Pingle Kodanda Ramma Reddy vs J.K. Ram Rao

M.A. Ansari, J.—The Defendant has filed this appeal against the decree, allowing plain-tiff No. 1 Rs. 5,000 in his suit for damages for malicious prosecution. Two persons had jointly instituted the suit for Rs. 20,000; but the lower Court has dismissed the entire claim of plain-till; No. 2 and disallowed the rest of the claim of plantiff No. 1, who has filed a cross-objection claiming the amount disallowed.

2-3. The circumstances leading to this action can briefly be narrated. A business concern known as the, American Oil Company was owned by the Defendant, managed by one C. R. Iyengar, and carried through twelve sub-agents at various places in this State as well as in Madras. In 1932, the Defendant sold it to Iyengar for Rs. 50,000 and the sale was of all the stocks, assets and liabilities as per its balance-sheet of March 31, 1932. No formal document was executed and the terms of the sale are to be gathered from the two letters of the parties whose copies have been placed on the record of the case. Exhibit 27/1 is Iyengar''s letter to the Defendant, bears the date 19-8-32 and contains the offer. Exhibit 2 is the Defendant''s reply to the above offer and is dated 25-8-1932. According to this later document, Rs. 15,000, out of the price, was paid and the remaining sum of Rs. 35,000 was to be cleared by 20-11-1932. The Defendant was to have a lien in respect of the kerosene oil stock in the Madras godown, which was to be in the custody of his agent. But as regards the rest, the purchaser was authorised to take immediate delivery of all the properties. In respect of the different agencies appointed before 1-4-1932, the purchaser had to get their agreements with the Defendant cancelled and relieve him of all the responsibilities and liabilities in. respect of the deposits made by the agents. It appears from the evidence that the relation between the parties soon became strained, and the entire amount of the purchase price was not paid. It further appears that about fifty-nine barrels of Lubricating oil belonging to the company were in a godown owned by the Defendant which he alleges to be within the compound of his bungalow, No. 939 A, Residency Bazar, Hyderabad-Dn. Exhibit 21 is the map of the godown, with an endorsement by the Defendant showing that it was let out to the American Oil Company; but in his evidence in the case he says that it was not really let out; and was shown to be so let out in order to get the permission for the storing. This appears to me to be the correct position, for on 9-12-1932, the purchaser wrote to the Defendant that if he would return the sixty barrels of Lubricating oils in sound condition the purchaser would give him credit for Rs. 3,515/11/10, which is not consistent with their possession being with the sub-agent.

On 23-1-1933, G. K. Rama Rao and C. R. Govindu, the two Plaintiffs in this case, who were also the employees of the purchaser, the former working as a travelling inspector and the other in the general staff, came to the godown, carted away twenty-four barrels of Lubricating oil to the Hyderabad Railway Station and booked them for Madras. The Defendant tried to stop their being despatched and it is said that notwithstanding his being shown an authority by the purchaser to despatch them, he dishonestly complained to the Residency police about their removal without his permission, which he alleged to amount to an offence u/s 380, Penal Code. Exhibit 16 is the copy of the Information and Ex. 17 is the copy of the complaint to the Circle Inspector of Police of Residency Bazar, Hyderabad-Deccan. In the meantime, the two Plaintiffs went to Madras; but were arrested on 15-2-1933, at Ramkot in Hyderabad-Deccan, and were four-days later let out on bail. The Magistrate after-recording the evidence including that of the Defendant as P. W. 9 discharged the accused by a judgment of 31-7-1933. He came to the conclusion that the ownership of the barrels was transferred to the. purchaser, who had also their possession as they were in the godown rented to the Sub-agency at Hyderabad. After refer-ring to the various admissions by the Defendant he held the barrels to be in possession of the purchaser till 5-11-1932. Later, he said that the offer of the return of the barrels was not accepted till 27-1-1933, four * days after the carting, so that on 23-1-1933, possession was still with the purchaser. He concluded that as the accused acted under the authority of the purchaser, who honestly believed himself to be in possession of the barrels and as they carted the barrels openly, dishonesty and secrecy were not proved, and the accused should be discharged. The weakest part of the judgment in my opinion is that relating to the offer for the return of the barrels in the letter of 9-12-1932. In it the purchaser has first claimed Rs. 4,111-3-1 as due, from the Defendant from which he oilers to deduct the price of the barrels if they are returned. Clearly, the offer contem-plates redelivery of the possession and till then acknowledges Defendant''s control over them, otherwise the claim which included their price is meaningless. With the offer still open, how could the purchaser honestly direct their removal is not quite clear.

After the discharge, the two accused on Shehrewar 24, 1343 Fasli (30-7-1934) filed the plaint alleging that Iyengar as the purchaser was entitled to possession, on 5-11-1932, the Defendant informed him about the stock in Hyderabad being with the sub-agent, Plaintiff No. 1 being the purchaser''s servant at Hyderabad was directed to take the Lubricating oils from the godown and despatch them to Madras, Plaintiff No. 2 was asked to accompany Plaintiff No. 1, some barrels were carted, but when the remaining were being removed from the go-down, the Defendant obstructed, was shown the authority, nevertheless he prosecuted the Plaintiffs who were eventually discharged and have jointly suffered the loss of Rs. 20,000. In the plaint, there is no explanation as to why the price had been earlier credited to the purchaser in the letter of 9-12-1932 and the offer for their return made. The Defendant in his written statement admitted that the concern was sold; but has raised the pleas that only Rs. 25,000 out of the price wore paid and for the rest he was entitled to a lien on oils in his possession. Another plea taken is that the purchaser was not entitled to the fifty-nine barrels, as he had'' already debited their price in the letter of 9-12-1932. Then the showing of the letter authorising the Plaintiffs to take the barrels is denied and it is alleged that the Plaintiffs taking advantage of the temporary absence of the Defendant brought carts at about 9 O'' Clock in the morning of 23-1-1933, entered his compound, assuring the Chowkidar about permission transported the twenty-four barrels to the Hyderabad Railway Station, and when the Defendant sent his servant to the Station, the Plaintiffs met him, told him that they would come, but they did not come, eventually he informed the police, who after enquiries challaned the Plaintiffs. It is obvious that one of the pleas for the prosecution being honest and on reasonable ground is the acknowledgment of defen-dant''s possession by the purchaser himself.

The case which was instituted in the Original Side of the High Court was later transferred to the Court of the First Civil Judge of the Hyderabad City, who on Bahman 3, 1351 Fasli (Dec. (5, 1941) came to the conclusion that the ownership of the twenty-four barrels of the Lubricating oils was transferred to the purchaser, and the Defendant had no lien over them for the unpaid amount of the purchaser money, as he had a lien only on the Madras godown according to the sale transaction. Then the Judge came to the conclusion that the letter from the purchaser authorising the taking was shown to the Defendant and notwithstanding this authority ho prosecuted the Plaintiffs. He further held that there was no evidence of malice; but as there were no circumstances justifying the complaint of theft, the claim of damages by Plaintiff No. 1 should be allowed to the extent of Rs. 5,000. As regards Plaintiff No. 2, he was not prosecuting the ease and no judgment should be given in his favour. The Defendant has appealed impleading only plain-till No. 1 as the Respondent who alone has filed the cross-objection. Hence, I need not consider in this appeal the correctness of the decision concerning Plaintiff No. 2 of the part of the record which relates to his claim.

I am of opinion that the decision by the Judge on the legal issue is very unsatisfactory. He at page 231 of the papers-book just mentions that certain authorities were cited on behalf of the Defendant, which lay down that the Plaintiff in order to succeed must prove the prosecution to have been started either maliciously or without any reasonable ground. Then at page 232, he accepts the authorities as correct; but refrains from citing any one in support of the legal proposition he has accepted as correct. Later, he on the same page decides about there being no evidence of malice, but holds that circumstances did not exist from which a case of theft or of any other kind of dishonesty could have been made out, the dispute was of a civil nature and the Defendant who had for some time acted as a honorary Magistrate could not fail to understand the true nature of the Plaintiffs'' acts.

I am afraid he has misunderstood the law relating to damages, for malicious prosecution. Leaving for the moment the question of damage''s, there are altogether four essentials which must be proved in order to make a case for malicious prosecution successful. The Plaintiff must first establish that he was prosecuted by the Defendant. Secondly, he must prove that the proceeding terminated in his favour. These do not arise in this case. Thirdly, the Plaintiff must show that his prosecution was without reasonable and probable cause and lastly, he should convince the Court about the prosecution by the Defendant being due to a malicious intent, and not with one of carrying law into effect. These four essentials appear in the case of � Balbhaddar Singh v. Budri Sah AIR 1926 PC 46 (A), where Lord Dunedin after referring at p. 49 to the four propositions laid by the Court of the Judicial Commissioners of Oudh, corrected tne second proposition to one of termination of the proceedings in favour of the Plaintiff from that of his being innocent of the charge and accepted the rest. Since then these four essentials have been applied in numerous authorities in his country. I shall only refer to the latest which is the case of � Tinsukia Municipal Board v. Bankim Chandra AIR 1950 Gau 101 (B), where Ram Labhaya J. at p. 105 refers to them as well as to the Privy Council authority.

It is obvious that the Judge in the case before me has erred in treating the prosecution without reasonable and probable cause and one with malicious intent as two alternative conditions. For having found no evidence of malice in the record, the decree in favour of plaintifl No. 1 is otherwise unexplainable. It is necessary to emphasise that both the essentials must be proved to exist before a decree in favour of the Plaintiff can be given. This has been repeated by the Privy Council in the case of � AIR 1944 1 (Privy Council) , where one of the Appellants in, the case the Raj of Aul, and the two original Plaintiffs, his employees. It appears that a daughter of one Harikrishna was with the consent of her father taken to the- Raja''s house in-order to make a subordinate form of marriage with him and about a month later she fell ill and died. This caused commotion among the persons who belonged to the girl''s caste, which was accentuated when it was rumoured that the younger sister of the deceased girl was to be sent to the Palace. Later, a First Information. Report was made implicating the Raja, his two servants, who were original Plaintiffs to the. suit, and the father of the girl in the offence of buying and selling minor girl for purposes of illicit intercourse and the Defendants to the suit were considered responsible for instigating the prosecution as well as instructing the police. The Raja, however, was not sent for trial, the two original Plaintiff''s were put on trial; but the case was eventually dismissed. Thereafter, a suit for malicious prosecution was filed, which was decreed by the original Court; but dismissed by the High Court of Patna, Lord Porter, in delivering the opinion of the Privy Council dismissing the appeal, observes at page 4:

In order to succeed in an action for malicious prosecution the Plaintiff must in the first instance prove two things: (i) that the Defendant was malicious and (ii) that he acted without reasonable and probable cause. Malice has been said to mean any wrong or indirect motive, but a prosecution is not malicious merely because it is inspired by anger. However wrong headed a prosecutor may be, if he honestly thinks that the accused has been guilty of a criminal offence he cannot be the initiator of a malicious prosecution. But malice alone is not enough: there must also be shown to be absence of reasonable and probable cause. If, in the present case, the Respondents honestly believed a criminal offence to have been committed and had reasonable cause for so doing, they are not liable in this action and even though they were malicious they still would not be liable if they had reasonable and probable cause for believing in the Appellant''s guilt.

The Judge of the Court below, therefore, erred in decreeing a part of the claim on the basis of there being reasonable and probable-cause. His decision even on this issue does not appear to me to be justified by the record. I do not say that absence of reasonable and probable cause can in no case be evidence of malice. There are English cases as well as authorities in this country which hold that suck an absence under certain circumstances can be regarded as evidence of malice. In � Brown v. Hawkes (1891) 2 Q B 718 (D), Cave J. observed at p. 723:

Of course, there may be such plain want of reasonable and probable cause that the jury may come to the conclusion that the prose-cutor could not honestly have believed in the charge he made, and in that case want of reasonable and probable cause is evidence of malice. But I am not prepared to assent to the proposition that, where there is want of reasonable and probable cause, the jury may always find malice, no matter what the circumstances may be Want of reasonable cause is sufficient evidence of malice in those cases only in which it is sufficient evidence that there was no genuine belief in the accusation made. If it appears that there was such a belief the Plaintiff must produce some independent evidence of malice, and cannot rely on the absence of reasonable cause....

A Division Bench of the Madras High Court has in � Abubucker Ebrahim and Another Vs. Maganlal K. Javeri, held that absence of reasonable and probable cause does not necessarily mean malice and where it is found that the Defendant honestly believed about the Plaintiff being a party to fraud on him, there is no malice even though it is found that he had no reasonable grounds to launch the prosecution. Again, in the Assam case � AIR 1950 Gau 101 (B) already referred, the learned Judge had held at p. 106:

But it is not in every case that because there is absence of reasonable or probable cause for a prosecution that a Judge would be justified in inferring malice. Where there is something more to indicate the existence of indirect or-improbable motive besides the mere absence of reasonable or probable cause a finding that the prosecution was malicious would be justified.

I need not multiply authorities, for it appears to me to be fairly well established that in order to sustain the decree of the lower court in this case, I must come to the conclusion not only that the lodging of the complaint by the Defendant was without reasonable and probable cause; but he did then entertain no genuine belief in the accusation he was making. I now propose to deal with the evidence in this case.

13-15 (His Lordship then discussed the evidence and concluded as follows): 1 cannot in these circumstances regard the complaint of the Defendant to the police regarding the two persons to be without reasonable and probable cause.

It may be that he was acting in anger. But that anger is not malice. It is true that the Magistrate has arrived at a finding in favour of the Defendant. But civil Courts have got to reach their own conclusions in decreeing the suits for damages for malicious prosecution. The burden of proof in such cases is always on the Plaintiffs. In the particular case before me, the letter of January 27 has not been produced, the sub-agent has not been produced, accounts have not been produced to show payment of rents or the chowkidar''s pay. The purchaser has prior to the removal credited the Defendant with their prices in his account and the letter of correction is not proved. The twenty-four barrels were removed without Defendant''s per-mission, the evidence of the two Plaintiffs about the circumstances following the showing of the authority is conflicting, they are not corroborated, the writing of the letter itself is suspicious. In these circumstances, I do not think the motive of the Defendant in informing the police can be treated as indirect or wrong. The Judge who delivered the judgment in the case has believed the oral evidence of the witnesses; but he did not record their depositions and therefore cannot be in a better position by having observed their demeanours. Comments are made in the judgment on the conduct and oral evidence of the Defendant. But that alone cannot sustain the decree in the case when the burden of proof rested on the Plaintiff and had not been properly discharged, I, therefore, allow the Defendant''s appeal, disallow Plaintiff No. 1''s cross-objection, dismiss the suit; but without any costs to the Defendant either of this appeal or of the Court below.

Naik, C.J.

I agree.