The central legal point established in the judgment is the requirement to prove both absence of reasonable and probable cause for prosecution and malice in a claim for malicious prosecution.

Alfred Henry Lionel Leach, C.J.

1. The appellants appeal from a decree passed by the Original Side of this Court awarding the respondent damages for malicious prosecution. The first appellant carries on business in edible oils in Bombay and has a branch office in Madras. The Madras branch was opened in the month of January, 1933 and the respondent was placed in charge of it. At the end of August, 1933, the respondents services were dispensed with and on the 22nd October, 1933, the second appellant became the manager of the Madras branch. On the 31st October, 1933, the second appellant received a visit from one Subramaniam Chetty and a broker named Murthi. It is common ground that Murthi had acted as the broker in transactions with the first appellants Madras branch during the period the respondent was in charge of it. Murthi represented to the second appellant that Subramaniam Chetty was a big merchant carrying on business in Mambalam, Madras, and on the strength of his recommendation the second appellant agreed to sell to Subramaniam Chetty 75 cases of edible oils at the price Rs. 14-8-0 per case, payment to be made in three days time. The contract having been entered into the goods were delivered to Subramaniam Chetty. He did not pay for them on the day arranged and has never paid for them. On the 5th November; 1933, the second appellant met Murthi and told him that Subramaniam Chetty had defaulted. Murthi then said that Subramaniam would be coming to pay the amount in the course of that day or the next. Subramaniam Chetty did not appear that day or the next day and the second appellant was unable to trace his whereabouts, but as the result of inquiries he ascertained that the respondent was doing business in vegetable oils and that the cases which had been sold to Subramaniam Chetty had been removed to a small godown in Thathamuthiappan Street, Madras, which had been rented by the respondent and Murthi. As default had been made in payment, the second appellant grew anxious and it is his case that he asked Murthi to accompany him to Mambalam to show him where Subramaniam Chetty lived. Murthi put him off by various pretexts and he never found Subramaniam Chetty. On the 10th November, 1933, the second appellant in the name of the first appellant wrote a letter to the officer in charge of the Law College Police Station, Madras, setting out substantially these facts. The letter concluded with the following paragraph:

Under these circumstances, we are obliged to infer and believe that all these three persons have colluded together with the sole object of defrauding us of the cost of the goods and thus cheat us from the very beginning. Now we find on further inquiry that the said godown is empty the said 75 cases having been despatched to some destination. As the parties have done a criminal act we request yon to apprehend and book them for the offence committed and also make enquiries both at Salt Cottaurs, Madras Beach, and Egmore Stations, to the stations to which the cases have been despatched and stop delivery of the same.

2. On receipt of this letter the police searched for Subramaniam Chetty, Murthi and the respondent, and on the 11th November arrested them, charging them with cheating under Sections 415 and 420 of the Indian Penal Code. The magisterial proceedings continued until the 10th July, 1934 when the three accused were discharged. On the 9th May, 1935, ten months later, the respondent filed the suit out of which this appeal arises. The case was tried by Gentle, J., who held that the respondent had proved his case and was entitled to the sum of Rs. 1,500 as damages.

3. In the course of his evidence the respondent stated that he had bought the 75 cases from Subramaniam Chetty at the price of Rs. 14-10-0 per case, two annas more than Subramaniam had paid. He also stated that he had re-sold 50 of the cases at Rs. 13-8-0 per case on the 4th November, 1933 and the balance, except two cases, at the price of Rs. 14-6-0