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PETITIONER: OUSEPH POULO AND THREE OTHERS

       Vs.

RESPONDENT: CATHOLIC UNION BANK LTD.  AND ORS.

DATE OF JUDGMENT: 16/04/1964

BENCH: GAJENDRAGADKAR, P.B. (CJ) BENCH: GAJENDRAGADKAR, P.B. (CJ) WANCHOO, K.N. GUPTA, K.C. DAS

CITATION:  1965 AIR  166            1964 SCR  (7) 745  CITATOR INFO :  R          1992 SC 248  (59,61)

ACT: Contract-Documents  executed in favour of Bank  as  security for   debts-Withdrawal   of  criminal  complaint   by   Bank Documents, if executed for stifling  prosecution-Test-Indian Contract Act, 1872 (9 of 1872), s. 23.

HEADNOTE: Two  of  the defendants in the two suits out  of  which  the present appeals arose borrowed a sum of Rs. 80,024-4-9  from the respondent Bank in course of their business by  pledging their goods.  The Bank discovered that there was shortage in the goods deposited and through its Secretary lodged a  com- plaint  with  the  police that the  said  defendants,  their father and brother had in collusion with the local agent  of the  Bank fraudulently removed part of the goods or, in  the alternative, had made a grossly inadequate deposit to  cheat the  Bank.   The  Police registered  the  case  and  started investigation.    The  parties,  thereafter  settled   their differences by a transaction which consisted, among  others, of  a hypothecation bond for Rs.  30,000/covering  immovable property  and a Karar for Rs. 35,000/-, which were  executed in favour of the Bank by the parent of the said  defendants, by the said defendants themselves and their brother and  his wife.   On the Secretary of the Bank stating to  the  Police that  the  Bank’s  claim had been settled  and  any  further action  would  be unnecessary the  criminal  proceeding  was dropped.    Thereafter  the  said  relatives  of  ;the   two defendants  who had executed the hypothecation bond and  the Karar  brought  a  suit for the  cancellation  of  the  said documents  on  the  ground that they had  been  executed  to stifle   the   criminal  prosecution  and   were   as   such unenforceable  under s. 23 of the Indian Contract Act.   The Bank sued for recovery of the amount due on the Karar  which was  resisted  on  the same ground  that  the  document  was unenforceable under s. 23 of the Contract Act. The said defendant-debtors did not examine themselves.  They did  not raise the plea of unenforceability in respect of  a hire-purchase   agreement  which  formed  a  part   of   the transaction in question and on which the Bank brought a suit

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against  them and got a decree.  After the  said  settlement these  defendants  applied for further loan from  the  Bank. There  was  evidence to show that an  agreement  to  furnish additional  security  had  been  reached  between  the  said defendants and the Bank even before the complaint was filed. The  trial Court held that both ;the documents  fell  within the  mischief of s. 23 of the Contract Act and  decreed  the first  suit  and dismissed the second.  The  High  Court  on appeal  took the contrary view and reversed the decision  of the  trial Court accordingly.  The plaintiffs in  the  first suit appealed to this Court. Held: It was well settled that agreements made with the sole purpose  of  stifling  prosecution were  opposed  to  public policy   since  the  consideration  which   supported   such agreements  was itself against public policy and could  not, therefore, be 746 enforced.  In India however this doctrine was not applicable either  to compoundable offences or to offences which  could be compounded with the leave of the Court. The onus was strictly on the party that impugned the trans-- action to prove that it was based on an agreement to  stifle the prosecution.  It must be able to show that on a  certain consideration  proceeding from it the complainant in  return promised  to  discontinue the criminal proceeding  and  then alone the transaction would be one against public policy. V.   Narasimha  Raju v. V. Gurumurthy Raju, [1963] 3  S.C.R. 687, Maharaja Srish Chandra Nandy v. Sapravat Chandra A.I.R. 1940  Cal.  337,  Sudhindra Kumar Ray  Chaudhuri  v.  Ganesh Chandra  Ganguli, 1939 I.L..R. I Cal. 241 and  Kamini  Kumar Basu  v. Birendra Nath Basu, A.I.R. 1930 P.C. 100,  referred to. Bhowanipur  Banking  Corporation  Ltd.  v.  Duresh  Nandini. Dasi, (1942) I.L.R. 1 Cal. 1, considered. But  in judging a particular agreement distinction  must  be made between the motive for the agreement and the considera- tion  for it and subsequent events should not be allowed  to confuse the issue. It  was  clear in the present case that the  plaintiffs  had failed  to  discharge  the onus that lay  on  them  and  the decision of the High Court was, therefore, correct.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos. 51 and  52 of 1962.  Appeals from the judgment and order dated June 12, 1959  of the Kerala High Court in A.S. Nos. 538 and  539  of 1954. V.   A. Seyid Muhammad, for the appellants-,. S.   T. Desai and A. G.- Pudissery, for the respondent No. 1 April 15, 1964.  The Judgment of the Court was delivered by GAJENDRAGADKAR, C. J.-These two appeals arise from two suits Nos. 5 of 1947 and 32 of 1951; and the main point which they raise for our decision is whether the two document& executed by   the   appellants  and  two  of  the   respondents   are unenforceable  as being opposed to public policy under  sec- tion  23 of the Indian Contract Act (hereinafter called  the Act).   The  trial Court has answered this question  in  the affirmative.  while  the High Court of Kerala  has  taken  a contrary view. Poulo  Varghese and Poulo Thommi who are the sons of  Ouseph Poulo  were carrying on trade in hill produce at Always  and in the course of their business, they had borrowed from  the branch  of  the  Catholic Union Bank Ltd.  at  Always  large

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amounts.   In that connection, they had pledged  goods  with the  Bank  as security for the loan and the  same  had  been deposited  in  a godown the key of which remained  with  the Bank.  It appears that on the 10th February, 1947, 747 the  Officers of the Head Office of the Bank  inspected  the godown  and  it was discovered that there  was  considerable shortage of the goods pledged.  Thereupon, the Secretary  of the  Bank  lodged a complaint with the  Police  that  Ouseph Poulo  and  his two sons who had dealings with the  Bank  as well as Poulo Joseph, another son of Ouseph Poulo, had  col- luded with the local Agent of the Bank and had fraudulently( removed a substantial part of the pledged articles form  the godown.   The complaint also alleged alternatively  that  if the  goods  had  not been  fraudulently  removed,  then  the security  offered  by Poulo Varghese and  Poulo  Thommi  was grossly  inadequate to cover the large amounts  advanced  to them,  and  that  was the result of  cheating.   The  Police registered this case and investigations began.  At that time the parties settled their differences and the two  documents in question were ,executed. The  criminal complaint was filed on the  13th  February.and the First Information Report was made on the 16th  February, 1947.  On the 22nd February, a hypothecation bond (Ext.  26) was  executed by Ouseph Poulo, his wife, his three sons  and the  wife  of  another son in favour of  the  Bank  for  Rs. 30,000/-.  This bound covered immovable properties belonging to  the  executants.  On the 27th  February,  1947,  another document  was executed by the same parties in favour of  the Bank for Rs. 35,000/-; this document was called Kollappirivu Karar (Ext.  B.). On the came day a receipt was executed  by Poulo Varghese and Poulo Thommi which showed that the  goods in  the  godown  were  valued  at  Rs.  10,000/-  and   were surrendered to the Bank in partial satisfaction of the debts due  from  them to the Bank.  This was followed by  a  hire- purchase  agreement by which the car owned by  Poulo  Thommi was  transferred to the Bank and the same was conveyed  back to him on a hire-purchase agreement-, the value of this  car was  taken  to be Rs. 5,0001-.  The total  amount  due  from Poulo  Varghese  and  Poulo  Thommi  to  the  Bank  was  Rs. 80,024-5-9.   As a result of the transactions in  which  the parties entered, Rs. 10,000/- were made good by surrendering to  the  Bank  the  goods in  the  godown;  Rs.  5,0001-  by transferring  the car; Rs. 30,000/- and Rs. 35,000/- by  the hypothecation  deed and the Karar respectively; that left  a balance  of Rs. 24-5-9 which was paid in cash.   After  this transaction  had thus been concluded, on the  28th  February the Secretary of the Bank made a statement before the police that  the Bank’s claim had been settled and that he and  the Managing  Director of the Bank was satisfied that  no  goods had been removed from the godown as alleged in the complaint and  that  in  collusion with the Agent  of  the  Bank,  the debtors Poulo Varghese and Poulo Thommi had 748 cheated the Bank by over-valuing the goods pledged, but that no further action was necessary to be taken in that  behalf. In  consequence,  the  criminal  proceedings  were  dropped. That,  in substance, is the nature of the transactions,  the character  of  which falls to be determined in  the  present appeals. On  the 15th December, 1947, Ouseph Poulo, the  father,  his son  Joseph, Poulo’s wife Aelia and Joseph’s  wife  Thressia filed a suit in forma paliperis seeking cancellation of  the two  documents in question on the ground that they had  been executed  to stifle criminal prosecution and that they  were

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also vitiated by undue influence, coercion and threat.   The first  defendant to this suit was the Bank and defendants  2 and 3 were the two debtors Poulo Varghese and Poulo  Thommi, the sons of Ouseph Poulo.  This was suit No. 5/1947. While this suit was pending, the Bank instituted suit No. 32 of  1951 on the 26th February, 1951 and claimed  to  recover the  amount due on the Karar from all its  executants.   The persons who had filed suit No. 5/1947 were defendants 1,  2, 5  &  6 in this suit and defendants 3 & 4 were  the  debtors Poulo  Varghere and Poulo Thommi.  These two sets of  defen- dants filed two separate written statements’. but the common plea  raised  by  them was that the document  on  which  the Bank’s  suit was based was unenforceable under s. 23 of  the Act.  The trial Court substantially upheld this defence with the  result that suit No. 5 / 1947 was decreed and suit  No. 32/1951 was dismissed.  The Bank took this matter before the High Court by preferring two appeals Nos. 538 & 539 of 1954. The  High  Court has reversed the conclusion  of  the  trial Court in regard to the character of the impugned transaction and  in consequence, suit No. 5/1947 has been dismissed  and suit  No. 32/1951 has been decreed.  That is how the  plain- tiffs  in suit No. 5 / 1947 have come to this Court  with  a certificate issued by the High Court.  During the course  of this  judgment. we will refer to the Bank as the  Bank.  the persons  who brought suit No. 5/1947 as the  plaintiffs  and the two debtors as defendants 2 & 3. Before  dealing with the merits of the  controversy  between the parties, it is necessary to state briefly the true legal position  in regard to the agreements which are held  to  be unenforceable on the ground that the consideration for which they  are  made is opposed to public policy.   It  is  well- settled   that  agreements  which  are  made  for   stifling prosecution  are opposed to public policy and as such,  they cannot be enforced.  The basis for this position is that the consideration  which  sup ports such  agreements  is  itself opposed  to public policy.  In India. this doctrine  is  not applicable  to compoundable offences, nor to offences  which are compoundable with the leave of the 749 court  where  the agreement in respect of such  offences  is entered  into  by the parties with the leave of  the  Court. With  regard  to  non-compoundable  offences,  however,  the position  is clear that no court of law can allow a  private party to take the administration of law in its own hands and settle  the question as to whether a particular offence  has been  committed or not, for itself.  It is obvious  that  if such  a course is allowed to be adopted and agreements  made between  the parties based’ solely on the  consideration  of stifling  criminal  prosecutions are  sustained,  the  basic purpose  of criminal law would be defeated; such  agreements may  enable the guilty persons to escape punishment  and  in some  others they may conceivably impose  an  unconscionable burden on an innocent party under the coercive process of  a threat of the criminal prosecution.  In substance, where  an agreement  of  this kind is made, it really means  that  the complainant  chooses  to decide the fate  of  the  complaint which  he has filed in a criminal court and that is  clearly opposed to public policy. In  dealing with such agreements, 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

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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  in  order to put  an  end  to  criminal proceedings, an agreement is made in the execution of  which persons other than those who are charged in a criminal court join, that may afford a piece of evidence that the agreement is   supported  by  the  consideration  that  the   criminal proceedings  should  be terminated.  If the  nature  of  the liability  imposed  upon a debtor by a previous  dealing  is substantially altered with a view to terminate the  criminal proceedings,  that  itself may be another factor  which  the Court  may take into account in deciding whether the  agree- ment  is supported by the prohibited consideration.  But  in weighing  the  different relevant considerations in  such  a case,  courts must inevitably enquire: did one party to  the transaction make his promise in exchange or part exchange of promise   of  the  other  "not  to  prosecute  or   continue prosecuting"?  As Lord Atkin observed in Bhowanipur  Banking Corporation,  Ltd.  v.  Durgesh  Nandini  Desi(1),  "In  all criminal cases reparation where possible is the duty of  the offender,  and  is to be encouraged.  It would be  a  public mischief if on reparation (1) (1942)I.L.R. I Cal. 1. 750 being  made  or promised by the offender or his  friends  or relatives mercy shown by the injured party should be used as a  pretext  for avoiding the  reparation  promised".   That, however,  is  not  to say that if reparation is  made  as  a consideration for a promise to give up criminal proceedings, it  would  not amount to an abuse of the  right  of  private prosecution and would not attract the provisions of s. 23 of the  Act.   The  main point to remember is  that  the  party challenging  the validity of the impugned  transaction  must show  that  it  was  based  upon  an  agreement  to   stifle prosecution.   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 (vide V. Narasimha  Raju  v.  V. Gurumurthy Raju(1), Maharaja Srish Chandra Nandy v. Supravat Chandra(2), Sudhindra Kumar Ray Chaudhuri v. Ganesh  Chandra Ganguli(3); and Kamini Kumar Basu, v. Birendra Nath Basu(4). What then are the facts in this case on which the plaintiffs seek  to challenge the correctness of the conclusion of  the High  Court that the impugned transactions are not  invalid? Dr.  Seyid  Muhammed for the plaintiffs has  urged  that  in dealing with the present dispute between the parties, it  is essential  to remember that the complaint filed by the  Bank against  defendants  2  & 3 is found to be  not  a  bonafide complaint  and  that,  according  to  him,  shows  the  true complexion  of the impugned transactions.  It is  true  that the  trial  Court has found that the complaint made  by  the Bank  was not bonafide and the High Court has not  in  terms reversed that finding because the High Court disbelieved the direct  evidence  led by the plaintiffs and  held  that  the agreement  alleged  by  them  was  not  proved.   Dr.  Seyid Muhammed,  therefore,  contends  that  there  is  a  finding recorded  by the trial Court which has not been reversed  in appeal,  and so, we should deal with the main point  in  the light  of this finding.  If we had been satisfied  that  the complaint filed by the Bank was deliberately and dishonestly filed, that no doubt would have assisted the plaintiffs to a

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very  large  extent;  but after  carefully  considering  the material  evidence on this point, we are satisfied that  the trial  Court was in error in coming to the  conclusion  that the Bank had filed the complaint malafide.  The complaint in terms  made  three material allegations.   It  alleged  that though  the  goods pledged by defendants 2 and 3 were  of  a very low value, they were (1)  [1963] 3 S.C.R. 687. (3)  1939 I.L.R. I Cal. 241. (2)  A.I.R. 1940 Cal. 337. (4)  A.I.R. 1930 P.C. 100. 751 entered  in  the godown and in the relevant books  as  being worth a much larger amount.  It also alleged that the goods, though of a cheap quality, were described as a very superior quality; and it also said that substantial part of the goods pledged had been removed from the godowns for the purpose of causing  loss  to the Bank and for making  unlawful  profit. This  complaint  was filed against defendants 2  and  3  and plaintiffs 1 and 2, and another son Ouseph Poulo who is  not a  party to the present litigation.  In regard to this  last allegation of theft, the complaint also averred that the key of  the  godown  used to be with the agent of  the  Bank  at Alwaye  and  the said agent had  absconded.   The  complaint mentioned  that  the lorry in which the goods  were  removed bore the registration No. 2923 and it belonged to the Qunani Motor Service. When the Secretary of the Bank gave evidence he stated  that on an enquiry being made on the spot, it was learnt that the goods had been removed in the particular lorry; but,  later, no  evidence  was forthcoming to support that  report.   He, however,  adhered  to the case of the Bank  that  the  goods which were found in the godown were hopelessly inadequate to serve as a security for the advance made to defendants 2 and 3.  The  argument  is that the allegation as  to  theft  was dishonesty  made  by the Bank in its complaint in  order  to apply  coercive pressure against defendants 2 and 3 and  the members  of their family.  Prima facie, this  argument  does appear  to be attractive, and if it had been  sustained,  it might have helped the plaintiffs a good deal. There  is,  however,  clear evidence  on  the  record  which negatives  this  contention.   As we have  already  seen,  a receipt  was passed in favour of the Bank  surrendering  the goods  which were found in the godown to the Bank and  these goods have been priced at Rs. 10,000/-.  It is common ground that  the  goods  which  were pledged  with  the  Bank  were intended  to serve as a security for as much as  Rs.  80,000 and  odd;  and so, there can be no doubt whatever  that  the goods found did not satisfy that requirement.  The number of bags which were mentioned in the receipt its 534; that again does not represent the total bags of goods pledged with  the Bank.  So, it is absolutely clear that the Bank realised  on inspection  of  the  godown that the  security  offered  was wholly in-adequate and it may well be that on the spot  some people  reported  that the pledged goods had  been  removed. That  is  why  the Bank stated all the  material  facts  and alleged that either the substantial part of the goods  which had  been pledged had been removed, or the goods  which  had been  pledged  were not at all enough to  cover  the  amount advanced.   In  any  case, the agent of the  Bank  may  have colluded with the debtors.  Now, in the view of the  receipt passed  by  the debtors and the members of their  family  in favour of the Bank in which the value 752 of the goods found in the godown has been determined at  Rs.

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10,000/-,  it  would  be unreasonable to  suggest  that  the complaint made by the Bank was not bonafide. Besides,  in dealing with this dispute, it is  essential  to remember  that defendants 2 and 3 have not entered the  wit- ness-box at all.  They have left it to their father, mother, brothers  and  sister-in law to fight this  litigation.   At every  stage of the proceedings in both the suits,  we  come across  points of dispute on which defendants 2 and 3  alone could have given evidence.  Did they pledge goods worth  the amount advanced to them?  If yes, did the Agent remove them, or  were  the  goods which were originally  pledged  not  of enough value and by collusion with the Agent, representation was made and accepted that they were valuable?  On all these matters,  it  was necessary that defendants 2 and  3  should have  taken  the  oath  to support  the  case  made  by  the plaintiffs   when  they  challenged  the  validity  of   the transaction  in  question.   The High  Court  has  seriously commented  on  the  fact  that  defendants  2  and  3   have deliberately  avoided  to  face  the  witness-box.   In  our opinion, in the circumstances of this case, this comment  is fully justified. There is another piece of evidence which is equally material and  which  is  in  favour of the  Bank  and  that  evidence relater, to the subsequent conduct of defendants 2 and 3. We have  already noticed that a motor car belonging to  one  of the  debtors was sold to the Bank for Rs. 5,0001- and  taken back on hire-purchase agreement.  Indeed, this hire-purchase agreement  is  a part of the transaction which  settled  the dispute  between the parties.  It appears that  the  debtors failed  to  pay  the  instalments  under  the  hire-purchase agreement and that led to a suit by the Bank.  In this suit, the debtors filed an elaborate written statement  containing 21  paragraphs; but we do not see, any allegation  that  the hire-purchase  agreement was a part of a  transaction  which was invalid and as such, the claim made by the Bank was  not sustainable.   In fact, this suit was decreed in  favour  of the Bank.  The conduct of defendants 2 and 3 in not  raising a  plea against the validity of the hire-purchase  agreement is not without significance. Similarly,  it appears that after the  impugned  transaction took  place between the parties, defendants 2 and 3  applied to the Bank for further advance on the 11th April, 1947  and Mr.  Ramakrishna Nair who is the principal witness  for  the plaintiffs  in the present litigation and who was the  Legal Adviser  of  the Bank, Supported the  debtor’s  request  for advance.   This request was, however, turned down and it  is obvious  that  the failure of the Bank  to  accommodate  the debtors  ultimately  led  to  the  present  plea  that   the transactions in question are 753 invalid.   Therefore, we are satisfied that  the  subsequent conduct  of defendants 2 and 3 clearly shows that  they  are not  prepared to take the risk of  facing  cross-examination and  that  is  the reason that they have left  it  to  their relatives to fight the present litigation. It is in the light of this background that we have to consi- der  the oral evidence in the case.  The main  witnesses  on whose  testimony Dr. Seyid Muhammed has relied are Mr.  Nair P.W.  I  and  Mr. Pillai P.W. 3. Mr. Nair  is  a  practising lawyer  and was at the relevant time the Municipal  Chairman of Alwaye, whereas Mr. Pillai was a Municipal Councillor  at that  time.   According  to Mr. Nair, he took  part  in  the execution  of the relevant documents and advised  the  Bank. He  stated that the documents were so executed for  settling the criminal case.  He also added that he told defendants  2

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and  3 that if the mortgage deed and the agreement were  got executed,  the  criminal  case  could  be  dropped  and  his explanation  was  that he made that  statement  because  the Managing  Director and the Bank’s Secretary Joseph had  told him to that effect.  It appears that for assisting the  Bank in  filing the criminal complaint, this lawyer  had  claimed Rs. 5001-, but the Bank, paid him only Rs. 200/-.  That  was one reason why he was dissatisfied.  It also appears that he recommended  to  the  Bank to give a loan  to  some  persons including defendants 2 and 3 and his recommendation  letters were  ignored by the Bank.  That war, another reason why  he was  not  feeling happy with the Bank.  The High  Court  has taken  the  view that the statements made  by  this  witness cannot  be regarded as reliable or trustworthy; and  we  are not  prepared to hold that the view taken by the High  Court is  so  erroneous that we should reverse it.  In  any  case, reading the evidence of this witness as a whole, we would be reluctant  to  come  to the conclusion  that  there  was  an agreement  between the Bank and. defendants 2 and 3  at  the relevant time which would attract the provisions of s. 23 of the   Act.   Our  reluctance  is  based  on   the   somewhat unsatisfactory  character  of  the evidence  given  by  this witness  as well as on the fact that defendants 2 and 3  who could  have given evidence on this point have  not  stepped. into  the  witness-box.   The  onus  to  prove  the  illegal character   of  the  transactions  was  obviously   on   the plaintiffs  and their failure to examine defendants 2 and  3 must largely contributed to the final decision on the issue. Mr.  Pillai who is the other witness on whose evidence  the, plaintiffs rely has been characterised by the High Court  as untrustworthy;  but  the infirmity in the evidence  of  this witness, is that his evidence does not clearly or  expressly lead  to the conclusion that there was an agreement  between the parties 754 that the document should be executed by the debtors in  con- sideration   for   the   Bank   withdrawing   the   criminal proceedings.   The answers which he gave are somewhat  vague and  indefinite,  and it would be unsafe to  make  the  said answers the basis of a definite finding against the Bank. The  last witness on whose evidence Dr. Seyid  Muhammed  has relied is plaintiff No. 1, the father, P.W. 7. His  evidence is obviously interested and the fact that he has taken  upon himself  to speak to a transaction when defendants 2  and  3 who were directly concerned in the transaction did not  come to  give evidence, considerably detracts from the  value  of his statements.  Therefore, having carefully considered  the evidence  in the light of criticism made by the High  Court, we are not prepared to accept Dr. Seyid Muhammad’s  argument that he has made out a case for reversing the conclusion  of the High Court. In this connection, we ought to mention another point  which is  not irrelevant.  The evidence given by the Secretary  of the  Bank,  Joseph,  shows that soon after  the  godown  was inspected  and before the complaint was filed, defendants  2 and  3 offered to the Bank to make up for the deficiency  in the  value of the pledged goods.  They appealed to the  Bank that  the  discovery made by the bank on inspection  of  the godown  should  not be disclosed to anybody  and  that  they would  immediately furnish sufficient  additional  security. In  order to carry out this promise, they in fact  delivered to  the  Bank certain documents of title in respect  of  the property which was ultimately mortgaged to the Bank; but all the  documents  of title were not handed over  and  that  is where  the  matter  stood when  the  complaint  war,  filed.

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Later,  the  two impugned documents were  executed  and  the complaint  was withdrawn.  The point on which Mr. Desai  for the  Bank has relied is that the evidence of  the  Secretary shows  that an agreement to furnish additional security  had been reached between defendants 2 and 3 on the one hand  and the  Bank on the other even before the complaint was  filed, and so, it would be unreasonable to suggest merely from  the sequence  of subsequent events that the  impugned  documents were executed with the object, and for the consideration, of stifling the criminal prosecution.  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 appeals, 755 and  in proving their case, the plaintiffs are  expected  to lead  satisfactory  evidence; and in our opinion,  the  High Court  is,,  on  the  whole,  right  when  it  came  to  the conclusion, that the evidence led by the plaintiffs is,  far from  satisfactory.   Therefore, we are satisfied  that  the view  taken  by  the  High Court  is  right  and  cannot  be reversed. The  result  is,  the appeals fail and  are  dismissed  with costs(  one set of hearing fees.  The appellants  have  been allowed to file their appeals in forma pauperis, and so,  we direct that they should pay court-fees which they would have had  to  pay  if  they had not been  allowed  to  appeal  as paupers. Appeals dismissed. 756