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Bhikhi Sahu Vs. Kodai Pande and ors. - Court Judgment

LegalCrystal Citation
SubjectFamily
CourtAllahabad
Decided On
Judge
Reported in(1919)ILR61All523
AppellantBhikhi Sahu
RespondentKodai Pande and ors.
Excerpt:
hindu low - mitakahara--joint hindu family--money borrowed by father at high rate of interest--legal necessity--burden of proof--act no. ix of 1872 (indian contract act), section 16. - - .....nothing harsh or unconscionable in the bargain, and he allowed interest to the plaintiff at the contract rate. on appeal the learned judge of the court below has reduced the interest to 18 per cent. per annum simple, he relied upon certain authorities of this court viz., nand ram v. bhupal singh (1911) i.l.r., 34 all., 126 and gaya prasad tewari v. ram phal misir (1915) 13 a.l.j., 246. there is also another case to the same effect which is reported in rao raghunath singh v. nazir begam (1913) 19 indian cases, 639. it has been laid down in these cases that in suits of this nature where a mortgagee is seeking to enforce a mortgage executed by the father in a joint hindu family, he must prove not only that there was a necessity for the loan secured by the mortgage but also that there was.....
Judgment:
1. The only question for decision in this second appeal is whether the lower appellate court was right in reducing the rate of interest entered in the bond which was put in suit.

2. The suit was a suit on a mortgage brought against Kodai Pande and his sons. Certain other defendants wore impleaded as subsequent mortgagees. The sons resisted the claim on various grounds and pleaded, inter alia, that there was no legal necessity for the loan, and that there was no need for their father to borrow at the exorbitant rate of interest entered in the deed, namely, 25 per cent, per annum compoundable with yearly rests. An issue was raised in the court of first instance regarding the propriety of this high rate of interest. The Subordinate Judge came to the conclusion that there was nothing harsh or unconscionable in the bargain, and he allowed interest to the plaintiff at the contract rate. On appeal the learned Judge of the court below has reduced the interest to 18 per cent. per annum simple, He relied upon certain authorities of this Court viz., Nand Ram v. Bhupal Singh (1911) I.L.R., 34 All., 126 and Gaya Prasad Tewari v. Ram Phal Misir (1915) 13 A.L.J., 246. There is also another case to the same effect which is reported in Rao Raghunath Singh v. Nazir Begam (1913) 19 Indian Cases, 639. It has been laid down in these cases that in suits of this nature where a mortgagee is seeking to enforce a mortgage executed by the father in a joint Hindu family, he must prove not only that there was a necessity for the loan secured by the mortgage but also that there was such necessity as justified the agreement for a high rate of interest. The principle so laid down is derived from the judgment of their Lordships of the Privy Council in the case of Hurro Nath Rai Chowdhri v. Randhir Singh (1890) I.L.R., 18 Calc., 311. The argument before us is that the court had no power to reduce the rate of interest except in a case which can be shown to fall under the provisions of Section 16 of the Contract Act. That argument docs apply and is well understood to apply to cases where the parties to the suit are the parties to the contract. In a case like the present, however, there is this difference; some of the parties to the suit are not parties to the contract, and it is for the protection of the latter that the courts have laid down the principle which we have enunciated above. We are of opinion, therefore, that on the authorities referred to by the learned Judge, he had the power to reduce the rate of interest, and, this being so, our finding on the only point urged in appeal is against the appellant. The appeal fails and is dismissed with costs.


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