The plaintiff, who is the proprietor of Kenayan Carpet Industries, has claimed a decree for its.
2,00,000 against the State Bank of Pakistan and its Deputy Assistant Controller, Foreign Exchange, namely, Qamarul Islam Siddiqui, on account of the prosecution of the plaintiff under the Foreign Exchange Regulations Act, 1947, which prosecution is alleged by the plaintiff to be malicious. The claim is made in the circum--stances mentioned hereunder.
2. The plaintiff exported two consignments of woollen carpets to Kenya. One consignment of the value of Rs. 19,240 was exported in January 1960 under G. R. P. Form No. 275549. The other consignment of the value of Rs. 13,727 was exported in March 1960 under G. R. P. Form No. 275541.
Under the conditions of these forms, which conditions are prescribed under the Foreign Exchange Regulations Act, 1947, the sale proceeds of the goods had to be repatriated to Pakistan within four months from the date of export. Except for a sum of Rs. 2,666-10-8 received in April 1960, the sale proceeds did not come to Pakistan for a long time and consequently the branch of the Special Police Establishment attached to the State Bank of Pakistan started investigations against the plaintiff, after completion whereof a complaint was filed against him on the 4th of May 1962, under the signature of the defendant No. 2, before the Foreign Exchange Tribunal under sections 12 (1) and 23 of the Foreign Exchange Regulations: Act, 1947. The Tribunal gave its decision on the 15th, of December 1964, whereby the plaintiff was found guilty of the offences alleged against him and was, therefore, convicted and sentenced to a fine of Rs. 35,000 and in default to six months rigorous imprisonment. On appeal, however the plaintiff was acquitted by the High Court by judgment dated the 2nd of February 1967. The High Court proceeded on the view that the circum--stances which had come on record did not prove that the plaintiff had intentionally made default to bring the sale proceeds of the goods into Pakistan. In coming to this view, note was taken of the fact that full sale proceeds had been brought into the country during the pendency of the appeal. The plaintiff then brought the present suit in which he claims damages for malicious prosecution against both the defendants. Out of the total claim of Rs. 2,00,000 the plaintiff claims Rs. 80,000 on account of deterioration in his health due to this prosecution and the expenses incurred by him in defending himself. Another sum of Rs. 1,20,000 is claimed by him for the financial loss allegedly caused to him by his prosecution under the Foreign Exchange Regulations Act, 1947.
3. Both the defendants have denied the allegations of the plaintiff, and have further pleaded that on the facts brought out in investigation, the plaintiff's prosecution could not be treated as malicious or without reasonable or probable cause. The defendants have also denied that the plaintiff has suffered any loss or damage on account of this prosecution.
4. On 15-1-19(8, the following issues were framed by the Court with the consent of the parties
(1) Whether the plaintiff's prosecution under section 12 (1) read with section 23 of the Foreign Exchange Regulations Act, 1947, was malicious and actuated by bad faith?
(2) Whether the suit is barred by section 26 of the F. E. R. Act, 1947?
(3) Whether the plaintiff has any cause of action against the defendants?
(4) Whether the plaintiff has suffered damages as alleged?
(5) Whether the plaintiff is entitled to damages as claimed from the defendants?
(6) What should the decree be?
5. Issues Nos. 1, 2 and 3 can be decided together, as they raise the same point, that is, whether the plaintiff's prosecution under the Foreign Exchange Regulations Act, 1947 was malicious or without reasonable or probable cause. Now, in an action for malicious prosecution, the plaintiff is under the onus to show that (i) he was prosecuted by the defendant on a criminal charge (ii) the prosecution terminated in the plaintiff's favour, (iii) the prosecution was malicious, and (iv) the prosecution was without reasonable and probable cause. I need not dwell on the first requirement, because it is not denied by the defendants that the complaint under sections 12 (1) and 23 of the Foreign Exchange Regulations Act, 1947 was made by defendant No. 2 in his capacity as the Deputy Assistant Controller, Foreign Exchange, State Bank of Pakistan.
6. With regard to the second requirement, the plaintiff has shown that the prosecution ultimately terminated in his favour by the judgment of the High Court dated the 2nd of February 1967. But Mr. A. A. Fazeel, the defendants' learned Advocate, took the view that termination of the prosecution in the plaintiff's favour by judgment in appeal is itself not sufficient compliance with this requirement.
The learned Advocate referred to several decisions in support of his contention that if the plaintiff is convicted by the trial Court but is acquitted in appeal, then no action in malicious prosecution was maintainable, as conviction in the first instance shows that the prosecution could not be held to be not well founded. The first case on which Mr. Fazeel relies is the decision of the High Court of Allababad in Jadubar Singh and others v. Sheo Saran Singh (I L R 21 All.26) in which it was held that conviction by the Court of first instance, though reversed in appeal, was evidence, if unrebutted, against the plaintiff's plea of absence of reasonable and probable cause. To the same effect are other decisions cited by Mr. Fazeel, that is, Shama Bibi v. Chairman of Baranagora Municipality ((1910) 61 C 675); Sowrendra Mohan Sinha v. Soshi Bhusan Koer and others (AIR 1919 Cal. 134); Jagnarain Dubey v. Bidapat Dubey (AIR 1923 Pat. 344) and Dhanjishaw Rattanji Karani v. Bombay Municipality and others (AIR 1945 Bom. 320). In the last case it was further held that so long legal process is honestly used for its proper purpose, mere negligence or want of sound judgment use creates no liability. Mr. Fazeel also referred to Halsbury's Laws of England, Vol. 25, (3rd Edn.), p. 355 in which the same view has been taken as is laid down in the above cases. Now, the rule that no action in malicious prosecution could lie if the plaintiff is convicted by the trial Court, though this conviction is reversed in appeal, was first laid down in clear terms in the English case of Reynolds v.
Kennedy ((1784) 1 Wils 232) on the reasoning that the original conviction showed conclusively that there was foundation for the prosecution. The decisions on which reliance is placed by Mr. Fazeel appear to follow this case. But this English case is no longer accepted as good authority. Reference may be made in this connection to Herniman v. Smith (1938 A C 305); Berry v. B. T. C. ((1962) 1 Q B 306) and Abbot v. Refuge Assurance Co. Ltd. ((1962) 1 Q B 432). In all these cases the prosecution terminated in the plaintiff's favour only in appeal against conviction, but no importance was given to this fact, as these decisions appear to proceed on the view that the question of reasonable and probable cause for the prosecution is an independent question and should not be regarded as finally answered in the defendant's favour on the ground only that a conviction was secured in the Court of first instance. I personally also take the same view, and would, therefore, decline, with great respect, to follow the decisions on which reliance is placed by Mr. Fazeel. The question of the existence or otherwise of reasonable and probable cause, in my opinion, should be determined independently of the fact that though the plaintiff was acquitted in appeal, his trial had originally resultedin conviction by the Court of first instance. In the instant case, therefore, the judgment has to rest on the determination of two points, that is, (i) whether the prosecution of the plaintiff' was malicious, and (ii) whether this prosecution was without reasonable or probable cause.
7. The term `malice', in a prosecution of the nature which is before me, has been held not to be spite or hatred against an individual but of `malus animus' and as denoting the working of improper and indirect motives. The proper motive for a pro--secution is the desire to secure the ends of justice. It should, therefore, be shown that the prosecutor was not actuated by this desire but by his personal feelings-See Mitchell v. Jenkins ((1833) 5 B & Ad. 588); Pike v. Waldrum ((1352) 1 Lloyd's Rep. 431) and Stevens v. Midland Counties Ry. ((1854) 10 Ex. 352). Further, malice should be proved by the plaintiff affirmatively :----Abrath v. N. E. Ry. ((1886) 11 A. C 247). Malice may sometime be inferred from absence of reasonable and probable cause, but this rule has no general application and there may be cases where it would be appropriate not to infer malice from unreasonableness. Further, if reasonable and probable cause is proved, the question of malice becomes irrelevant, and also defect of want of reasonable and probable cause cannot be supplied by evidence of malice-See Turner v. Ambler ((1847) 10 Q B 252) ; Mitchell v. Jenkins; Brown v. Hawkes ((1891) 2 Q B 718) and Herniman v. Smith ((1938) A C 305). It would be proper here to quote the following observation of Denning, L. J. (as he then was) in Tempest v. Snowden ((1952) 1 K B 130)
"Even though a prosecutor is actuated by the most express malice, nevertheless he is not liable so long as there was reasonable and probable cause for the prosecution."
The same rule has been applied by the Courts in India and Pakistan. Several decisions on this point were brought to my notice by Mr. Fazeel. The first case on this point is the decision of the High Court, Lahore, in Abdul Shakoor v. Lipton & Co. (AIR 1924 Lah. 1) where it was held that in suits for malicious prosecution, proof of the existence of malice itself is not sufficient but should be accompanied by proof of absence of reasonable and probable cause. The Lahore High Court reiterated this view in Nur Khan v. Jiwandas (AIR 1927 Lah. 120) and Gobind Ram v. Kaju Ram (A 1 R 1939 Lah. 504). The same view prevailed with the High Court of Madras in V. T. Srinivasa Thathachariar v. P. Thiruvenkatachariar (AIR 1932 Mad. 601). This view also found approval of the Judicial Committee of the Privy Council in Balbhaddar Singh v. Badri Sah (AIR 1926 PC 46) and in Raja Braid Sunder Deb and others v. Bamdeb Das and others (AIR 1944 PC 1) in which last case it was further observed that malice cannot be inferred from the anger of the prosecutor.
8. As regards reasonable and probable cause, the classic definition is that given by Hawkins, J. In Hicks v. Faulkner ((1881)8 Q B D 167) that it is, "an honest belief in the guilt of the accused based upon a full conviction, founded upon reasonable grounds, of the existence of a state of circumstances, which, assuming them to be true, would reasonably lead any ordinarily prudent and cautious man placed in the position of the accuser, to the conclusion that the person charged was probably guilty of the crime imputed." This definition was approved by Lord Atkin in his speech in Herniman v. Smith. But in a later decision of the House of Lords, Glinski v. McIver ((1962) A C 726)
Lord Devlin defined reasonable and probable cause to mean that there must be a cause (i.e. Sufficient grounds) for thinking that the plaintiff was probably guilty of the crime imputed. Diplock, L. J. Followed this definition in Dallison v. Caffery ((1965) 1 Q B 348). It is not necessary that the prosecutor should have the belief that evidence E is sufficient to secure the conviction. The requirement of law would be satisfied if the prosecutor has prima facie evidence pointing out towards the plaintiff's guilt Dawson v. Vasandau ((1863) 11 W R 516). In an Australian case Commonwealth Life Assurance Society Ltd. v. Brain ((1935) 53 C L R 343) Dixon, J. Observed that it is enough that the prosecutor believes that the probability of the accused's guilt is such that upon general grounds of justice a charge against him should be brought. It is not necessary that the prosecutor should enter into an examination of the strength of the evidence for the defence. He is concerned only with the question whether there is a fit case to be tried-See Tempest v. Snowden: Glinski v. McIver ; Dallison v. Caffery. The rule may be summed up, according to Lord Devlin, Glinski v. McIver in this way : "Did the Prosecutor actually believe and did he reasonably believe that he had cause for prosecution"?
9. Mr. A.I Ahmed Fazeel put forth another contention also that is, that if prosecution is instituted on expert advice, though it fails ultimately, it cannot be said to have been taken without reasonable or probable cause. A few facts in this connection may be relevant. The investigation was undertaken by the Branch of the Special Police Establishment attached to the State Bank of Pakistan with the permission of the Foreign Exchange Tribunal, as is evident by its order contained in Exh.
6. The Special Police submitted its report, Exh. 37/1, on 21-8-1961, to the effect that there was strong evidence for prosecution against the plaintiff: On 14th September 1961, the Special Police advised the State Bank by Exh. 37/2 that before instituting prosecution against the plaintiff a show-cause notice should be sent to him. Such a notice was in fact given to the plaintiff and his explanation was forwarded by the State Bank to the Special Police (see Exh. 37/3/8-11-61). Opinion of the Special Police, according to Exh. 37/4 dated 28th November 1961, was that this explanation was not satisfactory. Thereafter, the State Bank asked for a full report of the Special Police by Exh. 37/5, dated 6th February 1962, and this report was given on 14th February 1962 in writing which is on record as Exh. 37/6. Thus, it was on the reports of the Special Police that a complaint was filed before the Foreign Exchange Tribunal under sections 12 and 23 of the Foreign Exchange Regulations Act, 1947. On these facts, Mr. Fazeel urged that the Court should hold that there was reasonable and probable cause for the plaintiff's prosecution under this Act. In support of his point, the learned Advocate referred to several decisions. The first case is that of the Judicial Committee of the Privy Council Albert Bonnan v. Imperial Tobacco Co. (AIR 1929 P C 222). This decision was given in the case in which the Imperial Tobacco Co. Of India Ltd. Was sued for malicious prosecution for bringing an action (which failed) against Albert Bonnan to restrain him from selling Wills, Gold Flake cigarettes which he had purchased from the British Army, on the allegation that these cigarettes were counterfeits of "Gold Flake" brand. It was held that proceedings were taken by the Imperial Tobacco Co. On expert advice and that it was impossible to hold that persons taking proceedings in this way have no reasonable or probable cause for the course they took. The next case brought to my attention by Mr. Fazeel is the decision of the High Court of Allahabad in Sumat Prasad v. Ram Sarup (AIR 1946 All. 204). In this case, the plaintiff was conducting a suit for trespass filed by his father. The Advocate for the defendant described the plaintiff as `Avara' in the written statement.
The plaintiff applied to the Court for direction that the Advocate should withdraw this word, whereupon the Advocate, on the advice of another Senior Advocate, applied for contempt proceedings against the plaintiff. These proceedings failed, whereupon the plaintiff brought a suit for malicious prosecution against the Advocate. It was held, on the basis of the expert opinion of the Senior Advocate, that there was reasonable and probable cause for institution of contempt proceedings against the plaintiff. The third case relied upon by Mr. Fazeel is also a decision of the Allahabad High Court, Municipal Board, Agra v. B. Mangli Lal (AIR 1952 All. 554) in which a house owner was prosecuted by the Executive Officer of a Municipality on the report of its Sanitary Inspector and on the advice of its Legal Adviser. The prosecution, however, failed. It was held that as the Executive Officer had no reason to disbelieve the report of the Sanitary Inspector, and as he acted on the advice of the Municipality's Legal Adviser, the prosecution could not be said to be without reasonable or probable cause. The same view had also for some time prevailed in the English Courts. But the rule in England now is that the fact that the prosecutor had received advice should be regarded as no more than one of the factors to be taken into account. This view rests on the reasoning that 3 if the complainant himself did not have an honest belief in the case for prosecution, then it is irrelevant whether or not he acted on expert advice. In Abrath v. The North Eastern Railway Company where the prosecutors had acted on the opinion of counsel, the Court of Appeal approved the direction of the trial Judge to the jury to find whether the prosecutors had taken reasonable care to inform themselves of the true state of the case, and whether they honestly believed the case which they laid for the prosecution of the plaintiff before the Magistrates. This view found support with the House of Lords in Glinski v. McIver and was followed by the Court of Appeal in Abott v. Refuge Assurance Co. Ltd. In this last case, it was held that opinion of counsel in favour of the prosecution, though not conclusive, is a relevant factor and should be given due con--sideration. This question again came up before Diplock, L. J. In Malz v.
Rosan ((1966)1 W L R 1008). In this case the defendant in the suit for malicious prosecution had laid an accurate account with police officers of an incident, and was told by the police that the plaintiff and another man had committed an offence. It was held that an ordinary citizen who, having given the police an honest and reasonably accurate account of an event which had occurred, was advised by a police officer that it constituted a particular offence, bona fide believed that advice and acted upon it, had reasonable and probable cause for prosecution; but that if the account given to the police was one which he knew to be untrue, then that in itself would be strong evidence of malice. Turning to the decisions cited by Mr. A.I Ahmed Fazeel, I would say that these cases have not laid down an unqualified rule to the effect that reasonable and probable cause should be presumed to exist if the prosecutor had acted on the advice of the experts, or of counselor of police officers. The question as to whether the Imperial Tobacco Co. Ltd. Honestly believed in the case which they brought against Albert Bonnan and in which they received the expert opinion of counsel was not pressed before their Lordships of the Privy Council in Albert Bonnan v. Imperial Tobacco Co. Ltd. And I would, therefore, be reluctant to read the rule laid down in this case to mean that opinion of counsel or of other experts is by itself evidence of the I existence of a reasonable and probable cause. In the Allahabadl cases, Sumat Prasad v. Ram Sarup and Municipal Board, Agra v. B. Mangli Lal no unqualified rule was laid down that action on the basis of lawyers' advice was evidence of the existence of reasonable and probable cause. On the contrary, in both these cased it was expressly stated that the facts laid before counsel should have been correct and the prosecutor should have honestly believed in the guilt of the accused.
Whether the prosecutor had honestly believed or not that the plaintiff had committed an offence, which should be tried by a Court, can r be found out generally not by any test with regard to subjective satisfaction, but from the evidence which is laid before the Court in support of the prosecution.
10. I will now proceed to examine the evidence before me to find out whether the plaintiff had established malice and absence of reasonable and probable cause for his prosecution. With regard to malice, the only ground on which an allegation to this effect is made by the plaintiff is that one Wazir Muhammad, proprietor of Bukhara Palace, was not prosecuted for a similar offence.
But this factor is irrelevant. Even otherwise, the case of the Bukhara Palace is entirely on different footing. It is admitted by the plaintiff that the consignee in Nairobi was a firm of two partners, namely, the plaintiff and the plaintiff's brother Abdul Hamid. Wazir Muhammad was not connected in any way with the consignee. Then, before the institution of the prosecution against the plaintiff, only Rs. 2,066.00 out of Rs. 32,967.00, had been received in Pakistan on account of the consignments sent by the plaintiff, whereas Bukhara Palace had succeeded in bringing to Pakistan half the sale price of the, consignment sent by it to Abdul Hameed at Nairobi. Thus, the plaintiff was both consignor and consignee. The Bukhara Palace was only an exporter. A greater responsibility was placed on the plaintiff to bring into Pakistan the full sale proceeds of the two consignments sent by him to Kenya. In any case, the failure of the State Bank or of the Special Police to I.K prosecute Wazir Muhammad cannot be treated as evidence of malice on their part against the plaintiff. My finding, therefore, is that the plaintiff has failed to establish malice against the defendants.
11. The examination of the evidence on record also leads me to the conclusion that the plaintiff has failed to prove that there was no reasonable or probable cause for his prosecution under sections 12 and 23 of the Foreign Exchange Regulations Act, 1947. After sending the two consignments in question, the plaintiff changed his address without, however, intimating this change to the State Bank, so that the State Bank's letter to the plaintiff, Exh. 14, dated 12-6-61, returned undelivered.
Ultimately, the plaintiff had to be located through the Special Police. Next, I would reiterate here the plaintiff's own admission that the consignee in Nairobi was the firm with two partners, namely, the plaintiff himself and his brother Abdul Hameed. But the case which the plaintiff presented to the State Bank was that the consignee was not traceable and had absconded from Nairobi. To this effect are the letters of the plaintiff's bankers, the Grindlays Bank, i.e., Exh. 36/2, dated 26-8-60, Exh.
13, dated 6-4-61 and Exh. 11, dated 17th February 1961. 1t is inconceivable that the plaintiff should not have been in a position to trace his own firm or his own brother.
Plaintiff represented to the Sate Bank of Pakistan that insolvency proceedings had been taken against the consignee in Nairobi Courts. But the plaintiff failed to furnish the State Bank with the insolvency certificate when required to do so by Exh. 22, dated 7-3-1962. Ultimately, it transpired that there were no insolvency proceedings in progress against the consignee, as is clear from Exh.
23, dated 12-7-1962, which is the letter addressed to thin plaintiff by the Official Receiver at Nairobi.
The plaintiff then represented to the State Bank by letter, Exh. 20, dated 13-8-1962, that the consignee had been "detected" doing business in Rouanda and was willing to pay the sale price in two instalments, but nothing came out of this representation. The next step is the letter of the plaintiff's brother Abdul Hameed, to the plaintiff, Exh. 21, dated 20-1-1963, stating that the carpets had been sent to Congo where they could not be disposed of due to unsettled political conditions.
It will thus be seen that the plaintiff had been taking shifting stands from time to time. He first set up the case that the consignee was not traceable at all. Thereafter he took the stand that the consignee had gone bankrupt and that insolvency proceedings were pending against him. 7 hereafter he sent the consignee to Rouanda and purported to obtain an undertaking from him to send the sale proceeds in two instalments. Again, after this, the consignee was sent to Congo and a case was set up that the carpets had remained unsold due to unsettled conditions in that country. These shifting pleas, coupled with the fact that the plaintiff himself was both exporter as well as consignee, do show that the defendants had reasonable and probable cause for believing that the plaintiff had intentionally failed to repatriate the sale proceeds of the two consignments to Pakistan. It should be noted that the exports were made in January and March 1960, and complaint was filed on 4th May 1962, but till then only Rs. 2,066.00 out of the total price of Rs. 32,967.00 only had been received. The plaintiff admitted in his evidence that he had been informed in July 1960 that his shop at Nairobi had been closed, but he does not appear to have taken any step to trace his partner, namely, Abdul Hameed, who is the plaintiff's brother. The first ever action which he took in this connection was only through letter Exh. 16, dated 13th July 1961, sent to the Chambers of Commerce at Nairobi, requesting for information with regard to the solvency of the consignee. I find it difficult to believe that all this time the plaintiff had no information with regard to the whereabouts of his own brother and with regard to the solvency of his own firm in Nairobi. On these facts it is not possible for me to come to the conclusion that there was no reasonable or probable cause for the plaintiff's prosecution under sections 12 and 23 of the Foreign Exchange Regulations Act, 1947. On the evidence reviewed above, which was before the defendants, any reasonable and prudent person would honestly believe that there was a fit case for the prosecution of the plaintiff.
12. Issues 4, 5 and 6 can be disposed of together as they raise a common question, as to whether any damage has been Caused to the plaintiff by his prosecution as aforesaid, and if so, whether the plaintiff is entitled to claim any damage from the defendants and how this damage should be assessed. At the outset, it may be stated that as the plaintiff has failed to prove either malice in the defendants or absence of reasonable and probable cause, he is not entitled to claim any damages from the defendants. Even otherwise, the plaintiff has failed to prove that he has suffered any damage at all. A sum of Rs. 80,000 is claimed by the plaintiff on account of deterioration in health due to his prosecution and expenses which he had to incur in his defence. With regard to the way in which his health deteriorated, the plaintiff stated that he developed diabetes due to the alleged malicious prosecution. I fail to understand the connection between the plaintiff's prosecution under the Foreign Exchange Regulations Act, 1947, and this particular kind of disease.
The plaintiff has not examined any medical expert to prove that diabetes is the likely cause of malicious prosecution. The plaintiff then states that he had incurred expenditure in the sum of Rs.
15,000 to Rs. 20,000 for his treatment, but the particulars of this expenditure were not given, nor was any evidence produced to establish this contention. The plaintiff also failed to mention the expenditure which he had to incur in his defence. The plaintiff had further claimed Rs. 1,20,000 on account of financial loss allegedly suffered by him due to his prosecution. The case set up by the plaintiff in his evidence is that he lost credit facilities with the Bank of Tokyo and the National Bank of Pakistan due to his prosecution at the hands of the defendants. But no evidence was given with regard to the extent of these facilities, nor did the plaintiff produce any letters from these banks refusing banking facilities to him. No person was examined from either of these banks to prove, either that the plaintiff had banking facilities with these banks, or that these facilities were discontinued on account of the plaintiff's prosecution under the Foreign Exchange Regulations Act, 1947. The plaintiff also complained about reduction in business due to the discontinuance of these credit facilities. But he did not produce his books of account or income-tax assessment orders to enable the Court to find out the extent of the plaintiff's business before and after the institution of the prosecution against him. Thus, the plaintiff has failed to prove that he suffered any damage at all consequent upon his prosecution on the complaint filed by the defendant No. 2.
15. For the foregoing reasons, my findings under all the issues are against the plaintiff, and therefore this suit fails and is dismissed with costs.