R. SIVARAM Vs. T.A. JOHN

JUDGEMENT

(1.) IN this second appeal the only question to be decided is whether the pronote sued on was executed by defendants 1 and 2 to stifle a prosecution or is otherwise vitiated on the ground that it is not supported by consideration. The facts as emerged from the pleadings of the parties and disclosed in the evidence are the following:

(2.) I am afraid the learned District Judge has gone wrong in his conclusion that the agreement is to stifle a prosecution. The law on the point has been stated by the Supreme Court in Ouseph Poulo v. Catholic Union Bank, AIR 1965 SC 166. In the light of that decision the position is as follows,No criminal complaint had been filed by the company here. No doubt, the company had lost the goods and the goods had gone into the hands of defendants 1 and 2 when they purchased them from the employee. Defendants 1 and 2 do not get any legal title to the goods because the employee who sold the goods had no title. If they could not return the goods to the company they are liable to pay their value. If they refuse to pay the company can take legal steps to recover the value. The company had not decided as to what legal steps they should take. They can take civil or criminal proceeding to get the remedy. At that stage there is nothing illegal in the company accepting the pronote in satisfaction of their claim. It cannot be said that the consideration for the pronote is to stifle a prosecution. There is a difference between the motive for the agreement and the consideration for it. At best the motive for the pronote may be to avoid a legal proceeding. That is not the consideration for the pronote. This differencehas been overlooked by the learned District Judge. There is nothing illegal or opposed to public policy as stated in Section 23 of the Contract Act in the transaction. The pro -note is supported by consideration and hence the learned Munsiff is right in decreeing the suit.