AMRATLAL GORDHANDAS Vs. KESHAVLAL KUBERDAS PATEL

JUDGEMENT

(1.) This is an appeal from the judgment of the District Judge of Ahmedabad confirming the decision of the Subordinate Judge of Dholka dismissing the suit. The ground on which both the lower Courts decided this case against the plaintiff was, that the bargain sued on was an unconscionable one and obtained by undue influence and that the plaintiff had taken advantage of the borrowers necessitous condition, and that accordingly it could not stand.

(2.) The document sued on, Ex. 15, was executed on January 8, 1917. Shortly stated, it gave the right to the plaintiff to obtain a commission of two and a half per cent on the gross income of a certain ginning factory in perpetuity. There were also provisions, binding the three borrowers not to remove the factory, but to get any future partners to enter into a similar agreement and that, in certain events, the properties of the factory would be liable for certain moneys, and that, in certain other contingencies, the lender would be at liberty to recover a certain amount from the machinery of the factory or from the borrowers, I should have stated that, shortly prior to this document, there was a promissory note, but the learned District Judge has found that the promissory note and the agreement for a commission effected by Exhibit 15 were all part of the original bargain for a loan. Defendant No. 1 was a party to this document but Defendants Nos. 2 and 3 were not parties.

(3.) It appears to us that the finding that the plaintiff exercised undue influence cannot be supported. The borrowers were not in needy circumstances in the ordinary meaning of that term. There is no evidence before us that they were being pressed by outside creditors, and at the most they wished to pay a retiring partner the amount of his share. Further, it is important to notice that the moneys were borrowed not so much for pressing needs as to build this factory, which they were under no obligation to build. Moreover, these three partners were all business-men and personally in a position to understand what was a fair bargain. There is no question here of some illiterate peasant being overborne by an intelligent schemer. Nor was there anything else in the relation between the parties which would put the plaintiff in a position to dominate the will of these three partners.