SHRIPAD Vs. SANIKATTA CO-OPERATIVE SALT SALE SOCIETY

JUDGEMENT

(1.) THIS appeal arises out of a suit to recover Rs. 663-8-0 due on a promissory note of Rs. 620 passed by the defendants to plaintiff No. 1 on January 3, 1934. The defendants contended that the promissory note was void as a part of its consideration was the withdrawal of a non-compoundable criminal case then pending against their brother Vishnu. The trial Court held that it was so and dismissed the suit. In appeal the learned District Judge took a different view and awarded the plaintiffs' claim with costs.

(2.) THE facts of this case which are either admitted or held proved may be briefly stated. Plaintiff No. 2 is the Sanikatta Co-operative Salt Sale Society, Ltd. , Sanikatta, and plaintiff No. 1 is its secretary. In July, 1933, the defendants' brother Vishnu entered into1 a contract with the Society to transport the Society's salt to the salt depots at different places and he was entriftted with seventeen consignments for delivery between July and October, 1933. In October, 1933, Vishnu disappeared and it was discovered that he had misappropriated five of those consignments. Vishnu could not be traced and the secretary of the Society filed a complaint against one of Vishnu's motor drivers before the Police Sub-Inspector of Haveri. THE secretary then went to Kumta and explained the situation to Mr. Divgi pleader. Defendant No. 1 was then a clerk in the Subordinate Judge's Court at Kumta. He was invited by Mr. Divgi on December 8, 1933, and there was some discussion between them about the. complaint intended to be lodged before the Police Sub-Inspector at Gokarn, in whose jurisdiction that misappropriation was believed to have taken place. Eventually the secretary did lodge a' complaint against Vishnu and his motor driver. Although Vishnu's whereabouts were not known to the secretary, it appears that the defendants were in touch with him and managed to obtain from him a promissory note for Rs. 300 in favour of the Society on December 15, 1933. On the same day Vishnu transferred two Government securities, each of Rs. 1,000 to defendant No. 1. THEreafter on December 28, 1933, defendant No. 2 deposited Rs. 400 with Mr. Divgi pleader and also handed over Vishnu's promissory note for Rs, 300, with a letter requesting him to keep the amount and the promissory1 note with him until the matter was compromised. THEreafter on January 3, 1934, defendant No. 1 and the secretary met in Karwar at the house of the latter's father-in-law Mr. Murdeshwar. THEy all then went to another pleader Mr. Mavinkurve. THEre defendant No. 1 requested the secretary to withdraw the case against his brother Vishnu, but the secretary refused to do so. On the next day the secretary was again persuaded to go to Mr. Mavinlcurve's house and there he agreed to give a letter to the District Superintendent of Police stating that the Society had no objection to withdraw the case against Vishnu. He accordingly signed exhibit 70 addressed to the District Superintendent of Police to the following effect : If your honour is pleased to permit withdrawal of the case, my Society does not wish to object.

(3.) THESE two sections and this illustration have been considered in several reported cases, and it is well settled that where an offence is non-compoundable, an agreement, the purpose of which is to compound that offence, is illegal as opposed to public policy, but that where an offence is compoundable, an agreement aimed at compounding it is not invalid as it is not opposed to public policy [Kamini Kumar Basu v. Birendra Nath Basu (1930) L. R. 57 I. A. 117 : s. c. 32 Bom. L. R. 639; Bhowanipur Banking Corporation, Ld. v. Shreemati Durgesh Nandini Dasi (1941) L. R. 68 I. A. 144] In the present case the defendants' brother Vishnu was accused of a non-compoundable offence, and a criminal case against him started on the secretary's complaint was already pending before a Magistrate. The motive of the defendants for executing the promissory note in suit was certainly to have that case withdrawn; but it is urged for the plaintiffs that the secretary did not agree to withdraw his complaint and the consideration of the promissory note was the amount that had been misappropriated by Vishnu. There is undoubtedly a distinction between the motive to a transaction and its object or consideration, and to avoid an agreement as being against public policy it is not enough that the motive which impelled the party who undertook the liability under the agreement was that a pending criminal case should be withdrawn. As observed by Derbyshire C. J. in Sudhindra Jiumor v. Ganesh Chandra (1938) A. I. R. Cal. 840 the test, to be applied in all such cases is whether it was an express or implied term of the bargain between the parties that a non-compoundable criminal case should not be proceeded with. It is true that the) promissory note in suit makes no reference to the criminal case against Vishnu. As Lord Atkin remarked in Bhowanipur Banking Corporation, Ltd. v. Shreemati Durgesh Nandini Dasi, agreements to stifle prosecution are from their very nature seldom set out on paper. Like many other contracts they have to be inferred from the conduct of the parties after a survey of the whole circumstances. Such a survey has been made in this case by the learned District Judge and he has come to the conclusion that there was a mutual understanding between the plaintiff and the defendants that on the execution of the promissory,note in suit the plaintiff should give a letter to the District Superintendent of Police that the society had no objection to the withdrawal of the case against Vishnu, and that such a letter was to be a part of the consideration of the promissory note. I agree with that finding. I have no doubt that the defendants were not concerned with the repayment of the . amount misappropriated by their brother Vishnu, but were anxious to persuade the plaintiffs to drop the criminal proceedings against him. They would not have executed the promissory note in suit had the secretary not agreed to give the letter exhibit70. Hence I exhibit 70 must be deemed to be a part of the consideration of the promissory note in, suit.