ORDER K. Sadasivan. J, 1. The revision petitioner-plaintiff, sued for paid up subscriptions in a chtty conducted by the defendant, wherein he was a subscriber. He subscribed only for four instalments. By way of subscription he had paid Rs. 791-05 ps., in cash. A sum of Rs.208-95 ps., was credited in his name towards veethapalisa. So the total amount due by way of paid up subscription was Rs. 10,000/-. The chitty came to a termination on 9-9-1970. When demand was made for the amount, the defendant offered him a cheque for Rs. 491-05 ps. He was told that after deducting foreman's commission and expenses of the chitty, he was entitled to get only Rs.491-05 ps. According to the petitioner, the provision in the chitty variola entitling the foreman to deduct veethapalisa and foreman's commission from the amount subscribed by a defaulted subscriber is against public policy and hence unconscionable. According to his calculation he is entitled to get a balance of Rs.329-70 ps., excluding other sundry expenses incurred. The defendant-foreman, contended that he is entitled to realize 3% of the full amount of the chitty for initial expenses from a defaulted subscriber. The plaintiff is not entitled to veethapalisa under the terms of the variola and he is not entitled to get anything more than Rs. 491-05 ps. Which he was already paid. None of the provisions in the Chitties Act or in the Chitty variola is unconscieonable or against public policy. The learned Munsiff accepting the plea of the defendant has dismissed the suit. 2. The claim regarding veethapalisa was not pressed before us. Stress was, however, laid on the deduction made under Cause 9 of Ex. D-1, Chitty variola. Clause 9 provides that in the case of defaulters of instalments up to 19, a deduction of 3% from the total amount will be made by the foreman towards initial expenses incurred by him for the starting of the chitty. 3% of the total amount in the present case would come to Rs. 300/-. The plaintiff, as already stated, had subscribed for instalments 1 to 4 only, that is, Rs. 791-05 ps. in cash and Rs. 208-95 ps. by way of adjustment towards Veethapalisa. 3% of the total amount in the present case would come to Rs. 300/-. The plaintiff, as already stated, had subscribed for instalments 1 to 4 only, that is, Rs. 791-05 ps. in cash and Rs. 208-95 ps. by way of adjustment towards Veethapalisa. It is argued that Rs.300/- is a substantial amount, considered in the light of the amount subscribed by the plaintiff and he will be hard hit if such a deduction is made in the amount due to him. It is also pointed out that towards expenses of the chitty, there is already provision for deduction of 1% of the prize amount at each draw and I n the light of that, the further deduction of 3% of the total amount would be a double payment. This deduction of 3% of the total collection, according to the plaintiff, can on no account be sustained as it is unconscionable and opposed to public policy. The chitty variola, it must be remembered, has been drawn up under the provisions of the Travancore Chitties Act (Act XXVI of 1120) and Rules. Section 27 of the Chitties Act provides that defaulting non-prized subscribed shall be entitled to recover from the foreman, at the termination of the chitty, his contributions subject to such deductions as may be provided for in the variola. A defaulting subscriber, therefore, falling under the category mentioned in Clause 9 of Ex. D-1 can claim only the amount less deductions provided for therein. The 3% of the total amount referred to in Clause 9 is towards the initial expenses of the chitty, whereas the 1% provided for under Clause 3 is towards the expenses of the individual instalments. The two deductions, therefore, would fall under two distinct categories. It would, therefore, be incorrect to treat the deduction a double payment. 3. Under Section 71 of the Chitties Act, powers are vested in Courts for granting relief against any of the provisions contained in the variola, if the same be unconscionable or opposed to the provisions of any law. This Court, therefore, can go into the legality of the provisions of the variola, and any provision if found to be unconscionable or opposed to the provisions of any law can be struck down. We do not think that any of the provisions of the variola Ex. D-1, is opposed of any law. This Court, therefore, can go into the legality of the provisions of the variola, and any provision if found to be unconscionable or opposed to the provisions of any law can be struck down. We do not think that any of the provisions of the variola Ex. D-1, is opposed of any law. On the other hand the provisions are only consistent and in accordance with the provisions of the concerned law, viz, the Chitties Act and the Rules. 4. We have next to see whether the impugned provision in Clause 9 of the variola is unconscionable. An unconscionable transaction is often struck when a person already indebted to a money-lender contracts a fresh loan, on terms on the face of them unconscionable. In such a case a presumption is raised that the borrower's consent was not free. The question here is not of fraud, but of the unconscientious use of superior power. Applying the analogy to the present case, it must be established that the foreman in admitting the plaintiff to his chitty was in such a positions as to dominate the will of the plaintiff. In case of this nature, in order to succeed in the action, both the elements, viz., that the foreman was in a position to dominate the will of the subscriber, and the bargain itself was unconscionable within the meaning of clause (3) of Section 16 of the Contract Act must be established. If people with their eyes open choose willfully and knowingly to enter into unconscinonable bargains, the law has no right to protect them. Hardship alone is not enough (Vide Pollock and Mulla's Indian Contract & Specific Relief Acts, 9th Edition page 154). 5. As observed by the privy Council in Poosathurai v. Kannappa Chettiar (I.L.R. 43 Madras 546):- It must be established that the person in a position of dominion has used that position to obtain unfair advantage for himself. Hardship alone is not enough (Vide Pollock and Mulla's Indian Contract & Specific Relief Acts, 9th Edition page 154). 5. As observed by the privy Council in Poosathurai v. Kannappa Chettiar (I.L.R. 43 Madras 546):- It must be established that the person in a position of dominion has used that position to obtain unfair advantage for himself. When the relation of influence as above set forth has been established, and it is also made clear the at bargain is with the person who influence the other, and is in itself unconscionable, then the person in a position to use his dominating power has the heavy burden thrown on him of proving affirmatively that no domination was practiced so as to bring about the transaction, but that the grantor of deed was scrupulously kept separately advised in the independence of a free agent. 6. Neither of these elements is proved in the present case. It is with h is eyes open and as an independent free agent that he entered into the transaction, in demanding 3% of the whole amount for initial expenses of the chitty from a defaulting subscribed in the earlier stage of the chitty, we do not see any thing so shocking to judicial conscience as to call it an unconscionable demand. Default in the early stages of the chitty will be embarrassing to the foreman. He is put to the necessity of finding substitutes or himself stepping into the shoes of the defaulting subscriber and continuing chitty. If a number of subscribers, after subscribing for 3 or 4 drawings default like this, the foreman will be in a highly precarious situation, and it is to prevent such a contingency happening that such a stringent provision is made in the variola. Examining the sustainability of a provision in a hypothecation bond providing for interest at 24% per annum the Madras High Court in Ramalingam Chettiar v. Subramonia Chettiar (I.L.R. 50 Madras 614) observed that:- there is no evidence of any domination of the will of the debtor by the creditor. Examining the sustainability of a provision in a hypothecation bond providing for interest at 24% per annum the Madras High Court in Ramalingam Chettiar v. Subramonia Chettiar (I.L.R. 50 Madras 614) observed that:- there is no evidence of any domination of the will of the debtor by the creditor. The money was borrowed for speculating in cotton and the first defendant apparently expected to make large profits in it and agreed of his own accord to pay the high interest for cash down hoping that he would be able to repay the debt in six months, for that is the due date fixed for repayment in the hypothecation deed. Things did not turn out as he expected; the arrangement to pay compound interest was also a part of the bargain, as the plaintiff as a money lender would be able to earn interest or the interest money due by the first defendant on the hypothecation, if paid to him. He, therefore, naturally stipulated for interest on interest and it was also agreed to by the first defendant. That a stipulation by way of compound interest is not necessarily a penalty has been laid down by the Privy Council in I.LR. 34 Cal. 150. 1921-41 M.L.J. 470 AMD 1918-23 C.W.N. 130. I am not prepared to say the mere fact of the rate being somewhat exorbitant will establish that the stipulations is one by way of penalty. 7. We are, therefore, of the view that the provision in the variola for a deduction of 3% of the total amount towards initial expenses, from a subscriber defaulting within the first 19 instalments is not unconscionable. A bench decision of this Court in Raghavan v. Subbarama Sastrigal (1971 K.L.T. 231) was brought to out notice is this connection. There, the right of a stakeholder in a chit fund to demand from a prized defaulting subscriber the future instalments in a lump with interest was considered. That particular kuri contained a provision relating to the payment of future instalments in a lump with interest at 12% in the event of default. There, the right of a stakeholder in a chit fund to demand from a prized defaulting subscriber the future instalments in a lump with interest was considered. That particular kuri contained a provision relating to the payment of future instalments in a lump with interest at 12% in the event of default. The Division Bench held citing certain decisions, that the provisions in the kuri vari for collection of all the future instalments in a lump, the denial to the subscribers their share in the reduction or dividend, and interest at 12 per cent, which, if calculated on the basis of the several due dates of the instalments, will work out to more than 20 per cent, is undoubtedly penal and unconscionable. 8. The position in out case is different, Here the chitty variola provided for realization of 3% from the total amount from a defaulter up to the 19th instalment towards initial expenses incurred by the foreman in the starting of the chitty. The total amount of the chitty is Rs. 10,000/-starting of the chitty. The total amount of the chitty is Rs. 10,000/- 3 per cent of which as stated earlier will be Rs. 300/-. This, according to the petitioner, is too much, especially in view of the other usual provision for reduction of 1% of the prize amount at chitty draw, towards expenses of the chitty. We have already pointed out that this deduction of 1% is a general deduction for the conduct of the kuri, while 3% of the total amount is a deduction which the foreman is entitled to make from a defaulting subscriber up to the 19th instalment. Justification for this is that the foreman has to undertake extra risks in continuing the kuri when at the initial stages the subscriber defaults. In such cases the foreman is entitled to a heavier compensation than in ordinary cases. There is no evidence in the case bout the expenses involved for starting the kuri. Without this information it is not possible to accept the contention that the three per cent of the total amount is more than what was required on that count. Nor is there any evidence as to how many persons defaulted and how much money was deducted by virtue of the provision that three per cent of the total amount is to be deducted. 9. Nor is there any evidence as to how many persons defaulted and how much money was deducted by virtue of the provision that three per cent of the total amount is to be deducted. 9. In the Madras decisions cited by the Division Bench in 1971 K.L.T 231 (cited supra), the view taken was that a stake-holder has the right to claim all future instalments in a lump from a defaulting subscriber. The decisions are: Vaithinatha Iyer v Govindaswami Odayar (A.I.R. 1922 Madras 67); Ramalinga Adaviar v Meenakshisundaram Pillai (A.I.R. 1925 Madras 177); Kunju Nair v. Narayanan Nair (A.I.R. 1933 Madras 252); Subbiah Pillai v Muthiah Pillai (A.I.R. 1933 Madras 657) and Ayyankunnu Pillai v Doraiswami Pillai (A.I.R. 1933 Madras 725). In all these cases the Court held that provision in the Kuri Rules for realization in a lump of the future subscriptions from a defaulted subscriber was not penal. In the first mentioned case A.I.R. 1922 Madras 67 the provision in the kuri vari was to the effect that in case the subscribers failed to pay their subscriptions regularly they were not only to forfeit the dividend but were also to pay the whole amount on demand with interest. The Court held in favour of the stake holder. In the second mentioned case "A.I.R. 1925 Madras 177" where the learned Judge Srinivasa Aiyangar, examined the principle underlying the law of penalty and held that the question whether any stipulation in a kuri vari was only by way of compensation or by way of penalty depended upon the construction of that particular document or contract, and on the circumstances of the case. The learned Judge on the authority of an English decision held that the provision was not penal. In AI.R. 1933 Madras 252. Ananthakrishna Ayyar, J. held that the provision to pay all the future instalments in a lump by a prized subscribed is not a penalty. This ruling of Justice Ananthakrishna Ayyar was approved by a later decision of the Bombay High Court in A.I.R. 1933 Madras 725. In AI.R. 1933 Madras 252. Ananthakrishna Ayyar, J. held that the provision to pay all the future instalments in a lump by a prized subscribed is not a penalty. This ruling of Justice Ananthakrishna Ayyar was approved by a later decision of the Bombay High Court in A.I.R. 1933 Madras 725. One other decision of the Bombay High Court quoted by the Division Bench in (1971 K.L.T. 231) is Bur jor ji Shapur ji Sheth v Modhvlal Jesinghbhai (A.I.R. 1934 Bombay 370) wherein Beaumont, C.J., held that:- If there is an agreement to pay a sum of money by a particular date with a condition that if the money is not paid on that date a larger sum shall be paid, that condition is in the nature of a penalty against which a Court of enquity can grant relief and award to the party seeking payment only such damages as he has suffered by the non-performance of the contract. 10. But in the case before us, we are not confronted with such a situation. The impugned provision in the chitty variola is not one demanding a larger amount than the party is entitled to pay. The provision, on the other hand, is that the subscriber-defaulting at the initial stages of the chitty would be subject to the risk of meeting the expenses of the foreman in starting the kurit. Towards such expenses, 3% of the capital of the kuri has been fixed in the variola. The facts of the case considered by the Division Bench 1971 K.L.T. 231 are not applicable to the present case and on a consideration of the relevant aspects of the case we are satisfied that the impugned provision is not penal. The foreman is within his rights in enforcing the provision in the chitty regarding costs, against the petitioner who defaulted at the early stages of the kuri. 11. The result is that the Court below is justified in dismissing the suit, and in confirmation of the decree of the Court below this revision petition is dismissed. No costs in this Court.