AJUDHIA PRASAD AND ANR. V/S CHANDAN LAL AND ANR., 1937

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AJUDHIA PRASAD AND ANR. V/S CHANDAN LAL AND ANR., 1937

CITATION	AIR 1937 All. 610 78
DATE OF JUDGMENT	11^th MAY, 1937
COURT	HIGH COURT OF ALLAHABAD
APPELLANT	AJUDHIA PRASAD AND ANR.
RESPONDENT	CHANDAN LAL AND ANR.
BENCH	SULAIMAN, C.J.

INTRODUCTION

The country’s most esteemed courts have recognised children, nearly 38% of the population, as national assets. Due to their youth, they remain innocent and vulnerable to manipulation, hence needing a form of guidance to help them develop through their formative years so they can integrate into society as productive citizens when they are grown up. Under the law, special provisions are allocated to minors to safeguard them from the total consequences of their actions, which they may not have the mental capacity to comprehend yet. Legal protection for these minors has been a leading concern for the legal community to determine the results of agreements between them and other parties.

The case of “Ajudhia Prasad and Anr. v. Chandan Lal and Anr.” is a second appeal. Based on a mortgage deal finalised on October 15, 1925, by respondents in favour of the appellant’s side, legal action for acquisition forms the backdrop of the case. Due to being a minor at the time of the mortgage transaction, the respondent believes they should not be indebted to the appellant. The legally-appointed guardian should assume the responsibility for the finances.

FACTS OF THE CASE

Two minors concealed their identity as minors and did not appoint a legally qualified guardian. They then proceed to agree to a mortgage. The mortgagee was left completely unaware of the genuine age of the minors and as a result, provided accurate sums for the wedding expenses. Under Section 68 of the Indian Contract Act of 1872, the mortgagee filed a lawsuit demanding repayment. The lower courts opined that the respondents were still minors/infants even though they were truly above 18, as they were still under 21.

Furthermore, the court’s ruling stated that marriage could not be considered a necessity, so the relief granted under Section 68 of the Indian Contract Act of 1872 did not make logical sense. However, the court also provided another perspective by discussing the “Khan Gul v. Lakha Singh” case – where it was determined that minors would be liable to repay the principal amount and any future interest if they had fraudulently misrepresented their age. Since the property would be sold in case there was a default, the present case was filed.

ISSUES RAISED

Is the case related to the respondents being minors, the debt’s nature, its valid verification, and value acknowledgement?
Were the two individuals agreeing to the mortgage agreement by fraudulently misrepresenting their age? Under the Guardians Act, they had a legally-appointed guardian. Was the money acquired with deceit?
Under the Act, is a contract with a minor feasible even though the agreement may not be binding? Do contracts require legally binding agreements?

CONTENTIONS OF APPELLANT

In their reply, the appellants objected to the respondents being thought of as minors and argued that since their minority was questionable, Section 68 of the Indian Contract Act 1872 made them liable for repayment.
The respondents fraudulently misrepresented their age as the mortgagee was completely unaware of their actual age.
The respondents and their father also deceitfully misrepresented their guardianship by saying that executors were under their guardianship. They admitted before the Sub-Registrar that the younger son was over 18 years old and that guardians were appointed for the minors.

CONTENTIONS OF RESPONDENT

The respondents claimed that since they were minors when the mortgage transaction occurred, they could not be expected to take on the burden of the debt, especially since a fully authorised guardian was assigned to them.
Agreements involving minors are void ab initio; they do not count as contracts, which is one of the basic principles of contract law. “The existence of an agreement/contract by competent parties,” is a requirement for Section 65 of the Indian Contract Act of 1972, so it cannot apply to this case.

JUDGEMENT

The central matter of argument in this case was about the contractual obligation of minor respondents to a loan agreement they had entered into, according to the acknowledgement of the court. If legal action were enforced in this scenario, it would effectively serve as a method to enforce the contract. From the past to the present day, there has not been an instance in the Court of Equity where there has been a ruling against a minor/infant in a scenario similar to the current case. There has not been a case where an agreement for a loan contract was entered into based on a minor’s fraudulent statements, and the minor was then held liable to repay the sum of the loan even though the contract was void (therefore validating the contract). The case is not too complex as the respondents being minors is enough proof to dismiss them from liability. Since they are minors, no contract they sign can be valid. Their contract is null under Indian law, hence an estoppel claim cannot be established.

ANALYSIS

Under the Indian Contract Act of 1872, a minor is recognised in India as someone under the age of 18 who hasn’t attained majority yet. If a guardian is appointed to watch over their person or property, then 21 becomes the age of majority. This is an exception.

Those under the age of 18 cannot enter into a legally binding contract, and if they attempt to do so then the contract shall be void ab initio or invalid from inception. The same holds even if an agent is acting on their behalf. This is a basic principle of contract law established by the landmark case of “Mohori Bibi v. Dharmodas Ghose” in 1903. This precedent-setting case saw Dharmodas, a minor, mortgaging his property to the moneylender named Brahmo Dutt so he could garner a loan. Brahmo Dutt claimed that Kedar Nath Mitter, Dharmodas’ lawyer, sanctioned the arrangement despite being aware of Dharmodas’ minority. After this quibble, Dharmodas filed a lawsuit while acting as the plaintiff. Using the fact that he was a minor, the agreement was claimed to be invalid and therefore unenforceable.

However, the respondent sought recourse by arguing that the minor had misrepresented his age and, hence should be held liable. When the mortgage was cancelled, he sought legal recourse by estoppel and loan repayment. Ultimately, these arguments held no gravity in court and the judgement was made: the minor could not be held liable for repaying the loan. The court also contended the that doctrine of estoppel, underlined in the Indian Evidence Act, Section 115, is inapplicable since the respondent’s agent was aware of the truth and could not have been misled.

Since they cannot be aware of the consequences of their decisions due to maturity and lack of knowledge, minors are granted civil and criminal immunity by the state. This is to prevent them from being exploited in any way or entering into an agreement which may harm them in some way.

Any provisions regarding liability for compensations are explained in Sections 64, 65, and 70 of the Indian Contract Act, along with Sections 39 and 41 of the Specific Relief Act. For Sections 64 and 65 to apply, the parties must be competent to contract. Since a minor cannot contract these provisions cannot apply to them. Other than this, Section 70 also excludes minors. In the case of “State of West Bengal v. B.K. Mondal and Sons”, this exclusion was upheld due to the specific inclusion of their cases under Section 68.

Sections 39 and 41 also explain the differing views regarding a minor’s liability. A few cases have set a precedent on how to interpret the statute. They are as follows.

Sir Shadi Lal, Chief Justice of the Lahore High Court opined in “Khan Gul v. Lakha Singh”:

A minor may be compelled to compensate the defendant in equity in order to restore pre-contractual status, as long as they seeking the cancelling or relief of the instrument by acting as a plaintiff.
The property may not be traceable but the minor might still be obligated to compensate if they have received any gains.

On the other hand, the Allahabad High Court in “Ajudhia Prasad v. Chandan Lal” contended:

However, the minor cannot be held liable for compensation if they are acting as a defendant.
The equitable doctrine of restitution was underscored in the case of “Leslie v. Sheill”. As per the court in this case a minor can only be held liable for restoring the property if it can be traced.

CONCLUSION

In this case, the appellant could not proceed with their case using their justification. The precedents set regarding a minor’s capacity to contract are well-defined and widely acknowledged. It would not make logical sense to contradict the Indian Contract Act of 1872 by saying minors should suddenly be held liable. If the principles of contract law are unequivocal and there is no law contradicting the same, then any conflicts should be avoided. The principles of estoppel do not extend themselves to minors. The existence of clear statutory provisions delineates that a minor cannot be held liable for a debt if they enter into a contract. Any agreements involving minors are void, and the doctrine of estoppel cannot override this rule.

REFERENCES

This Article is written by Eshal Zahur student of National Law University, Odisha; Intern at Legal Vidhiya.

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