JUDGMENT

1. This appeal arises out of a suit brought by the plaintiff to recover Rs. 1,300 being principal Rs. 80, and interest, Rs. 1,220, on a mortgage bond executed by three defendants on 1st Jaistha 1312.

2. The transaction was an unusual one and the facts found require to be carefully stated as well as the circumstances which are admitted in connection with the giving of the mortgage-bond and recited in the bond itself.

3. It appears that Abdul Majid, defendant No. 1, mortgaged 6 annas of a raiyati jote in which his brother, defendant No. 2, was also interested while defendant No. 3 a relative, mortgaged three 6-anna shares of jotes and an 8-anna share of a howla belonging exclusively to him.

4. The three defendants had bid successfully at a sale of the land of one Nagarbashi Kundu and had deposited the earnest money. They were in immediate need of Rs. 80 to complete the purchase and applied to the former creditor of defendant No. 3, one harish Chandra Pal who had a mortgage on properties Nos. 1 to 4, on which he has according to the plaint recently got a decree or a heavy claim, and by him they were introduced to the plaintiff, another moneylender. The Rs. 80 was obviously only required as a temporary accommodation and the security given was worth over Rs. 3,000, for the property No. 5 was sold under Harish Chandra Pal's decree for Rs. 650 and there are throe similar yotes and a larger taluki interest also mortgaged. Yet interest at 60 per cent, with compound interest was agreed to. The defendants' story is that the land they had purchased was released from sale by deposit of the decretal money by the original owner and they, therefore, tendered the principal Rs. 80 and Rs. 8 interest to the plaintiff who took the Rs. 8 and pursuaded defendant No. 1 to let the principal sum stand over on promising to forego compound interest and to reduce the simple interest by half. This story has been disbelieved by the lower Courts as far as the payment of Rs. 8 and the oral agreement is concerned, but no liriding has been come to as to the probability of the defendants having desired to pay off the debt when they had the money.

5. The lower Court has also held that no fraud was practised on the defendants because defendant No. 1 is a very clever man and able to take care of himself and entered into the bond with his eyes open. But here the lower Court has fallen into the error of not considering the position of defendant No. 3, who had a far larger interest in the property mortgaged than anybody else and who is an ordinary cultivator.

6. Every presumption must be made in his favour and the lower Court appears to have erred in not applying the doctrines of undue influence and penalty very strictly to his case. The trend of modern decisions is to hold that the Courts have ample powers under the amended Contract Act to go behind harsh and unconscionable bargains on tlm ground that where there is ample security, the exaction of excessive and usurious interest in itself raises a, presumption of undue influence which it requires very little evidence to substantiate. Further, it has been held that the attempt to conceal the real rate of interest by describing it as one pice in the rupee per mensem or, as in the present case, Rs. 5 per mensem is evidence of an intention to get it better of the debtor and the law seems to be that there must be a footing of complete equality between debtor and creditor and they must be, so to speak, at arm's length to make a bargain which is in itself harsh and unconscionable, enforceable at law. We may refer to the case of Carringtons Limited v. Smith (1906) 1 K.B. 79 : 75 L.J.K.B. 49 : 54 W.R. 424 : 93 L.T. 779 : 22 T.L.R. 109 and the ciscussion at page 87 of the meaning of the terms 'harsh' and 'unconscionable'. It is pointed out that in In re a Debtor (1903) 1 K.B. 795 : 72 L.J.K.B. 382 : 5 I W.R. 370 : 88 L.T. 401 : 19 T.L.R. 283 : 10 Man 130 the Master of the Rolls and Cozens Hardy, L.J., each say that under t