Mohori Bibee v. Dharmodas Ghose [1903 ILR 30 Cal 539(PC)]; Contract entered with minor is void- ab-intio

FACTS OF THE CASE

• Dharmodas  Ghose was the respondent in the respective case. He had not completed  was a minor. According to Indian Majority Act , 1875 of section 3, the person who completed the age of 18 years is major.
• Dharmodar Ghose was the sole owner of his immovable property. The mother of  Dharmodas Ghose was authorised as his legal custodian by Calcutta High court.
• Brahmo Dutt was the money lender at that time and he secured a loan or amount of Rs 20,000 , his transaction of the contract with Dharmodas Ghose was executed by Kedar Nath. He acted as the attorney of Brahmo Dutt.
• When the case is in process Brahmo Dutt had died , then further the appeal or petition was litigated by his executor , Mohori Bibee. She was the appellant of the case.
• Dharmodas Ghose  had entered into the contract on 20 July 1985 with Brahmo Dutt , when he was minor. The contract states that Dharmodas Ghose executed a mortgage in favour of Brahmo Dutt .to secure the repayment of Rs 20,000 at 12% interest with respect to the house which belongs to Dharmodas Ghose.
• It was claimed that while the transaction was being considered the respondent mother through her attorney had sent a letter. And revealed the minority of the respondent and intimated to Mr. Kedar Nath that any contract with the respondent would be at the lender’s own peril.
• The Attorney of the defendant, Kedar Nath who actually acted instead of on behalf of money lender has given money to the plaintiff who was the minor and he was totally aware about the incompetency of the plaintiff to perform or enter into the contract and also that he was incompetent legally to mortgage his property which belongs to him.  

ISSUE RAISED

• The contract had been executed with the minor so whether the law of estoppel will be apply on the minor who had received advantages and benefits by fraudulently misrepresenting his age and whether relief should be given to him.
• If the contract with minor is void then minor should return Rs 10,500 which he had received in advance by the moneylender. Whether Special Relief Act 1897 will be apply or not?
• Whether Section 64 and Section 65 of Indian contract Act will be applicable on minor who had contracted?
• Whether  contract  was void under section 2, 10(5), 11(6) of contract act or not?
• Whether the contract that defendant had commenced was voidable or not?

CONTENTIONS BY APPELLANT :

• The respondent presented himself the major at the time of execution of contract.
• Neither the appellant nor his attorney had any information or awareness that the respondent was a minor.
• The knowledge of the respondent’s actual age which Mr. Kedar Nath Mitter possessed should not imputed to the appellant as the Kedar Nath acted as the agent of Brahmo Dutt in the transaction.
• The respondent is preclude by Section 115 of Indian Evidence Act,1857 from claiming that he was minor at the time of executing the contract.
• The respondent must repay the amount advance according to Section 64 and 65 of Indian Contract Act ,1872 and section 41 of the Specific Relief Act ,1877.
• The Indian Contract Act ,1872 does not deal with contract by minors.
• The respondent dishonestly misrepresented the fact of his age that he was a major though he was not.

CONTENTIONS BY RESPONDENT :

• Dharmodas Ghose’s mother had already given notice to Kedar Nath , about Dharmodas Ghose was a minor through the letter.
• Brahmo Dutt and his attorney Kedar Nath possessed the knowledge of the respondent’s actual age.
• Since the respondent is minor at the time of the execution of Contract so the contract is void  and inappropriate and as a result of which such Contract should be revoked and rescinded.

JUDGEMENT

According to the verdict of Trial Court, such Contract that was commenced between the plaintiff and the defendant was void as it was accomplished by the person who was minor at the time of the execution of mortgage.

Brahmo Dutt was not satisfied with verdict of the Trial Court. He filed an Appeal in Calcutta High Court. The Calcutta High Court agreed with verdict of the lower Court and dismissed the Appeal of Brahmo Dutt.

Then he went to Privy Council for the appeal, in that process Brahmo Dutt had died and this further appeal was litigated by his executors.

Privy council also dismissed the appeal of Brahmo Dutt and held that there cannot be any sought of Contract between a minor and a major person.

Privy Council after considering all the facts, held that the contract enter with the minor is void- ab- intio means it is void from the beginning.

The court further held that regarding the contentions of the defendant that Law of estoppel will not be applicable because the attorney of Brahmo Dutt had knowledge of the fact of Minority of Dharmodas Ghose. His attorney stood in place of defendant, for the purpose of this mortgage and his acts and knowledge were the acts and knowledge of his principal.

Section 64 and 65 of Indian Contract Act, 1872 will not be applicable because it wasn’t the contract at the first place and for the application of Section 64 and 65, the Contract must be between competent parties.

Since the minor Dharmodas Ghose was incompetent to make the Contract hence, the minor can’t be forced to give back the amount of money that was advanced to him , because he was not bound by the agreement that was executed in a Contract.

The appellant therefore wholly fails and the case had been dismissed and the Privy Council imposed the cost of the appeal on appellants.

CONCLUSION

We can conclude that there are specific laws which are contented by the parties to apply but the Court had gone through with all the facts and made it absolutely clear about some specific laws.

Law of Estoppel states if any person incurs liability on another person’s representation then such person will not be allowed to change his position. In this case , the law of Estoppel was not applicable because the attorney of the appellant had awareness about the minority of the  respondent, so the law of estoppel will never apply against the minor. The reason behind such postulation is that the law made minor incompetent to Contract because the person who is minor should not be made liable to incur liabilities.

Section 64 and 65 of the Indian Contract Act ,1872 relates to the restoration of benefit received under voidable and void contracts respectively. Court observed respective sections will only apply to the contract between competent wherein it has been declared as void and voidable.

But in this case , the party is incompetent for the Contract , therefore this respective Section 64 and 65 of Indian Contract Act ,1872 will not applicable.

The section 41 of Specific Relief Act 1877, i.e. current section 33 of Specific Relief Act ,1963 basically the provision means that party who wants the cancellation of instrument from the court must restore the benefit it received under the instrument.

In this present case , appellant asserted for the refund under Specific Relief Act ,1877. But he can’t claim the benefit of refund or restoration as the Contract competency is not fulfilled. The Contract is void-ab-initio. At the end it can be concluded that any agreement or Contract in which the minor is the party , then that particular deed or Contract will be void-ab-initio and in this case the custodian is also shall not liable for the functioning by the minor with or without the consent. Hence they are also not liable to return the benefit or amount which is received by the minor

Written by: PRAGATI GAUTAM (CASE ANALYSIS BATCH 3), MAHARSHI DAYANAND UNIVERSITY – CPAS , GURUGRAM .