Husain Bakhsh v. Rahmat Husain

Tyrrell and Brodhurst, JJ.:— In this case the defendants-respondents helped the plaintiffs-appellants to recover from one Ram Sarup a nankar holding of 51 bigbas, 11 biswas, 4 dhurs, the plaintiffs promising the defendants that they should have half the property and half the mesne profits with all their costs in the event of success in the suit. The plaintiffs did succeed in that suit and recovered their, 51 bighas, 11 biswas 4 dhurs with profits. The defendants, who were co-plaintiffs in that suit and who consequently were entitled to execute the decree obtained in that suit jointly with the plaintiffs in this suit, took half the profits awarded under that decree and their costs, and got possession of half the land amounting to 25 bighas, 15 biswas, 12 dhurs. The present action has been brought to eject them from the land. The Subordinate Judge of Allahabad decreed the claim, holding that the defendant shad received sufficient compensation for the advance they made to the plaintiffs by getting [134] the sum of Rs. 330 with interest, which the plaintiffs were to pay to them at the rate of 12 per cent. per annum. The learned Subordinate, Judge found that the bargain between the plaintiffs in the former suit, was unconscionable and extortionate, and, as such, was inequitable against the plaintiffs in the present suit. He found the recompense secured to the present defendants was grossly, unreasonable, inasmuch as the expense they had to incur was small, the risks they ran were inconsiderable the labour they had to undergo was little or nothing, while the land which they had taken possession of was worth fully one thousand rupees. The Subordinate Judge accordingly decreed the plaintiffs the recovery of the land on condition of their paying to the defendants Rs. 330 with interest at 12 per cent. per annum, from the 10th February, 1885, to the date of payment. The learned District Judge of Allahabad reversed the decree and dismissed the plaintiffs' suit upon the following grounds. He found that the bargain was fair, because although the entire land is probably worth Rs. 2,000, the plaintiffs knew their own business and it was undesirable that the Court should make contracts for parties. The District Judge also thought that the Subordinate Judge had forgotten to take inter account the labour and trouble which fell upon the defendants in their character of co-plaintiffs in the former suit. And lastly he held that there was nothing gambling or speculative about the bargain.

In second appeal Mr. Ram Prasad, on behalf of the plaintiffs-appellants, contended that there was no labour and trouble incurred by the defendants in the former action; that the action was necessarily fought by the present plaintiffs, who possessed all the information necessary for the successful conduct of the case, and who only were the persons who did all that was to be done in the way of employing and instructing counsel, bringing witnesses forward and the like. Mr. Ram Prasad also pointed out the inconsistency in the learned Judge's finding that the transaction was not of a gambling or speculative character, with the learned Judge's remark, which was perfectly true, that the defendants stood to lose six hundred rupees at least in costs. Mr. Ram Prasad urged several forcible arguments in support of the finding that the bargain by [135] which the plaintiffs were to yield a thousand rupees' worth of land to the defendants as a recompense for the defendants' assistance in the suit, so far from being fair, was unconscionable, extortionate and unreasonable, as it has been held by the Court of first instance.

We think that this appeal must prevail. Mr. Amir-ud-din, the learned counsel for respondents, argued that it should be remembered that his clients were not common money-lenders nor professional usurers, that they were related to, or connected with, the plaintiffs, and were consequently induced to run the heavy risk they incurred in helping the plaintiffs with their suit, the plaintiffs being unable to get help from any other quarter. The learned counsel also quoted certain rulings of the Calcutta Court in support of his argument. Those rulings are to be found in Punchannn Muzoomdar v. Doorga Nath Roy, Nobeen Chunder Ghose v. Ramgogsnath Gope, Ramrav Khunderav v. Govind Pandshet, and Woodman's Digest, page 699.

The learned Subordinate Judge in his judgment cited certain recent rulings of the Indian High Courts strongly in favour of his view of the case. Indeed, all the current of rulings upon cases of this character is against the respondent. Two cases have lately been before this Court, Chunni Kuar v. Rup Singh(4) and Loke Indar Singh v. Rup Singh(5), in which this question has been very fully and carefully considered, and all the case-law upon the subject was under the consideration of the Court. The circumstances of those two cases are very analogous to the circumstances of the case before us. In those cases, as here, the lender of the money for the purposes of maintaining the action was not a common money-lender or a professional usurer. There also the receiver of the assistance was in extremely great need of help, having found it impossible to get assistance from any one but the person who lent him the money. In those cases also it was common ground that the persons who advanced the funds ran a very serious risk of losing their money. In those cases this Court decided that the contract [136] by which a large portion of the estate was conveyed to the person who advanced the money necessary to bring the action to recover the estate, was a contract which the Civil Court ought not to enforce. It was held, and we must hold here, that whether the contract be regarded as having been made under very risky circumstances, or whether it was made under circumstances of ordinary or inconsiderable risk, it would still be a contract open to objection, under one or other of the conditions mentioned in s. 23 of the Contract Act. For if it was a very risky contract, then obviously its enforcement would be against public policy on the ground of its being of a speculative character. If it was not of extraordinary risk, then it would be inequitable to enforce the contract, as the recompense secured was out of all proportion to the risk incurred. Approving of the rulings in those cases, we adopt and follow them in this case, and finding that the learned District Judge dissented from the Court of first instance for reasons which are not sustainable, we find that the contract, under which the defendants were to get half the plaintiffs' land in addition to other advantages in return for the pecuniary assistance afforded by them, was unfair, unreasonable and extortionate, and we think that the Court of first instance made a proper decision and decree in the case. We set aside the decree of the lower appellate Court, restore that of the first Court, and decree this appeal with costs.

Appeal allowed.