VITHOBA Vs. BHANGI

JUDGEMENT

(1.) THE plaintiff-appellant Vithoba, a money-lender and malguzar of mouza Pandhurna (Chhindwara) brought the present suit on a mortgage deed, dated 7th June 1911, for Rs. 600 executed by Dewoo, Kowa and Dewaji (respondents 2 to 4), by Chikkoo Gond their father and the father also of respondent 1 Bhangi and by Khenda, the father of respondent 5 Ojhi. The defendants' position in the first Court was an exceedingly unsatisfactory one. They filed a long and rambling written statement which alleged, amongst other things, that the plaintiff was a terrorizing influence in the village that no one could dispute what he proposed and the like. The plea of undue influence was not taken in words and instead it was attempted to take shelter under the Usurious Loans Act, the Court being asked to re-open the contract and relieve in the matter of interest under the said enactment. On the issues which arose in the case, the first Court held that the mortgage deed in suit had been duly executed. The Subordinate Judge further held that the Usurious Loans Act could not apply to the present case, a point that is now admitted. On the question of interest, the Subordinate Judge came to a finding which practically amounts to one that the debtors and the creditor were unequally situated and that the latter was in a position to exercise something approaching undue influence over the former. The first Court accordingly allowed simple interest at Rs. 2 per cent, per mensem and gave a preliminary decree for forelosure on this basis.

(2.) THE plaintiff appealed and the defendants neither appealed nor filed a cross-objection. The District Judge, however, was of opinion that the transaction was an unconscionable one and held that he was able to re-open the contract on such terms and conditions as he deemed fit. He accordingly came to the conclusion that the plaintiff should get a simple money decree in place of the foreclosure one with interest allowed by the first Court, viz., simple interest up to the date of the suit. A money decree for this amount was accordingly passed.

(3.) I now pass to the question of the fact of the disallowance of the contract rate of interest by both the lower Courts. It has been urged in this connexion that the plea of undue influence was never distinctly raised by the defendants and I have been referred' to decisions like that in Chota Nagpur Banking Association Ltd. v. Bhagwant Bux Rai A.I.R. 1922 Pat. 491 and that of their Lordships of the Privy Council reported in Raghunath Prasad v. Sarju Prasad A.I.R. 1924 P.C. 60 as being in favour of the proposition that, in a case like the present on the pleadings of the parties, the lower appellate Court had no power to re-open the contract in the way it did. In the Privy Council case just quoted their Lordships held that, although a mortgage for ample security provided for excessive and usurious interest, no presumption arose that it was induced by undue influence in the absence of proof by the mortgagor that the mortgagee was in a position to dominate his will. In Poosathurai v. Kannappa Chettiar A.I.R. 1920 P.C. 65 their Lordships of the Privy Council pointed out the distinction between "influence" and "undue influence" and it, therefore, remains to decide whether in the present case, on the pleadings of the defendants, it can be said that there was at least an implied pleading of undue influence.