Raghunath Prasad is the petitioner who is the father of the respondent Sarju Prasad.

To defend himself
in court, the respondent mortgaged his property with the plaintiff to borrow a sum of Rs.10,000
compounded with a rate of interest @2% per month. In the deed it was mentioned that he shall pay
simple interest of 2% per month and on non-payment of it, the interest would become the principal
amount and the interest then would be calculated compoundly. No doubt that these terms were high
because, in eleven years, the interest increased 11 times and totaled Rs.1,12,885. At the time of the
mortgage, they both were equal owners of joint undivided family property. Both had a dispute and
fought over the property due to which the father sued a criminal proceeding against his son in court.
The defendant then argued that the plaintiff took advantage of his mental condition in increasing the
interest rate and thus, section 16 of the Indian Contract Act 1872 should apply.

The Lordship passed upon a three-step process. In the first step, the relation between the parties must
be such that the other party is in a position to dominate the other. After this, in the second stage, one
has to prove undue influence. And in a third step which is onus probandi, if the transaction seems
unconscionable then the responsibility of proving that the contract was not influenced by undue
influence falls on the individual who had the power to control the decision-making of others. If this
sequence is not followed, an error will surely arise.

The defendant could not provide any evidence at all to prove that the lender was in a position to
dominate. He could only prove that the relation between them was of a borrower and lender only. As
the first step could not be proved, the defendant got no relief.

The court decided to revise the mortgage amount and decrease it. The court permitted the inclusion of
interest, on the loan at a rate of two percent starting from when the bond was executed until
September 25, 1917. After that date, simple interest at a rate of six percent per year will be applied until
the final payment is made. Additionally, it was determined that the appellant is responsible, for covering
all costs associated with this appeal.

I, go with the decision of the court. In my opinion, the court gave the right verdict and Raghunath
Prasad was not at fault. Sarju, the defendant accepted the deed himself with the mentioned conditions.
He had the option of borrowing money from some other lender, but he willingly chose to borrow from
his father. He also had the option to bargain and negotiate the deal, but he didn’t. Therefore, Section 16
of the Indian Contract Act 1872 didn’t apply and hence no relief was given.