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Ram Kumar Das v. Nanda Kumar Shaha
Factual and Procedural Background
The plaintiff (now the appellant) purchased a holding originally belonging to defendant No. 7 (Rajani Raha). Defendants Nos. 1 and 2 (landlords) sued the plaintiff for registration of an alleged agreement in respect of a tank and were unsuccessful. They then sued defendant No. 7 for rent and obtained an ex parte decree. Defendant No. 7 applied to set aside that decree. During the pendency of that application, defendant No. 7 applied for an adjournment on grounds of illness, supporting the adjournment with an affidavit sworn by the plaintiff (filed 10 February 1917). Defendants Nos. 1 and 2 alleged that affidavit was false and applied (11 March 1917) for sanction under Section 195 CrPC to prosecute the plaintiff for offences under Ss. 193 and 199 IPC. That application for sanction was set down for hearing 2 February 1918 after various adjournments. On that date the parties filed a joint petition stating they had come to terms and sought time; the case was adjourned to 6 February 1918. On 6 February 1918 a petition stated the matter had been settled and prayed that the application be dismissed; it was dismissed. On the same day the plaintiff executed and presented for registration three deeds (Ext. C, D and E) transferring various interests (a patta settling the tank, a release relinquishing bhita, and a conveyance of nal lands to defendant No. 7).
In the present suit the plaintiff alleged that defendants Nos. 1 and 2 had gained over defendant No. 7 and, in conspiracy with defendant No. 3 and Naba Saha (predecessor-in-interest of defendants Nos. 4–6), had started the prosecution sanction application to threaten him. He alleged he executed the deeds without consideration and under undue influence, coercion and threats of criminal prosecution, and sought a declaration that the deeds were void and an injunction restraining defendants from exercising rights under them, and recovery of possession if necessary. Defendants denied conspiracy and undue influence, and contended the plaintiff executed the deeds voluntarily.
The trial Court found the plaintiff executed the deeds under undue influence and to avoid a possible prosecution for perjury; it decreed the plaintiff's suit. The lower Appellate Court reversed: it held no criminal conspiracy was proved, found the compromise was to stifle a non-compoundable criminal prosecution (hence illegal), and held the plaintiff was in pari delicto and had not established undue influence; it set aside the trial Court's judgment. The plaintiff appealed to this Court.
Legal Issues Presented
- Whether the deeds executed by the plaintiff were the result of undue influence, coercion or threats of criminal prosecution such that they should be set aside.
- Whether the plaintiff is disentitled to relief because he was in pari delicto with the defendants and the alleged compromise was founded on an illegal object (stifling a non-compoundable prosecution).
- Whether the exceptions to the general rule denying relief for illegal transactions (for example where one party is oppressed and not in pari delicto) apply on the facts of this case.
Arguments of the Parties
Appellant's (Plaintiff's) Arguments
- The deeds were executed without consideration and as a result of undue influence, coercion and threats of criminal prosecution by defendants Nos. 1 and 2 (and others), who had obtained an ex parte decree against defendant No. 7 and kept the threat of prosecution hanging over the plaintiff.
- The defendants conspired to procure the sanction application and used that threat to compel the plaintiff to execute the deeds; accordingly the deeds are void and should be set aside and possession restored if necessary.
- The plaintiff contends there is nothing in law preventing him from obtaining relief on these facts (i.e., despite the alleged illegality of the underlying negotiation, undue influence and oppression vitiate the transaction).
Respondents' (Defendants') Arguments
- The defendants deny conspiracy, undue influence, coercion or threats; they assert the plaintiff voluntarily executed the deeds.
- Even if the transaction was illegal (a compromise to stifle a criminal prosecution), the plaintiff is disentitled to relief because he is in pari delicto with the defendants; the maxim melior est conditio possidentis (and the rule ex dolo malo non oritur actio) applies.
- The respondents relied on authorities for the general proposition that courts will not assist a party who founds a cause of action upon an immoral or illegal act; similarly, money paid on an illegal contract cannot be recovered in the absence of fraud, duress, undue influence or oppression.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Williams v. Bayley | Relied upon by the appellant (specific principle from the case not stated in the provided opinion). | Cited by appellant; the opinion does not state a specific application beyond being relied upon by the appellant. |
| Flower v. Sadler | Relied upon by the appellant (specific principle not stated in the provided opinion). | Cited by appellant; no specific application described in the text. |
| Jones v. Merionethshire Permanent Benefit Building Society | Relied upon by the appellant (specific principle not stated in the provided opinion). | Cited by appellant; the court did not identify a particular rule from this case in the excerpt. |
| Nujebar Rahman v. Muktashed Hossein | Relied upon by the appellant (specific principle not stated in the provided opinion). | Cited by appellant; treated as part of appellant's authorities but not separately analyzed in the text. |
| Muthuveerappa Chetty v. Ramaswami Chetty | Relied upon by the appellant (specific principle not stated in the provided opinion). | Cited by appellant; no discrete discussion of the case's rule in the opinion excerpt. |
| Taylor v. Chester | Relied upon by the respondents as authority supporting the general rule that courts will not assist parties who base actions on immoral or illegal acts. | Cited by respondents; court acknowledged the general rule but examined its qualifications and exceptions. |
| Scott v. Brown, Doering, Mc Nab & Co. | Relied upon by the respondents in support of the general rule against aiding claims founded on illegal acts. | Cited by respondents; the court treated these as part of the body of authority stating the general principle but considered exceptions on the facts. |
| Holmanet Al' v. Johnson, alias Newland | Quoted Lord Mansfield's statement of the general principle: "no Court will lend its aid to a man who founds his cause of action upon an immoral or illegal act." | Relied on by respondents; the Court accepted the maxim but emphasized that its generality is qualified by authorities protecting parties vulnerable to oppression. |
| Harse v. Pearl Life Assurance Company | Used to illustrate the rule that money paid on an illegal contract cannot be recovered in the absence of fraud, duress or undue influence or oppression. | Referred to by the Court as an example of the general rule; the Court then discussed recognised exceptions to that rule. |
| Browning v. Morris | Example (per Lord Mansfield) of qualification to the general rule where the law protects one set of persons from oppression by another; parties may not be in pari delicto. | Identified by the Court as an authority supporting the exception that an injured person may bring an action to defeat a contract when he was oppressed. |
| Kearley v. Thomson | Example of the qualification to the general rule: where transactions are prohibited for protection of one party, that party may obtain relief though the transaction was illegal. | Applied by the Court to illustrate exceptions to the pari delicto bar; used to justify relief where one party was oppressed or in a weaker position. |
| Atkinson v. Denby | Example where a debtor who secretly paid money under pressure to induce a creditor to agree to a composition could recover the money. | Used by the Court as an example of circumstances in which payments obtained under pressure may be recovered; supports the exception to pari delicto. |
| Smith v. Cuff | Quoted (Lord Ellenborough) that "It can never be predicated as par delictum when one holds the rod and the other bows to it." (illustrative of unequal bargaining positions). | Relied upon by the Court as doctrinal support for the proposition that one who is oppressed and coerced is not in pari delicto with the oppressor. |
| Smith v. Bromley | Another illustration cited for the proposition that oppressive pressure negates pari delicto. | Referenced by the Court to support the line of authority permitting relief where one party held dominance over the other. |
Court's Reasoning and Analysis
The Court first acknowledged the general legal principle (referred to by respondents and supported by certain precedents) that a court will not assist a party who bases an action on an immoral or illegal act and that money paid on an illegal contract is generally irrecoverable in the absence of fraud, duress, undue influence or oppression. However, the Court observed that this generality is subject to qualifications where the law seeks to protect a weaker or vulnerable party from oppression by a stronger party.
The Court then analysed the factual findings made by the trial Court and the record portions brought to its notice. It recited the salient facts found by the trial Court including:
- The application for sanction to prosecute the plaintiff was kept pending from 14 March 1917 to 2 February 1918 and thus hung over the plaintiff's head.
- On 2 February 1918 both sides filed a joint petition stating they had come to terms and sought time; the case was adjourned to 6 February 1918.
- On 6 February 1918 the plaintiff executed and completed registration of three deeds between 1 and 2 p.m., and at about 4 p.m. the application for sanction was dismissed.
- Defendant No. 7 (whose illness was sworn to by the plaintiff) appeared to have been gained over by defendants Nos. 1 and 2 (for example his name was included in the list of witnesses filed on 2 February 1918).
- Under the deeds, defendants 1 and 2 obtained the tank (for which they had earlier propounded a forged lease in 1910), defendant No. 3 and Naba Saha obtained the homestead they had earlier sought and defendant No. 7 obtained land his family had lost earlier.
Considering these facts and the trial Court's express findings that defendants were in a position to dominate the plaintiff's will and that no consideration had passed, the Court concluded that the deeds were not voluntary and that the defendants had "held the rod and the plaintiff bowed to the same." The Court found these trial Court findings to be fully supported by the record and not legitimately displaced by the lower Appellate Court.
On legal principle, the Court accepted the respondents' cited maxim but applied the recognized exceptions (cases cited) to hold that where one party is oppressed and the transaction results from undue influence or coercion, the oppressed party is not in pari delicto and may obtain relief (e.g., setting aside deeds or recovering money). Applying that principle to the established facts, the Court restored the trial Court's judgment.
Holding and Implications
Appeal allowed; judgment of the trial Court restored and the judgment and decree of the lower Appellate Court set aside.
Implications and direct effects:
- The Court restored the trial Court's decree that the deeds were executed under undue influence and that the plaintiff was entitled to relief (i.e., the plaintiff's suit was decreed at trial).
- The appeal was allowed with costs in this Court and in the lower Appellate Court (costs awarded against the respondents as stated).
- The opinion applies established exceptions to the general pari delicto/illegality rule to protect a party found to have been subjected to undue influence and oppression; the Court did not purport to lay down a new legal principle beyond applying those authorities to the facts before it.
1. The plaintiff is the appellant before us and the facts which have given rise to the suit out of which this appeal has arisen are shortly stated, as follows: The defendants Nos. 1 and 2, who are the landlords, sued the plaintiff for an order for registration of an alleged agreement in respect of a tank. They were unsuccessful. They then sued the old tenant, defendant No. 7, one Rajani Raha, for the rent of the holding and obtained an ex parte decree. The latter applied for the setting aside of the said ex parte decree. During the pendency of that application, the defendant No. 7 applied for an adjournment of the hearing of the said application on the ground of his illness and in support thereof used an affidavit which had been sworn to by the plaintiff who has purchased the holding, which had originally belonged to defendant No. 7, and who had been recognized as tenant by the landlords, i.e, the defendant Nos. 1 and 2. The affidavit referred to above was filed on the 10th February, 1917, and it was alleged that the affidavit was false to the knowledge of the plaintiff. On the 11th March, 1917, the defendant Nos. 1 and 2 applied to the Court for sanction under Section 195 of the Cr PC to prosecute the plaintiff for offences under Ss. 193 and 199, I.P.C, alleging that he had made a false affidavit. The application for sanction was set down for hearing on the 2nd February, 1918, after various adjournments had been obtained by the parties. On that date the defendants 1 and 2 filed a list of their witnesses who were in attendance, but subsequently on the same day they and the plaintiff filed a joint petition for time, alleging that they had come to terms and that the plaintiff would execute certain deeds on the following Tuesday settling a tank and bhita with defendants 1 and 2's man Jagat Saha and releasing some paddy lands to the defendant No. 7, Rajani Raha.” The case was accordingly adjourned to the 6th February, 1918, and on that date a petition was filed by both parties, stating that the matter had been settled and praying that the application might be dismissed. The application was accordingly dismissed. On the same day, the plaintiff executed and presented for registration three deeds, Ext. C, a patta settling the tank with defendants 1 and 2; Ext. D, a deed of release, relinquishing the bhita in favour of defendant No. 3, and Ext. E. a conveyance conveying the nal lands to the defendant No. 7, Rajani Raha. The plaintiff, in the present suit, alleges that the defendants 1 and 2 gained over the defendant No. 7 and as the result of a conspiracy between these persons and defendant No. 3 and Naba Saha, who was the predecessor-in-interest of the defendants Nos. 4 to 6, the case for sanction to prosecute the plaintiff was started. The plaintiff was apprehensive that sanction might be granted for prosecuting him, and as the defendants continued to threaten him with prosecution, he was compelled to accept their proposals that he should execute certain deeds in consideration of their abandoning the application for sanction to prosecute. He urges that he executed the document referred to above without any consideration and as a result of undue influence, coercion and threats of criminal prosecution exercised and Used by the defendants 1 and 2, and he prays for a declaration that, the said deeds are void and inoperative and for an injunction restraining the defendants from exercising any rights over the properties comprised in the said deeds. There is also a prayer for recovery of possesion of the said properties, should it be found that possession thereof is with the defendants. The allegations made by the plaintiff as regards charges of conspiracy, undune influence, coercion and threats of criminal prosecution are denied by the defendants, and it is urged on their behalf that the plaintiff voluntarily executed the deeds in question.
2. The trial Court found that the possibility of a trial for perjury unsettled the plaintiff's mind and that on the 2nd February, 1918, he had no other alternative but to accept the proposal of the defendants 1 and 2 in order that he might extricate himself from the position in which he found himself.
3. It was further found that the defendants 1 and 2 were in a position to dominate the will of the plaintiff and that the facts connected with the execution of the deeds in question could fit in only with the theory that the defendants 1 and 2 did take advantage of their position to exercise undue influence upon the plaintiff to induce him to execute the deeds in question in respect of properties which the plaintiff had all along jealously guarded and it was also found that no consideration whatsoever had passed in respect of the deeds. After reviewing the entire evidence in the case, the trial Court held that the deeds were executed by the plaintiff under undue influence practiced upon him by the defendants 1 to 3 and 7 and for the purpose of avoiding a possible prosecution for perjury. In this view of the matter the plaintiff's suit was decreed.
4. The defendants preferred an appeal and it was held by the lower appellate Court that it could not be said that there was a criminal conspiracy for the purpose of putting the plaintiff to trouble. It was further held that the plaintiff understood that there was every chance of sanction being accorded for his prosecution and in order to avoid the prosecution, which might result in a conviction, the plaintiff agreed to a compromise with the defendants on such terms as they were willing to offer. In other words, it was found that the compromise was for the purpose of stifling a criminal prosecution for a charge which was not compoundable, and that the object of the compromise was consequently illegal. But the lower Appellate Court held that the plaintiff could not apply to set aside said document inasmuch as he was a person in pari delicto with the defendants, and further, that on the evidence no case of undue influence had been made out. The lower Appellate Court, therefore, set aside the judgment and decree of the Court of first instance.
5. Against this judgment and decree the plaintiff has appealed to this Court and it has been argued on his behalf that on the findings arrived at by the two Courts the conclusion that there was no undue influence exerted on the plaintiff is not sustainable, and, secondly, that the circumstances show that the conduct of the defendants was oppressive and that there is nothing in the law to prevent the plaintiff from getting the relief he seeks. On behalf of the respondents it has been argued that assuming that the transaction in question was illegal, yet the plaintiff is disentitled to any relief, because the illegal purpose, whatever it was, had been carried out by the execution and registration of the deeds in question and the parties were in pari delicto and maxim melior est conditio possidentis applies; in other words, it is argued that if the plaintiff could not make out his case for relief otherwise than through the medium and by the aid of the illegal transaction, to which he was himself a party, then it must be held that the plaintiff and the defendants were in pari delicto and therefore the plaintiff who seeks relief is disentitled to the same. The appellant relies upon the cases of Williams v. Bayley(1), Flower v. Sadler(2), Jones v. Merionethshire Permanent Benefit Building Society(3), Nujebar Rahman v. Muktashed Hossein(4) and Muthuveerappa Chetty v. Ramaswami Chetty(5), while the respondents rely upon the cases of Taylor v. Chester(6), Scott v. Brown, Doering, Mc Nab & Co.(7), and Holmanet Al' v. Johnson, alias Newland(8), where Lord Mansfield stated that the principle of public policy being ex dolo male non oritur actio, “no Court will lend its aid to a man who founds his cause of action upon an “immoral or illegal act.” The contention advanced by the respondents is only the application of the general rule that money paid on illegal contract cannot be recovered in the absence of fraud, duress or undue influence or oppression, where the payment was obtained by the innocent misrepresentation of the other party, [See Harse v. Pearl Life Assurance Company(9)]. The generality of the rule referred to above is, however, subject to some qualification, e.g, where contracts or transactions ape prohibited by law for the sake of protecting one set of men from another set of men; the one from their situation and condition being liable to be oppressed or imposed upon by the other: there the parties are not in pari delicto and it has therefore been held that the person injured after the transaction is finished and completed, may bring his action and defeat the contract [per Lord Mansfield, Browning v. Morris(10), Kearley v. Thomson(11)]. It would therefore follow that if one person has, in such circumstances, paid money to another or has executed deeds in favour of another in pursuance of an illegal agreement, though both parties are in delicto, yet they are not in pari delicto, and the person who has paid the money or has executed the deeds may recover it back in an action for money paid and received or may apply for the setting aside of the deeds respectively. For instance, where a debtor has under pressure secretly paid a sum of money to his creditor to induce him to agree to a composition, the money so paid may be recovered back by the debtor [see Atkinson v. Denby(12); see also Smith v. Cuff(13) where Lord Ellenborough says. “It can never “be predicated as par delictum when one holds the rod and the other bows to it.” [See also Smith v. Bromley(14)]. The case therefore resolves itself into this, whether on the facts disclosed in the evidence on record it can be inferred that pressure or undue influence was exerted on the plaintiff, and for that purpose we have carefully considered the judgments of the two Courts below and such portions of the records as have been brought to our notice. In our opinion the facts found by the trial Court, namely, that the application for sanction to prosecute was kept hanging over the head of the plaintiff from the 14th March, 1917 to the 2nd February, 1918; that on the last mentioned date the pleaders for the defendants 1 and 2 insisted upon a joint petition for further time being put in, alleging that the parties had come to terms; that on the next adjourned date the plaintiff not only executed the three deeds in question but completed the registration thereof between 1 and 2 p.m; that about 4 p.m on the same date the application for sanction wad allowed to be dismissed; that the defendant No. 7, whose illness was sworn to by the plaintiff in the affidavit referred to above, had been gained over by the defendants 1 and 2 (e.g, his name was included in the list of witnesses filed by the defendants 1 and 2 on the 2nd February, 1918); that under the deeds in question, defendants 1 and 2 got the tank, to obtain which they had propounded a forged lease in 1910 (exhibit 9); that the defendant No. 3 and Naba Saha got the homestead which they sought in vain to get under a decree; and defendant No. 7 got the land which his family had lost many years ago and in respect of which the defendants 1 and 2 got the ex parte decree, which the plaintiff was seeking to set aside, lead to the irresistible conclusion that the deeds in question were not voluntary and the transaction was brought about because the defendants held the rod and the plaintiff bowed to the same. The facts have been very exhaustively set out in the judgment of the first Court, and as far as we can see, the findings arrived at by the first Court cannot be and have not been legitimately displaced. In this view of the matter, the judgment and decree of the lower Appellate Court must be set aside and those of the Court of first instance restored.
6. The result therefore is that this appeal is allowed with costs in this Court and in the lower Appellate Court.
7. Appeal allowed.
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