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Panchi Dasi Minor by Her Next Friend Gopi Nath Saha Vs. Khiroda Dasi and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1926Cal171,90Ind.Cas.727
AppellantPanchi Dasi Minor by Her Next Friend Gopi Nath Saha
RespondentKhiroda Dasi and ors.
Excerpt:
contract act (ix of 1872), section 16 - mortgage--interest, high rate of--court, power of, to reduce rate of interest--undue influence, finding of, whether necessary. - .....however, by itself is not sufficient to justify the court in reducing the rate of interest. the learned judge ought to have gone further and it was necessary for him to find that the money lender had unduly taken advantage of his position and that he was in a position to dominate the will of the borrower and to exercise an undue influence over him. unless it can be shown that undue advantage has been taken, the court cannot interfere with the contract. the only finding that the learned judge has come to is that there was good security given for the debt. there is no suggestion by any of the parties that the one dominated the other or had exercised undue influence over him.2. in these circumstances i allow this appeal, set aside the decree of the lower appellate court and restore the.....
Judgment:

Cuming, J.

1. This appeal arises out of a suit brought by the plaintiff to recover a certain sum of money borrowed on a mortgage-bond at an interest of 37 1/2 per cent, per annum. The Trial Court decreed the plaintiff's suit in full. The lower Appellate Court modified the decree of the first Court by reducing the rate of interest to 12 1/2 per cent, per annum on the ground that the rate of interest was excessive and the transaction as between the parties was substantially unfair. In dealing with this point the learned District Judge says: 'I am of opinion that the argument is valid. The parties were near relations and there was good security given for the debt. In the circumstances the interest charged was clearly excessive and as between the parties the transaction was substantially unfair'. This finding, however, by itself is not sufficient to justify the Court in reducing the rate of interest. The learned Judge ought to have gone further and it was necessary for him to find that the money lender had unduly taken advantage of his position and that he was in a position to dominate the Will of the borrower and to exercise an undue influence over him. Unless it can be shown that undue advantage has been taken, the Court cannot interfere with the contract. The only finding that the learned Judge has come to is that there was good security given for the debt. There is no suggestion by any of the parties that the one dominated the other or had exercised undue influence over him.

2. In these circumstances I allow this appeal, set aside the decree of the lower Appellate Court and restore the decree of the Court of first instance with costs in all the Courts, including this Court.

3. The defendant will be allowed one month's time from the date of receipt of this order and record in the lower Court for the payment of the decretal amount. In default, the mortgaged property will be sold in satisfaction of the decretal amount. Interest at the bond rate will run up to the date fixed by the Trial Court as the due date of payment and at 6 per cent, per annum from that date until realisation.


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