>Do i need pick up my luggage at London and go through the custom or not?
If you have booked flights with 2 separate airlines
go through border control (immigration), collect your bags, go through Customs and go 'landside'. That means you will enter the UK
. It is unlikely that Westjet will allow you to check your bags more than 3 hours before the United Kingdom
If you have a through ticket with the same airline for both flights
the airline might
transfer your bags for the second flight but I think that is unlikely with such a long layover. You must contact the airline directly to ask them.
> Do i need any transit visa to stay over night at airport.
Unless your bags are checked through India > Canada by the airline or you have checked them in with Westjet you won't be able to go back airside at the airport. So you will almost certainly have to spend your layover time in the landside
part of Gatwick
airport (much noisier and less comfortable, unfortunately).
There is an official UK government website which answers your question about transit visas:
https://www.gov.uk/check-uk-visaIndian nationals normally need a UK transit visa whether they enter the UK or stay airside.
There are some possible exceptions. The site states that you might
be allowed to enter the UK (i.e. go landside) without a visa because you have a confirmed onward flight to Canada. Please note the word 'might'. It means that whether you are allowed to enter the UK or not depends on the border officers who deal with you on the day. There are no guarantees.
It is up to you whether you decide to take that risk.
If you decide to get a transit visa and need to collect your bags, you must apply for a Visitor in Transit
visa, which lasts for 48 hours:https://www.gov.uk/transit-visa/visitor-in-transit-visa
If your bags are checked through from India > Canada (check with the airline first) you can stay airside and will need a Direct Airside Transit Visa