1. This appeal arises out of a suit for arrears of rent in which interest on the arrears was claimed at the rate of one anna per rupee, per mensem in terms of a kabuliyat, i.e., 75 per cent, per annum. Both the Courts below decreed the suit for the rent claimed with interest at 25 per cent, per annum instead of 75 per cent, as stipulated in the kabuliyat.
2. In this appeal it is contended that the Courts below erred in law (first) in not allowing interest at the contract rate and in holding that the stipulation relating to interest amounted to a penalty Under Section 74, Contract Act ; (second) in holding that the rate of interest was hard and unconscionable in the absence of any evidence to that effect and that there being no case of undue influence as mentioned in Section 16, Contract Act, the Court had no jurisdiction to re-open the contract between the parties. The only point at issue in this appeal therefore is whether Under Section 74, Contract Act, it was open to the Courts below to hold that the stipulation as regards interest which was in accordance with the terms of the contract was by way of penalty merely on the ground that the rate of interest was very high. This is the view taken by the Courts below. In this appeal, it is pointed out that previous to the decision of the Lordships of the Privy Council in Aziz Khan v. Duni Chand AIR 1918 PC 48 there were two different views adopted by this Court. In a number of cases it was held that it is open to the Court to interfere merely on the ground that the rate of interest is high and unconscionable. In other cases it was held that in the absence of evidence of undue influence the Court is not entitled to interfere with the terms of a contract. Authorities for the former view are to be found in Abdul Majeed v. Khirode Chandra Pal AIR 1915 Cal 383, Gopeswar Saha v. Jadav Chandra AIR 1917 Cal 630, Chellaphroo Chowdhuri v. Banga Behari AIR 1916 Cal 771 and Krishna Charan v. Sanat Kumar Das AIR 1917 Cal 502. On the other hand there are authoties for the latter view, that even interest at 75 per cent, per annum did not constitute a penalty in the absence of undue influence: of. Narendra Nath Sarkar v. Moniruddin Howladar (1903) 85 CLJ 209, Ashutosh Dhar v. Joy Lal Sardar (1913) 18 IC 621 and Umesh Chandra v. Golap Lal (1904) 31 Cal 233.
3. Since the decision in the case of Aziz Khan's case AIR 1918 PC 48 where their Lordshipa of the Privy Council have held that it is difficult for a Court of justice to give relief on grounds of simple hardship in the absence of any evidence to show that the money-lender had unduly taken advantage of his position even where the transaction appeared to be undoubtedly improvident, it has held in subsequent cases by this Court mostly, it is true, in mortgage suits, that the Court has no option but to allow the rate of interest stipulated in the bend. The above view has been adopted in the following cases: Ektar Sikdar v. Wajaadi Tati AIR 1919 Cal 413, Bejoy Kumar v. Satish Chandra AIR 1920 Cal 529. Bhut Nath v. Rama Nath AIR 1921 Cal 199, Nabin Chandra v. Dudu Mia AIR 1925 Cal 1193 and Jewan Lal Daga v. Nilmani Choudhurani AIR 1928 PC 80 these oases and the case of Nabin Chandra Saha's case : AIR1925Cal1193 is admittedly similar to the present case. There it was pointed out that the law had been altered by the decision in Balla Mal v. Ahad Shah AIR 1918 PC 249 and it was held that the law on the subject having been altered by judicial decisions since the judgment in a previous suit, it could not operate as resjudicata in that case, the law now being that in the absence of anything to show that there was undue influence, the rate of interest cannot be treated as penal or unconscionable merely because it is high. On behalf of the respondent, it has been sought to distinguish this case on the ground that there was no decision of the Courts below in that case, that the terms of the kabuliyat were hard or unconscionable, whereas in the present case there is such a finding. But apparently that finding was based merely on the fact that the rate of interest was seventy-five per cent, while there was good security. Even if it be held that the bargain was a hard one, according to the interpretation which has been put upon the decision of the Judicial Committee it must also be found that there was undue influence. The case of Dhanipal Das v. Maneshwar Baksh Singh (1903) 28 All 570 has also been referred to by the respondent, but in that case it was distinctly found that there had been undue influence. Another case which has been referred to on behalf of the respondent is the case of Jenan Lal Daga v. Nilmani Chowdhuri AIR 1928 PC 80, but that case was for specific performance in which the Courts were entitled to give equitable relief and therefore, it is distinguishable from the present case. Another recent decision referred to by the respondent is in the case of Bhai Panna Singh V. Firm Bhai Abjan Singh AIR 1929 PC 179, but that decision is not at all relevant to the facts of the present case.
4. We think, therefore, that we must hold that the plaintiffs are entitled to a decree for arrears of rent with interest at the rate claimed in accordance with the terms in the kabuliyat. It is to be noted that there was no issue framed in this case regarding undue influence, although there was an assertion of undue influence in the written statement. This appeal is accordingly allowed and the decree of the lower appellate Court is set aside and the plaintiffs' claim is allowed in full with interest at 6 per cent, per annum from the date of the decree of the trial Court till realization. We make no order as to costs throughout.
5. I agree.