Name- Surabhi Rajak

SEM- 1
Subject- Legal & Business Environment
Email ID- surabhirajak007@gmail.com

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Topic –

The Minor Contract Based on Case Law... Mohori

Bibee Vs Dharmodas Ghose

Answer-
Name of the Case- Mohori Bibee vs Dharmodas Ghose in the Privy Council

Citation- ILR (1903) 30 Cal 539 (Pc)

Date of Judgment – 04 March 1903

Minor's Agreement Landmark Case : Bench of Judges - Lord McNaughton, Lord Davey, Lord
Lindley, Sir Ford North, Sir Andrew Scoble, Sir Andrew Wilson, JJ.

INTRODUCTION:
Mohori Bibee vs Dharmodas Ghose is an Indian case of Contract Law, which deals with the issue
of contract with a minor. Section 10 of the Indian Contract Act, 1872, says that a contract is
valid only if it is entered into by the parties competent to contract. As per Section 11 of the
Indian Contract Act, 1872, a minor is not competent to contract. A minor is a person who has
not completed the age of majority or is below the age of 18 years. A contract with a minor is
deemed to be void ab-initio. The reason behind such rule is that a minor is not considered
mature enough to understand the provisions of a contract.
This case provides that a contract with a minor person is void ab-initio. It was also held by the
Privy Council that minors should be provided certain protections when they enter into a
contract with a major person.

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FACTS:

The facts of this case were as follows:-

 Dharmodas Ghose, was the respondent in this case. He was a minor (i.e. has not completed
the 18 years of age) and he was the sole owner of his immovable property. The mother of
Dharmodas Ghose was authorized as his legal custodian by Calcutta High Court.

 When he went for the mortgage of his own immovable property which was done in the
favor of appellant i.e. Brahmo Dutta, he was a minor and he secured this mortgage deed for
Rs. 20,000 at 12% interest rate per year.

 Bhramo Dutta who was a money lender at that time and he secured a loan or amount of Rs.
20,000, and the management of his business was in the control of Kedar Nath, and Kedar
Nath acted as the attorney of Brahmo Dutta.

 Dharmodas Ghose's mother sent a notification to Brahmo Dutta informing him about the
minority of Dharmodas Ghose on the date on which such mortgage deed was commenced.

 But the proportion or sum of loan that was actually provided was less than Rs. 20,000.

 The negotiator or representative of the defendant, who actually acted instead of on behalf
of money lender has given money or sum to the plaintiff, who was a minor and he fully had
knowledge about the incompetency of the plaintiff to perform or enter into contract and
also that he was incompetent legally to mortgage his property which belonged to him.

 After that, on 10th Sept. 1895 Dharmodas Ghose along with his mother brought an legal suit
or action against Brahmo Dutta by saying that the mortgage that was executed by
Dharmodas was commenced when he was a minor or infant and so such mortgage was void
and disproportionate or improper and as a result of which such contract should be revoked
or rescinded.

 When this petition or claim was in process, Brahmo Dutta had died and then further the
appeal or petition was litigated or indicted by his executor's.

 The plaintiff argued or confronted that in such case no relaxation or any sought of aid
should be provided to them because according to him, defendant had deceitfully or

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 dishonestly misinterpreted the fact about his age and because if mortgage is cancelled at
the request by defendant i.e. Dharmodas Ghose.

ARGUMENTS ADVANCED BY THE PETITIONER:

Executors of Brahmo Dutta had argued that Dharmodas Ghose had deceitfully misrepresented
his age at the time of entering into the contract, so, no relaxation or aid should be provided to
him, if the contract is rescinded.

ARGUMENTS ADVANCED BY THE RESPONDENT:

Dharmodas Ghose had argued that when the mortgage had commenced, he was a minor and
he was incompetent to contract. Therefore, the contract should be rescinded or revoked, as a
mortgage entered into with a minor is void and improper.

ISSUES BEFORE THE COURT:

The following issues were raised before the court:

1. Whether under Sections 10 and 11 of the Indian Contract Act, 1872, the mortgage deed
was void?
2. Whether under Sections 10 and 11 of the Indian Contract Act, 1872, the mortgage deed
was voidable?
3. Whether the respondent was liable to return the loan amount received by him under
the mortgage deed?

OBSERVATIONS OF THE COURT:

The court observed that any contract entered into with a minor person is void or void ab-initio,
i.e. void from the very beginning. As the consent given by a minor cannot be considered as a
free consent because a minor is not deemed to understand the provisions of a contract like a
prudent or reasonable man, the minor was incompetent to mortgage his property. Therefore,
the contract of mortgaging the property of Dharmodas Ghose is deemed to be void from the
very beginning.
The court also observed that Dharmodas Ghose was not bound to the contract of mortgaging
his property for a loan of Rs. 20,000, as the contract was entered by him when he was a minor,
and the contract is void from the beginning. The court further observed that Dharmodas Ghose

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cannot be compelled to return the money received by him as loan for mortgaging his property
because he was not bound by the contract.
The court laid down that any contract entered with a minor is neither valid nor voidable, but
void ab-initio. The court observed that Section 64 of the Indian Contract Act is only applicable in
cases where the parties to the contract are competent to contract. It cannot be applied in the
present case as one of the parties was a minor when the contract was entered into by the
parties, and the contract does not exist and is void from the beginning. The court also observed
that any act done by an agent, any legal action taken by the agent, or any knowledge of the
agent, is deemed to be that of or done by the principal.

OBSERVATIONS OF THE COURT:

The court observed that any contract entered into with a minor person is void or void ab-initio,
i.e. void from the very beginning. As the consent given by a minor cannot be considered as a
free consent because a minor is not deemed to understand the provisions of a contract like a
prudent or reasonable man, the minor was incompetent to mortgage his property. Therefore,
the contract of mortgaging the property of Dharmodas Ghose is deemed to be void from the
very beginning.
The court also observed that Dharmodas Ghose was not bound to the contract of mortgaging
his property for a loan of Rs. 20,000, as the contract was entered by him when he was a minor,
and the contract is void from the beginning. The court further observed that Dharmodas Ghose
cannot be compelled to return the money received by him as loan for mortgaging his property
because he was not bound by the contract.
The court laid down that any contract entered with a minor is neither valid nor voidable, but
void ab-initio. The court observed that Section 64 of the Indian Contract Act is only applicable in
cases where the parties to the contract are competent to contract. It cannot be applied in the
present case as one of the parties was a minor when the contract was entered into by the
parties, and the contract does not exist and is void from the beginning. The court also observed
that any act done by an agent, any legal action taken by the agent, or any knowledge of the
agent, is deemed to be that of or done by the principal.

DECISION HELD BY THE COURT:

The court (Privy Council) dismissed the appeal of Brahmo Dutta, and held that the contract
between Brahmo Dutta and Dharmodas Ghose was void from the beginning as Dharmodas was
a minor, and any contract with a minor is void ab-initio.
The court also held that Dharmodas Ghose cannot be compelled to return the money advanced
to him under the contract, as the contract does not exist and he is not bound by the contract.

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PRINCIPLES OF LAW:
The principles of law that were laid down in this case are:-
1. Any contract with a minor or an infant is neither valid nor voidable but is void ab-
initio(void from beginning)
2. Section 64[7]of Indian Contract Act,1872 is only applicable in the case, where the parties
entering in contact are competent to make such contract and is not applied to cases
where there is no contract made at all.
3. The legal acts done by a representative or any knowledge of an agent means that such
acts done or having knowledge of anything is of his principal.

MAJORITY ACT, 1875:

Majority Act, 1875 was enforced on 2nd March 1857. It is a law that was enacted to introduce
various laws relating to the "Law of Majority". Prior to the enactment of this act, there was no
surety or certainty about the age limit of attaining majority. This act has basically fixed the age
limit of attaining majority and i.e. 18 years of age. It states that, every single person who is
domiciled in India can only achieve the age of majority only after the completion of age of 18
years, and not before that at any cost. There comes an exception in the case were any
particular personal law provides the age of attaining majority only and if not provided than, else
any person domiciled by India shall only achieve majority after the completion of 18 years of
age.

In the case were the guardian or a custodian is appointed by any court of justice for a minor in
case of a person or his property or for both before the age of 18 years, then in such a case the
age of majority would be after attaining the age of 21 years instead of attaining 18 years of age.

CRITICAL ANALYSIS:

In the case of Mohori Bibee vs Dharmodas Ghose, the Privy Council strictly defined that any
sought of contract or agreement with a minor or with any infant shall be null and void. All
contacts with the minors will be void ab-initio. Majority Act, 1875 outlined the definition of a
minor, according to such act, any person who is below the age of 18 years or has not completed

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the age of 18 years shall not be competent to create or enter into any sought of contact or
agreement.

According to me any sought of contract in which a minor is party to contract or whether he/she
is involved in it shall be void. This perception is correct because minor or infant comes in the
category of such people who cannot give the free consent along with the reason that they are
not in a situation where they can think in a manner in which a prudent or an ordinary person
could do it. An agreement is a deal where free an equal consent of all parties are given but in
case of a minor there consent can be dominated by major ones as a result of which, it leads to
the violation of one of the condition to form a contract, i.e. free consent (a consent is said to be
free when it is not caused by Coercion, Undue Influence, Fraud, Miss representation and
Mistake).

The court also through its verdict has propounded that, a contact with an infant shall be
declared null and void it means that it is neither valid nor voidable. According to me, minors
contract shall be avoided and stopped because it sometimes lead to the harmful social,
economic and legal effects on the lives and conditions of the minors. Any such person who
commits such offence shall be strictly punished by court of law, either through imprisonment or
with a fine or with both according to the ambit of the offence committed by the major person.

CONCLUSION:
In this case, the Privy Council held that a contract with a minor person is void from the
beginning.
A minor is a person who is below the age of 18 years. A minor is not considered to have
prudence of a reasonable man to understand the provisions of a contract, and therefore, a
minor’s consent is not considered to be a free-consent. It is also believed by the courts that a
major person can take advantage of a minor person in a contractual relationship. Therefore, a
minor is incompetent to enter into a contract. And, the Privy Council very well laid down in this
case that a contract with a minor is void ab-initio and will be considered to be non-existent in
the eyes of law. The Privy Council also provided protection to the minor by considering him not
bound to the contract and he was allowed to keep the money advanced to him.

BIBLIOGRAPHY
 Link provided by our Prof. Prabir Chakraborty
 Google.
 Article from Lawlex.org.

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