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TMI Blog1934 (10) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... so. We are not prepared to accept his statement that he felt any doubt about the truth of the mother's indebtedness, though technically he is entitled to the proof of it by the production of the accounts. Whatever strength there was in this contention, in the Court below, it has now been shown to be unfounded. The accounts have been called for from the records of the other case and after their production, the appellant's learned Counsel has not gone the length of denying the fact of the debt due by the mother to the plaintiff but merely raised a point that ₹ 200 or ₹ 300 out of the ₹ 7,000 might have remained after the discharge of the mother's debt. No such point was raised before the Court below and there is an incidental atatement in the evidence of P.W. 2 that the balance that remained after the discharge of the mother's debt, w s paid over to defendant 1. In these circumstances, we see no reason to differ from the conclusion arrived at by the lower Court on this point. 3. The second question, as to interest, arises under the following circumstances: The mortgage deed Ex. A provides for repayment of the principal in a year's time. Inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not say that it is not possible but we have no evidence of that;, kind. There is however some force in the respondent's argument that it is not unlikely that defendant 1 would have attempted to raise loans in other quarters and he must have ultimately agreed to these terms because he could not obtain loans elsewhere. There is the undisputed fact that there was a delay of a month eft-two between the time when the loan was applied for and the time when the loan was ultimately advanced. Giving full effect to these considerations, there is no doubt that there is no basis for any suggestion of overreaching by the creditor. 6. If the matter rested only upon Section 16, Contract Act, there can be no doubt as to the answer. The case is clearly covered by illus. (d) to Section 16 which provides that if a banker in view of the stringency of the money market declines to make the loan except at an unusual high rate of interest and a debtor accepts the loan on these terms, that is a transaction in the ordinary course of business and the contract cannot be said to be induced by undue influence. The question is whether under the terms of the Usurious Loans Act (10 of 1918), the position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. When excessive interest is apparently established, any facts that tend to show that such excess does not render the contract 'harsh and unconscionable' should be proved in evidence by the lender. This burden is on him. At p. 475 the same learned Lord adds: The word 'excessive' applied to interest is, of course, a relative and elastic term, impossible of absolute definition. But we know the general rule of interest in commercial transactions and in loans on perfect security. We know the rate of interest juries are in the habit of giving in cases of adjudging damages. But in respect of ordinary loans deviations from these guides, dependent upon the facts of each case, must doubtless be expected and ought to be allowed. But such doviation must be reasonable in relation to facts. 8. Difficulties of this kind have been pointed out in later English cases as well and some solution was found by Parliament, by the Amending Act of 1927, wherein it was provided that a provision for interest above 48 per cent is prima facie harsh and unconscionable and is sufficient to throw upon the creditor the burden of justifying it. See observations on this new Act in Readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue thereof. 10. Applying these considerations to the circumstances of this case, we find that even according to the mortgagee's admission, he had ample security and in the transactions between him and the debtor on a previous occasion, interest was charged only at 131 per cent, per annum, simple interest. In the transaction between him and defendant l's mother, the interest was at the same' rate and both of them were unsecured pro-note loans. In the mortgage loan contracted by defendant 1's mother during his minority from defendant 2, the rate of interest was only 9 per cent. The plaintiff has not suggested that he insisted on a higher rate of interest by reason of any special risk involved in the loan, but only maintained that this is the usual rate at which he lends. As we have already pointed out, the provisions of Sub-clause (a) of Clause 2 impose upon the Court the duty of coming to a conclusion as to what will be a reasonable rate of interest, having regard to the risk incurred. It is very doubtful, if this will take in the usual terms at which the creditor has been in the habit of lending. But the very fact that very shortly prior to this loan, the credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... readiness to pay his adoptive mother's debt to the plaintiff, he required in all only about ₹ 15,000 or ₹ 16,000, for these purposes. He borrows the balance of Es 18,000 for meeting the expenses of his family, defraying the cost of repairs to be executed in the village and paying kists. Having regard to his age at the time and the fact that he had also quarrelled with the only other elderly relation on the adoptive father's side, he was hardly very competent to come to a proper conclusion as to the prudence or otherwise, of borrowing on these terms, merely for the purpose of effecting improvements in his village. The plaintiff stated that defendant 1's natural father came to~ him, along with defendant 1, at the time when this loan was arranged. Defendant 1 stated that that was not so, but on the other hand, he had quarrelled with his natural father even before the. date of Ex. A. The learned Judge does not accept either version in the form put forward by each party, but he infers that he must have had the benefit of his-natural father's advice in entering into-this transaction. All that we can say is, that, as a question of probability, this inference is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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