P L D 1962 (W (PLP)

WAHIDUDDIN AHMED, J.‑The facts out of which this first appeal arises are as follows :‑ Muhammad Rafi Qureshi the respondent is carrying on business under the name of Marfi Electric Trading Co., in Karachi, and supplies electrical goods to his customers. Prior to this the respondent was carrying on this business in the name of Laxmi Electric Company. Vressrs Dorabji Edulji and Anupchand Kirparam Mehta in 1949 were one of the customers of the respondent. They used to buy goods from him on cash and also on credit. According to the respondent, in the year 1949, these two gentlemen along with Shaikh Muhammad Obaid, the appellant, approached the respondent for the supply of electrical goods in connection with a joint contract obtained by them for installation of electrical works in the Pakistan Industrial Exhibition held in Karachi. They represented that they had taken that work jointly and the respondent should supply the goods to Dorabji on their account. They further promised that they would pay the bills of the respondent on getting payment from the Exhibition. The respondent's case is that the appellant and the above mentioned two gentlemen, during the period commencing from the Ist of July 1949 to 31st of December 1949, purchased electrical goods in respect of their joint undertaking as electrical contractors of the value of Rs. 8,721‑8‑

3. He further alleged that under an agreement dated the 10th of February 1951, the appellant and the other two gentlemen, described above, undertook to liquidate the said sum in the manner set out in the agreement. According to the respondent, out of this amount the appellant paid Rs. 3,500 only on account and has failed to pay the balance of the sum of Rs. 5,221‑8‑0.

3. As the balance of the amount was not paid by the appellant, the respondent brought Civil Suit No. 225 of 1953 for the recovery of the balance of the amount on the Original Side of the Chief Court of Sind. This suit was later on transferred to the District Court, Karachi, and was numbered as Suit No. 219 of 1956. The suit was resisted by the appellant. In defence, the appellant denied that he had approached the respondent In the company of Dorabji and Anupchand for the supply of electrical goods for the electrification of the Pakistan Industrial Exhibition. He also denied that he obtained any contract jointly with these persons from the Pakistan Industrial Exhibition. He pleaded that Dorabji and Anupchand were doing business independently and any goods purchased by them was on their own account. As regards the agreement dated 10th of February 1950, the appellant pleaded that it was brought about by undue influence and is therefore void. He alleged that the respondent was making some demands from Dorabji and Anupchand and with a view to bring about pressure, made a report to the police for criminal prosecution of Dorabji and Anupchand. The respondent also impleaded the appellant as party to the criminal proceedings as he thought that the money could be easily realised from the appellant. He alleged that the police officer brought so much pressure upon him under the threat of criminal prosecution that the appellant had to sign the document dated the 2nd of February 1950 and the agreement dated the 10th of February 1950. On these grounds tie appellant contended that the respondent had no claim against him and the suit should be dismissed. On the pleadings of the parties, the following issues were struck in the original suit:- (1) Whether there was any joint undertaking between the defendant, Dorabji and Anupchand and what were its terms. (2) Whether Dorabji and Anupchand were authorised to make purchases of the goods in suit from the plaintiff for the joint undertaking. (3) Whether the signatures on list dated 2‑2‑50 were obtained under undue influence. (4) Whether the agreement dated 10‑2‑50 was brought about under undue influence and is void. (5) Whether Dorabji and Anupchand are necessary parties to this suit. (6) To what amount, if any, is the plaintiff entitled. (7) What should the decree be. After hearing the evidence of the parties, Syed Iftikhar Hussain, the First Additional District Judge, Karachi, decreed the respondent's claim by judgment dated the 10th of November 1958. The finding of the learned Subordinate Court is that the appellant was a partner of Dorabji Edulji and Anupchand Kirparam Mehta and in partnership they obtained a joint contract for the electrification of the Pakistan Industrial Exhibition. He further found that the list dated the 2nd of February 1950 (Exh. P/2) and the agreement dated the pith of February 1950, (Exh. P/3) were not procured by undue influence. He further held that Anupchand Kirparam Mehta and Dorabji Edulji were not necessary parties to the suit and it was open to the respondent to institute the suit for tie recovery of the balance of the value of the goods from one of the partners. In conclusion, the learned Additional District Judge decreed the respondent's claim with costs. The appellant in this first appeal has challenged the finding of the learned Subordinate Court both on questions of law and facts. Mr. Riaz Ahmed has strenuously contended before us that the finding of the learned Subordinate Court that the appellant was the partner of Messrs Dorabji Fdulji and Anupchand Kirparam Mehta is not based on sufficient evidence on the record. The case of the respondent in this respect is supported by his own evidence and the evidence of Dorabji Edulji, who was examined in the trial Court as P. W.

2. Dorabji Edulji made a categorical statement that at the time of tae Pakistan Industrial Exhibition in 1949 Anupchand Mehta, Obedullah and he himself entered into a contract to electrify the Exhibition. He further stated that they all went together with the appellant to buy material for that work. According to him, it was agreed with the respondent that he would send chits for goods from the Exhibition ground and collect the goods from Qureshi Stores. He further stated that he was promised equal share in the profit of the Exhibition. He alleged that he looked after the work at the Exhibition and Obedullah and Anupchand used to help him. He is supported by P. W. 1 Muhammad Rafiq, the respondent. Then Mr. Sadiq, learned counsel for the respondent referred us to the chits (Exhs. P/1 to P/115) on which the goods were supplied for the Exhibition work. These chits also include visiting cards of the appellant firm, Messrs Theopract Electric Engineering Works. He contended that the four visiting cards dated 27th October 1949, 28th October 1949, 27th November 1949 and 17th December 1949 could not be used unless the appellant was a party to the contract obtained from the Pakistan Industrial Exhibition. He further referred us to a bill produced by the appellant, Exh. P/9 which shows that on the 14th of January 1950, the respondent submitted a bill to the appellant in respect of the goods supplied in connection with the Pakistan Industrial Exhibition work. The learned counsel contended that the fact that this bill has come from the possession of the appellant and was not repudiated by him supports the contention of the respondent that the appellant was a partner in the joint undertaking in respect of the Pakistan Industrial Exhibition work. The appellant, on support of his contention, examined himself only as a witness in the case. He admitted in examination- in‑chief as D. W. 2, that Dorabji was his employee. He further admitted in cross‑examination that he maintained his shop accounts and recorded in the goods taken from other shop‑keepers. According to him, goods from Marfi Electric Trading Company were shown in his books, which also showed the payment made to the respondent against goods supplied. He further admitted that he had not produced any accounts in Court. He stated in cross‑examination that in or about 1950 or before that Dorabji joined his service. We have carefully considered the evidence of the parties on the question of the partnership of the appellant with Dorabji Edulji and Anupchand Kirparam Mehta in respect of the joint venture for the electrification of the Pakistan Industrial Exhibition and have come to the conclusion that the finding of the learned Subordinate Court that the appellant was a partner of Dorabji Edulji and Anupchand Kirparam Mehta is based on sufficient evidence. In our opinion, the fact that Dorabji Edulji was admitted to be an employee of the appellant shifted a heavy responsibility on him to show that he was not his partner in the joint venture. Besides, the circumstances that the appellant produced the bill (Exh. P/9) and had not repudiated it, supports the respondent's contention that he was a partner of the above two gentlemen. The further circumstance that the appellant had failed to produce his account books gives rise to an adverse presumption that if the account books had been produced, it would have supported the respondent's case. In these circum stances the contention of Mr. Riaz Ahmad that the finding of the learned Subordinate Court on the question of partnership with the above‑mentioned two gentlemen is wrong must fail. The next question for consideration in this appeal is whether the respondent from the 1st of July 1949 to 31st December 1949, supplied goods of the value of Rs. 8,721‑8‑3 in connection with the Pakistan Industrial Exhibition electrification contract. Mr. Riaz Ahmad has strongly urged before us that on the evidence on the record, it is sufficiently established that goods of the value of Rs. 4,390‑6‑4 were only supplied for the Pakistan Industrial Exhibition Work. In this connection he has referred us to a bill of the respondent (Exh. P/9) dated the 14th of January 1950. The contents of this bill proves that on the 14th of January 1950, the respondent informed the appellant on his verbal request the details of the goods that were supplied by him in connection with the Pakistan Industrial Exhibition, which were still unpaid. The learned counsel then referred us to the statement of P. W. 1 Muhammad Rafiq, the respondent, in cross-examination. The respondent admitted that Exh. P/9 bears his signature and it is in the name of Theopract Electric Engineering Company, and the claim was for Rs. 4,390‑6‑4 and it was included in his claim of Rs. 8,

721. He further admitted that he prepared this account on 14th January 1950 and he did not claim, under this bill, the whole amount of Rs. 8,

721. The appellant's counsel further referred us to the fist information report (Exh. D/1‑A) lodged by the respondent on the 20th of January 1950, at Police Station Mithadar, District Karachi. The first information report lodged by the respondent furnishes full information about the manner in which the claim of Rs. 8,752‑6‑10 was made against the appellant, Dorabji Edulji and Anupchand Kirparam Mehta. In the police report the respondent admitted that before September 1949 he supplied goods of the value of Rs. 4,326‑15‑6 to Dorabji Edulji and Anupchand Kirparam Mehta in the name of General Engineering Corporation. The allegations in para graphs 1 to 4 make it perfectly clear that the appellant had nothing to do with the supply of these goods and could not be held responsible for them. In the police report he alleged that in September 1949, these two persons accompanied by Mr. S. M. Obaid of Theopract Electric Engineering Works, Karachi came to him and all the three said that they had jointly taken the electrical contract of Pakistan Industrial Exhibition and repre sented that the contract was of considerable value and in order to have mutual facilities he should start supplying them goods and they would make cash payment to them as early as possible. According to the respondent's plea, in response, he supplied them with goods of the value of Rs. 4,425‑7‑4 at their request. He further alleged in this paragraph that the appellant and these persons thus managed to get the goods of the above mentioned value in the Exhibition account without paying its price to him. The respondent made the following material allegation in para. 6 of the police report: "That I have approached these persons several times for the payment of the account due in respect of the value of goods supplied to these persons in the above two accounts and with a view to gain time they kept on promising and now each of them is putting liability of payment on the other and thus refuse to pay my amount without any justification." If the police report is read with Exh. P/9 it is quite clear that only goods of the value of Rs. 4,390‑6‑4 were supplied for the Exhibition work to the appellant and the above‑mentioned two gentlemen. Therefore, the case set up by the respondent in the plaint that he had supplied goods of the value of Rs. 8,721‑8‑3 from 1st July 1949 to 31st December 1949, in connection with the Pakistan Industrial Exhibition Work is patently false, and could not be maintained if the appellant had not executed an agreement on the 10th of February 1950, admitting his liability to pay the whole of this amount. The most important question for consideration thus in this appeal is whether the agreement entered into between the parties on the 10th of February 19.40, is binding on the appellant or not. The appellant's case, as set up earlier, is that this document was obtained from him by police pressure and under undue influence. The learned Additional District Judge has disbelieved his case and held that it was not procured by undue influence. His observations on this question are as follows :‑ "When Dorabji and Anupchand Mehta who were business partners of the defendant, as averred by the plaintiff, were arrested, the defendant acknowledged his responsibility to pay, lest his friends shock suffer. I do not accept the statement that the list and the agreement were the result of undue influence. The defendant was never arrested. Moreover, the complainant had been dismissed as unproved on 29th January 1950. Anupchand and Dorabji Edulji were therefore at large. If 4 days later the defendant checked the list and signed it, it could not be as a result of pressure brought to bear on him. He signed it in all fairness to himself and to his business partners. By deliberately excluding the responsibility of Anupchand Mehta he enabled him to leave Pakistan with impunity. He, however, bound himself and Dorabji to the extent of Anupchand's interest also. Hansotia who is alleged to have been instrumental in Exh. P/2 being executed has not been summoned by this witness nor has any other person connected with the execution of this document been examined. No protest has been made against the alleged conduct of Hansotia at any time to the authorities for remedial action. Therefore, the plea of undue influence is a mere face saving device. What was the influence that compelled the defendant to execute Exh. P/3 12 days after the dismissal of the plaintiff's complaint. What compelled him to make the various payments in conformity with this agreement to the tune of Rs. 3,

500. Having acted on a contract which according to his light was voidable, he has set the seal of validity on it. I personally feel that he was all the time a free agent. The only com pulsion on the defendant was that of the moral obligation." Mr. Riaz Ahmed, the learned counsel for the appellant, has urged before us that the observations of the learned Subordinate Court on the question under consideration are against the weight of the evidence produced on the record. He contended that the appellant would never have entered into this agreement had he not been pressed by the police and other threats to execute it. In support of his contention that police pressure was put on the appellant, the learned counsel referred us to the statement o3 P. W. 2 Dorabji Edulji in cross‑examination. This witness made the following significant admission in cross‑examination; "In January 1950 plaintiff lodged a complaint with the police and got me arrested. I was put in the lock‑up. Police called the defendant also. Exhibit P/3 was executed after that complaint had been made to the police. The list Exh. P/2 and agreement P/1 were also signed after that complaint was lodged. Anup had left by then so Obaid and myself were forced to sign the list. If we had not signed these lists the plaintiff had no proof to my knowledge except the chits signed by us. I am still liable for the amounts for which I signed. We would not have agreed to execution of these documents if no case had been filed against us." In re‑examination this witness stated: "No coercion was made against me. The agreement was executed by Obaid and myself 8 days after the complaint to the police". The appellant's version of the pressure put on him for obtaining the list (Exh. P/2) and agreement (Exh. P/3) is in the following words: "On 2‑2‑50 I signed the list Exh. P/2 when Rafi filed a complaint against Dorabji and Anupchand and they were arrested. They made me a party and police told me to settle the matter because the accused used to work with me. Therefore 1 signed it. The agreement of 10th February 50, was also signed under police pressure Exh. P/13." In cross‑examination this witness stated as under: "No warrant was served on me in 1950, nor was I arrested." In further cross‑examination he stated: "I gave no writing to police and the plaintiff that I had under compulsion signed the document. Volunteers `As Hansotia Police Inspector a Parsi, was present and he was sending policemen to me to pay Murphy I did not make any protest.' I have not summoned Hansotia as witness." Muhammad Rafi respondent has denied this fact. In this connection in cross‑examination he stated as under: "The agreement was written long after the police report. I do not know if the police proceedings bad terminated when the agreement was written. It is not correct that I got this agree ment executed under police coercion." The documentary evidence on this question shows that the respondent filed a police complaint against Anupchand Kirparam Mehta and two others on the 20th of January 1950. In the police report (Exh. D/1‑A) specific allegations were made not only against Anupchand Kirparam Mehta and Dorabji Edulji but against Muhammad Obaid the appellant also. After the first information report under section 420, P. P. C., the police arrested Dorabji Edulji and put him in the lock‑up. Thereafter on the 2nd of February 1950, the appellant and Dorabji Edulji signed a list of the goods (Exh. P/2) showing that goods of the value of Rs. 8,721/8/3 were supplied to them. Then, on the 7th of February 1950, a stamp paper was purchased through Messrs S. M. Sohail & Company, Advocates, and the appellant and Dorabji Edulji executed an agreement in favour of the respondent accepting their liability in the sum of Rs. 8,721‑8‑

3. In this agreement it was further stated that sum of Rs. 2,000 will be realised by the appellant (sic) from Mr. Khalid, Advocate, with whom this amount had been deposited and the remaining Rs. 6,721‑8‑3 will be paid in instalments of Rs. 500 per month. At this stage it will be useful to mention here that in this agreement it was clearly stated that the respondent had instituted a proceeding in the City Police Station against Dorabji and Anupchand Kirparam Mehta which had been amicably settled and compounded. It was further stated in the terms of the compromise that the appellant and Dorabji Edulji fully took upon themselves to pay Rs. 8,721‑8‑

3. The material portion of this agreement is as under: "Out of this sum, a sum of Rs. 2,000 will be realised by the first party from Mr. M. Khalid, Advocate, with whom the sum of rupees two thousand has been deposited as soon as the criminal case is disposed of and the criminal liability of the second and third parties and Mr. A. K. Mehta is finished and the balance of Rs. 6,721‑8‑3 (Rupees six thousand seven hundred twenty‑one annas eight and three pies) will be paid to the first party in Instalments of Rs. 500 per month payable on the 1st day of the English month jointly and severally by the second and the third party and on default of any two instalments the entire sum shall be payable at once jointly and severally by the second and third party. That a copy of this agreement shall be kept with each of the parties and one copy each shall be sent to the City Police and Mr. Khalid, Advocate." On this evidence it is quite obvious that the appellant executed the agreement (Exh. P/3) after police action had been taken against him and Dorabji and the respondent had assured them that on the execution of this agreement their criminal liability in respect of the said amount would be considered to have finished. The oral evidence and the documentary evidence produced by the parties leaves no doubt in our mind that the document in question was obtained by the respondent from the appellant and Dorabji Edulji under police pressure and pending criminal prosecution. This fact is also borne out by the contents of Exh. P/7, a notice dated the 21st of August 1951, addressed on behalf of the respondent. Paragraph 4 of this notice reads as under: "With reference to the prior correspondence exchanged between the parties, your client at first, point blank, denied having had any dealings with our client and thereupon our client was compelled to report the matter to the police. Your client when confronted with prompt action on our client's part was then advised by his Advocate not to persist in the dishonest denial of the claim, but, to settle the matter amicably as evidenced by the writing dated 10‑2‑51." There is thus both extrinsic and intrinsic evidence in support of the above conclusion. Mr. Sadiq, the learned counsel for the respondent, has on the other hand contended that when the list (Exh. P/2) and agreement (Exh. P/3) were signed, police proceedings had already come to an end. In this connection he referred us to Exh. D/1a, a document produced from the police diary showing that the Additional Sub‑Inspector, Mithadar, on the 29th of January 1950, informed the A. D. M., Karachi, that the matter had already been disposed of as the case was of a civil nature and no offence under section 420, P. P. C., was found to have been committed, but a note of the A. D. M. dated the 31st of January 1950, shows that he inquired from the officer concerned the date of the arrest and the date of the release and further inquired from him why this fact was not shown in the return submitted to him, but no information in this connection was furnished to the Magistrate concerned. The contention of the learned counsel for the respondent that the police case had ended by the 29th of January 1950 may be correct so far as document (Exh. D/1B) is concerned, but it cannot be denied that neither the respondent was aware of this fact nor the appellant knew about it. Both have admitted this fact in their statements In the trial Court ; therefore, no significance can be attached to the document (Exh. D/1B) for the consideration of the question under consideration. It will be noticed that the appellant in his defence pleaded that the agreement (Exh. P/3) was void because it was obtained by undue influence. During the course of the argument, Mr. Riaz Ahmed conceded that the facts of this case do not come within the four corners of section 16 of the Contract Act, which deals with the subject of undue influence. He contended that it falls within the definition of coercion as defined in section 15 of the Contract Act. In our opinion, the concession made by the learned counsel was not rightly made. The question, what is undue influence, is sometimes a difficult one as observed by the Judicial Committee in the case of Sayed Muhammad v. Fateh Muhammad and others (I L R 22 Cal. 325). But In this judgment of the Privy Council approved the observations of Lord Cranworth in the case of Boyse v. Rossborough ((1857) 6 H L C 1 (49)), which is to the following effect: "It is sufficient to say that allowing a fair latitude of construction, they must arrange themselves under one or other of these heads coercion, or fraud." It is therefore clear that undue influence can also be played on a party by means of coercion. In section 16 of the Contract Act also a contract is said to be induced by undue influence where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. In subsection (2) of this provision of law it is provided that in particular and without prejudice to the generality of the e foregoing principle, a person is deemed to be in a position to dominate the will of another, besides other reasons, where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. So, if a person's mental capacity is temporarily affected by reason of mental or bodily distress by the action of another person, that person would be deemed to be in a position to dominate his will. No doubt undue influence usually arises in contracts made between relatives or persons in a fiduciary position but it appears to us that it can also arise even in cases between strangers if certain form of coercion, oppression or compulsion is exercised to dominate the will of the aggrieved party. Thus, if a person is persuaded to do something under coercion or by threatening him in such a way that it gives his mental distress, it will be nothing else but exercise of undue influence. In our opinion it is not necessary that such coercion or threat may in itself be illegal, but if it has given mental distress to the aggrieved party resulting in the domination of his will, it will clearly amount to undue influence. This view is supported by the observation of Pal, J, in the case of Lancashire Insurance Co. Ltd. v. Binoy Krishna Mitra (A I R 1945 Cal. 218), which are reproduced below: "Undue influence may exist where a promise is extracted by a threat to prosecute certain person unless the promise is given. It is not necessary that there should be any direct threat. It may be enough if the undertaking is given owing to a desire to prevent prosecution, and that desire is known to those to whom the undertaking is given; Undue influence usually arises in contracts made between relatives of persons in contracts made between relatives or persons in a fiduciary position. But even as between strangers whom there exists no fiduciary relation certain forms of coercion, oppression or compulsion may amount to undue influence invalidating a contract. Just as a contract may be invalid because it is contrary to public policy In its substance or its purpose, so it may be Invalid because it is contrary to public policy in respect of the coercive method of its procurement. This is perhaps the true underlying principle and this general principle has been reduced so far as possible, to the form of specific rules in respect of diverse methods of coercion and undue influence. The requirements of public policy have been similarly made specific In respect of illegal and nugatory contracts. Where the instrument of coercion is the doing or threatening of wilfully illegal act of any description, it retains the name of coercion in the Indian Statute. But even though the instrument of coercion is not thus in itself illegal as in the case of a threat of prosecution, it may amount to undue influence and the enforcement of a contract so procured may nevertheless be held, In the appropriate cases, to be contrary to public policy (1904, 1 K B 591)." As against this, Mr. Sadiq referred us to the case of Bameshwar Marwari v. Upendranath Das Sarkar (A I R 1926 Cal. 455). It was held in that case by the learned Judges of the Calcutta High Court that the evidence to the effect that the defendant‑debtor was threatened by the plaintiff creditor's brother that the criminal case which had already been instituted against him would not be withdrawn unless he executed a bond for amount due would not bring the case within section

15. It was further held in this case that the relation between a debtor and a creditor is not necessarily one in which the former is to be taken as being situated In such a position that his will is bound to be domi nated by the latter. But that case is distinguishable on facts as it was found in it that the debtor in his statement in Court was unable to make out a case of undue influence. The following observation will bear out this fact: "As I have already stated the defendant himself was examined in the case ; but in his examination‑in‑chief I do not find that he made the least attempt to make out a case of undue influence at all. In cross‑examination he states that at the time when the bond was executed the matter was settled by the Davendra Nath Ghose, who is apparently an Indepen dent man and coal merchant, and also by his own eldest brother, one Prem Chand Sarkar. The terms of the bond may be considered to be stringent, but there is no reason to suppose that the bargain was an unconscionable one. I am, therefore, of opinion that it has not been proved that there was any undue influence in consequence of which the defendant was made to execute this bond. So long as there is no agreement not to prosecute, and, as I have said, there are not materials in this case upon which it may be held that there was such an agreement, there is nothing to prevent a creditor from taking a security for the payment of his debt, even if the debtor is Induced to give the security by a threat of criminal proceedings." In the present case, however, it is clear that the appellant was not bound to pay any amount to the respondent in excess of Rs. 4,425‑7‑0 which was the value of the goods supplied for the Exhibition work. It is further proved that the respondent filed a false complaint against the appellant. He got Dorabji Edulji arrested and threatened the appellant also to put him to the same trouble if he failed to accept his liability for the remaining amount with which he had nothing to do. Not only that, the agreement in question was executed by the appellant on the definite understanding that he would not be prosecuted in case he agrees to pay the whole of the amount in the manner stated in the agreement. We are, therefore, satisfied that on the facts of the present case it is satisfactorily proved that the respondent with the aid of the police was in a position to dominate the will of the appellant and exercised undue influence by coercion and pressure of criminal prosecution. Besides, we are also satisfied that the facts of this case also fall within the definition of section 15 of the Contract Act. It is quite clear to us that the agreement in question was obtained from the appellant by coercion as defined in this section. The admission of the respondent's witness D. W. 2 Dorabji Edulji, that the document in question was obtained by police pressure and the statement of the appellant in examination‑in‑chief that it was obtained under police pressure fully support this view. There is not the slightest doubt in our mind that it is none of the business of the police authorities to put pressure on any party to settle their disputes. This is not the function of the investigating officers and if they indulge in it, it is an illegal action and amounts to criminal intimidation, which is an offence under the Penal Code. We agree with Mr. Sadiq, the learned counsel for the appellant, that threat of criminal prosecution itself is not coercion as held in the case of Kazi Noor Mohammad v. Pir Abdul Sattar Jan (P L D 1959 Kar. 348). We entirely agree with the obser vations in this case that in order to prove coercion it must be shown that the creditor applied pressure upon the debtor to procure his consent and mere threat of prosecution is not sufficient to hold that such a pressure was used. But in the present case the appellant was not only threatened with criminal prosecution but police pressure was also brought on him for obtaining the agreement in question. Mr: Sadiq contended that there is no independent evidence on this point, but this fact is admitted by the respondent's only witness and is further borne out by other circumstances of the case. We would, therefore, hold that the agreement in question was obtained by coercion. It may be further added that the facts of this case disclose that the agreement in question is also hit by section 23 of the Contract Act. The criminal prosecution against the appellant and other persons was under section 420, P. P. C. This offence is compoundable but only with the permission of the Court. No such permission was obtained in this case from the Magistrate concerned or from the Court. In these circumstances, the agreement of the respondent that he would not prosecute the appellant for the offence under section 420, P. P. C., in law amounts to an agreement to stifle prosecution. Such agreements are considered to be against public policy. The law on the point has been laid down by the Privy Council In the case of Bhowaniput Banking Corporation Ltd. v. Sreemati Durgesh Nandini Dassi (AIR 1941 PC 95). In that case it was considered whether an agreement was void if entered into in the face of prosecution under sections 406, 408 and 420, I. P. C. In that connection their Lordships made the following observations: "In the case of an agreement to stifle prosecution, 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. The fact that the debt forming the consideration was real is Irrelevant. It is of course impossible for such a contract to be made unless both parties know of the proposed or actual proceedings. Proof that there has actually been a crime committed is obviously unnecessary. But it is 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 were possible is the duty of the offender, and is to be encouraged. It would be a public mischief if on reparation bing made or promised by the offender or his friends or relative 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 proposed to vindicate the criminal law must do so whole heartedly in the interest of justice, and must not seek his own advantage." On this view of the Privy Council, it is now well settled that if the criminal offence is compoundable and can be settled in or out of the Court without the leave of the Court, a compromise entered in such cases would not be regarded as forbidden by law or against public policy, the policy of the criminal procedure being to allow compromise in such cases. But if the offence is compoundable with the leave of the Court and such leave has not been obtained, the compromise entered in such circumstance will fall within the mischief of section 23 of the Contract Act. In T. A. Meenakshi Sundarmmal and another v. K. Subrammania Ayyar and others (A I R 1955 Mad. 369), it was observed that it is sometimes difficult to draw the line between the acceptance of reparation by the party aggrieved and an agreement not to prosecute the offender. But it was held that‑-- "It may be that that compounding is effected after reparation is made for the wrong done to the injured party. But it Is not the acceptance of that reparation that invalidates compound ing even of the offences specified in section

345. It is only where recourse Is not had to section 345, and the agreement between the injured person and the offender is to terminate the criminal proceedings against the offender otherwise than in accordance with section 345, Cr. P. C. that the agreement would fall within the mischief of section 23." This appears to us to be a sound statement of law on the question under consideration. In the light of the above discussion we are satisfied that the agreement In question is not only hit by the provisions of sections 15 and 16 of the Contract Act but is also hit by section 23 of the Contract Act. We are fully satisfied that the agreement in question was obtained from the appellant under police pressure and on the assurance that he would not be prosecuted for the offence of section 420, P. P. C. in respect of a portion of the claim with which he had nothing to do. We do not agree with the observations of the learned Subordinate Court that the appellant entered into this contract with a view to accommodate his friend 3 or in order to vindicate his moral obligations. This is not a case of that nature at all. On the view that we have taken of the matter, had the respondent based his claim only on the agreement entered into on the 10th of February 1950, we would have had no hesitation in dismissing the entire suit, but the respondent has based his claim on the original transaction that was entered into between the parties and in support of his claim has also relied on the agreement dated the 10th of February 1950. In these circum stances, the respondent's claim in so far as it is proved on the original transaction, cannot be defeated even if the agreement dated the 10th of February is found to be illegal or voidable. As already held, the respondent supplied to the joint venture undertaken by the appellant, Dorabji Edulji and Anupchand Kirparam Mehta electrical goods of the value of Rs. 4,390/6/4) as evidenced by bill (Exh. P/9) dated the 14th of January 1950. Admittedly the appellant has paid towards this claim Rs. 3,

500. There now remains only the balance of Rs. 890/6/4 in respect of the claim of the goods supplied to the joint venture. This the appellant is bound to pay and the respondent is entitles to a decree for this amount against him. In the result, we would, therefore maintain the decree of the lower Court to the extent of Rs. 890/6/4 and set aside the decree for the rest of the amount. The appeal is, therefore, partly allowed with proportionate costs throughout. K. B. A. Appeal partly accepted.