MOHORI BIBEE VS DHARMODAS GHOSE ILR (1903) 30 Cal 539 (PC)- Is a contract made by a minor void or voidable? This question was frequently asked before the Privy council. The ambiguity arose because neither Section 10 nor Section 11 of the Indian contract act addresses the issue. Section 10 requires that the parties to a contract must be competent and Section 11 declares that a minor is not competent. But neither section makes it clear whether, if a minor agrees it would be voidable at his option or altogether void.
FACTS OF THE CASE –
Dharmodas Ghose a minor was the respondent in the case. He was the sole owner of his immovable property. Dharmodas Ghose’s mother was authorized as his legal custodian by Calcutta High Court. When he went for the mortgage of his immovable property which was done in the favor of Brahmo Dutta (the appellant) he was a minor and he secured the mortgage deed for rupees 20000 at an interest of 12% per annum. The appellant was a moneylender whose attorney was Kedar Nath. The respondent’s mother notified the appellant regarding the minority of the respondent on the date on which the mortgage deed was commenced.
On 10th September 1895, the respondent and his mother brought legal action against Brahmo Dutta by claiming that the mortgage was executed by the respondent when he was a minor as a result of which such a mortgage was void and improper. Consequently, such a contract should be rescinded. During the proceedings, the appellant died, and then further the appeal was indicted by his executor’s. The appellant argued that no relaxation or any sought of aid should be provided to them because he felt that the defendant had deceitfully or dishonestly misinterpreted the fact about his age.
ISSUES RAISED –
- Whether the deed was void under Section 2(g) of the Indian Contract Act, 1872?
- Whether the defendant was liable to return the amount of loan which he had received by the mortgage of property?
- Whether the mortgage commenced by the defendant was voidable or void?
The trial court held that such a mortgage deed or contract that was commenced between the plaintiff and the defendant was void as it was executed by a person who was a minor at the time of execution of the mortgage. Consequently, Brahmo Dutta not being satisfied by the trail’s court judgment filed an appeal in the Calcutta High Court. The Calcutta High Court reaffirmed the Trail’s court verdict and dismissed the appeal.
An appeal was later filed to the Privy Council which held that there cannot be any sought of a contract between a minor and a major. Accordingly, dismissed the appeal.
Highlights of the Privy Council’s judgment –
- Any sought of a contract with a minor or infant is void ab initio.
- It was held that since minor was incompetent to make such a mortgage hence the contract such made shall be void and not valid in the eyes of law.
- The minor cannot be forced to give back the amount of money that was advance to him because he was not bound by the promise that was executed in a contract.
Principles laid down –
- Any contract with a minor or an infant is void ab initio.
- Section 64 of the Indian Contract Act, 1872 is applicable in cases, where the parties entering into the contract are competent to make such a contract and do not apply to cases where there is no contract made at all.
- The legal acts done by a representative or by an agent mean that such acts are done with the knowledge of his principal.
MAJORITY ACT –
It was brought into force on 2nd March 1875. It was enacted to introduce various laws relating to the “law of majority”. It states that every person who is domiciled in India can achieve the age of majority only after the completion of 18 years of age. There is an exception provided that in the case were any personal law provides the age of attaining majority that shall be considered. In the case where the guardian or a custodian is appointed by any court of law for a minor in case of a person or his property or both, then in such case, the age of majority shall be 21 years of age.
It can be concluded that any agreement or deed in which minor is a party such agreement shall be declared null and void because such agreement is void ab initio. Any agreement with a minor cannot be enforced against him. In cases where the minor has done dealings without the consent of parents or guardians, they cannot be held liable for the breach. No action lies against them. If a minor has derived any profit from such a contract then he or she cannot be forced to reimburse it back or give compensation for the same.
- Avtar Singh – Contract and Specific Relief, Eastern Book Company, Printed by: Media Network, 12th edition, (Reprint 2019).
- Avtar Singh – Textbook on Law of Contract and Specific Relief, Eastern Book Company, Printed by: Gopsons Papers Ltd, 7th edition, (2019).
This blog is written by Kushal, KLE Society’s Law College.
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