CHANDANMAL Vs. RUPAKULA RAMAKRISHNAYYA

JUDGEMENT

(1.) The plaintiff appeals against the decrees of the lower Courts dismissing his suit against the defendants 2 and 3. The suit was filed to recover Rs. 2,086-14-6 being the amount due under a promissory note (Ex. A) executed by defendants 1 to 3 in favour of the plaintiff. The defence which found acceptance in the lower Courts is that the consideration so far as defendants 2 and 3 are concerned was the stifling of a criminal prosecution against the first defendant and therefore illegal under Section 23 of the Indian Contract Act. Both the Courts found against the plaintiff.

(2.) The first defendant pledged certain packages of goods representing that they contained bottles of condensed milk and jeevamrutham bottles and borrowed money from the plaintiff. The money was not paid and the pledgee took steps to have the goods sold. When the packages were opened for the purpose of sale, it was found that they contained stones, husk, saw dust, waste paper etc. This was clearly a case of cheating. The discovery was made on the 19 September, 1935. That evening the third defendant who is a pleader practising at Masulipatam came to Bezwada and that night there were talks between the plaintiff and the defendants. Second defendant is the brother of the first and the third defendant is his son-in-law. All three took part in the discussion. There was a mediation. P. W. 3 and D. W. 4 are admittedly two of the mediators, who took part in the mediation. The result was that at about 6 o clock next morning, that is, the 20th, Ex. A the suit promissory note, came into existence which was executed by all the three defendants for Rs. 2,050. The promissory note recites that a sum of Rs. 2,800 was settled by the mediators to be paid in full settlement of all the claims of the plaintiff and that a sum of Rs. 750 was paid that day. For the balance of Rs. 2,050, the three defendants executed the promissory note. It appears that a larger sum than Rs. 2,800 was in fact due. The mediators settled that the plaintiff should give up a portion and be content with Rs. 2,800. It also appears that the defendants wanted time to pay; thus acceptance of a smaller sum than what was due and -giving time for the payment of the sum settled were, at any rate, part of the consideration for defendants 2 and 3 joining in the execution of the promissory note. But the question is: was it also a part of the bargain that the consideration for defendants 2 and 3 joining in the promissory note was that the plaintiff should refrain from prosecuting the first defendant and if so, whether it vitiates the promissory note altogether as one opposed to public policy? One of the plaintiffs went into the box and swore: We believed first defendant committed an offence and cheated us .... We contemplated criminal action against the first defendant but did not take any steps in that direction.... It was known in the town that the defendant played mischief. There was talk in the night that defendant No. I should be saved from prosecution by settling the matter that night. We did not take any action thereafter as the matter was settled. We said we would give up taking action if defendants 2 and 3 joined in the execution of the promissory note. They had nothing to do with the business of the first defendant. We would have taken action if defendants 2 and 3 had not joined in the execution of the promissory note. We sought the advice of Mr. C. Venkatapayya at that time... We never saw defendant No. 3 before.

(3.) The evidence of P. W. 3 makes it further clear that defendants 2 and 3 were asked to join the execution of the promissory note partly, at any rate, for the purpose of saving the first defendant from criminal prosecution. They were not under any pre-existing liability. On the evidence therefore the consideration for defendants 2 and 3 joining in Ex. A is partly, at any rate, abstention on the part of the plaintiff from prosecuting the first defendant.