Hello Jobin
In a sense, you are correct. RIP does perform load balancing across multiple paths to the same destination that have the same metric. In this case, the problem is that RIP is interpreting specific networks using their classful subnet masks and the load balancing feature is being implemented with incorrect criteria.
Specifically, R2 is being told that it can reach 172.16.3.0/24 via R3 and 172.16.1.0/24 via R1. However, when R2 receives this information, what it does is it replaces the /24 prefix with the /16 classful prefix, because the specific range of addresses has a classful prefix of /16. So this is interpreted as: you can reach 172.16.0.0/16 via R3 and you can reach 172.16.0.0/16 via R1.
So traffic destined for either network is actually being viewed as a single stream of packets and is in essence, load balanced (albeit incorrectly) across the two available routes to the single destination of 172.16.0.0/16.
Ultimately, the load balancing is acting on an incorrect assumption, thus, is incorrectly routing traffic.
I hope this has been helpful!
Laz