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Meghraj and anr. Vs. Ganga Bakhsh and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtAllahabad
Decided On
Judge
Reported in7Ind.Cas.286
AppellantMeghraj and anr.
RespondentGanga Bakhsh and ors.
Excerpt:
contract act (ix of 1872), section 16 - undue influence--indebtedness of mortgagor prior to execution of mortgage. - - they further say that the plaintiffs obtained the mortgage in bad faith;.....rests claimed were explained to him.' there is no evidence whatever on the record to show any undue influence on the part of the mortgagees, nor is there anything to show that they took any unfair advantage of the mortgagor. it appears from the evidence that the property had already been mortgaged. reliance is placed upon the provisions of 16 of the contract act (act ix of 1872), which defines undue influence and provides in clause 3 that 'where a person who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall be upon the person in a position to dominate the will of the other.'.....
Judgment:

1. This appeal arises out of a suit to enforce payment of a mortgage debt by sale of the mortgaged property. The mortgage is dated the 28th of January, 1S90, and was executed by the father of the defendants, who has since died, in favour of the plaintiffs, to secure a principal sum of Rs. 270, with compound interest, at the rate of 24 per cent, per annum. In their written statement the defendants do not admit the execution of the mortgage and they say that the rate of interest charged therein is excessive and penal. They further say that the plaintiffs obtained the mortgage in bad faith; and that the property comprised therein was not of greater value than Rs. 3,000, and was already subject to a possessory mortgage. The learned Additional Judge gave a decree to the plaintiffs for the principal amount of the bond but reduced the interest payable to simple interest at Rs. 20 per cent, per mensem. He surmised that the plaintiffs extorted more onerous terms from the mortgagor than the terms contained in earlier bonds, and that as the motgagor was an illiterate man, he could hardly have realised the real nature of the agreement into which he was entering. He then observes: 'The original debtor is unfortunately dead, but it was for the plaintiffs to have produced some evidence that the terms of the bond with special reference to interest and half-yearly rests claimed were explained to him.' There is no evidence whatever on the record to show any undue influence on the part of the mortgagees, nor is there anything to show that they took any unfair advantage of the mortgagor. It appears from the evidence that the property had already been mortgaged. Reliance is placed upon the provisions of 16 of the Contract Act (Act IX of 1872), which defines undue influence and provides in Clause 3 that 'where a person who is in a position to dominate the Will of another, enters into a contract with him, and the transaction appears, on the face of it or on the evidence adduced, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall be upon the person in a position to dominate the Will of the other.' It is contended that the mortgagees in the present case, who were creditors of the mortgagor, were in a position to dominate the Will of the motgagor, and that the Court below was entitled to throw the onus upon the plaintiffs of showing that the contract was not induced by undue influence. We cannot take this view. As we have said there is no evidence of any actual exercise of undue influence by the mortgagees and, indeed, the defendants did not allege any undue influence. There is no evidence of any special circumstance from which an inference of undue influence could be legitimately drawn. All that we know is that the mortgagor was, prior to the mortgage, indebted to the mortgagees in a small sum of money. This indebtedness, we cannot hold, placed the mortgagees in a position to dominate the Will of the mortgagor. In the case of Sunder Kuer v. Rai Sham Krishen 34 C. 150 : 4 A.L.J. 109 : 11 C.W.N. 249 : 5 C.L.J. 106 : 17 M.L.J. 43 : 9 Bom. L.R. 304 : 2 M.L.T. 75, their Lordships of the Privy Council held that urgent need of money on the part of the borrower does not of itself place the lender in a position to dominate his Will within the meaning of 16of the Contract Act.' We are, therefore, unable to uphold the decree of the Court below. We allow the appeal, modify the decree of the Court below, and allow the plaintiffs Rs. 2,611 in addition to the sum already decreed to them. We extend the time for payment for a period of six months from this date. The plaintiffs will have their costs of this appeal and also the costs of the Court below, including fees in this Court on the higher scale.


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