JUDGMENT

1. This is an appeal on behalf of the plaintiff in a suit to enforce three mortgages executed in his favour by the first defendant. The bond, earliest in point of time, was executed on the 11th January 1904, for a sum of Rs. 3,999, which carried simple interest at the rate of 11 per cent, per annum. The second bond was executed on the 6th April 1904 for Rs. 3,001, which carried compound interest at 9 per cent, per annum with annual rests. The last bond was executed on the 14th January, 1905 for Rs. 2,650 which carried compound interest at 12 per cent, per annum with annual rests. On the 1st May 1905, the first defendant deposited in Court the sum of Rs. 7,277-8 in full satisfaction of what he considered was due to the mortgagee at that time on the three bonds. The plaintiff ignored the deposit as insufficient in amount, and on the 30th June 1909, commenced the present action to enforce the three securities. Upon the first bond, he allowed credit in the plaint for Re. 2,944-13- 3, alleged to have been paid on the 11th January 1905. The defendant resisted the claim on various grounds which need not be set out in detail at this stage. It is sufficient to state that the defence prevailed in part and a decree was made in favour of the plaintiff. In the present appeal, the plaintiff has assailed that decree on three grounds; namely, first, that the sum of Rs. 2,944-13 3 ought to have been treated as paid on the 11th January 1905 and not deducted from the principal sum of Rs. 3,999; secondly, that the compound interest payable upon the third bond has been disallowed on grounds erroneous in law; and thirdly, that interest at the contract rate should have been allowed, during the pendency of the litigation and up to the date fixed in the decree for re-payment of the mortgage-money. In our opinion, each of these contentions is well founded and must prevail.

2. In so far as the first ground is concerned, the Subordinate Judge has held upon the evidence that the whole of the principal sum scared by the first mortgage was not paid at the date of the execution of the bond. He has in substance made a new case for the defence and has overlooked the very important fact that in the application which accompanied the deposit by the defendant on the 1st May 1905, he admitted receipt of the sum of Rs. 3,999 secured by the mortgage of the 11th January 1904. The view taken by the Subordinate Judge cannot be supported and the sum of Rs. 2,944-13-3 must be treated as paid on the 11th January 1905. The effect will be that interest will be allowed upon the principal sum secured by the first mortgage up to the 11th January 1905, and for the period subsequent to that date, interest will be calculated only upon the balance due. The first ground, therefore, prevails.

3. In so far as the second ground is concerned, the Subordinate Judge has held that as the plaintiff took an unfair advantage of his position as creditor and dominated the will of the first defendant, he is not entitled to claim compound interest as provided in the third mortgage. This view clearly cannot be supported. As was pointed out by their Lordships of the Judicial Committee in the case of Dhanipal Das v. Maneshar Bakhsh Singh 28 A.C 570; 4 C.L.J. 1; 1 M.L.T. 205; 33 I.A. 118; 3 A.L.J. 495; 9 O.C. 188; 8 Bom L.R. 491; 10 C.W.N. 849; 16 M.L.J. 292 the Court must, in a case of this description, first consider the terms of the amended Section 16 of the Indian Contract Act only. Now Section 16, as amended in 1899, provides in the first sub-section that 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 another and use that position to obtain an unfair advantage over the other. Sub-section (3) of Section 16 provides that where a person, who is in a position to dominate the will of another, enters into a contract with him, and the transaction appears, on the face o