Brahmdeo Narayan vs Brajballabh Prasad and Others

Agarwala, J.—This is an appeal by the plaintiff from a decision of the Additional District Judge of Patna reversing a decision of the Subordinate Judge. The appeal arises out of a suit for recovery of the unpaid portion of the consideration of a sale deed executed by the plaintiff in favour of defendant 1 or alternatively for recovery of the subject-matter of the sale deed. There is also a prayer for the refund of Rs. 800 deposited by, the plaintiff with defendant 3 in circumstances which will appear presently, and also for one month''s salary alleged to be due to the plaintiff from defendant 1. Defendant 1 is the owner of an estate in the Gaya District and the plaintiff was his Tahsildar.

In March 1935 defendant 1 initiated a prosecution against the plaintiff on a charge u/s 408, I.P.C., alleging that he had misappropriated a sum of Rs. 1535-1-9 out of the rents which he had collected from the tenants of defendant 1. The case of defendant 1 is that in order to induce him to withdraw from this prosecution the plaintiff agreed to repay the money misappropriated and to convey 40 bighas of land which is the subject-matter of the sale deed. The plaintiff in fact deposited Rs. 800 with a person whom both parties trusted and executed a handnote for Rs. 750 in favour of a relative of defendant 1. This handnote was executed on 22nd July 1935, the same date as that on which the sale deed was executed.

It is necessary to state a few particulars with regard to the 40 bighas of land which is the subject-matter of the sale deed. It is alleged in the pleadings that while the estate of defendant 1 was under the management of the Court'' of Wards a decree for rent was obtained in respect of 63 bighas of land. The plaintiff, as Tahsildar of the estate, bid for this property at the sale in execution of the rent decree but instead of purchasing it on behalf of the estate he purchased it in his own name. Thereafter he reimbursed himself for the price of the property by selling 23 bighas of the land for the price which he had paid for the whole of 63 bighas. When called upon to convey to defendant 1 the remaining 40 bighas he declined to do so. This area of land therefore, although it was not in any way directly concerned with the charge of criminal misappropriation, was a matter of contention between the parties at the time when the prosecution was pending.

On 23rd July 1935 a petition was filed in the Court of the Magistrate before whom the prosecution was pending stating that the parties had compromised and asking the permission of the Court to terminate the proceeding. Although the charge was u/s 408, I.P.C., which was not a compound, able offence, the Magistrate permitted the dispute to be compromised and passed an order of acquittal on 26th July 1935. In order to be able to do this the Magistrate was constrained to hold that the charge disclosed against the present plaintiff was one u/s 403,I.P.C., and not u/s 408, the former offence being an offence compoundable with the permission of the Court. It is difficult to appreciate how the Magistrate came to take this view.

The charge was that the plaintiff as Tahsildar of defendant 1 had misappropriated moneys which he had collected from the tenants of defendant 1. Those facts, if proved, constituted an offence u/s 408. However that may be, the plaintiff was acquitted in the criminal proceeding. Having secured his acquittal he then showed reluctance to complete the agreement with defendant 1 and declined to register the sale-deed which he had executed as part of the conside. ration for the compromise. Defendant 1 accordingly, on 22-8-1935, applied for compulsory registration of the sale deed. This was ordered by the District Registrar on 18th May 1936. In the meanwhile, on 23rd November 1935, the plaintiff instituted the suit out of which this appeal has arisen.

The plaintiff alleged in his plaint that the consideration for the compromise was the payment of Rs. 1550 but as he had only Rs. 800 he executed a handnote for the balance of Rs. 750 but defendant 1 not being agreeable to accepting a handnote in lieu of cash the plaintiff agreed to convey the disputed 40 bighas to him for a consideration of Rs. 4000 out of which consideration defendant 1 was to deduct Rs. 1550 and pay the balance to the plaintiff. The suit as originally instituted was for the recovery of the balance of the consideration money for the sale and for refund of Rs. 800 which had been deposited with defendant 3. After the sale deed had been registered the plaintiff amended the relief portion of the plaint and inserted a prayer for recovery of possession of the 40 bighas.

The Court of appeal below has disbelieved the plaintiff''s version of the terms of compromise and accepted the version of defendant 1, namely that the conveyance of the 40 bighas was a part of the consideration for defendant 1 withdrawing from the prosecution. On behalf of the plaintiff appellant it has been contended that the Court was not entitled to entertain evidence intended to show that the sale deed was something other than it purported to be, namely a sale for a consideration of Rs. 4000. Section 92 Evidence Act, is relied upon for that contention. Proviso 1 to the Section, however permits the proof of any fact which would invalidate any document referred to in the Section on grounds such as fraud, intimidation and illegality.

The validity of a document may therefore be challenged in the present case on the ground of the illegality of the transaction. Proviso 1 appears to adopt the law as laid down in Collins v. Blantern 1 Smith''s LC (13th Edn.) 406. In that case two persons who had been indicted on a charge of perjury by one Eudge agreed to give Rudge a note for �350 as a consideration for his not appearing to give evidence at the trial. In a suit on the note the defendant pleaded that the transaction was an illegal one and that it was unenforceable in law. It was held that illegality may be pleaded as a defence to an action on a bond. In a later case the doctrine was carried further in Faxton v. Popham (1808) 9 East 408 where Lord Ellenborough observed:

Since the case in Pole v. Harrobin (1732) 9 East 417n., it has been generally understood that an obliger is not tied up from pleading any matter which shows that the bond was given upon an illegal consideration, whether consistent or not with the condition of the bond.

So far as the law of this country is concerned it would appear to be the same. In Kamini Kumar Basu v. Birendra Nath Basu the Privy Council held that if it be an implied term of an ekrarnama Or a reference to arbitration that a criminal complaint would not be further proceeded with, then the consideration for the ekrarnama or the reference, as the case may be is unlawful, and the ekrarnama or the award is invalid, quite irrespective of the fact whether any prosecution in law has been started or there is something for which it is to be dropped, and that it was not necessary that an agreement to settle criminal proceedings should be expressly stated as part of the consideration. It is enough if the inference necessarily follows from the evidence that the consideration was such. This was the finding of the Court below and I have no hesitation in accepting that finding that the execution of this sale deed was a part of the consideration for dropping the criminal proceeding against the plaintiff.

It is clear that the consideration for the agreement between the parties was illegal and therefore that by reason of Section 23, Contract Act, it was void. The next question is whether the plaintiff is entitled to recover either the balance of the consideration money for the sale or the land, which is admittedly in possession of defendant 1. On the authorities I think it is clear that he must fail. The reason why the plaintiff cannot recover is stated by Wilmot L.J. in Smith''s Collins v. Blantern 1 Smith''s LC (13th Edn.) 406. in this language:

This is a contract to tempt a man to transgress the law, to do that which is injurious to the community: it is void by the Common law; and the reason why the Common law says such contracts are void, is for the public good. You shall not stipulate for inequity. All writers upon our law agree in this, no polluted hand shall touch the pure fountains of justice. Whoever is a party to an unlawful contract, if he hath once paid the money stipulated to be paid in pursuance thereof, he shall not have the help of a Court to fetch it back again. You shall not have a right of action when you come into a Court of justice in this unclean manner to recover it back: Procul, O! procul este profani.

This is more succinctly rendered by the maxim: in pari delicto melior est positio possidentis. To the generality of this rule however there is an exception on which the plaintiff, appellant relies. That exception has been stated by Lord Mansfield in Browning v. Morris (1778) 2 Cowp 791 as follows:

Where contracts or transactions are prohibited by positive statutes, for the sake of protecting one set of men from another set of men; the one, from their situation and condition, being liable to be oppressed or imposed upon by the other; there, the parties are not in pari delicto; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring his action and defeat the contract.

It is contended that the plaintiff-appellant was not in pari delicto with defendant 1 in the transaction which resulted in the dropping of the criminal prosecution inasmuch as he was in the power of defendant 1 by reason of the pending prosecution. The answer to that contention is afforded by the decision in Amjadunnessa Bibi v. Kahim Bukhsh AIR (1916) Cal 74 where it was held that

no refund of money or return of consideration given under an agreement not to prosecute a criminal case will be allowed unless circumstances disclose pressure or undue influence. Mere fear of punishment in a criminal case does not constitute undue influence.

In the present case the Court below has found that there was no evidence what so-ever to justify an assertion that the plaintiff had acted under any undue influence, duress, compulsion or fear practised upon him by defendant 1. It was also suggested on behalf of the plaintiff-appellant that as the Magistrate had agreed to the compromise of the criminal proceedings the Civil Court is not entitled to say that it was illegal. The contention is negatived by the decision in Keir v. Leeman (1844) 6 QB 808 where it was held that an agreement that there shall be no prosecution is illegal even though sanctioned by the presiding Judge.

It was next contended that the plaintiff did not put the defendant into possession of the land in consequence of the agreement which he had entered into but that defendant 1 succeeded in obtaining possession only at a later stage after the acquittal in the criminal case had been recorded and the sale deed had been subsequently compulsorily registered. The plaintiff however had executed the sale deed prior to the acquittal and did not resile from it until it had achieved its object. The fact that he subsequently endeavoured to frustrate the defendant in obtaining the benefit of the sale does not in any way improve his position.

The last point on behalf of the plaintiff-appellant is with respect to the claim for salary.

The amount involved is Rs. 35. The Court below held that the onus of proving that the salary was due from the defendant to the plaintiff lay primarily on the plaintiff and that the mere denial of the plaintiff that the money had been received by him was not sufficient to discharge the onus. It is contended that the onus was wrongly placed on the plaintiff in view of the defendant''s admission that the plaintiff was, at the time in question, his Tahsildar. It is not necessary, in my view, to decide whether the Court was right in its view regard-ing the onus, for, it is quite clear that the learned Additional District Judge did not believe what the plaintiff stated on oath whereas he regarded the defendant as a respectable zamindar, who was not likely to perjure himself for a comparatively small sum of money.

Quite apart therefore from the question of onus, it is clear to my mind that the Additional District Judge would have accepted the denial of defendant 1 that anything was due from him to the plaintiff on account of salary in preference to the plaintiff''s assertion that he had not been paid. In the result therefore I would dismiss this appeal but in view of the fact that the parties were in pari delicto in the matter of the compromise of the criminal proceeding I would direct each party to bear his own costs of this appeal.

Rowland, J.

I agree. In the Courts below the parties were at variance as to whether the document sued on was a sale deed or a deed of surrender. As I understand Section 92, it operated to preclude the defendants from asserting that it was not a sale deed when it was expressed as a deed of sale on a consideration of Rs. 4000. But this, as my learned brother has said, was no bar to the defence proving anything that they were entitled to under the proviso to the Section.

That this deed was a part of an illegal bargain in the same transaction with the deed it hardly required any extraneous evidence to establish, for, in the recitals of the document itself there is a reference to the fact that the executant as Tahsildar had been using his master''s collection money for his own purpose and that thereby over Rs. 1500 of his master''s money was outstanding with him for which a criminal case was started and was pending. On other points I agree with what has been said by my learned brother.