LAB PROJECT REPORT

Understanding the legality of a contract made by a minor person

Submitted to:
Prof. Baharul Islam, Dean- Academics

Submitted by:
Sudhati Vineeth Rao (MBA19152)
Section B, MBA-1 (2019-21)
Contents
1. Introduction.....................................................................................................2
2. Parties of the Case..........................................................................................2
3. Facts of the Case.............................................................................................2
4. Issues Raised....................................................................................................3
5. Judgement.......................................................................................................3
6. Principle of Law..............................................................................................4
7. Majority Act, 1875..........................................................................................4
8. Analysis............................................................................................................4
9. Conclusion.......................................................................................................5
1. Introduction
Section 10(3) of the Indian Contract Act, 1872 provides which agreements are considered as
contacts. Section 11(4) provides information regarding the competency of a person to make a
contract. This case is one such example which covers the ambit of minor’s agreement.
According to the law, Minors (a person below the age of 18 years) do not fall under the ambit
of the capacity of agreement or contract of doing so. Thereby, it is considered that any
contract with a minor is void from the beginning. This is known as Void ab-initio.
The case under review is between Mohori Bibee V/S Dharmodas Ghose – (1903) 30 Cal 539
(Pc).
In this case, the jury declared the law that any contract by minor or any minor’s agreement is
absolutely void and since then, it has been strictly followed.

2. Parties of the Case

1. Dharmodas Ghose: He is the respondent in this case. He was a minor and he was the sole
owner of his immovable property. His mother was authorized as his legal custodian by
Calcutta High Court.
2. Brahmo Dutta: He is the moneylender at that time and the management of his business was
in control of Kedar Nath, and Kedar Nath acted as the attorney of Brahmo Dutta.

3. Facts of the Case

 When Dharmodas Ghose went for the home loan of his own unfaltering property
which has helped in out of an appealing party for Brahmo Dutta, he was a minor and
he verified this home loan deed for Rs. 20,000 at 12% loan fee every year. Bhramo
Dutta who used to be a money lender at that time and he secured a loan or amount of
Rs. 20,000.
 On 20th July, the respondent Dharmodas Ghose executed a home loan for Brahmo
Dutt to verify the reimbursement of Rs. 20,000 at 12 per cent enthusiasm regarding a
few houses having a place with the respondent. At that time, the respondent was a
minor and achieved 21 years old just in the period of September of that year. Without
Brahmo Dutt from Calcutta, the entire exchange was done by his lawyer Kedar Nath
Mitter and the cash was progressed by his supervisor, Dedraj. It was asserted that
while the exchange was being considered, the respondent's mom and watchman, Smt.
Jogendranundinee Dasi, sent a letter through her lawyer, Mr. Bhupendra Nath Bose,
uncovering the minority of the respondent and suggested to Mr. Kedar Nath Mitter
that any cash loaned to the respondent would be at the moneylender's own risk.
Dharmodas Ghose’s mother gave a notification to Brahmo Dutta informing him about
the age of Dharmodas Ghose on the date on which this mortgage deed was
commenced.
 But the sum of the loan that was actually provided was less than Rs. 20,000.
 The representative of the defendant, who actually acted instead of on behalf of the
person who gave the money has given money or sum to the plaintiff, who was a minor
 (age less than 18) and he had complete knowledge about the incompetence 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 Dutt 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 and claim being in process, Brahmo Dutt died and then further the
appeal or petition was litigated or indicted by his executor’s.
 The offended party contended or stood up to that in such case no unwinding or any
looked for of help ought to be given to them in light of the fact that as per him,
respondent had misleadingly or insincerely misconstrued the reality about his age and
in such a case that home loan is dropped at the solicitation by litigant i.e. Dharmodas
Ghose.

4. Issues Raised
The issues that were raised through the case are the following:
1. Whether the deed was void or not according to the Indian Contract Act, 1872?
2.Whether defendant Mr. Dharmodas Ghose was liable to return the amount of loan which he
had received under such deed or mortgage or not?
3. Whether the mortgage in this case commenced by the defendant was voidable or not?

5. Judgement
According to the verdict of Trial Court, such type of mortgage deed or contract that was
commenced between the defendant and the plaintiff was void as it was accomplished by the
person who was an infant or minor at the time of the execution of the mortgage.
Brahmo Dutt, dissatisfied with the verdict appealed it in the Calcutta High Court.
Even the Calcutta High Court agreed with the verdict of the trial court and dismissed the
appeal of Brahmo Dutt.
Brahmo Dutt, then appealed the verdict at the Privy Council. The Council also dismissed the
appeal of Brahmo Dutt and held that there cannot be any such sought of contract between a
major and a minor person.

The final judgement passed by the Privy Council included the following:
1. Any sought of contract with a minor is void from the beginning of the contract.
2. As the minor was incompetent to make such mortgage, the contract such made or
commenced shall also be void and is not valid in law.
3. The minor Dharmodas Ghose cannot be forced to give back the amount of money as he
was not bound by any contract or promise that was executed in the contract.

6. Principle of Law
Any contract can only be valid under the section 64(7) of the Indian Contract Act, 1872 when
the parties entering the contract are competent to make such contract and is not applied to
cases as there would be no contract made at all.

7. Majority Act, 1875

This act provides the basis for determining the maturity of a person for legal matters based on
the age factor. According to this law, every single person who is domiciled (born) in India
can only and only achieve the age of such majority only after the completion of age of 18
years, and not before that.

8. Analysis
Based on the Majority Act of 1875, the council has decided that the defendant Dharmodas
Ghose is a minor during the execution of the agreement or mortgage. As the minor is not
legally identified, all the contracts involving a minor would be legally void from the
beginning.
Therefore, this case reinforces that a minor who has not reached the age of 18 (eighteen)
years shall not be competent to enter or compete into any sought of contract or agreement.
According to me, the law is formed taking into consideration the prudence of an ordinary
person. As the minor is not capable of thinking in a manner of an ordinary prudent person.
Also, an agreement is a deal where free and wilful consent of all parties are given. In case of
minor, the agreement would be dominated by a single party. Therefore, the agreement would
not between equals anymore.
For the above two reasons, I also agree with the verdict given by the jury in the above case of
Dharmodas Ghose Vs Brahmo Dutt.
Also, I believe that all the agreements involving minor person as a party should be stopped as
it may sometimes lead to the harmful social, economic and legal effects on the lives and
conditions of the minors. Any person who commits such an offence should be strictly
punished by the court of law.
9. Conclusion
According to the law, Minors (a person below the age of 18 years) do not fall under the ambit
of contractual capacity of contract or agreement of doing so. Thereby, it is considered that
any contract with a minor is void from the beginning. This is known as Void ab-initio. The
case under review is between Mohori Bibee V/S Dharmodas Ghose – (1903) 30 Cal 539 (Pc).
In this case, the jury declared the law that any contract by minor or any minor’s agreement is
absolutely void and since then, it has been strictly followed. Any contract can only be valid
under the section 64(7) of the Indian Contract Act, 1872 when the parties entering the
contract are competent to make such contract and is not applied to cases as there would be no
contract made at all.
Based on the Majority Act of 1875, the council has decided that the defendant Dharmodas
Ghose is a minor during the execution of the agreement or mortgage. As the minor is not
legally identified, all the contracts involving a minor would be legally void from the
beginning.