Case Note: Mohori Bibee v. Dharmodas Ghosh (1903) 30 Cal. 539
The Author, Nihal Chhetri is a 2nd Year student of University Law College, Gauhati University.
Introduction
The law relating to contracts in India is contained in Indian Contract Act, 1872. The Act was passed by British India and is based on the principles of English Common Law. It is applicable to all the states of India except the state of Jammu and Kashmir.
It determines the circumstances in which promises made by the parties to a contract shall be legally binding on them. All of us enter into a number of contracts everyday knowingly or unknowingly. Each contract creates some rights and duties on the contracting parties. Hence this legislation, Indian Contract Act of 1872, being of skeletal nature, deals with the enforcement of these rights and duties on the parties in India.This case basically lead to the formulation of law relating to Contract with a Minor. According to Section 11, a minor is incompetent to contract but the Indian Contract Act is conspicuously by its silence about the nature of minor’s contract.
That is to say, it is not clear as to whether it is void or simply voidable. There was a great Controversy in this connection among the Indian High Courts up to 1903. In the year 1903, the Privy Council Finally resolved the controversy by declaring that the combined effect of Section 10 and 11 is to make the minor’s contract void. This was held in the case mentioned above
Brief Facts:
The plaintiff, Dharmodas Ghose, while he was a minor, mortgaged his property in favour of the defendant, Brahmo Dutt, who was a moneylender to secure a loan of Rs. 20,000. The actual amount of loan given was less than Rs. 20,000. At the time of the transaction the attorney, who acted on behalf of the money lender, had the knowledge that the plaintiff is a minor.
The plaintiff brought an action against the defendant stating that he was a minor when the mortgage was executed by him and, therefore, mortgage was void and inoperative and the same should be cancelled. By the time of Appeal to the Privy Council the defendant, Brahmo Dutt died and the Appeal was prosecuted by his executors.
The Defendant, amongst other points, contended that the plaintiff had fraudulently misrepresented his age and therefore no relief should be given to him, and that, if mortgage is cancelled as requested by the plaintiff, the plaintiff should be asked to repay the sum of Rs. 10,500 advanced to him.
Judgement:
The Privy Council was held that the minors contract is void and not merely voidable on the basis of section 10, 11, 183, 184 and old sections 246 and 247(now section 30 of the Partnership Act). The combine effect of these sections and particularly section 10 and 11 renders the minor contact completely void . According to the Privy Council section 11 should be literally construed and that only a person who is of the age of the majority is competent to contract. A minor’s contract is, therefore, ab initio and wholly void. In the view of the Privy Council, this was also in accordance with the Hindu Notion of a minor’s incompetence to contract
PRESENT SITUATION OF THE LAWS RELATING TO A MINOR’S CONTRACT AND RELATED CASES
Section 10 of the Contract Act requires that the parties must be competent to contract. Competence to contract is defined in Section 11:
Section 11: Who are competent to contract- Every person is competent to contract who is of the age of majority according to law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.
Thus, the section declares the following persons to be incompetent to contract-
- Minors,
- Persons of sound mind, and
- Persons disqualified by law to which they are subject.
Effect of minor’s agreement
- Action in contract cannot be converted into an action in tort:
In Jhonson v. Pye an infant by fraudulently misrepresenting his age induced the Plaintiff to lend him 300 dollar. The plaintiff brought an action against for the tort of deceit. The action was rejected by the court on the grounds that it was an indirect way of enforcing the contract which is void. Thus an action of contract cannot be converted into an action in tort so as to make the infant responsible. The court added than if an action in contract is allowed to be converted into an action in tort, all the minor’s in England may be ruined
- Equitable Doctrine of Restitution:
If a minor obtains some property by fraudulently misrepresenting his age, he can be ordered to restore the property or goods thus obtained. This is called the equitable doctrine. Under the English law, a minor may be compelled to restore the goods or property so long as they are traceable. Money being generally not traceable, a minor cannot be asked to restore it.
- Principal of Estoppel not applicable:
The term ‘estoppel’ may be defined as prevention of a claim or assertion by law. In other words, when someone makes another person to believe that a particular thing or fact is true, then later on he cannot be allowed to deny the truth of that thing.It will be interesting to know that there is no such estoppel against the minor. In other words, when a minor fraudulently enters into a contract, representing that he is a major, but in reality he is not, then later on he can plead his minority as a defence and cannot be stopped (i.e. prevented) from doing so.
