MUTHUVEERAPPA CHETTI ALIAS VELLAYAPPA CHETTI Vs. RAMASWAMI CHETTY

JUDGEMENT

(1.) The Subordinate Judge has found in this Wallis, case and we see no reason to differ from his finding on the evidence--that the plaintiff was induced to pay Rs. 7,000 to the defendants in order that a criminal prosecution instituted by the defendants against the plaintiff for an offence which was not compoundable should not be proceeded with.

(2.) The agreement to stifle the criminal prosecution was illegal, and it is said that money paid in pursuance of an illegal agreement cannot be recovered back. No doubt that is generally so according to the maxim in pari delicto potior est conditio defendentis; but it appears to be well established that when a payment of money is obtained by means of such an agreement the parties are not to be considered in pari delicto and that the money may be recovered back. In Bullen and Leake s Prece dents of Pleadings, second edition, page 51, the law is stated as follows: "But where the plaintiff having paid the money in execution of an illegal contract or for an illegal purpose is not in pari delicto, he may in some cases recover it; as when the money was paid under oppression, as the money paid by a bankrupt to obtain his certificate-- Smith v. Bromley (1760) 2 Doug. 696; money paid by the defendant in a penal action to compound the action; Williams v. Hedley (1807) 8 East. 878 and Unwin v. Leaper (1840) 1 M. & G. 747. In Williams v. Hedly (1807) 8 East. 878 an action for penalties had been brought by the defendant against the plaintiff in respect of certain usurious transactions entered into by the latter, and to escape the penal action the plaintiff had been induced to pay the persons who pat forward Hedley the amount of a debt due to them by a third party; and it was held the money could be recovered back. Similarly in Unwin v. Leaper (1840) 1 M. & G. 747, the jury were directed, that the money could be recovered if it had not been paid voluntarily but by coercion of the threatened penal actions." The Subordinate Judge held that the evidence did not show coercion within the meaning of the Contract Act but it is now settled that is not the test: Kanhaya Lai v. National Bank of India Ld (1913) I.L.R. 40 Calc. 598 (P.C.). It makes no difference in my opinion here that money was found payable by the arbitrators as the plaintiff s consent to the arbitration was obtained by means of the criminal prosecution, or that it may have been really due, as in either case the plaintiff is entitled to get back what was obtained from him by coercion. The appeal must be allowed with interest at 6 percent, from the date of plaint. No order as to costs. As regards the connected; appeals I agree with the judgment of my learned brother. Seshagiri Ayyar, J.

(3.) The plaintiff was the agent of the defendants at Rangoon. He returned in 1905 to Madras. Disputes arose at once regarding the plaintiff s management. An attempt at mediation between the parties was not successful. About the end of 1907 matters came to a crisis. The defendants had a plaint prepared to bw filed against the plaintiff in August of that year (Exhibit C). In November, they instituted a complaint for criminal breach of trust in respect of a pair of bangles. The plaintiff was arrested on a warrant on the 30th of November and was released on bail while the difference between the parties was being adjust-d. .Two arbitrators were selected on the 1st of December, one by the plaintiff and the other by the defendants. As a result of their mediation, the plaintiff paid Rs. 7,000 to the defendants and gave a hundi for Rs. 3,000. No evidence was offered by the defendants at the adjourned hearing of the criminal prosecution and the plaintiff was acquitted.