PADAM SINGH Vs. RAM RUP

JUDGEMENT

(1.) This appeal must be dismissed. I do not feel sufficiently strongly about the matter to differ from my brother Mr. Justice Sunder Lal, who thinks that, the defence having been raised by the sons of the original mortgagor, there are under the special circumstances of this case sufficient grounds for upholding the decision of the Court below. Probably rough justice has been done, and I am not prepared to dissent. But speaking for myself, 1 should like to say that in my view neither of the judgments of the Courts below can be supported. Ro far from either of them containing any ground justifying the conclusion at which they arrived, each of them contains affirmative grounds which are in my view clearly contrary to law and which indicate--I am sorry to say--to, tendency, not infrequently found in inferior Courts, to lose their heads when they are called upon to decide a question of contract between a person who has advanced money at a high rate of interest and the person who was under necessity to take it. The first Court has held that it is incredible that the debtor should have agreed to treble the rate of interest unless some sort of pressure had been brought to bear upon him, and that the high rate of interest is itself evidence of undue influence and pressure. This view is entirely contrary to law. It goes on to say that the debtors acquiescence in the hard bargain requires explanation but the plaintiff has given none, and that when there is a high rate of interest the onus is on the plaintiff to show that he ha? not exercised undue influence, This is also contrary to law. The lower Appellate Court has gone farther. It has held, as a matter of law, that the rate of interest itself is ample ground for holding that undue influence or fraud was exercised. It does not seem to mind which it is; either: is good enough. The findings amounts to this that if you find a plaintiff suing upon a bond carrying a high rate of interest, you are entitled to assume undue influence or fraud, whichever you like. It furtive goes on to say--"The case is similar to illustration (c) of Section 16 of the Contract Act and...it lay upon the plaintiffs to prove that the contract was not induced by undue influence." It is not pretended here that the plaintiff s case comes evidence that the plaintiff was a money-lender by profession. In the face of rulings of this kind, whatever the merits of this particular case may be, it is necessary to point out to inferior Courts that in dealing with such matters they must have regard to the law and to the fact that money-lenders, who come to Court to enforce their contracts, have the same right as any other citizens to have their contracts enforced according to law, and not according to sentiment. Sunder Lal, J.

(2.) This was a suit to enforce a mortgage dated the 2nd of July 189e, executed by one Kharga in favour of the plaintiffs Nos. 1, 2 and 3. The mortgage was for a sum of Rs. 200, which was made up of Rs. 173 due on a previous loan and a further advance of Rs. 27 made on the occasion when this mortgage was made. Kharga the mortgagor is dead and his sons and grandsons as also the subsequent mortgagees of the property are impleaded as defendants. I may mention that this sum of Rs. 173. was due on a previous mortgage-bond which carried simple interest at the rate of six per cent, per annum. Kharga executed this new mortgage agreeing to pay compound interest at eighteen per cent, per annum with half-yearly rests. Under the Hindu Law, specially in view of the ruling in Ghandradeo Singh v. Mata Prasad 1 Ind. Cas. 4796 (F.B.) : 31 A. 176 : 6 A.L.J. 263 the sons of a Hindu father are entitled to pat the mortgagee to proof of the legal necessity for the loan which the father contracted, specially when the money was borrowed at an exorbitant rate of interest as in the present case. Both the Courts below seem to have gone very much off the rails. The real point is whether there is any proof of legal necessity for the loan at such a high rate of interest. As to the sum of Rs. 27 advanced on the date of the present mortgage, the creditor was bound under the Full Bench ruling referred to above to prove that the money was required for some actual necessity. With reference to this amount the Court of first instance says: The father of the defendants was the manager of the family property and it may be presumed that a family already in debt would have a valid need for borrowing such a trifling sum." Under the Full Bench ruling the plaintiffs in the present case were bound to prove legal necessity and that the money was required for such purpose. No evidence was given on the point. Only one witness was examined, who formally proved the execution of the mortgage. The sons and grandsons of Kharga, however, did not appeal in order to get themselves relieved from the liability to pay this portion of the mortgage-debt and in the absence of an appeal on their behalf the decree for this item stands. Then there is the question of the sum of Rs. 173. The father had previously borrowed this money at six per cent, simple interest. If he was unable to repay it, it was proper for him to allow the debt to remain outstanding on the terms of the previous bond. The creditors have not put themselves into the witness-box and no reason has been shown why the father found it necessary to enter into such an onerous bargain. The sons are not bound under the circumstances by the contract made by their father. If the defence had been put in by the father alone, there might have been a great deal to be said in support of this appeal. But in view of the fact that the sons were the defendants to the suit against whom the creditors were bound under the Full Bench ruling to prove legal necessity both for incurring the debt and for the terms as to interest which the debt carried, the Court below was right in holding that legal necessity for entering into such an onerous bargain by the father was not made out. On this ground, I would uphold the decree of the Court below and dismiss this appeal with costs.

(3.) This appeal is dismissed with costs, including fees on the higher scale.