Judgment :- 1. Second appeal by the defendant. 2. Plaintiff was the Secretary of the S.N.D.P. Sakhayogam, Kadavoor, and Dw. 4 its President at the relevant time. Suspecting misappropriation of certain sums collected for the Sakhayogam, Dw. 4 preferred a complaint before the Police and the plaintiff was arrested on October 27, 1950. According to the plaintiff, at the intervention of the defendant and certain others, and to get released from arrest, he undertook to pay whatever was found due to the Sakhayogam on a scrutiny of its accounts and as security therefor he entrusted Rs. 500/- to the defendant directing him to pay the same or part thereof to Dw. 4 if he became convinced from the accounts that such amount was really due from the plaintiff. On October 30, 1950, the Police referred the complaint to the Magistrate as not seen to be true; and on April 30, 1951, the Magistrate dropped the case, after notice to Dw. 4, as not fit to be proceeded with. 3. On December 30,1950, the plaintiff issued a notice, Ext. D3, to the defendant demanding return of the amount entrusted. Admittedly the defendant neither replied to nor complied with that demand. On the other hand, he gave the amount to Dw. 4 on January 23,1951, and got the receipt, Ext. II. In the present suit the plaintiff seeks to recover from the defendant the amount entrusted by him. The defendant pleaded to have paid the amount to Dw. 4 in the presence of the plaintiff on January 23,1951. Though the defendant in his written statement averred in unambiguous terms that the money entrusted to him by the plaintiff had nothing to do with the criminal case, but was intended only to clear off the plaintiff's liability to the Sakhayogam, he appears to have contended at the trial that it was given with the object of stifling a criminal prosecution and therefore could not be claimed back in a Court of law. The Courts below concurred to find the plea of payment to Dw. 4 in the presence of the plaintiff untrue, the receipt, Ext. II, unacceptable and the entrustment to defendant unaffected by illegality and therefore to decree the suit. Hence this second appeal. 4. On the facts admitted in the case it is clear that the plaintiff had entrusted Rs. 500/- to the defendant authorising him to pay it to Dw.
4 in the presence of the plaintiff untrue, the receipt, Ext. II, unacceptable and the entrustment to defendant unaffected by illegality and therefore to decree the suit. Hence this second appeal. 4. On the facts admitted in the case it is clear that the plaintiff had entrusted Rs. 500/- to the defendant authorising him to pay it to Dw. 4 on his behalf, and that long before such payment was made the plaintiff had cancelled the authority and demanded return of the amount by a registered notice, Ext. D3. Thereafter the defendant's obligation was only to return the plaintiff's amount to him and leave the affairs between the plaintiff and Dw. 4 to be settled between themselves. If he had made the payment to Dw. 4 after receipt of Ext. D3, it was unauthorised and not binding on the plaintiff. 5. Counsel for defendant contended strenuously that the object of the entrustment was to stifle a criminal prosecution and therefore the plaintiff is not entitled to relief. The plea in the written statement, verified duly for the truth of its contents, is that the entrustment of money had nothing to do with the prosecution. Now he is vehement that it was for the purpose of stifling the prosecution. The two pleas are totally inconsistent with each other. 6. Admittedly, the defendant had nothing to do with the prosecution of the plaintiff. The payment to stifle prosecution must have been to Dw. 4 who moved the Police in the matter. In Bhowanipur Banking Corporation, Ltd. v. Sreemathi Durgesh Nandini Dassi (AIR. 1941 PC. 95) Lord Atkin has observed: "...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....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." Here, the payment was not to Dw. 4, nor was the entrustment to the defendant to pay Dw. 4 straightaway as an inducement to withdraw from the criminal case. The entrustment was to pay only if, on a scrutiny of accounts, the plaintiff's liability for the amount was found established.
4, nor was the entrustment to the defendant to pay Dw. 4 straightaway as an inducement to withdraw from the criminal case. The entrustment was to pay only if, on a scrutiny of accounts, the plaintiff's liability for the amount was found established. It cannot then be said that the consideration for the entrustment was a withdrawal of the prosecution. In Ouseph Poulo v. Catholic Union Bank (1964 KLT. 398) the Supreme Court has cautioned that in dealing with agreements to stifle criminal prosecutions, "it is however necessary to bear in mind the distinction between the motive which may operate in the mind of the complainant and the accused and which may indirectly be responsible for the agreement and the consideration for such an agreement. It is only where the agreement is supported by the prohibited consideration that it falls within the mischief of the principle that agreements which intend to stifle criminal prosecutions are invalid. The sequence of events, no doubt, has relevance in dealing with this question; but from mere sequence it would not be safe to infer the existence of the prohibited consideration....If it is shown that there was an agreement between the parties that a certain consideration should proceed from the accused person to the complainant in return for the promise of the complainant to discontinue the criminal proceedings, that clearly is a transaction which is opposed to public policy... ... Mr. Desai argues, and we think rightly, that where the validity of an agreement is impeached on the ground that it is opposed to public policy under S.23 of the Act, the party setting up the plea must be called upon to prove that plea by clear and satisfactory evidence. Reliance on a mere sequence of events may tend to obliterate the real difference between the motive for the agreement and the consideration for it. Did the parties offer to give security and execute the documents in consideration for the withdrawal of the criminal complaint by the Bank? - that is the question which has to be decided " In the present case, the money was not to be paid to Dw. 4 if he withdrew his criminal complaint. It was to be paid to him only if his claim against the plaintiff was found established on verification of the accounts of the Sakhayogam.
- that is the question which has to be decided " In the present case, the money was not to be paid to Dw. 4 if he withdrew his criminal complaint. It was to be paid to him only if his claim against the plaintiff was found established on verification of the accounts of the Sakhayogam. It cannot then be said that the money entrusted to the defendant formed the consideration for a withdrawal of the complaint by Dw. 4. At best, it may be said that the possible withdrawal of criminal proceedings by Dw. 4 was the motive for the entrustment. But that would not taint the entrustment with an illegality that would bar the plaintiff's claim to return the amount. 7. Further, it is settled law that, even in cases of contracts for an illegal object, it is open to a party to cancel it before the object is achieved and claim return of the amount or property delivered under the contract. The following passage in the commentary on the Indian Contract Act by Pollock and Mulla (8th edn. pages 391-2) is pertinent here: "If the illegal purpose or any material part of it has been performed the money paid cannot be recovered back, for then the parties are equally in fault, and in pari delicto melior est conditio possidentis. But according to the English rule, money paid in consideration of an executory contract or purpose which is illegal may be recovered back upon repudiation of the transaction, as upon a failure of consideration. The English rule has been followed in a large number of cases in India, and is reproduced as regards the transfer of property in S.84 of the Trusts Act.... In cases where the illegal purpose has not been accomplished, English law examines the reason which led to the failure of the unlawful project. There must be repentance by the plaintiff, and where the scheme has been frustrated by the vigilance of third parties, or a change of mind on the part of the defendant, the plaintiff cannot recover. In India it suffices for the plaintiff to establish that the illegal purpose has not been achieved for whatever cause." In Petherperumal Chetty v. Muniandi Servai (35 I.A. 98,103) the Privy Council has observed: " ...
In India it suffices for the plaintiff to establish that the illegal purpose has not been achieved for whatever cause." In Petherperumal Chetty v. Muniandi Servai (35 I.A. 98,103) the Privy Council has observed: " ... the purpose of the fraud having not only not been effected, but absolutely defeated, there is nothing to prevent the plaintiff from repudiating the entire transaction, revoking all authority of his confederate to carry out the fraudulent scheme, and recovering possession of his property." It is then clear that even if the object of the entrustment was to stifle prosecution the plaintiff was entitled to cancel it before the object was carried out, and recall the money entrusted therefor. That he did in time under Ext. D3. If the object of the entrustment to the defendant was to dissuade Dw. 4 from continuing the prosecution it cannot have been carried out before the Magistrate dropped the proceedings or at least the amount was paid to Dw. 4. The Magistrate dropped the case only on April 30,1951. Till then Dw. 4 could have moved for proceeding with the prosecution. The amount was paid to Dw. 4 on January 23,1951 only. But the plaintiff has revoked the arrangement and demanded return of the amount much earlier - on December 30,1950. As observed pertinently by the Munsif "Defendant is an ... advocate who knows what he ought to do". And, if he chose to act against his duty he cannot by such act avoid his duty to perform the right. 8. Kamini Kumar Basu v. Birendra Nath Basu (57 I.A. 117), Bhowanipur Banking Corporation, Ltd. v. Sreemathi Durgesh Nandini Dassi (AIR. 1941 P.C. 95) and Narasimha Raju v. Gurumurthy Raju (AIR. 1963 SC. 107) relied on by counsel for the appellant were cases where the test of consideration was satisfied and the demand was made after the object was carried out. They can therefore be of no assistance to the defence in this case. 9. In the circumstances, the decree of the Courts below appears to me correct. This appeal is dismissed with costs. Dismissed.