Raghunath Prasad v. Sarju Prasad (1923) — 51 I.A. 101

Quick Summary

This case explains how courts test undue influence under Section 16 (ICA). It sets out a simple three-step path and tells who carries the burden of proof when a deal looks unconscionable.

• Three steps: relationship, causation, and onus shift if the transaction looks unfair.
• Dominant party must disprove undue influence once the deal appears harsh.
• On facts, the strict test was not satisfied.

Issues

1. Is the plaintiff protected by Section 16(3) (burden shift) of the ICA?
2. Was the mortgage contract induced by undue influence?

Rules

• Step 1 — Relationship: Decide if one party could dominate the will of the other.
• Step 2 — Causation: Check if the agreement was actually induced by the undue influence.
• Step 3 — Onus Probandi: If the deal seems unconscionable, the dominant party must prove there was no undue influence. (§16(3))
• Who may dominate? Persons with authority, fiduciary ties, or dealing with someone of weakened capacity (age, illness, distress).

Arguments

Judgment

The Court explained the three-step approach and the burden shift rule under Section 16. On the facts, the party alleging undue influence did not prove domination and causation. So, the strict conditions for undue influence were not met. Interest was allowed from the date of execution.

• Relationship alone is not enough; there must be inducement by undue influence.
• Only when the bargain looks unconscionable does the onus shift to the dominant party.

Ratio

Courts use a relationship–inducement–onus test. If the deal looks unfair, the alleged dominant party must show it was fairly made. Mere kinship or tension is not enough—there must be proof of dominance and causation.

Section 16(3) moves the burden only when the transaction appears unconscionable.

Why It Matters

• Clear path: Gives students and courts a neat 3-step structure for undue influence.
• Evidence focus: Shows when and how the burden moves under §16(3).
• Fairness check: Highlights the role of unconscionability in contract review.

Key Takeaways

• Test = Relationship → Inducement → Onus.
• Unconscionable terms can trigger burden shift under §16(3).
• Prove both dominance and causation; not just harsh terms.

Mnemonic + 3-Step Hook

Mnemonic: R-I-O — Relationship, Inducement, Onus.

1. Spot the tie (could A dominate B?).
2. Link to deal (did that cause the bargain?).
3. Shift the load (if unfair, dominant party must justify).

IRAC Outline

Issue: Was the mortgage induced by undue influence under §16 ICA, and does §16(3) shift the burden?

Rule: Three steps: (1) position to dominate, (2) inducement by undue influence, (3) onus shifts if deal appears unconscionable.

Application: Family dispute and high interest were shown, but proof of domination and causation was insufficient.

Conclusion: §16 test not met; interest allowed from execution date.

Glossary

Undue Influence

When one party uses a position of power to get an unfair advantage in a contract (Section 16 ICA).

Unconscionable

So one-sided or harsh that it signals unfair dealing.

Onus Probandi

The burden of proof—who must prove what in court.

FAQs

Related Cases

• Allcard v. Skinner — classic undue influence guidance.
• Williams v. Bayley — pressure and consent.
• Rani Annapurni — unconscionable bargains in Indian context.