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C.M. Agarwalla Vs. Halar Salt and Chemical Works and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata High Court
Decided On
Case NumberSuit No. 511 of 1959
Judge
Reported inAIR1977Cal356
ActsIncome-tax Act; ;Indian Penal Code (IPC) - Sections 406 and 420; ;Code of Criminal Procedure (CrPC) - Section 258
AppellantC.M. Agarwalla
RespondentHalar Salt and Chemical Works and ors.
Excerpt:
- .....the part of the accused. it is further the case of the plaintiff that by reason of the aforesaid malicious prosecution and malicious abuse of the process of the court the plaintiff has been injured in his credit and business reputation and suffered from mental agony (sic) pain. the plaintiff was compelled to appear in the court from time to time and was thereby prevented from transacting his business for a long time. the plaintiff has examined himself and also examined two other witnesses being plaintiff's witnesses nos. 2 and 3 to prove that as a result of the said malicious prosecution the plaintiff lost credit and/or confidence of other customers and suppliers and considering him to be a bad man and/or criminal they ceased to do any business with the plaintiff on credit. the.....
Judgment:
ORDER

Padma Khastgir, J.

1. This suit has been filed by Chouthmal Agarwalla against (1) Halar Salt and Chemical Works, (2) Harjivandas Vithaldas, (3) Jamnadass Madhawji (4) Gordhandass Madhawji Thakkar, (5) Patalia Saratchandra Jethalal and (6) Haridas Dwarkadas for a decree for Rs. 1,00.000, in the alternative an enquiry in respect thereof, costs, injunction and other reliefs on 27th April 1959.

2. The case of the plaintiff is that he carried on 'business as an importer and exporter in salt, iron and general merchandise, order suppliers in Calcutta for a long time and has good reputation. The plaintiff carried on the said business as a partner of Sri Bajrang Trading and Supply Company at No. 22, Bartala Street, Calcutta.

3. The defendant No. 1 is a firm, inter alia, carrying on business in salt at No. 1, Amratala Lane, Calcutta and the defendants Nos. 2 to 4 are partners. The defendant No. 6 is the Branch Manager of the defendant No. 1. On 26th November 1957 the defendant No. 6 under the instruction and/or advice, directions and/ or orders of his masters being defendants Nos. 2 to 5 maliciously without reasonable and probable cause preferred in the Court of the Additional Presidency Magistrate. Calcutta a complaint against the plaintiff under Ss. 406 and 420 of the Indian Penal Code and thereby caused the said Court to issue process against the plaintiff. The defendants Nos. 2 to 5 caused the proceedings to be initiated through the defendant No. 1 and unequivocally ratified and/or admitted the said acts of the defendant No. 6. The plaintiff had to appear before the said court on various days between 27th November 1957 till 25th September 1958 and had to stand in the prisoners' dock as an accused during the trial in the said court along with other criminals. On 25th September 1958 the plaintiff was acquitted under Section 258 of the Code of Criminal Procedure on the ground that there was no mens rea on the part of the accused. It is further the case of the plaintiff that by reason of the aforesaid malicious prosecution and malicious abuse of the process of the Court the plaintiff has been injured in his credit and business reputation and suffered from mental agony (SIC) pain. The plaintiff was compelled to appear in the court from time to time and was thereby prevented from transacting his business for a long time. The plaintiff has examined himself and also examined two other witnesses being plaintiff's witnesses Nos. 2 and 3 to prove that as a result of the said malicious prosecution the plaintiff lost credit and/or confidence of other customers and suppliers and considering him to be a bad man and/or criminal they ceased to do any business with the plaintiff on credit. The plaintiff in paragraph 11 has claimed a total sum of Rs. 1,00,000 towards the damages that he is alleged to have suffered. A written statement was filed on behalf of the defendants denying the claim of the plaintiff and trying to justify their own conduct. The plaintiff in his examination-in-chief stated there were various dealings and transactions between the plaintiff and the defendant for a long time. In the course of such transaction on 9th October 1957 the plaintiff gave 4 cheques in favour of the defendant No. 1. Out of 4 cheques 2 were passed by the bankers for payment and subsequently as the plaintiff found that salt supplied by the defendant No. 1 was short, as such he wrote to the banker stopping the payment in respect of other 2 cheques. Those 2 cheques were for the sums of Rs. 4,537.50 and also for Rs. 3,000. At that time the plaintiff had with the defendant a total sum of Rs. 3,000 in deposit. The defendant No. 1 was holding that sum of Rs. 3,000 to the credit of the plaintiff as a deposit. At the time when the plaintiff issued the said 2 cheques, the plaintiff had an overdraft facility with the bank for a sum of Rs. 70,000. On the day when the plaintiff issued notice stopping payment of the said two cheques the plaintiff had also overdraft facilities with the bank to the tune of Rs. 70,000. That instruction for stoppage of payment was given by the plaintiff on a bona fide grond as the goods supplied by the defendant No. 1 to the plaintiff was short in supply. As such, according to the plaintiff, the plaintiff was entitled to stop payment for the said cheques. The defendant No. 6 under the instruction of defendants Nos. 1 to 5 wrongfully filed the criminal complaint in respect of the said 2 cheques, which were not paid by the hankers. The plaintiff has proved the complaint filed before the Criminal Court which was signed by the defendant No. 16. The said criminal trial lasted for 6 months and the plaintiff had to attend court for more than 20times. During has visit to the court the plaintiff had to remain there from 11 o'clock in the morning upto 4 o'clock. The plaintiff stated that he had to engage lawyer for 22 days and in fact had to pay Rs. 1,580 to the said lawyer. Although he says that he had receipt for payment to the lawyer he had not been able to find them. Ultimately the plaintiff was acquitted of both the charges on 25th September 1958. He submits that the defendants had no reason whatsoever to start the said criminal proceeding against the plaintiff. The plaintiff deposed that the defendants have started criminal case with the oblique motive and not for any reasonable and probable cause as he has stopped payment of the cheques. The defendant wanted to injure the prestige of the plaintiff in the business community and in the trade. The plaintiff states that he was A regular assessee under the Income-tax Act and he has proved a number of orders paid into the Income-tax Department for the assessment years 1957-60. He has also proved the balance sheet of the fund Bajrang Trading and Supply Company to show that the plaintiffs name appeared under the column of the capital account and also proved the figures lying to its credit as mentioned in the different balance sheets proved by the plaintiff. The plaintiff has given the name of different parties with whom he had business in salt and also proved various bills for large sums of money which had been paid to different parties during the relevant period. Apart from the credit facilities given by Hindusthan Commercial Bank Ltd. to the extent of Rs. 70,000 the plaintiff enjoyed other credit facilities in the market. The plaintiff's case is that because of the institution of the criminal case, his prestige was lowered and as a result the business community refused to give him goods on credit. Amongst the parties, who refused credit, the plaintiff mentioned the names of Sri Lakshmi Salt Works Ltd., Imperial Iron and Steel Works, etc. He also proved the different letters written by the parties refusing to give the plaintiff any credit facility because of the said criminal proceedings. The plaintiff examined on his behalf Sri Hrishikesh Chakraborty of Lakshmi Salt Works to prove the letter written by them also to prove that people knew about the said prosecution of the plaintiff as a result whereof the Director of the said company decided not to give any salt to the plaintiff, save and except strictly on cash terms. The plaintiff also examined one Satyanarayan Saraf of S.L. Gupta Pvt. Ltd. to prove that because of the criminal proceedings taken against the plaintiff they stopped supplying goods to the plaintiff save and except on cash terms and also proved the letter dated 4th May 1958 written by them to the plaintiff.

4. The Law of Tort in India has not yet been codified and therefore the basis of this branch of law in India continues to remain the rules of English Law which had been imported to India and became part of the Indian Law. In India the litigations in respect of Tort are not very many. One of the branches of the Law of Tort is actions for malicious prosecution and the law for malicious prosecution in India is exactly the same as the Law in England. Foundation of law for action for malicious prosecution lies in the abuse of the process of Court by wrongfully setting the law in motion. I The generally accepted essential elements in a cause of action for malicious prosecution, in conformity with the malicious decisions are: (1) that the plaintiff was prosecuted by the defendant (2) that the prosecution terminated in his favour, if from their nature they were capable of such termination (3) that there was no reasonable and probable cause for launching such prosecution (4) that the prosecution was malicious, i.e., it was done with ulterior motive and not with the intent of carrying the law into effect. In a claim for malicious prosecution the plaintiff can claim damages on three counts:-- (a) For damages to person (b) For damages to property (c) For damages to reputation.

5. The burden of proving the case is on the plaintiff and he must go the whole way as there is no half way point of rest and such proof is extremely heavy. The whole principle lying behind for malicious prosecution is that the society as a whole is interested in protecting the individual against unjustifiable and oppressive imputation of criminal charges. If a person has been prosecuted it is to be presumed that some damage to that party has resulted. He may or may not have suffered pecuniary loss but loss to his reputation and mental anxiety in every case is bound to result. A plaintiff may recover damage for the distress which normally results from being prosecuted for a time without proving the he has suffered any emotional disturbance. Damages of that kind are (SIC) general damages. However, the amount of harm to the reputation of the plaintiff and the extent of the emotional disturbance are determined by the gravity of the offence charged against him in criminal proceedings. In this particular case the question would have to be considered in view of the facts and principles of law as stated above, in fact was the prosecution in the criminal proceedings, that has been brought, by the defendants against the plaintiff? A prosecutor has been described as a person who is actively instrumental in prosecuting the plaintiff (Halsbury's Laws of England, Vol. 25 p. 339 para. 684). A person may be liable as a prosecutor though the complaint has been filed either by his agent or his employee. Usually a person is liable as a prosecutor if he filed a complaint to a Magistrate. He is also liable as a prosecutor if caused a complaint to be filed either through his agent or employee. Thus, one who personally or by a third person for whose conduct he is responsible under the Law of Agency presents to a Magistrate a petition upon which a warrant of arrest is issued or necessary action is taken by the Magistrate is also held to be the prosecutor. In this particular case, therefore, there is no doubt that the partners, defendants Nos. 2, 3, 4 and 5 of defendant No. 1 through the defendant No. 6 launched the prosecution against the plaintiff. As such they all would be deemed to be the prosecutor in the said criminal proceedings.

6. In this particular case the criminal proceedings terminated in favour of the plaintiff, in the sense that the plaintiff was acquitted of the charges brought against him by the defendants. Although the decision of the criminal court is not binding on a Civil Court for the purpose of coming to the conclusion whether the prosecution was malicious or not and the Civil Court will have to go itself is to the question of reasonable and probable cause and also of malice 'but the acquittal of the plaintiff in the criminal case is a sure proof of the termination of the criminal proceedings in favour of the plaintiff. The plaintiff will have to make out his case independently and the Civil Court has to conduct an independent enquiry as to the presence or absence of reasonable and probable cause. 'Malice' in an action for malicious prosecution does not mean wrongful intention or recklessness but it is construed more narrowly to show that the prosecution was inspired by some motive other than a desire to bring to justice a person whom he honestly believes to 'be guilty. In case where charges are found to be false and false to the knowledge of the defendants not only lack of reasonable and probable cause is there but also malice may be inferred. As malice is a question of fact on the evidence laid before a court it will have to decide whether there was, malice or not.

7. Now lastly in an action for malicious prosecution a reference has already been made earlier that three types of damages one may suffer because of malicious prosecution. 'Damages are denned as the pecuniary compensation which the law awards to a person for the injury he has sustained by reason of the act or default of another whether the act is a breach of contract or a tort or put more shortly damages are the recompense given by process of law to a person for the wrong that another has done to him'. (Halsbury's Laws of England. Vol. 2 p. 216 para 383. 3rd Edn.). Punitive damages are intended to be in solatium to the plaintiff and in terrorem to the public. While awarding damages 'the wounded feeling and injured pride of a plaintiff' are taken into consideration. A false charge that a person has committed cheating or is guilty of criminal breach of trust is bound to injure his reputation, more so, in a case of a person who is known to the business world. The second type of damages arises due to the injury to the person of the plaintiff Injury to the person may result because of arrest, i.e., he is deprived of his liberty and also because of what he has to suffer from mental stress. It is however not necessary that a person may have been actually arrested but it is sufficient even if imprisonment is the immediate and necessary consequence of the prosecution.

8. Regarding the third type of damages, i.e., injury to property, a person who is maliciously prosecuted has necessarily to spend some money to defend himself. Where the infringement of right is not followed by any real damage or where a person has to face prosecution the court may award nominal damages. 'Nominal damages' are defined as a sum of money that may be spoken of but that has no existence in point of quantity of a mere peg to hang costs. In assessing damages the Court to some extent will have to rely on the rules of commonsense over and above that the court will have to consider (1) the nature of the offence which the plaintiff was charged of (2) the inconvenience of the plaintiff in which he was subjected to (3) monetary loss and (4) the status and position of the person prosecuted. 'Damages awarded for loss of reputation are in the nature of solatium and not given for punishing the defendant or enriching the plaintiffs.'

9. The plaintiff in this case has proved that he has suffered damages not only by defending himself in a criminal court by engaging lawyers and presenting himself for more than 20 times before the court of Metropolitan Magistrate, Calcutta but also he had undergone a great mental stress for being placed along with other criminals in the dock. The plaintiff although has given evidence that he had to engage lawyer and he spent a sum of Rs. 1,500 in defraying his expenses at the Metropolitan Magistrate's Court 'but also said that he had the receipt for the same although through inadvertence that is mislaid. In this case the plaintiff may not have supported his claim for payment to the lawyer concerned by producing the receipt but in the absence of the same it may be presumed that he must have spent money in engaging lawyers for getting himself defended. He has also claimed damages on account of loss of reputation and loss of profit as he was all the time engaged in court during the period when the said criminal case was going on. As such his commercial interests have been affected. The plaintiff is a partner of a firm of Messrs. Bajrang Trading and Supply Company. So even if the plaintiff had been detained while the criminal case was going on it cannot be said that the normal running of the said partnership firm was hampered or could not be carried on in the absence of the plaintiff during those days.

10. From the trend of decisions it appears in awarding damages the learned Judges in India take conservative attitude and are not inclined to award ex-emplary damages, save and except in exceptional cases. Where the plaintiff proves want of reasonable and probable cause malice may be inferred although want of probable and reasonable cause is not conclusive evidence of malice. The master is liable in tort where the servant is working within the scope of his authority, that is, within the scope of his employment, commits a wrong. In this case the prosecution was initiated by the defendant No. 6 with the authority of defendants 1 to 5.

11. So far as special damages as claimed by the plaintiff are concerned I am of the opinion that the plaintiff is entitled to a sum of Rs. 1,500 as per the particulars given under paragraph 11 of the plaint. So far as claim of the plaintiff regarding loss of business is concerned, I am of the opinion that as he is a partner of a partnership firm and he had other partners to look after the business during the days when the criminal trial was going on his absence could not make much difference. Regarding the claim of loss suffered due to mental agony and pain, I think a sum of Rs. 5,000 considering the position of the plaintiff as a reputable businessman of Calcutta would be enough. From the evidence given before me it appears that the dispute between the plaintiff and the defendants was strictly of civil nature arising out of short delivery of the goods by the defendants to the plaintiff and in view of the fact that the defendants had a sum of Rs. 3,000 with them as security deposit made by the plaintiff in respect of the said supplies, the defendants, when the cheques were stopped for payment by the plaintiff, could have adjusted the said claim against the said security money, could have raised a dispute by demand in writing letters and requested the plaintiff to settle up balance amount. Moreover, it was always open for the defendants, if they were really aggrieved to file a civil suit to recover their dues. Instead of doing so or taking up the course as stated above the defendants promptly with an ulterior motive brought charges against the plaintiff under Section 420 and Section 406 which ultimately terminated in favour of the plaintiff.

12. From the facts and circumstances of this case I am of the opinion that there was no reasonable and probable cause for the defendants to launch the prosecution against the plaintiff and they have been actuated by malice in doing so. As a result I hold that the present suit of the plaintiff succeeds. I pass a decree for the sum of Rs. 5,000 as general damage and Rs. 1.500 as special damages and costs, as against the defendants.


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