Citation– 30 M.I.A 114
Date of Judgement- 04 March 1903
Bench- Lord Macnaughten, Lord Davey, Lord Lindley, Sir Ford North, Sir A. Scoble, and Sir A. Wilson
“This is a famed & benchmark judgement concerning the minor’s capacity to enter into a contract.”
The Respondent, who was a minor, owned immovable property, executed mortgage of his property for Rs.20,000 at 12% interest rate per year in favour of Brahmo Dutt, a money lender.
Though the Attorney of Brahmo Dutt, Kedar Nath, who executed the entire transaction, was completely aware of the incompetency of the Respondent, lent money to the minor. During the agreement, the mother of the Respondent informed Kedar Nath about Dharmodas’s minority and his incapacity to enter into a contract.
Consequently, Dharmodas and his mother filed a lawsuit to get the mortgage declared as void.
The lower court held in favour of minor. Later, Brahmo Dutt died, and the further appeal was initiated by his representative, Mohori Bibi.
- Whether the deed was void under section 2, 10, 11, of Indian Contract Act, 1872 or not?
- Whether the executed mortgage was voidable or not?
- Whether the money advanced to the defendant must be returned?
According to the verdict of Trial Court, such a mortgage deed or contract that was commenced between the plaintiff and the defendant was void as it was accomplished by the person who was an infant at the time of execution of the mortgage. An appeal was filled in the Calcutta High Court, and it was dismissed. Later, the appeal was made in Privy Council, and the Privy Council also dismissed the appeal and held:
- Any kind of contract with a minor or infant is void/ void ab-initio (void from beginning).
- Since minor was incompetent to make such mortgage hence the contact such made or commenced shall also be void and id not valid in the eyes of the law.
- The minor i.e., Dahrmodas Gosh, cannot be forced to give back the amount of money that was advanced to him because he was not bound by the promise that was executed in a contract.
Prior to this case, there was a lot of confusion regarding contracts with minors. Generally, minors are incapable of understanding the consequences of an agreement they enter into. Many would deceive and take unfair advantage of them. This historical case provided a protection shield to the minors and sets a precedent. It also cleared any ambiguity that may arise from the minor’s agreement.
(By – M. Soujanya)