Multiple choice

A Hindu widow borrowed money from a lender for the purpose of filing a suit for maintenance. The lender advanced money at 100 percent rate of interest. The act of the money lender is induced by

  1. coercion

  2. undue influence

  3. fraud

  4. misrepresentation

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

This is a classic case of undue influence under Section 16 of the Indian Contract Act. The money lender is in a position to dominate the will of the borrower - a Hindu widow in distress, needing funds for a maintenance suit. Charging 100% interest in such a situation is clearly unconscionable and exploitative of her vulnerable position.