1. This second civil appeal arises out of a suit brought by the plaintiff respondent on the basis of two hundis, both executed on the 6th July 1920, one for Rs. 400 and one for Rs. 200. The defendant-appellant pleaded in defence that the hundis were without consideration and were executed in order to induce the plaintiff to stifle a prosecution pending against him for embezzlement. This defence was accepted by the Court of first instance. On appeal the District Judge of Muttra, remanded the case to determine whether at the date of the execution of the hundis there was any liability on the part of the defendant to pay the sum secured by the hundis to the plaintiff, and secondly whether the hundis were executed to induce the plaintiff to abstain from prosecution of the embezzlement case. The first Court found both these issues in favour of the defendant but the Additional Subordinate Judge has decided that there was existing a liability on the part of the defendant which served as consideration for the hundis, and that this being the case the fact, that the execution of the hundis operated to induce the plaintiff to stop the prosecution for embezzlement, was immaterial.
2. The facts of the case appear to be as follows. The defendant was occupying a building belonging to the plaintiff as a press and type-foundry. He became indebted to the plaintiff to the amount of Rs. 1,164 and in order to liquidate this debt he agreed to make over the machinery and fittings to the plaintiff for the nominal sum of Rs. 1,164.
3. He was, however, to continue to occupy the building and in addition to the rent due for such occupation, he was to pay a further sum for use of the machinery.
4. That this was the case is proved by two documents executed by the plaintiff and defendant respectively on the 4th of May 1919.
5. On the 30th of June 1920, the plaintiff lodged a criminal complaint against the defendant that he had wrongly sold and disposed of some of the machinery to a third party, some one living at Hathras. The 22nd July 1920 was fixed for trying the case. Before this date, namely, on the 6th July 1920, Rs. 480 appears to have been the amount calculated as depreciation of the total machinery by reason of the alienation to the man at Hathras.
6. Subsequently on the 12th October 1920, the remainder of machinery was sold to one Parsi Mal for Rs. 700, which was paid over to the plaintiff.
7. On these facts, it is contended by the appellants' Counsel that the Rs. 480, secured by their hundi, were merely money paid for the stifling of the criminal prosecution. With this suggestion we do not agree. The defendant was liable to make good to the plaintiff the value of any machinery wrongfully alienated by him when using that machinery as lessee of it from the plaintiff. It makes no difference that the plaintiff also was entitled to prosecute the defendant for embezzlement. The decision of the Allahabad High Court relied upon by the lower Court, i.e., Jai Kumar v. Gauri Nath 28 A. 718 : 3 A.L.J. 506 : A.W.N. (1906) 212, appears to us to be applicable. 'Where a bona fide debt exists, and where the transactions between the parties involve a civil liability as well as possibly a criminal act, a promissory note given by the debtor executed for the debt constitutes. a valid agreement.' We have been referred to a decision of the Calcutta High Court by the appellants' Counsel, but that decision does not appear to have been based on facts in the slightest degree similar to the present one. It may be that the lower Appellate Court misconstrued the evidence, in its decision as to the existence of the liability, but the liability existed, we hold, for the reasons stated above. We, therefore, see no reason to interfere in second appeal with the decision of the lower Appellate Court and dismiss this appeal under Order XLI, Rule 11, C.P.C.