' ABDUL MAJEED MALLICK, C. J. -This first appeal arises out of the judgment and decree of the Court of the District Judge, Poonch, dated 15th August, 1979, resulting in dismissal of the plaintiff- appellant's suit for damages.
2. The leading facts involved in the case are that the plaintiff-appellant brought a suit for damages on the plea of malicious prosecution, at the instance of the defendant. He claimed a sum of Rs, 1,00,000 as damages in the case. It was averred that in the beginning of year 1969, the plaintiff learnt that the defendant-Government was contemplating his suspension from service on account of alleged misappropriation and embezzlement in the deposits of Kashmir Co-operative Bank Ltd.
On 4th of January, 1969, the plaintiff submitted an application to the President of the Government for providing him an opportunity of hearing before taking the proposed action of suspension. He also implored in the application that a departmental inquiry in the light of the Government Order, dated 8th of May, 1965, may be ordered through a Judge of the High Court before any final action.
The Government instead of providing an opportunity of hearing to the plaintiff or directing an inquiry in the ligh of the said Government Order, suspended him from service on the 10th of January, 1969. On 23rd of February, 1969, a case was registered against Managing Director (Irshad Ahmed Sheikh) of the said Bank and plaintiff, as a co-accused. On completion of the investigation, prosecution against the plaintiff was dropped for want of evidence and Irshad Ahmed Sheikh was put to trial. On proof of innocence of the plaintiff, in the investigation, he moved another application to the President, on the 23rd of June, 1969, for his reinstatement. The Government instead of reinstating the plaintiff-appellant, directed for registering another case against plaintiff under section 5(2) of the Anti-Corruption Act. Consequently, a case was registered against the plaintiff on the 13th of August, 1969 and challan was submitted before the Special Judge, Anti-Corruption on the 29th of September, 1969. The learned Special Judge Anti-Corruption acquitted the plaintiff- appellant on tbe 10th of August, 1970. On securing acquittal, the plaintiff filed the present suit on the 10th of August, 1971.
3. He claimed damages on the following counts :-
(i) That he sufferred loss due to illegal order of suspension.
(ii) That he incurred loss in prosecution of a criminal case.
(iii) That he was made to suffer mentally and financially by illegal and wrong act of the defendant- Government.
(iv) That the prosecution initiated at the instance of the defendant-Government was malicious.
(v), That the reputation of the plaintiff was damaged.
(vi) That due to mala fide act of the Government, referred to above, the plaintiff failed to provide adequate maintenance and education to his children.
4. That defendant-Government, in its written statement, repudiated the claim of the plaintiff and reiterated the attributions made, the criminal case. It was averred that huge Government amount of Rs, ,00,000 was embezzled and misappropriated due to hasty registration of the Bank ; unauthorised nomination and acceptance of plaintiff as Director of the Bank ; illegal acceptance of honorarium and negligence in supervision and control of the functioning of the Bank.
5. In view of the value of suit (Rs, 1,00,000), the suit was filed in this Court on the side of its original jurisdiction. But on enhancement of pecuniary jurisdiction of the subordinate. Courts, by an amendment, the case was transferred to the file of the District Judge, Poonch.
6. In support of the claim, the plaintiff produced various witnesses and documentary evidence which we shall discuss next when we examine the controversy raised by the parties. In rebuttal, the Government-defendant produced Farman Ali Shah who conducted investigation in the criminal case.
7. The claim of the plaintiff, primarily, rests on the plea of malicious prosecution. In order to arrive at a proper conclusion, it is necessary to examine the meaning and scope of phrase, "malicious prosecution." The phrase, "mala fide" and "malicious prosecution" connotes an action a case accompanied by enmity, despite, or hatred. In 'Wharton's Law Lexicon', the phrase, "malicious prosecution" is defined as :- "a prosecution, preferred maliciously, without reasonable or probable cause ; the remedy is an action on the case, in which damages may be recovered. The allegation of want of probable cause, must be substantively and expressly proved, and cannot be implied ; but it is for the Judge, to determine upon it."
' The meaning of the word, "malicious" as defined in 'Webster's International Dictionary (Second Edition), is :-{{TALBE TEXT}} "(1) Indulging or exercising malice, harboring or enmity ;
(2) Proceeding from hatred or ; dictated by malice ;
(3) Playfully or archly mischievous.
(4) Obs. a Med. Malignant ; virulent. b. Clever ; Cunning.
(5) Law. 'Characterized by, or involving, malice ; having or done with, wicked or mischievous intention or motives ; as a malicious act."
' The phrase, "malicious prosecution" finds its meaning as :- "A wanton prosecution by legal process without probable cause."
' In presence of the meaning and scope of phrase, "malicious prosecution," referred to above, it is, therefore, further necessary to find out the meaning and scope of the phrase, "probable cause." The phrase, "probable cause," in its dictionary meaning, defined in 'Webster's International Dictionary'
(Second Edition), signifies as :- "A reasonable ground or presumption that a charge is well-founded.' Two definitions of probable cause with reference to the criminal prosecution and actions in tort are in general acceptance.
One I that 'probable cause is the existence of such facts and circumstance as would excite the belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor, that the person charged w guilty of the crime for which he was prosecuted.' The other, and more widely accepted definition, tantamount this, is ; 'probable cause' means a reasonable ground of suspicion, supported by circumstances sufficiently strong in themselves to warrant a cautious man in the belief that the person accused is guilty of the offence with which he is charged."
' It is evident from the aforesaid meaning of the phrase, "probable cause" that a bona fide prosecution rests on the circumstances sufficiently strong and convincing to warrant, a man of ordinary prudence, to entertai an impression and belief that the person accused was guilty of offence with which he was charged. On an action for damages, on the ground of mali cious prosecution, the initial onus of proof was on plaintiff to satisfy Coupon the following points :-
(i) That his criminal prosecution was malicious and
(ii) that the prosecution was without reasonable and probable cause.
' It was contended that in presence of acquittal in criminal prosecution, the onus of proof was placed on the defendant to show that criminal prosecution of plaintiff was free from malice and based on reasonable and probable cause. We do not agree with the contention as in a civil action for damages, the onus of proof was on the plaintiff to prove that his criminal prosecution was malicious as well as that there was no reason and probable cause for undertaking his prosecution.
The rule of evidence is that the burden of proof (in a civil case or proceedings) lies on that person who would fail, if no evidence at all were given on either side. In our opinion, the initial onus of proof was on plaintiff. On the discharge of initial onus of proof the burden of proof shifted on the opposite party which was bound to show the existence of reasonable and probable cause. This being the position, in order to succeed, the plaintiff was under an obligation to prove :-
(i) that he was prosecuted by the defendant ;
(ii) that such prosecution was malicious ;
(iii) that defendant acted without any reasonable or probable cause ; and
(iv) that prosecution terminated in acquittal of the plaintiff.
' In an identical case titled Balbhaddar v. Badri Shah (Viscount Dunedin) (1) it was held as under :- "In an action for malicious prosecution, the plaintiff has to prove that he was prosecuted by the defendant ; that the proceedings complained of in favour of the plaintiff if from their nature they were capable of so terminating, that the prosecution was initiated against him without any reasonable and probable cause and that it was due to malicious intention of the defendant, and not with a mere intention of carrying the law into effect."
' The aforesaid view was followed in AIR 1933 Mad. 429, AIR 1944 (P. C.) 1 and PLD 1970 Kar.
344. In the instant case, parties are in agreement on the following points :-
(i) that the plaintiff was prosecuted ;
(ii) that criminal prosecution terminated in acquittal of plaintiff ; and
(iii) that plaintiff was suspended from service during the period of trial.
' However, the averments of malicious prosecution and action of defendant, in absence of reasonable and probable cause, were controverted.
9. As the present controversy emanated from criminal prosecution of the plaintiff, we propose to settle the controversy in the light of the attributions in criminal case. It is deemed equally convenient and conducive to appraise the evidence, in order to reach a safe conclusion. The allegations, as evident from the judgment of the Special Judge, Anti-Corruption, are as under :-
(1) That instead of submitting the feasibility report of the proposed (I) AIR 1926 P C 46 Bank to the President as desired by him, he (plaintiff) registered the said Bank, on 3rd August, 1967 within a day without going into the antecedents and financial soundness of the promotors of the Bank.
(2) That he (plaintiff) made additions and alterations in letter No, 524/31/A. R. M./67, dated 3rd August, 1967, addressed to him by Chi. Muhammad Latif, Assistant Registrar, Muzaffarabad, for concealing his interest in the said Bank.
(3) That he (plaintiff) received Rs, 400 as honorarium for two months from the said bank against the provisions of Article 50 of the K. S. R.
(4) That he (plaintiff) failed to keep an eye on the finances of the Bank and flow of its money outside Azad Kashmir territory and due to his negligence and omission an amount of Rs, 7,00,000 was transferred to Co-operative Investment and Finance Corporation Karachi. By Mr. Irshad Ahmed Sheikh, the Managing Director of the said Bank and it resulted in loss of Rs, 7,00,000 to the Government.
' In addition to the admitted facts, the plaintiff has produced evidence to show that his criminal prosecution was without a reasonable and probable cause. It is evident from the record that the plaintiff was arrayed as a co-accused alongwith Irshad Ahmed Sheikh (principal accused) in the criminal case under sections 420, 421, 422, 468, 409 and 109, A. P. C. Registered on 23rd February, 1969 on the report of Badar-ud-Din. On conclusion of the investigation, the prosecution of the plaintiff was dropped, for want of evidence and Irshad Ahmed Sheikh, the principal accused, was sent to trial on the 15th of April, 1969. It is also on record that the plaintiff applied to Government for his re-instatement, on the 23rd of June, 1969.The Government kept quite upto 13th of August, when the second case was registered against the plaintiff, under section 5(2) of the Anti-Corruption Act.
It is undeniable that the evidence collected in the investigation against the plaintiff on which second case was registered on the 13th of August, was already in possession of the Government, as such it was readily available for reaching a conclusion leading to the guilt of the plaintiff.
Nevertheless, the Government felt advised to ignore the results of the earlier investigation and directed registration of the second case and allowed sanction for prosecution of the plaintiff. The learned counsel representing the defendant-Government was unable to explain as to what additional or new evidence was collected to initiate fresh investigation and prosecution of the plaintiff.
10. Among the charges, the first charge was that the plaintiff, in his capacity as Registrar, was hasty in registering the Kashmir Co-operative Bank Ltd : as he registered the Bank on the same day, when the application for the purpose was made. The relevant facts brought on the record show that the plaintiff was transferred from his parent department (Revenue Department) to the Co-operative Department, as Registrar Co-operative Societies, by the end of July, 1967. The application for registration of the bank was presented to him, on the 2nd of August, 1967 and the same was sent to the Assistant Registrar, an Officer immediate below, for scrutiny and report. The Assistant Registrar, in his scrutiny, found the application in order and recommended registration of the Bank. The Bank was consequently, ordered to be registered in the light of the recommendation of the Assistant Registrar. The defendant has not attributed an omission or violation of the provisions of the Co- operative Societies Act, 1912 (in force at the relevant time), pertaining to the registration of the Co- operative Societies. Section 8 of the Act empowers the Registrar to register a society on fulfilment of the conditions laid therein. The relevant conditions were entered in subsection (2) which provided as under :- "(2) The application shall be signed-
(a) in the case of a society of which no member is a registered society, by at least ten persons qualified in accordance with the requirements of section 6, subsection (1) ; and
(b) in the case of a society of which a member is a registered socity, by a duly authorised person on behalf of every such registered society, and where all the members of the society are not registered society, by ten other members or, when there are less than ten other members, by all of them."
' Subsection (3) of section 8 further provided that the application for registration of the co- operative society shall be accompanied by a copy of the proposed bye-laws. It shall contain the name of the persons by whom or on whose behalf, such application was made and shall also furnish such information in regard to the society as the Registrar may require. In the criminal case, before the Special Judge, Anti-Corruption or in this case, there is no attribution to the effect that the said application was incomplete or that the necessary conditions required for registration of the society were not sufficiently complied with. On the contrary, the defendant ascribed the allegation of hasty registration of the Bank. May be that the plaintiff took efficient steps in completion of the process of registration of the Bank, but the completion of the process of the registration, by itself, cannot be counted as motivated for likely embezzlement or misappropriation, as suggested by the defendant. It is clear from the facts of the case, that the alleged embezzlement took place after a year or so from the date of the registration of the Bank. It is also borne out from the admitted facts that the establishment of the Bank was quite within the knowledge of the Government as the President of the Government and the Senior Secretary were shown to have taken active part and keen interest in the establishment of the Bank, in its progress and accomplishment of its proposed objectives. Therefore, we do not feel persuaded to hold that the hasty registration of the Bank, in any manner, subscribed to the embezzlement and misappropriation of the bank deposits.
11. The second allegation made in the criminal case, was to the effect that plaintiff, in his capacity as Registrar, made alterations in the letter No, 524/31/ARM/67, dated 3rd of August, 1967 addressad to the plaintiff by the Assistant Registrar (Ch. Muhammad Latif), as such, was liable for tampering with the official record. Precisely, the alleged alteration was shown as cutting of the word, "verbal".
This allegation was unfounded for the reason that Ch. Muhammad Latif, Assistant Registrar (as he then was), appeared as a witness before the Special Judge as well as in this case. He expressly deposed that the cutting of the word, "verbal" was made by him and not by plaintiff as alleged by the defendant, This part of the testimony was recorded in reply to a question asked in the cross- examination. The '- relevant part of the answer of the witness is reproduced in his own words as under :-- {{URDU TEXT}}- ' In presence of positive evidence, we are not prepared to accept that the plaintiff was involved in tampering with the said letter as suggested by the defendant-respondent. Thus, the second allegation is also shown to have been misconceived by the defendant.
12. The third charge levelled against the plaintiff pertains to honorarium. It was alleged that the plaintiff was ineligible to accept his position as Director of the Bank. Likewise, it was shown that the plaintiff was incompetent to receive honorarium from the said Bank. The substance of the allegation was that receiving of honorarium was violative of the provisions of Article 50 of K.S.R. Vol. I. The plaintiff denied the allegation and insisted that his nomination as Director of the Bank was legal. Similarly, the payment of honorarium in favour of the plaintiff was supported by the bye-laws and resolution of the Board of Directors passed under the Chairmanship of Maqbool Ahmad Sheikh, the then Senior Secretary of the Government. In support of the contention, our attention was invited to the relevant rules. Rule 33 of the bye-laws of the Bank pertains to the Board of Directors and its constitution. Sub-rule (1) of rule 33 contemplates that among Directors, one Director shall be nominated by the Azad Government of the State of Jammu and Kashmir who will act Chairman of the Board of Directors. Sub-rule (2) provides that one ex officio Director would be a preson who may be the Registrar of the Co-operative Societies. The relevant provisions of the rule are reproduced as below :- "33. Board of Directors and its Constitution.
' Sub-rule (i) provides that one Director shall be nominated by the Azad Government of the Jammu & Kashmir who will act as Chairman of the Board of Directors ; ' Sub-rule (ii) provides that one ex officio Director would be who may be the Registrar Co-operative Societies, Azad Government of the Jammu & Kashmir ; and ' Sub-rule (iii) provides that the remaining Directors are to be elected from the individual members."
' It was in the light of sub-rule (1) of rule 33 that the Azad Government of the State of Jummu and Kashmir nominated Mr. Maqbool Ahmed Sheikh, the then Senior Secretary of the Government, as Chairman of the Board of Directors. Likewise, the plaintiff who was Registrar of the Cooperative Societies, was nominated as ex officio member of the Board of Directors of the Bank. It is undenied that the bye-laws of the Bank were approved by the Government. It is evident from the registered bye-laws that the plaintiff was competent to be nominated as ex officio member of the Board of Directors of the Bank. It may also be stated that nomination of the plaintiff as ex officio member of the Board of Directors, was well in the knowledge of Chairman of the Board of Directors (Senior Secretary of the Government), as well as the Government. In case nomination of plaintiff was illegal, the defendant-Government failed in its duty to object to the nomination of plaintiff as ex officio member of the Board of Directors of the Bank. Be as it may, but the fact remains that the defendant was unable to point out as to how such nomination was violative of the rules of service or in conflict with any order or instruction of the Government. The fact of the matter is that nomination of plaintiff as Director of the Bank was not violative of any law. It was for this reason that the defendant-Government did not object to nomination of the plaintiff as ex officio member of the Board of Directors of the Bank. But it appears that the real grudge of the Government confines to the honorarium proposed by the Board of Directors in favour of the plaintiff. It was argued that payment of the honorarium was violative of Article 50 of K.S.R. Vol. I. Article 50 K.S.R. Vol. I is reproduced as under :- "50. (a) Any officer may receive a fee from a private person or private body or a public body whose funds aft not administered by the Government for work done for it provided :-
(1) he has undertaken the work with the knowledge and sanction in writing of the Head of his Department ;
(2) that the Head of the Department certifies that it can be carried out without detriment to his official duties ; and
(3) that the acceptance of a fee and the amount of the fee are approved by the authority having power to sanction his appointment."
' It was suggested that the honorarium received by the plaintiff was not supported by the sanction in writing of the Government, as contemplated in clause (1) of the Article. In reply to this objection, the learned counsel fort the plaintiff invited our attention to the provisions of Article 49, K.S.R. An, contended that Article 50, K.S.R. Was not applicable to the case and that the case of the plaintiff was covered by Article 49, K.S.R. Article 49, K.S.R. Vol. I is also reproduced as under :- "49. Any servant of the State is eligible to receive without special permission :
(a) ... ... ... ...
(8) any reward offered for the arrest of a criminal or for information or special services in connection with the administration of justice ; and also any reward payable in accordance with the provisions of any Act or Regulation or Rules framed under such enactments."
' A perusal of the provisions of Article 50, K.S.R. Shows that an officer is allowed to receive a fee from a private person or private body or a public body for the work done by him provided such work was undertaken with the knowledge and sanction of the Head of his Department and that the Head of Department certified that such work would be carried out without detriment to the official duties and acceptance of a fee or the amount of fee was approved by the authority having power to sanction his appointment.
' This provision indicates that the public servants were not allowed to undertake any work of private person or private body or public body, without previous permission of the Head of the Department ; nor they were authorised to receive any fee for such work without the authority of the Head of the Department. The provisions of this rule do not apply to the plaintiff as, under the Co-operative Societies Act, it was enjoined upon the plaintiff, in his capacity as Registrar Co-operative Societies, to control, supervise and keep in touch with the functioning of the Bank. It was in the light of the provisions of the Co-operative Societies Act and bye-laws registered under the said Act, that the plaintiff was nominated as ex officio member of the Board of Directors of the Bank. On the other hand, Article 49, K.S.R. Vol. I, protection of which is taken by the plaintiff, in clause (b) provides that any reward payable in accordance with the provisions of any Act or Regulation or Rules framed under such enactments, was permissible to a Government servant. In the present case, as discussed above, the bye-laws authorised the Board of Directors to sanction honorarium for the Directors or any one of them, for performance of functions assigned to him from time to time. Rule 33 of the bye-laws further provided that the Registrar Co-operative Societies would be eligible to be nominated as ex officio member of the Board of Directors. Thus, the honorarium sanctioned by the Board of Directors in favour of the plaintiff as reward for the performance of functions of the Bank, was admissible to him under the provisions of clause (b) of Article 49, K.S.R. We do not find the fixation of honorarium and its payment to the plaintiff, violative of the bye-laws or the Co- operative Societies Act. It is also noticeable from the resolution of Board of Directors wherein honorarium was sanctioned in a meeting held on 11th November, 1969 that plaintiff was nominated as ex officio member of the Board of Directors and was allowed honorarium in lieu of his services, as such ex officio Director of the Bank, on the proposal and initiative of Maqbool Ahmed Sheikh, who in his capacity as Senior Secretary of the Government, was head of the Administration. As the nomination of the plaintiff as ex officio member of the Board of Directors and sanction of honorarium, was made at the instance of the Chairman who was also the Senior Secretary of the Government, the plaintiff was justified to believe that his nomination and grant of honorarium were obviously made with the approval and sanction of the Government. In order to hold the plaintiff guilty for his acceptance of his nomination as ex officio member of the Board of Directors and grant of honorarium, it was incumbent upon the defendant to show that such act of the plaintiff fell within the scope of corruption. Even if for the sake of argument, we may agree that the nomination of the plaintiff as Director of the Bank and his acceptance of honorarium, was not protected under Article 49, K.S.R. Vol. I and that the same was hit by the provisions of Article 50, K.S R., yet it was incumbent upon the defendant to prove that such action of the plaintiff fell within the scope of corruption. The fact of 'the- matter is that the Government failed to prove that the aforesaid allegation was sufficient to constitute corruption attributed to the plaintiff.
13. The next and last charge ascribed to the plaintiff was that the deposits of the Bank were embezzled and misappropriated due to his negligence and carelessness, as the plaintiff failed to take steps in controlling the activities of the Bank and allowed the authorities to take the amount beyond the limits of Azad Jammu and Kashmir territory. This charge was sought to be proved by reference to the functions and duties of the Registrar, Co-operative Societies enjoined under the provisions of the Co-operative Societies Act. The Special Judge, Anti-Corruption discussed this charge in detail and concluded that the charge was unfounded. The plaintiff, in support of his innocence, produced Sardar Muhammad Sharif Khan, Retired Chief Justice, who was Special and District Judge, Mangla Dam Affairs at the relevant time. Sardar Muhammad Sharif Khan deposed that the deposits were given to theBank in the light of recommendation of Maqbool Ahmed Sheikh, Senior Secretary. It was stated that the plaintiff had no hand in the transfer of the deposits nor he ever approached the Judge for opening account in the said Bank. It is necessary to state here that on registration of the Bank, its main office was established at Muzaffarabad and Branch Office was opened at Mirpur. M aqbool Ahmed Sheikh, Senior Secretary, handed over a letter of recommendation to the Managing Director for receiving deposits from the Deputy Commissioner, Mirpur and District Judge, Mangla Dam Affairs, Mirpur. On receipt of the letter, Sardar Muhammad Sharif Khan recorded the statement of the Managing Director and thereafter, on his satisfaction that the recommendation of the Senior Secretary was genuine, he ordered transfer of Rs, 10,00,000 to the Branch Office of the Bank at Mirpur. Likewise, the Deputy Commissioner Mirpur transferred a sum of Rs, 3,00,000 in his account opened in the Branch office at Mirpur. These deposits were given to the Branch Office of the Bank at Mirpur in August, 1968 i,e, one year after its operation and establishment. It is evident from the letter Exh. DY/1 written by the Senior Secretary to the President of the Government for approval of the transfer of the Account to the said Bank, that the Government had the knowledge of the transfer of the amount to the Bank and was in full picture of its functioning. The said letter is reproduced as under :- ' The language of the letter confirms the contention of the plaintiff in order to hold that the Senior Secretary and the then President (Khan Abdul Hamid Khan), were deliberately aiding the management of the Bank by taking keen interest in the establishment and functioning of the Bank.
On the other hand, the evidence proves the contention of the plaintiff that he was not taken into confidence at the time of transfer of the deposits nor he was apprised of this situation. Exh. DF/1, is the Investment Scheme of the Bank. The relevant parts of this Scheme are reproduced below :- "......In order to meet initial expenses of the Bank and its Head Office a sum of Rs, 10,00,000 has been invested by the Managing Director with the approval of the Chairman. This amount has been placed in Investment Deposit Account with the Co-operative Investment and Finance Corporation Ltd. Karachi for one year for the present, with the agreement that the said Corporation will invest the amount in Import Trader and will share 50% of the profit of the Trade with the Bank with a minimum of Rs, 7i% on our investment deposit with the said Corporation.
' It was resolved that the investment of Rs, 10,00,000 with Co-operative Investment Finance Corportation Ltd. Karachi, for a period of one year with a minimum of Rs, 7i% is confirmed.
' In order to meet the expenses of Muzaffarabad Branch, an Industrial and Commercial Enterprize for establishing Cinema House and a Restaurant with a small Hotel at Muzaffarabad was considered. This project will be installed by M/s. Eastern Agencies Karachi in name of Muzaffarabad Enterprizes, Muzaffarabad. They require a credit facility of Rs, 4,50,000 to be invested in this project which will cost Rs, 6,00,000 and will yield 15% profit when comes into producation. The party is prepared to invest 25% of the cost of the project.
' It was resolved that Maximum Credit limit of Rs, 4,50,000 is sanctioned to M/s. Muzaffarabad Enterprize, Muzaffarabad, on the same terms and conditions as above.
' Bank own Investment Scheme for purchasing fruits and its marketing in West Pakistan was considered. It will help economic growth of the local people and will also yield l2i% per annum profit to the Bank on its investment of Rs, 1,00,000 after meeting all the expenses.
' It was resolved that to invest upto Rs, 1,00,000 in this Investment Scheme is approved. It was further resolved that the Managing Director is authorised to release this amount after getting approval of the Chairman when all the details are available and arrangements completed.
' It was resolved that to invest Rs, 2,50,000 in the Investment Scheme is approved and it was further resolved that the Managing Director is authorised to release this amount after getting approval of the Chairman when all the details are available and the arrangements are completed."
14. A perusal of this piece of evidence suggests that the Managing Director prepared a scheme of investment of the assets of the Bank with the approval of the Chairman. On approval of the scheme, a sum of Rs, 10,00,000 was shown to have been invested by the Managing Director with the approval of the Chairman, in order to meet the initial expenses of the Bank and its Head Office.
This amount was placed in the Investment Deposit Account with the Co-operative Investment and Finance Corporation Ltd. Karachi, so that the said Corporation would invest the amount in Import and would share its profit with the Bank on the agreed ratio of its profits. According to the defendant-respondent, the transaction of the said amount was calculated as embezzlement and misappropriation. And it is in relation to the said amount that the plaintiff was attributed the charge of negligence and complicity. Exh. DF/l is pointer of the fact the amount in question was transferred to Karachi under an approved scheme of the bank and the scheme was approved by the Chairman. Thus, in fact, the amount was transferred out of Azad Kashmir with the approval and blessing of the Chairman. The defendant-respondent was in possession of this piece of evidence at the time of suspension of the plaintiff, registration of the first criminal case as well as registration of the second one against the plaintiff. It is unexplained as to how and why the real persons at whose instance the scheme was prepared and approved and the money was sent out of Azad Kashmir, was allowed to escape the liability and the plaintiff who was neither shown partisan to the preparation of the investment scheme nor party to its approval and ultimate transfer of the amount to Karachi, was atributed the guilt of corruption for embezzlement and misappropriation of the amount. We may agree that the plaintiff in his capacity as Registrar, Co-operative Societies, was vested with the powers under sections 35 and 36 of the Co-operative Societies Act, to undertake inspection of the books of the Bank as well as to make inquiry and if, in his opinion, the society for its bad functioning, was found fit to be dissolved, he was competent to cancel the registration of the society, but the fact remains that in absence of any complaint or apparent reasons to suspect the functioning of the Bank, in ordinary course of his duties, he was not supposed to initiate inspection of books or inquiry into the functioning of the bank. On the other hand, the plaintiff in his evidence, deposed that when he was apprised of the situation he opposed the so-called Investment Scheme but his objection was overruled by the Chairman who failed to record the objection of the plaintiff in the minutes of the meeting.
15. On examination of the charges levelled against the plaintiff in criminal case, in the light of the evidence recorded in this case, coupled the acquittal order, we have come to the conclusion that the defendant-respondent had no reason and probable cause to undertake criminal prosecution of the plaintiff. Therefore, in our well-considered view, the facts available at the time of registration of the case as well as holding of the trial of the plaintiff were insufficient to lend help to believe that such facts and circumstances were sufficient to constitute probable or reasonable cause to launch prosecution of the plaintiff.
16. The next aspect of the case necessitating attention of this Courts to find out enmity or motivation of the defendant-Government for criminal prosecution of the plaintiff. The plaintiff, in his pleadings, averred that he moved the Government through an application in early January, 1969 that before taking any action in respect of his suspension from service, he may be provided an opportunity of hearing and that an inquiry through a Judge of the High Court may be conducted against him in the light of the provisions of the inquiry order of 1965. This application of the plaintiff was ignored. The averment was not expressly denied in the written statement. It is also admitted in para. 6 of the written statement that Irshad Ahmed Sheikh alone was found guilty of the charge of embezzlement. Thus, claim of the plaintiff that he was found innocent in the first investigation, was admitted. In para. 7 of the plaint, the plaintiff averred that on proof of his innocence in the investigation and failure of the Government to re-instate him after two months' wait, he moved an application, on 23rd of the June, 1969 for his reinstatement. This averment raised in the plaint was undenied by the defendant-respondent. The answer to the allegation, as given in the written statement, is that these two matters were not co-related. Thus, it shall be deemed that the allegation was admitted by the defendant, as the law provides that an allegation of fact in complaint, shall be denied specifically, and expressly. An evasive denial is not permissive, as evasive denial is not a denial and the allegations are deemed to have been admitted. The plea of the plaintiff is further strengthened by the fact that the record, consisting of letter Exh. DY/1 and Investment Scheme, Exh. DF/1, clearly suggested participation and involvement of the Senior Secretary, in the establishment of the Bank, procurement of deposits and their transfer from Azad Kashmir to Karachi. It is undented that the criminal case was registered twice against the plaintiff at the instance of the Government, in presence of the evidence leading to the innocence of the plaintiff. The adamant attitude of the Government to prosecute the plaintiff and in consequence of its intention, according of sanction for such prosecution,' was a clear proof of malicious prosecution.
17. We have to bring on record that the documentary evidence pertaining to the establishment and functioning of the bank is pointer of the fact that Kashmir Co-operative Bank Ltd. Was established with the assistance, guidance and blessing of the Senior Secretary. It was the Senior Secretary who sent the Managing Director to the District Judge, Mirpur Development Authority and Deputy Commissioner, Mirpur, equipped with his letter, to obtain the deposits. Sardar Muhammad Sharif Khan, in his testimony, expressly stated that he transferred the amount under the direction of the Government. The testimony of the witness finds full support and corroboration from the letter Exh.
DY/1. The recitals of that letter disclosed that the deposits were procured from the two agencies, at the instance and on the recommendation of the Senior Secretary who obtained its approval and confirmation from the President. Likewise, the Investment Scheme, Exh. DF/1, is pointer of the fact that investment of Rs, 10,00,000 was approved by the Senior Secretary under whose guidance this amount was transferred to Karachi where it was finally embezzled and misappropriated. This is a proof of the fact that the said deposits were procured with the assistance of the Senior Secretary.
As the Bank scandle received wide publicity, it appears that in order to avoid involvement of the Head of the Administration, perhaps it was deemed convenient and suitable to prosecute the plaintiff. The testimony of plaintiff suggests that he was involved in the first case and in subsequent prosecution as the Government found it difficult to hush up the matter.
Ordinarily, malice is the result of ill-will, hatred and condemnation due to an act, or omission of opposite party, resulting in one's injury or loss. It is developed on account of clash of interest between two rivals.Malice may also take shape in absence of the aforesaid position, in a case where, in order to avert or escape from a likely injury or loss to person or allied matters like reputation, attained career, profession and property, one tends to make another person scape goat, to incur such loss. In such position, presence of hatred or clash of interest may not be visible.
In the instant case, may be that the Government or its Senior Secretary, was not shown openly inimical to plaintiff but one cannot lose sight of the fact, as the authorities of Ministry of Kashmir Affairs were in picture of the alleged bank scandle, apparently it was impossible for the Government to hush up the scandle without demonstrating punishment to one of the officials. The plaintiff being connected with the Co-operative Department, was considered suitable for demonstration of such severe action taken in that behalf. It is undeniable that such an action of the Government was found successful. The net result of aforesaid discussion is that criminal prosecution of plaintiff cannot be declared short of malice.
18. The third phase of the case pertains to the assignment of the damages, claimed by the plaintiff.
The damages in cases of malicious prosecution are generally determined in view of the loss suffered by plaintiff or injuries sustained by him. In this case the plaintiff has claimed damages to the tune of Rs, 1,00,000 on the counts enumerated in one of the preceding paragraphs. The defendant-respondent has admitted the criminal prosecution of the plaintiff. The plaintiff is, therefore, eligible to compensation for the losses incurred by him in defending himself in the criminal prosecution. The plaintiff has failed to provide details of expenses incurred by him in defence of his criminal prosecution. In our estimation, the expenses incurred by the plaintiff in his defence, cannot be beyond Rs, 10,000. This includes counsel's fee as well as the expenses of trvelling and miscellaneous expenses in defence. The plaintiff has also claimed damages for his defamation. It was averred that the plaintiff, during his past service, achieved good reputation for his honesty, integrity and efficiency. The criminal prosecution, not only caused mental and physical torture to plaintiff, but it proved as a big jolt to his reputation as well. In support of this plea, he produced Sardar Atta Muhammad Khan and Sardar Mukhtar Khan, Vakeel. Both the witnesses deposed categorically about the reputation, integrity and honesty of the plaintiff and stated that on knowing the allegation of embezzlement, the respect and honour enjoyed by plaintiff was lowered and his reputation was damaged. This Court is in a position to take judicial notice of the fact that the scandle of embezzlement of bank amount, received wide publicity in the country. The plaintiff, in his capacity as co-accused, equally received bad name. Thus, in his honest estimation, the plaintiff was justified to feel aggrieved of the injury caused to his good reputation. Keeping in view the position and offices held by the plaintiff and his status in ordinary life, we resolve to allow damages to the plaintiff to the tune of Rs, 50,000 on this account. The total amount of damages allowed to the plaintiff, thus, comes to Rs,60,000.
19. In view of the aforesaid observations, the appeal succeeds. It is, therefore, ordered that the judgment and decree of the trial Court is set , aside and plaintiff's suit is decreed to the tune of Rs, 60,000 with costs' throughout.