RAGHUNATH PRASAD Vs. SARJU PRASAD

JUDGEMENT

(1.) This is an appeal from a decree, dated November 9, 1920, of the High Court of Judicature at Patna, which varied a decree, dated September 25, 1917, of the Subordinate Judge of Arrah.

(2.) The suit is for recovery of the amount of principal and interest due by the appellant to the respondents (the plaintiffs) under a mortgage of late May 27, 1910. The Subordinate Judge gave decree in the mortgage suit but only allowed simple interest. The High Court allowed compound interest.

(3.) The substantial question raised on the appeal is whether the appellant, in the circumstances proved in the case, fell within the protective provisions of Section 2 of the Indian Contract (Amendment) Act, 1899. It may be convenient to set that section out in full:-- 2. Section 16 of the Indian Contract Act, 1872, is hereby repealed, and the following is substituted therefor, namely:-- 16.--(1) A contract is said to be induced by undue influence where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other. (2) In particular and without prejudice to the generality of the foregoing principle, a person is deemed to be in a position to dominate the will of another:-- (a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary relation to the other; or (b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress. (3) 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 lie upon the person in a position to dominate the will of the other Nothing in this sub-section shall affect the provisions of Section 111 of the of the Indian Evidence Act, 1872.