would have tried to pre-empt it, The appellants knew that by a claim of pre-emption, they would get a valuable property for a very small amount and, therefore, they filed the suit without referring the matter to the respondents. When, however, they failed to get success in the trial Court, they did not think it proper to risk their money further. These circumstances further confirm that the agreement between the parties was simply for the sake of gambling in litigation.
14. Learned counsel for the respondents has urged that his clients had agreed to pay half the purchase price to the appellants and this shows that they did not intend to gamble in litigation. This contention also is not correct because in a suit for pre-emption, the pre-emptor has only got
a right to get the property by paying the purchase price of that property. Even in the event of their success, the appellants could get the property only on payment of the purchase price. The respondents had agreed to pay half the price because they wanted to purchase only half of the rights of the appellants. So the payment of half the price, in view of the nature of. the appellants’ rights does not take this case out of its champer-tous nature. This argument is therefore of no help to the respondents.
15. It is further contended by learned counsel that an agreement by a plaintiff in a pre-emption suit with a stranger to give him share of the property in case of success on his paying the proportionate purchase money is not illegal. In support of his contention, he has referred to a case reported at page 167 of The Law of Pre-emption in the Punjab by T. P. Ellis (Sixth Edition). We cannot say what the full facts of that case were, but it is clear that it was not an agreement of champertous nature.
It looks that in that case the pre-emptor had borrowed some money in order to carry on his case. In the present case, the appellants had not borrowed any money from the respondents. As shown above, they were not in need of any money nor were they in need of the respondents’ assistance in any way. Learned counsel for the respondents has also urged that the respondents were living at Sardarshahar, while Suganchand was living at Calcutta and the appellants had agreed to share the property with the respondents because the appellants could not look after the case.
This argument also does not appear to be correct because the statement of P. W. Nizamuddin shows that even after the filing of the appeal, it was Suganchand appellant who used to give him necessary instructions in the case. From the statement of the plaintiff-respondent Surajmal himself, it appears that before entering into the above contract with the appellants, he did not even obtained expert legal opinion if it was a sound case. He says that he had heard in the bazar that the case could be won. His -actual words are, “Bazar men suna tha ki mukdama jeet ka hai”. Thus all the circumstances taken together leave no doubt, in our opinion, that the respondents had entered into this agreement simply for gambling in litigation in the hope that they would be able to make a large profit, If by chance there was success in appeal.
They must also have the knowledge that the sale by Mt. Soovti in favour of her grandson was not a genuine sale and they wanted to derive unfair advantage by injuring and oppressing them by way of litigation. While making these remarks against the respondents, we do not mean to justify the conduct of the appellants. We are aware of the fact that the appellants were not honest in denying the agreement altogether. We do not also approve of the manner in which they were successful in getting Rs. 20,000/- from Hansraj. But, at the same time, we think that it would be wholly opposed to public policy to enforce such champertous agreements when they are made with the sole object of gambling in litigation. We, therefore, decide point No. 1 in the appellants’ favour and We hold that the respondents are not, entitled to get Rs. 10,000/- from the appellants as their share out of Rs. 20,000/- which the appellants got from Hansraj.
16. Now, coming to the second point, it is Urged by appellants’ learned counsel that the respondents have not been able to prove if they ever gave Rs. 1,700/- to the appellants and that the trial Court has passed a decree for this amount without any evidence. Learned counsel for the respondents has, on the other hand, urged that the payment of this amount is proved by the account-books of the respondents. In that connection, he has referred to the statement of P. W. 10 Surajmal. We have given due consideration to Surajmal’s statement as also to Exs. P-29 and P-30 which are copies of entries of the respondents’ account-books. P. W. 10 Surajmal has stated that Exs. P-29 and P-30 are in the handwriting of Santokchand, but Santokchand has not been examined by the respondents.
Surajmal has not stated if this amount of Rs. 1,700/- was given by him or by somebody else to any of the appellants in his presence. We cannot, therefore, say that the payment of this amount is proved. The trial Court ought not to have decreed this amount simply on the basis of Exs. P-29 and P-30 especially when Santokchand was not produced and when it was also admitted by Surajmal that his account-books were not written every day. On the other hand, it is clear from his statement that the usual practice at his shop was to make entries of transactions for the whole month in one day.
In other words, day to day entries were not made in his Rokar because there were very few transactions in the whole month and after the expiry of each month all the entries for the preceding month used to be written in one day. We cannot place any reliance on such account-books and, therefore, the decree for Rs. 1,700/- is fit to be set aside.
17. As regards the third point, we find that the respondents have been able to prove that they had spent Rs. 1012/12/- from their pocket towards the expenses of the fees in the High Court and the Judicial Committee of the former Bikaner State. They have produced entries from their account-books Rokar Exs. P.15, P.16 P.17, P.18, P.20, P.21, P.22, P.23, P.24, P. 26, P.27 and P.28. They have also proved corresponding entries Exs. P-14, P-19 and P-25 from their Khata. Besides these entries and the statement of Surajmal, there is also the statement of Kazi Nizammuddin P. W. 11 to the effect that all the expenses of the two appeals were met by the respondents.
Section 65 of the Indian Contract Act lays down that even when an agreement is discovered to be void, any person 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. The appellants have received the advantage of this amount from the respondents and. therefore, they are bound to restore it to them even though the rest of the agreement has been found to be void. The decree for this amount, therefore, must be given.
18. Then coming to point No. 4, it is urged by learned counsel for the appellants that although P. W. 11 Nizamuddin has admitted the receipt of Rs. 1,200/- from the respondents, the trial Court ought not to have relied upon Nizamuddin’s statement because he was only a Mukhtar and a heavy fee of Rs. 1,200/- could not possibly be paid to him. Learned counsel has pointed out that the case in the High Court and also in the Judicial Committee was argued by Shri Surajkaran Achar-ya who was leading advocate at Bikaner, that he was paid Rs. 130/- as his fees in each Court and that when such a senior advocate was given only Rs. 260/- for both the appeals. Kazi Nizamuddin could not be given Rs. 1,200/-.
Learned counsel for the respondents has urged that Kazi Nizamuddin used to reside at Sardarshahar and since he had to go to Bikaner every time, he was given a lump sum of Rs. 1,200/- for
his labour and also the losses he used to incur in
losing his practice at Sardarshahar. This argument does not appeal to us. We find from the account-books of the respondents themselves that Kazi Nizamuddin used to be paid his travelling expenses and other expenses including diet money every time he was sent to Bikaner. The respondents had opened a Khata which was named as ‘adalat kharch khata’, and all these expenses were entered therein.
It is significant that the amount of Rs. 1200/-was not written in that Khata. On the other hand, we find that the said amount of Rs. 1,200/-was entered in a separate Khata in the following words;
“Rs. 1,200/- Nizamuddin Gafcor Kazi ke nam miti Bhadwa Vadi 2 Samwat 2000.”
The said entry Ex. P-32 does not even mention if Rs. 1,200/- were given to Nizamuddin for his fees. On the other hand, the entry has been made as if a loan of Rs. 1,200/- was advanced to Nizamuddin. No reasonable explanation has been given by the respondents as to why this amount was not entered in ‘adalat kharch khata’ if it was given to Nizamuddin for his fees. Moreover, it is difficult to understand that when a senior advocate like Surajkaran Acharya who had in fact argued both the appeals was given only Rs. 260/-, how Rs. 1,200/- could be given to Kazi Nizamuddin who does not appear to have done anything in those appeals except making his appearance in the Court and giving instructions to the said advocate. We feel that either the entry of Rs. 1,200/- was fictitiously made by the respondents in collusion with Kazi Nizamuddin in order to get this amount from the appellants or if it was actually paid to Kazi Nizamuddin, it was not for his professional fees but for some other purpose best known to them. At any rate, we do not feel any justification for allowing more than Rs. 200/- to the respondents on this score.
19. Thus, the respondents are entitled to receive in all Rs. 1212/12/- as principal from the appellants.
20. Lastly, we have to determine whether the respondents are entitled to receive interest on, the said amount from the appellants. From the document Ex. P-X, which embodies the agreement between the parties, it is clear that there was no stipulation by the appellants for paying any interest on the amount of expenses which were to be borne by the respondents. Learned counsel for the respondents has urged that interest should be allowed to his clients by way of compensation. He has referred to the case of C. Soon Thin V. Mg. Than Gywe, AIR 1934 Rang 346 (F).
In that case it was held that where a person contracts with the real claimant of an estate to litigate on his behalf for its recovery and agrees to share a portion of the net assets realised by him out of the estate, such agreement is not void as opposed to public policy, yet when it is extortionate it should not be enforced in its entirety but the amount which he spent in litigation plus a reasonable amount for the trouble which he has taken should be awarded. It is clear that in the above case, the learned Judges thought it proper to allow interest because the plaintiff had taken some trouble in prosecuting the case.
In the present case, however, it is clear that the respondents did nothing except paying the expenses of the two appeals. Section 65 of the Indian Contract Act referred above provides that a person, who has received advantage under the void agreement, is bound to restore it or to make compensation for it to the person from whom he has received the advantage. That section does not lay down that the person receiving advantage
is not only bound to restore that advantage but also pay further compensation.
On the other hand, it shows that compensation should be awarded in the alternative only when the advantage received by a person cannot be restored to the person from whom it has been received, in the present case, we have already held that the appellants are bound to restore the advantage, namely, the amount of Rs. 1212/12/-which the respondents had spent on their behalf. In the absence of any contract between the parties, we do not see any reason why the respondents should be further allowed compensation over and above the amount which they had spent. In the case of B.N. Rly. Co. Ltd. v Ruttanji Ramji, AIR 1938 PC 67 (G) their Lordships of the Privy Council have laid down when the Court has authority to allow interest for the period prior to the institution of the suit. Their Lordships observed as follows:
“Now, interest for the period prior to the date of the suit may be awarded, if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provision of any substantive law entitling the plaintiff to recover interest, as for instance, under Section 80, Negotiable Instruments Act, 1881, the Court may award Interest at the rate of 6 per cent. per annum, when no rate of interest is specified in the promissory note or bill of exchange.”
It would thus appear that the Court can allow interest for the period prior to the institution of the suit, only in one of the following three circumstances, namely
1. if there is an agreement for the payment of interest at a fixed rate,
2. if it is payable by the usage of trade having the force of law, or
3. if there is any provision of any substantive law entitling the plaintiff to recover interest.
21. In the present case, none of the above conditions is fulfilled and, therefore, we find ourselves unable to award interest to the respondents.
22. The appeal is therefore partly allowed. The trial Court’s decree is amended to the extent that the appellants will pay Rs. 1212/12/, to the respondents. The rest of the decree is set aside. If we were to allow costs to the parties in proportion to their success, the appellants’ costs would outweigh those of the respondents; but in view of the fact that the appellants were not honest even to admit the agreement embodied in Ex. P-X. we do not think it proper to allow them any costs. Under the circumstances, both the parties are left to bear their own costs in both the Courts.