Raghava Chariar. v Srinivara (1916) 31 MLJ 575

FACTS OF THE CASE

On March 23, 1903, the Plaintiff, who was a minor at that time and the defendant, who is the major, entered into a mortgage. The funds for which the mortgage was signed as security were fully advanced to the mortgagor, although the mortgagee (Plaintiff) was a child at the time of the mortgage. The Plaintiff fulfilled his half of the bargain and gave the Defendant money. Plaintiff fulfilled his responsibilities, however the defendant disregarded the contract. The lawsuit was filed to recoup the unpaid mortgage balance of Rs. 1100 and some change. The matter is an appeal against the Chingleput District Judge’s ruling.

ISSUES

1. Whether a minor who has paid the entire mortgage amount can enforce the mortgage on his own or with the help of another person.

ARGUMENTS 

The question at hand in this case is whether a mortgage signed in a minor’s favour who has paid the entire mortgage amount can be enforced by him or by anybody else on his behalf.  There were allegations made that the plaintiff was a baby at the time of the mortgage. The decision in Mohori Bibee v. Dharmodas Ghose (1909) I.L.R. 38 M. 312: 19 M.L.J. 752, which determined that a mortgage by a minor was void, serves as the beginning point for discussion of this issue.

A mortgage is a transfer of property, and their Lordships noted that under Section 7 of the Transfer of Property Act, people who are competent to contract are also competent to transfer property. They continued by demonstrating that a minor is not capable of contracting under the Contract Act. In a later case, Mir Sarwarjan v. Fakhruddin Muhammad Chowdhuri (1913), 21 M.L.J. 363, their Lordships determined that the guardian of a minor or the executor of his estate did not have the authority to bind the minor or his estate by a contract for the sale of real property and that the contract could not be enforced on the minor’s behalf in the absence of mutuality. 

A minor is competent to transfer property, according to the plaintiff’s argument. A minor may receive property under Section 6 of the Transfer of Property Act if he is not “a person legally disqualified to be transferee” as defined by Subsection (h) of that section. It is obvious that a minor may receive a gift of full ownership or a mortgage interest in immovable property, just as a minor may inherit a specific piece of real estate or a mortgage interest therein.

The mortgagee has already completed his portion of obligations and has already provided the money, which is nothing more than the consideration of the mortgagee’s commitment, the court concluded that the agreement is enforceable by law.

JUDGEMENT

Judges ruled that minors could receive transfers but not initiate them. This was because the Transfer of Property Act does not state anywhere that a person cannot receive property as a transferee unless he is competent to enter into a contract. Therefore, a mortgage can be imposed on a mortgaged property if a minor borrowed money and failed to repay it. 

The court’s reasoning was that giving a lease to a juvenile who is agreeing to pay rent or fulfil certain covenants that are a crucial component of the deal could prevent the transfer from going through. In a sale, gift, or mortgage, there typically aren’t any significant, mutually agreed-upon commitments. However, a mortgage is merely a conditional transfer; once the condition is met (such as when the debt is discharged), the transferor regains ownership of the property. The statute does not prevent the minor from being the promisee because the criterion of competence is only necessary for the promisor, even though the minor is unable to enter into a contract and provide his permission because such contracts would be void.

Current Day Significance

The case law is very important since it contributed to expanding the area in which children are protected under contracts. In the Mohiri Bibi vs. Ghose case, this was restricted. This choice was made with the intention of avoiding the harshness of Mohori Bibee and offering minors the protection provided by English common law when entering into contracts. This answer, nevertheless, wasn’t perfect. Contracts where the consideration was only partially performed or partially executed on behalf of the minor were excluded from its scope. Because the juvenile’s liability under the contract remained the same, such contracts were found to not grant the minor any rights.

REFERENCES

https://indiankanoon.org

https://ww.scconline.com

https://www.manupatrafast.com

This Article is written by Anoskaa Barui of Symbiosis Law School, Pune, Intern at Legal Vidhiya.

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