Raghunath Prasad CASE
Raghunath Vs. Sarju Prasad – Father and son equal owners of a vast joint family property – both quarrelled over it – Father instituted criminal proceedings against the son – In order to defend himself, the son borrowed money from the plaintiff at 24% compound interest and mortgaged his properties – In eleven years, the amount payable magnified more than eleven fold – Defendant contended that plaintiff/lender taking unconscionable advantage of his mental distress and exercised undue influence - defendant failed to prove that the lender was in a position to dominate his will – Borrower got no relief.
However, no presumption of undue influence in following cases and burden of proof lies on the party claiming as such -
1. Landlord and tenant
2. Creditor and debtor
3. Husband and wife
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 Section 16 of the Indian Contract Act, 1872, is hereby repealed, and the following is substituted therefor, namely:--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
However, no presumption of undue influence in following cases and burden of proof lies on the party claiming as such -
1. Landlord and tenant
2. Creditor and debtor
3. Husband and wife
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