Judgment :- 1. These appeals are from the decrees in two suits O.S. Nos. 5 of 1125 and 32 of 1951, tried and disposed of together by the Additional District Judge of Parur. The appeals are by the Catholic Union Bank Limited, Mala, the 1st defendant in O.S.No. 5 and the plaintiff in O.S. No. 32. The two appeals were heard together. 2. The facts necessary for the decision of the appeals may be stated. Poulo Varghese and Poulo Thommi, sons of Ouseph Poulo, were carrying on trade in hill produce at Alwaye and they were borrowing money from the branch of the Catholic Union Bank Ltd., at Alwaye for the purpose of the trade. They had pledged goods to the Bank as a security for the loan and the key of the godown was entrusted to the Bank. On inspection of the godown by officers of the Head office of the Bank, considerable shortage in the goods was discovered and the Secretary of the Bank lodged a complaint with the police that Ouseph Poulo and his two sons who were having dealings with the Bank as well as another son Poulo Joseph had colluded with the local agent of the Bank and had fraudulently removed a substantial part of the pledged articles from the godown. The police registered a case and while investigation was going on the parties settled their differences executing in favour of the Bank a simple mortgage Ext. XXVI for Rs. 30,000/- on 22-2-1947 (10-7-1122) and an unregistered deed Ext. B dated 27-2-1947 (15-7-1122) undertaking to pay Rs. 35,000/- to the Bank. These deeds were executed by Ouseph Poulo, his wife, their three sons and the wife of Poulo Joseph. The ladies who joined in the execution of the deed alone had immovable properties in their names which were given as security in Ext. XXVI. The total amount due to the Bank on the date of settlement was Rs. 80,024-5-9 out of which Rs. 10,000/- was made good by surrendering to the Bank, the goods in the godown, Rs. 5,000/- by transferring a car belonging to Thommi to the Bank, and Rs. 24-5-9 by payment in cash. The two deeds Exts. XXVI and B were for the balance. 80,024-5-9 out of which Rs. 10,000/- was made good by surrendering to the Bank, the goods in the godown, Rs. 5,000/- by transferring a car belonging to Thommi to the Bank, and Rs. 24-5-9 by payment in cash. The two deeds Exts. XXVI and B were for the balance. On 28-2-1947 (16-7-1122) the Secretary of the Bank gave a statement to the police that the Bank's claim had been settled by the execution of these deeds and that himself and the Managing Director of the Bank were satisfied that there was no removal of goods from the godown as alleged in the complaint but that the parties had in collusion with the agent of the Bank cheated the Bank in respect of goods pledged and that further action was not necessary. The Criminal proceedings were thus dropped. On 15-12-1947 (29-4-1123) Ouseph Poulo, his son Joseph, Poulose's wife Alia and Joseph's wife Thersia filed a suit informa pauperis seeking cancellation of the two deeds on two grounds, namely, that the deeds were executed to stifle the criminal prosecution and that the same were executed as a result of undue influence, coercion and threat. The 1st defendant in the suit was the Bank and defendants 2 and 3, Varghese and Thommi, who were originally having dealings with the Bank. The Bank denied the allegations on which cancellation of the deeds was sought. While this suit was pending, the Bank instituted O.S. 32 of 1951 for recovery of money on the basis of the unregistered deed Ext. B, from all the executants of the deed. Defendants 1. 2, 5 and 6 who were plaintiffs in O. S. No. 5, filed a joint written statement repudiating the claim on the same grounds on which they sought a decree in their suit. Defendants 3 and 4, i.e., Poulo Varghese and Poulo Thommi filed a separate written statement adopting the contentions of the other defendants. They however admitted that a sum of Rs. 75,000/- was due from them to the Bank. The learned judge held that the two deeds were invalid, having been executed to stifle the prosecution and also as the same were executed as a result of undue influence, coercion and threat. O.S. No. 5 was accordingly decreed while O. S. No. 32 was dismissed. The Bank has preferred separate appeals from the two decrees. The learned judge held that the two deeds were invalid, having been executed to stifle the prosecution and also as the same were executed as a result of undue influence, coercion and threat. O.S. No. 5 was accordingly decreed while O. S. No. 32 was dismissed. The Bank has preferred separate appeals from the two decrees. The parties will hereinafter be referred to according to their respective position in O. S. No. 5. 3. The two points which arise for decision in these appeals are: (1) Whether Exts. XXVI and B were executed as a result of an agreement to stifle a criminal prosecution and are therefore void; and (2) whether Exts. XXVI and B were executed as a result of undue influence and coercion. 4. These points cover the grounds on which the two deeds have been declared invalid. These are distinct defences and if the 1st point is found in favour of the respondents the deeds must be declared void, while the result of finding on the second point in their favour will be to set aside the deeds. 5. Before considering these points it is necessary to refer to a few facts which are either admitted or proved. Defendants 2 and 3 were having transactions with the Bank and at the time of the execution of the two deeds, they owed a sum of about Rs. 80,000/- to the Bank. This fact is admitted by defendants 2 and 3 in their written statement in O. S. No. 32 in Para.6 of which they say they owed Rs. 15,000 to the Bank under'pattuvaravu' transaction and about Rs. 70,000 under key loan. Though it was asserted by the plaintiffs that none of them had dealings with the Bank, it was found by the court below that out of the sum due to the Bank on the dates of execution of Exts. XXVI and B, plaintiffs 1 and 2 were each liable to the Bank in the sum of Rs. 5,000 under Exts. X and XV respectively. As part of the settlement was arrived at by the parties, the pledged goods valued at Rs. 10,000 were surrendered to the Bank in partial satisfaction of the claim and another sum of Rs. 5,000 was made good by the 3rd defendant transferring ownership in a car owned by him to the Bank. 5,000 under Exts. X and XV respectively. As part of the settlement was arrived at by the parties, the pledged goods valued at Rs. 10,000 were surrendered to the Bank in partial satisfaction of the claim and another sum of Rs. 5,000 was made good by the 3rd defendant transferring ownership in a car owned by him to the Bank. This was taken back on hire-purchase agreement by the 3rd defendant, the 2nd defendant giving a letter of guarantee in respect of the same. The Bank instituted a suit against defendants 2 and 3 for recovery of the amount under the hire-purchase agreement and obtained a decree. On 11-4-1947 defendants 2 and 3 made a written request to the Bank for granting them overdraft facilities up to Rs. 10,000. It was stated in the letter of request Ext. II that at the time of the settlement of transaction, the Bank had agreed to help them, that they had mortgaged all their properties to the Bank, that no other Bank would help them and that they would not be in a position to repay the amount due to the Bank unless they were given such assistance. Pw.1 who was acting as the Bank's counsel in the Criminal proceedings sent Ext. II to the Bank with a recommendation that the request be granted. The Bank however refused the request. Thereafter O. S. No. 5 was filed in forma pauperies on 15-12-1947. Another admitted fact is that all the negotiations which resulted in the execution of Exts. XXVI and B were carried on by defendants 2 and 3, none of the plaintiffs taking part in the same. . 6. Learned counsel for the appellant raised two points, namely, (1) that there was no specific pleading that Exts. XXVI and B were executed as the result of an agreement to stifle a prosecution or that such an agreement was part of the consideration for Exts. XXVI and B and (2) that there was no reliable evidence to support the conclusions of the learned judge that the deeds were executed to stifle the prosecution or that the execution of the same was due to undue influence or coercion. 7. As regards the first question, it cannot be said that there was no pleading on the point. XXVI and B and (2) that there was no reliable evidence to support the conclusions of the learned judge that the deeds were executed to stifle the prosecution or that the execution of the same was due to undue influence or coercion. 7. As regards the first question, it cannot be said that there was no pleading on the point. Vague though it be, there is an allegation in Para.8 of the plaint in O.S. No. 5 to the following effect: '-It was represented that defendants 2 and 3 owed Rs. 65,000 to the 1st defendant and that if the plaintiffs also would undertake liability for the same and mortgage the properties of plaintiffs 3 and 4, the criminal proceedings would be dropped; the plaintiffs agreed to the same on account of the pressure of the police and out of fear of loss of reputation and personal violence." In Para.11 of the Bank's written statement it is stated that there was no agreement that the criminal proceedings would be dropped if the deeds were executed. Issue No. 7 in O. S. No. 5 was in these terms: "Whether the said documents were executed as a result of threat, coercion and intimidation and to avoid criminal prosecution as alleged in the plaint." It cannot therefore be said that there was no pleading on the point. It would be more correct to say that there was no clear and specific averment in the plaint regarding this matter. What is contemplated under S.23 of the Contract Act is that the defence should establish a contract whereby the opposite party agrees as part of the consideration received or to be received by him, either not to bring or to discontinue criminal proceedings for some alleged offence. The plaint does not indicate from whom the proposal came or as to who acted on behalf of the Bank. It is also not clear when the agreement was made. The vague nature of the plea was no doubt useful to the 1st plaintiff inasmuch as he was able to put forward different versions regarding this later, untramelled by any specific pleading. This criticism of vagueness applies to the pleading regarding undue influence and coercion also. This aspect has to be kept in view in appreciating the evidence on the questions of fact arising in the case. This criticism of vagueness applies to the pleading regarding undue influence and coercion also. This aspect has to be kept in view in appreciating the evidence on the questions of fact arising in the case. It may also be added that issue No. 7 is not clearly worded. The point really arising for decision is whether the deeds were executed as a result of an agreement to discontinue the criminal proceedings. The issue as it stands does not make any reference to such an agreement. Even if the plaintiffs executed the deeds to avoid a criminal prosecution that by itself may not amount to a valid defence, as the essence of a valid defence is an agreement to drop the criminal proceedings. However we do not consider it necessary to frame a proper issue and remit the same for finding in view of our decision on the questions of fact. 8. Before considering the evidence on the question whether there was an agreement to stifle a criminal prosecution, it is useful to refer to some of the authorities cited at the Bar. In Kamini Kumar Basu and others v. Birendra Nath Basu and another (57 I. A. 117) it was found on evidence that there was in fact such an agreement as rendered the contract void. In Deb Kumar Ray Choudhury v. Anath Bandhu Sen and others (1931 Cal. 421) the distinction between a case where the withdrawal of the prosecution might be the motive for entering into the contract and a case where such withdrawal forms the object or consideration for the contract was pointed out and it was held that the contract could be void only in the latter case. Sudhindra Kumar Rai Ghoudhuri v. Ganesh Chandra Ganguli (A.I.R.1938 Cal. 840) is another decision of the Calcutta High Court in which this question came up for consideration. Mr. Justice B. K. Mukherjea (as he then was) observed: "The law on the point seems to me to be perfectly well-settled. It is against public policy to make a trade of felony or attempt to secure benefit by stifling a prosecution or compounding an offence which is not compoundable in law. Mr. Justice B. K. Mukherjea (as he then was) observed: "The law on the point seems to me to be perfectly well-settled. It is against public policy to make a trade of felony or attempt to secure benefit by stifling a prosecution or compounding an offence which is not compoundable in law. The principle is that no Court of Law can countenance or give effect to an agreement which attempts to take the administration of law out of the hands of the judges and put it in the hands of private individuals. The test to be applied in all such cases is, as to 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; vide 571. A. 117 and 37 C. W. N. 749 If the quid pro quo or consideration for a bond is the withdrawal of a criminal prosecution, obviously it is hit by S.23, Contract Act But the fact that prosecution was actually withdrawn as a result of the execution of the bond does not necessarily show that the object or consideration of the bond was the stifling of the criminal case. A distinction has always been drawn between the motive to a transaction, and its object or consideration and it is not enough that the motive which impelled the party who executed the bond was that the criminal case against him might be dropped; 29 C W. N. 855 and 35 C. W. N. 26. Dr. Bysak, in his argument before us, assailed the propriety of the view taken in some cases, e.g., 35 C. W. N. 26 that the provision of S.23. Contract Act, does not apply, when there is an already existing civil liability on the part of the person who executes the deed, even though there has been a withdrawal of a non-compoundable criminal case against him. The decisions in 57 I A. 117 and (1892) 1 Ch. 173 are relied upon in support of this contention. It seems to me that the question really is one of fact, not of law. To bring a case within the purview of S.23, Contract Act, it is necessary to show that the object or consideration of the agreement is unlawful. 173 are relied upon in support of this contention. It seems to me that the question really is one of fact, not of law. To bring a case within the purview of S.23, Contract Act, it is necessary to show that the object or consideration of the agreement is unlawful. When there is a just and bonafide debt owing by the accused, against whom a non-compoundable criminal case is proceeding, and he gives a security to his creditor, the entire consideration for which is the pre-existing debt and no part of it is referable to the withdrawal of the criminal case, the transaction would be a perfectly good transaction; 35 C.W.N. 28. There, as between the debtor and the creditor that is no trading on felony, which public policy condemns, and the law attempts at preventing. The creditor gets just what be was entitled to, and there is no advantage, or emolument coming to him for withdrawing the prosecution against his debtor," The Judicial Committee had to consider the question again in Bhowanipur Banking Corporation Ltd. v. Sreemati Durgesh Nandini Dassi (A.I.R.1941 P.C. 95). It was found on evidence that there was an agreement to stifle a prosecution and that the wife who gave her property as a security for her husband's debt was aware of the pendency of a criminal prosecution against him as well as the agreement to drop the criminal proceedings if security was given. Lord Atkin held: "The law in regard to agreements to stifle prosecutions is reasonably clear. The Board was referred to the various considerations set out at length in the well-known judgment of Vaughan Williams, J. in (1891) 2 Ch. 587. The learned judge is in fact doing nothing more than considering the elements that go to the making of a simple contract, for it is of the essence of the defence that the defendant should establish a contract whereby the proposed or actual prosecutor agrees as part of the consideration received or to be received by him either not to bring or to discontinue criminal proceedings for some alleged offence. It is of course impossible for such a contract to be made unless both parties knew of the proposed or actual proceedings. Vaughan Williams, J. inadvertently says "must be cognisant of the crime". Proof that there has actually been a crime committed is obviously unnecessary. It is of course impossible for such a contract to be made unless both parties knew of the proposed or actual proceedings. Vaughan Williams, J. inadvertently says "must be cognisant of the crime". Proof that there has actually been a crime committed is obviously unnecessary. But it is also of course necessary that each party should understand that the one is making his promise in exchange or part exchange for the promise of the other not to prosecute or continue prosecuting. In all criminal cases reparation where possible is the duty of the offender and is to be encouraged. It would be a public mischief if on reparation being made or promised by the offender or his friends or relatives, mercy shown by the injured party should be used as a pretext for avoiding the reparation promised. On the other hand to insist on reparation as a consideration for a promise to abandon criminal proceedings is a serious abuse of the right of private prosecution. The citizen who proposes to vindicate criminal law must do so wholeheartedly in the interests of justice, and must not seek his own advantage. It only remains to say that such agreements 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". The next case to be referred to is London & Lancashire Insurance Co. Ltd. v. Binoy Krishna Mitra (A.I.R. 1945 Cal. 218), Pal, J. summarised the principles laid down in earlier decisions in England and India as follows: 1. (a) that the defence that the consent was caused by threat of prosecution should be kept distinct from the other defence that the promise was given because it was agreed that there would be no criminal prosecution; the first relates to the method of procurement of the contract; the second relates to the substance or purpose of the contract; (b) Consent caused by threat will at the worst, mean. (i) consent caused by coercion or undue influence the contract will only be voidable, (ii) consent given because of the agreement not to prosecute will render the resulting contract void; 2. (i) consent caused by coercion or undue influence the contract will only be voidable, (ii) consent given because of the agreement not to prosecute will render the resulting contract void; 2. that in order to amount to a defence on the ground of illegality attached to the substance or purpose of the contract, there must be an agreement not to prosecute, an agreement to stifle prosecution; 3. that such an agreement may either be express or implied; but from its very nature such an agreement is seldom set out on paper; 4. that whether or not there was such an agreement is always a question of fact to be determined by the Court; 5. that when the agreement set up is an implied one to be inferred from the circumstances, such circumstances ought to be shown leading to the irresistible inference that such a contract was in fact made; (b) that in weighing the circumstances in cases where the act involves both a criminal offence and a tortious liability it should be remembered, [i] that the injured is entitled to a reparation; [ii] that reparation is a duty which the offender owes quite independently of his fear of prosecution; [iii] that reparation may legitimately and reasonably affect the mind of the person wronged; [iv] that law encourages reparation; law certainly is not anxious to discourage reparation; and [v] that where there is a debt actually due, the creditor may legitimately make use of threats of prosecution in order to induce the offender to give security for the debt." 9. As has been pointed out above, the question whether or not there was an agreement to stifle prosecution in any particular case, will always be a question of fact. Remembering that such an agreement will seldom be set out on paper and perhaps will more often than not be only an implied one, the Court will always have a difficult task in arriving at a decision on the point. The difficulty is further enhanced by the recognition accorded to two conflicting interests, viz., (1) the individual interest of the injured and (2) the interest of society. No hard and fast rule can be conceived of in this respect and perhaps it is not yet possible to lay down any canon of valuing these conflicting and overlapping interests. The difficulty is further enhanced by the recognition accorded to two conflicting interests, viz., (1) the individual interest of the injured and (2) the interest of society. No hard and fast rule can be conceived of in this respect and perhaps it is not yet possible to lay down any canon of valuing these conflicting and overlapping interests. Experience in this field has not yet been sufficient so as to be formulated into a rule of law. Ramachandra Laxman and others v. The Bank of Kohapur (A.I. R.1952 Bom. 315) is a case decided by the High Court of Bombay. The 1st defendant, an employee of a Bank misappropriated a sum of money and when this was discovered, his aunt and her adopted son created an equitable mortgage of their property in favour of the Bank for the sum misappropriated. The Bank sued for recovery of money and the suit was decreed repelling the defence contention that the mortgage was created to stifle a prosecution. On appeal the decision of the trial court was confirmed. Mr. Justice Bhagawati (as he then was) considered all the leading cases on the point and gave the following dictum: "It is not enough to establish that there was a pre-existing debt nor is it enough to establish that besides the pre-existing debt there was also a threat of criminal prosecution These circumstances by themselves would not be enough There should be in addition to those circumstances an agreement on the part of the plaintiff not to prosecute, a contract whereby he agrees as a part of the consideration either not to bring or to discontinue criminal proceedings for some alleged offence, and unless and until the defendant is in a position to establish any such contract, a mere threat of criminal proceedings or pressure or undue influence or intimidation would not afford a valid defence to the suit" The evidence has to be considered in the light of the principles laid down in these decisions. 10. The question whether the dropping of the criminal proceedings was a matter of bargain between the parties and the same constituted a part of the consideration for Exts. XXVI and B is, as stated earlier, one of fact. 10. The question whether the dropping of the criminal proceedings was a matter of bargain between the parties and the same constituted a part of the consideration for Exts. XXVI and B is, as stated earlier, one of fact. Before considering the evidence on the point it may be stated that the 1st plaintiff unambiguously stated in cross-examination that all the negotiations preceding the execution of the deeds were carried on by defendants 2 and 3 and that he had nothing to do with the same. Defendants 2 and 3 were not examined by the plaintiffs. This omission appears to be deliberate and not due to inadvertence. The subsequent conduct of defendants 2 and 3 was totally inconsistent with the case put forward by the plaintiffs. Some time after the execution of Exts. XXVI and B, defendants 2 and 3 approached the Bank with a request for sanctioning an overdraft upto Rs. 10,000. Ext. II dated 11-4-1947 is the letter sent by them to the Managing Director of the Bank and it was in these terms: "When our transactions were closed it was agreed that we would be helped in several respects. When Thommi talked to you about this matter you had promised that you would do the needful a little later. Things happened like this due to unfavourable times and we have given all our properties as security to you It is your duty to help and encourage a trader in distress. You know that we had no dealing with any other Bank and that other Banks are not therefore likely to help us. We have to do some business to earn money so as to repay you. We regret to inform you that if you do not help us out of generosity and goodness of heart, we may not be able to carry on business or repay the amount we owe. We therefore request you to help us by allowing us overdraft facilities for at least Rs. 10,000." (translation] There is no reference in Ext. II to the alleged agreement to drop the criminal proceedings or even a suggestion that Exts. XXVI and B were vitiated in any manner. Ext. II was written nearly two months after the two deeds in question. Defendants 2 and 3 got Pw.1 who was acting as the Bank's counsel in the criminal proceedings to recommend this request for overdraft. II to the alleged agreement to drop the criminal proceedings or even a suggestion that Exts. XXVI and B were vitiated in any manner. Ext. II was written nearly two months after the two deeds in question. Defendants 2 and 3 got Pw.1 who was acting as the Bank's counsel in the criminal proceedings to recommend this request for overdraft. Pw.1 wrote at the bottom of the letter as follows: "This petition is forwarded through the Alwaye Branch. Forwarded to the Managing Director, Catholic Union Bank, Mala, for favour of consideration". In view of Ext. II it would have been very inconvenient for the plaintiffs to examine defendants 2 and 3. In fact Ext. II was not the only impediment in the way. As part of the settlement with the Bank, Thommi, the 3rd defendant, had transferred ownership of car registered in his name to the Bank and this was taken back on hire-purchase by him, the 2nd defendant giving a letter of guarantee. The Bank filed a suit as O. S. No. 114 of 1122 against defendants 2 and 3. Though defendants 2 and 3 raised a number of contentions, there was no hint in their written statement that the transaction was vitiated in any manner. O. S. No. 114 was decreed in terms of the plaint and Ext. XIII is copy of the judgment. The plaintiffs filed O. S. No. 5 some months after the institution of O. S. No. 114 of 1122. In view of these facts it is clear that the omission of the plaintiffs to examine defendants 2 and 3 was deliberate. Of the six persons who joined in the execution of Exts. XXVI and B, defendants 2 and 3 alone had taken part in the negotiations culminating in the execution of the deeds and they were the persons most competent to give evidence in support of the plaintiff's case regarding the agreement to drop the criminal proceedings. They were not examined and this fact has to be borne in mind in considering the weight of the evidence adduced by the plaintiffs. 11. The first plaintiff was examined as Pw. 7 and by a number of leading questions he was made to say that the agreement to discontinue the criminal proceedings formed part of the consideration for Exts. They were not examined and this fact has to be borne in mind in considering the weight of the evidence adduced by the plaintiffs. 11. The first plaintiff was examined as Pw. 7 and by a number of leading questions he was made to say that the agreement to discontinue the criminal proceedings formed part of the consideration for Exts. XXVI and B. In view of his admission that he did not take part in the negotiations with the Bank and that his information regarding the same was obtained from defendants 2 and 3, his evidence is of no use for the plaintiffs. One thing however is clear from his -evidence and that is, that he has no regard for truth. It was stated in Para.4 of the plaint in O. S. No. 5 that defendants 2 and 3 had certain transactions with the Bank but that none of the plaintiffs had any responsibility or liability in respect of the same. Pw. 7 reiterated this in his chief examination also but when confronted with Ext. X he had to admit that the same was executed by him and that he was liable to the Bank in the sum of Rs. 5,000. It has been found by the court below that the second plaintiff had also rendered himself liable in the sum of Rs. 5,000 under Ext. XV. The readiness with which a false averment was made in the plaint casts suspicion on the truth of the plaintiffs' case. 12. The principal witness for the plaintiffs is Pw. 1, an Advocate practising in the Magistrate's court at Alwaye. It was Pw.1 who drafted the criminal complaint filed by the Bank. It may be stated that his claim for remuneration for filing the complaint was not settled to his satisfaction. He admitted that he was paid only Rs. 200/- by the Bank although he had demanded a higher sum as remuneration. He was asked whether his demand was not for Rs. 500/- and he replied that he could not remember the exact figure but that his claim was not fully met. He further admitted that he recommended the application Ext. II sent by defendants 2 & 3 for overdraft. That was not the only application for loan that he recommended. Ext. III is another letter of recommendation sent by him to the Bank. He further admitted that he recommended the application Ext. II sent by defendants 2 & 3 for overdraft. That was not the only application for loan that he recommended. Ext. III is another letter of recommendation sent by him to the Bank. He admitted that such recommendations were made by him without ascertaining the financial position of the parties who applied for loans and that he did not consider it improper to recommend applications for loans without satisfying himself about the solvency of the parties. He also added that no recommendation of his has been accepted by the Bank. In view of these and other matters which will be referred to later, we are not inclined to place much reliance on his testimony. He was asked in chief examination as to who told defendants 2 and 3 that the criminal action would not be proceeded with if the mortgage deed and the other deeds were executed. It may be mentioned that before this question was put, Pw.1 had not said that anybody had said so to defendants 2 and 3. His answer was "I said so since Joseph and the Managing Director had said so to me". Joseph referred to in this answer is the Secretary of the Bank who was examined as Dw. 4. Dw. 4 denied having said so and the Managing Director was not examined to prove that he made such an offer through Pw. 1. Another answer by Pw.1 touching the alleged agreement is that the deeds were executed to bring the criminal action to an end. This is all that he speaks about the alleged agreement which is pleaded by the plaintiffs and the rest of his deposition is mainly about the allegation of coercion, threat etc. There is discrepancy between the versions given by him and Pw. 7 regarding what transpired before the execution of the deeds. Pw. 7 stated in chief examination that the 1st plaintiff and defendants 2 and 3 were called to the police station. The 1st plaintiff has no such case and he asserted that defendants 2 and 3 and Pw.1 went to the police station. Pw.1 admitted that he was not present when the Inspector of Police discussed the matter with defendants 2 and 3. The 1st plaintiff has no such case and he asserted that defendants 2 and 3 and Pw.1 went to the police station. Pw.1 admitted that he was not present when the Inspector of Police discussed the matter with defendants 2 and 3. In answer to a question whether he was not satisfied that it was advantageous for defendants 2 and 3 to close the transaction by executing the deeds, Pw.1 said that he advised them to execute the deeds. Pw.1 further admitted that he did not talk to any one of the plaintiffs regarding this matter. Finally he said that in his opinion Exts. XXVI and B were fair and just if defendants 2 and 3 owed such an amount to the Bank. Thus all that Pw.1 speaks regarding the alleged agreement is that pursuant to what the Secretary and the Managing Director told him he mentioned to defendants 2 and 3 that criminal proceedings would be dropped if the deeds were executed. We are not inclined to place much reliance on his testimony on this point, especially as he had a grouse against the Bank at the time he gave his deposition. Pw. 3 is another witness examined to prove the alleged agreement. He deposed that he was a councillor of the Alwaye Municipality from 1115 to 1123 and that Pw.1 was the Chairman of the Municipality during this period, that he used to go to the Municipal Office fairly often and that on one such occasion he heard the Police Inspector who was present there asking defendants 2 & 3 to execute a deed for the amount due to the Bank. He does not speak about the alleged agreement and it appears that he was examined to prove the allegation of coercion and threat. Pw. 4 is the Inspector of Police before whom the complaint was filed. He also does not speak about the agreement alleged in the plaint. 13. The burden of proving that Exts. XXVI and B were executed pursuant to an agreement that the criminal proceedings would be discontinued if the deeds were executed is on the plaintiffs and the only evidence on the point is that of Pw 1. In the circumstances stated above we are unable to find this point in favour of the plaintiffs on the sole testimony of Pw. 1. In the circumstances stated above we are unable to find this point in favour of the plaintiffs on the sole testimony of Pw. 1. Reference has been made to the fact that defendants 2 and 3 who were the persons most competent to give evidence on the point were not examined. The learned judge observes that if the 1st defendant had not agreed to withdraw the criminal complaint, plaintiffs 3 and 4 would never have executed Ext. XXVI and B. This is a surmise not based on evidence. Plaintiffs 3 and 4 who gave their immovable properties as security were also not examined. This is a serious omission because the question whether plaintiffs 3 and 4 were aware of the criminal complaint or any agreement regarding the same is a material one. There is no evidence that they were aware of this & this means that they could not have been parties to the alleged agreement to stifle the prosecution. As pointed out by Lord Atkin, it is impossible for such a contract to be made unless both parties knew of the proposed or actual proceedings. It is also necessary that each party should understand that the one is making his promise in exchange or part exchange of the promise of the other not to prosecute or continue prosecuting. Such evidence is lacking in this case. The plaintiffs have thus failed to discharge the onus of proof. 14. Learned counsel for the respondents argued that the agreement pleaded should be presumed to be true on account of the fact that plaintiffs 3 & 4 who had nothing to do with the original transaction gave their properties as security. Reliance was placed on the observations of Cotton, L.J. in Flower v. Sadler (1883) 10 Q.B.D. 572 that when security is given by an outsider who is under no existing obligation, the consideration could be nothing else but withdrawal of the criminal case and as such the security is not entertainable in law. From the mere fact that plaintiffs 3 and 4 were not liable to the Bank it cannot be held that there was an agreement to discontinue the criminal proceedings. In the case reported in A. I. R.1952 Born. 315 the persons who gave security were strangers to the original transaction and yet the court found that the plea under S.23 of the Contract Act was not sustainable. In the case reported in A. I. R.1952 Born. 315 the persons who gave security were strangers to the original transaction and yet the court found that the plea under S.23 of the Contract Act was not sustainable. So far as this case is concerned it is doubtful whether the properties given as security by plaintiffs 3 and 4 were acquired by them with their own funds. No doubt the title deeds stand in their names but valuable buildings have been erected on the land and at the time the buildings were put up, the 1st plaintiff and defendants 2 and 3 were having a thriving business. It is also significant to note that defendants 2 and 3 referred in Ext. II to the properties given as security as 'our property'. Some other circumstances have also been referred to by the learned Judge in Para.19 of the judgment. He observes that plaintiffs 1 and 2 had nothing to do with the trade of defendants 2 and 3. In the earlier part of the judgment he has found and correctly so that plaintiffs 1 and 2 were each liable to the Bank in the sum of Rs. 5,000/-. Another circumstance relied on is that the criminal complaint was filed without any bonafides. It is true that the investigation by the Police as well as later enquiries by the Bank disclosed that there was no theft of the pledged articles as alleged in the complaint. The Secretary of the Bank gave a statement before the Police that further enquiries disclosed that it was not actually a case of removal of goods from the godown but that defendants 2 and 3 colluded together to defraud the Bank by showing in the records that more goods were pledged than were actually stocked in the godown. Even assuming that the prosecution was launched without bona fide enquiries, this does not prove that there was an agreement to discontinue the criminal proceedings on getting security for the amount due. It may be that the plaintiffs and defendants 2 and 3 hoped that the criminal proceedings would be dropped if they gave security but that could only be motive and not the consideration for the contract as pointed out in the decisions cited above. It may be that the plaintiffs and defendants 2 and 3 hoped that the criminal proceedings would be dropped if they gave security but that could only be motive and not the consideration for the contract as pointed out in the decisions cited above. There is also the circumstance that the Secretary of the Bank gave a statement to the Police soon after the execution of the two deeds that the criminal proceedings need not be continued. In the absence of evidence that discontinuance of the criminal proceedings loomed as part of the bargain in the negotiations preceding the execution of the deeds this does not lead to the conclusion that there was such an agreement. The other circumstances referred to were in support of the conclusion that the deeds were vitiated by coercion and undue influence. 15. There are however several circumstances which support the appellant's case. Reference has already been made to the subsequent conduct of defendants 2 and 3, who asked for further overdraft from the Bank. Defendants 2 and 3 who were carrying on the trade after their father stopped his business, were the only earning members of the family at that time. A fairly large sum was due from them to the Bank and the Bank agreed to receive payments in instalments spread over a period of 10 years. There must have been some talk of giving further help to defendants 2 and 3. In fact in answer to a question on this point, the 1st plaintiff stated as follows: "The 1st defendant Bank said "You settle these transactions now; we will help you in future" Believing this Exts. A (XXVI] and B were executed." No complaint was made by the plaintiffs to anybody that the Bank had induced to execute the deeds in the manner stated in the plaint. Pw.1 in whom they seem to have reposed confidence advised them that it was advantageous to close the civil liability in this manner. The delay in filing the suit is another circumstance which has not been explained. The learned judge observes that they had probably to raise money for the litigation. The parties had no such case and the filing of a suit informa pauperis would not have required a big sum. The delay in filing the suit is another circumstance which has not been explained. The learned judge observes that they had probably to raise money for the litigation. The parties had no such case and the filing of a suit informa pauperis would not have required a big sum. Reference has also been made to the failure of defendants 2 and 3 to refer to any invalidating circumstance in their written statement in the suit on the hire-purchase agreement. The idea of instituting a suit of this nature seems to have originated only after the Bank refused the request made by defendants 2 and 3 for further credit facilities - a request which was recommended by Pw. 1. Thus, while the evidence adduced by the plaintiffs is insufficient to lead to the irresistible conclusion that Exts. XXVI and B were executed as a result of an agreement to discontinue the criminal proceedings, the circumstances referred to above show that the plaintiffs' case cannot be true. The conclusion reached by the court below cannot in the circumstances be upheld. 16. The only question which remains for consideration is whether Exts. XXVI and B were executed as a result of coercion or undue influence. The trial court considered the two questions arising in the suit together and recorded a finding that the two deeds were "brought into existence under the circumstances mentioned in the plaint". It is not clear whether the court below referred to undue influence or coercion or both as grounds invalidating the two deeds. Reference has already been made to the fact that the pleading on this point is rather vague. What is suggested in the plaint is that the authorities of the Bank persuaded the Police to threaten the plaintiffs and that the deeds were executed as a result of such threats and pressure exerted by the Police. The case developed in evidence is that the Inspector of Police Pw. 4 threatened defendants 2 and 3 with arrest and detention in the lock-up if security was not given to the Bank. Here again the omission to examine defendants 2 and 3 is a very material one. Of the six executants of the deeds, the 1st plaintiff alone has given evidence and he admitted that he did not meet Pw. 4. 4 threatened defendants 2 and 3 with arrest and detention in the lock-up if security was not given to the Bank. Here again the omission to examine defendants 2 and 3 is a very material one. Of the six executants of the deeds, the 1st plaintiff alone has given evidence and he admitted that he did not meet Pw. 4. According to the 1st plaintiff defendants 2 and 3 who were sent for by the Police went to the Police Station accompanied by Pw.1 and it was there that they agreed to execute the deeds. Pw.1 has deposed that the Inspector said that he would charge the accused and proceed with the case and that the Secretary of the Bank said that he was prepared to give evidence. Pw.1 added that the Inspector told them that if documents were not executed and the transaction closed, the next step would be the arrest of the accused and defendants 2 and 3 believed and feared that they would be arrested. Towards the close of the chief examination Pw.1 was asked this question. "I put it to you that the reasons for executing the deeds were fear that they would be arrested and kept in the lock-up and the pressure executed by the Police. Can you say whether this is correct?" (translation). His answer was "The Police case was the reason for the ladies and the 1st plaintiff to join in the execution of the deeds" (translation). In cross-examination he admitted that he did not threaten defendants 2 and 3 and that no one else did so when he was present. He further stated that in his opinion Exts. XXVI and B were fair and just if defendants 2 and 3 owed the amount to the Bank and that he advised the parties that it was advantageous to settle the transaction in that manner. However he added that the parties were influenced by fear in executing the documents and that this was his surmise and not guess. The Inspector of Police Pw. 4 said that he did not threaten defendants 2 and 3 or exert any kind of pressure on them. No doubt he told them that when a case was registered and found true on investigation the next step was to arrest the accused. Pw. 3, who said that when he casually went to the Municipal Office one evening he saw Pw. No doubt he told them that when a case was registered and found true on investigation the next step was to arrest the accused. Pw. 3, who said that when he casually went to the Municipal Office one evening he saw Pw. 1, Pw. 4, Dw. 4 and defendants 2 and 3, was more specific than Pw. 1. His version is that the Inspector of Police told defendants 2 and 3 that if the documents were not given to the Bank they would be arrested the next day. His impression was that defendants 2 and 3, were frightened. It is too much to believe that Pw. 3 who was there casually could remember everything that was said on the occasion. We have indicated earlier that we are not inclined to place much reliance on the testimony of Pw. 1. Defendants 2 and 3 were the most competent persons to say what the threats were, who made them and how the same reacted on their minds. There is no evidence that the Inspector of Police contacted the plaintiffs. Plaintiffs 3 and 4 who gave their immovable property as security should have been examined in the case. As the evidence now stands it is not certain that they were even aware of the prosecution. No doubt the 1st plaintiff deposed that a Head Constable and two policemen came to the residence of the third defendant to ask why they were not executing the documents as agreed to already. This suggests that the agreement to execute the documents had already been reached. The testimony of the 1st plaintiff is also to the same effect. It cannot therefore be said that this visit of the police-men, even if true, amounted to coercion. It has also to be remembered that the plaintiffs had influential friends and relations. The 1st plaintiff admitted that he mentioned this matter to some of his relations. The father of the fourth plaintiff was an Officer-in-charge of a Police Station. In these circumstances it is difficult to accept the case of coercion pleaded by the plaintiffs. The documents cannot be said to fall into the class of unconscionable transactions. Defendants 2 and 3 who were carrying on business were the sole earning members of the family and the consideration for the deeds was the debt incurred for the purpose of the trade. The parties obtained some advantage under Exts. The documents cannot be said to fall into the class of unconscionable transactions. Defendants 2 and 3 who were carrying on business were the sole earning members of the family and the consideration for the deeds was the debt incurred for the purpose of the trade. The parties obtained some advantage under Exts. XXVI and B as the Bank agreed to receive payment in instalments spread over a period of ten years. Even assuming that there was a state of fear, that by itself is not sufficient to hold that there was undue influence. As observed by the Allahabad High Court in Gobardhan Das v. Jai Kishan Das 22 All. 224: "A state of fear by itself does not constitute undue influence. Assuming a state of fear amounting to mental distress which enfeebles the mind, there must be action of some kind, the employment of pressure or influence by or on behalf of the other party to the agreement". This no doubt was a decision under the old section but Pollock and Mulla in their Commentary on the Indian Contract Act observe that the decision would be the same under the new section. 17. We have referred to the subsequent conduct of the parties after the execution of the two deeds which is in consonance with the first plaintiff's case that the two deeds were executed as the Bank agreed to grant credit facilities in future. These, as well as the delay in filing the suit are circumstances which render the defence case probable. In fact these circumstances go further and establish acquiescence amounting to ratification of the transaction. We are satisfied that the court below was not right in coming to the conclusion that the documents were vitiated by undue influence or coercion. The two decrees must therefore be set aside. 18. In the result we set aside the decrees in the two suits and dismiss O.S. No. 5 of 1125 and allow O. S. No. 32 of 1951. As we do not consider it proper to saddle the respondents with costs in both the suits, we allow the appellant costs in both courts in O.S. No. 32 of 1951 and direct the parties to bear their costs in O.S. No. 5 of 1125. Appeals are allowed as indicated above. Allowed.