CASE- Ajudhia Prasad and Another Versus Chandan Lal and

Another

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TABLE OF CONTENT

Serial No. TOPIC Page No.

1. FACTS 3

2. ISSUES 4

3. RULES 5

4. ANALYSIS 6-8

5. CONCLUSION 9

6. REFERNCES 10

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 FACTS OF THE CASE

 In the case of Ajudhia Prasad and Others (Defendant) vs. Chandan Lal and Others
(Plaintiff), two children aging 18 to 21 years obtained cash from the plaintiff underneath
a mortgage deed on October 15, 1925, while wrongfully hiding the fact that a certified
guardian had been assigned for them.

 However, at the period of the mortgage deed's execution, the defendants refuse to refund
the amount obtained, claiming that they were minors at the moment the contract was
formed, thereby invalidating the contract, and thus they are not lawfully obligated by the
legislation to reimburse the plaintiff's payment.

 The lender then filed a complaint in court, requesting a decree for the restoration of the
principal amount under Section 65 of the Indian Contract Act, 1857, as well as an order
for the sale of the mortgaged asset.

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 ISSUES

1. Whether the plaintiff can receive the principal amount from defendant
under Section 65 of the Indian Contract Act 1872, or under any other
equitable principle also can the plaintiff get a decree for sale of the
mortgaged property?

2. Whether the defendant was liable under the principle of estoppel?

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 RULES

1. Section 2(g) of Indian Contract Act-

“An agreement not enforceable by law is said to be void.”

2. Section 2(h) of Indian Contract Act-

“An agreement enforceable by law is a contract.”

3. Section 11 of Indian Contract Act-

“Who are competent to contract.—Every person is competent to contract who is of the age of
majority according to the law to which he is subject,1 and who is of sound mind and is not
disqualified from contracting by any law to which he is subject.”

4. Section 65 of Indian Contract Act-

“Obligation of person who has received advantage under void agreement, or contract that
becomes void.—When an agreement is discovered to be void, or when a contract becomes void,
any person who has received any advantage under such agreement or contract is bound to restore
it, or to make compensation for it to the person from whom he received it.”

5. Section 115 of the Indian Evidence Act-

“Estoppel. —When one person has, by his declaration, act or omission, intentionally caused or
permitted another person to believe a thing to be true and to act upon such belief, neither he nor
his representative shall be allowed, in any suit or proceeding between himself and such person or
his representative, to deny the truth of that thing.”

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 ANALYSIS

 Whether the plaintiff can receive the principal amount from defendant under
Section 65 of the Indian Contract Act, 1872, or under any other equitable
principle also can the plaintiff get a decree for sale of the mortgaged
property?

1. When an individual falsely represents oneself or itself as a major, according to Section

65, any individual who has obtained any benefit under such arrangement or contract is
obligated to return it or compensate the person from whom he got it. Any person,
including minors, is included here. As a result, the Law Commission of India proposed
amending section 65 of the Indian Contract Act in its 13th Report. Section 65 deals with
agreements that are found to be null and void, as well as contracts that become null and
void. A conceivable viewpoint would be that Section 65 extends to children as well, and
that they can use it in any situation where there is an error, misrepresentation, or
fraudulent or not be forced to repay or compensate the individual from which the minors
got the benefit. Even if the contract is void, a claim for the recovery of money obtained
by a minor on a bond or promissory note would be filed.
2. In Khan Gul v. Lakha Singh1, when the respondent committed to sell a piece of
property to the complainant while still a minor by falsely hiding his age. He was given Rs
17,500 in exchange for his share of the agreement and denied carrying it through. In
which the Court had ordered restitution in regard of the cash obtained by him, the
plaintiff requested restoration of property or a reimbursement of the consideration. The
idea of restitution is based on the beneficial premise that a court of equity cannot enable a
child to profit from his own deception. The order for the return of consideration was
granted.
3. The majority of the learned Judges in this Full Bench case of the Lahore High Court have
based the decision exclusively on principles of equity. The learned Chief Justice
remarked that he was “unable to follow the distinction pointed out in Lesley Ltd. v.
Shiell2 and thought that there was no real difference between restoring property and

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refunding money, except that the property can be identified, but cash cannot be traced.
That there is a clear difference is well recognized in England. Where a contract of
transfer of property is void, and such property can be traced, the property belongs to the
promise and can be followed. There is every equity in his favor for restoring the property
to him. But where the property is not traceable and the only way to grant compensation
would be by granting a money decree against the minor, decreeing the claim would be
almost tantamount to enforcing the minor's pecuniary liability under the contract which is
void. The distinction is too obvious to be ignored. The learned Chief Justice has
distinguished the case of Mohori Bibee v. Dharmodas Ghose 3 where restitution was not
allowed on the ground that the party who had lent the money to the minor was aware of
the minority. But that part of the judgment of their Lordships was with reference to a
claim by the minor under the Specific Relief Act, in which cases the Court would have a
discretion to impose terms before granting the decree. It would absolutely have no
application to the converse case where the defendant is being sued and is not himself
asking for any relief. I regret I am unable to appreciate the applicability of the remark of
Lord Kenyon quoted by the learned Chief Justice that the protection given by law to the
infant “was to be used as a shield and not as a sword”. Surely when the defendant is
being sued and sets up the plea of minority, he is not using his minority as a sword, but is
merely using it as a shield. I am unable to agree that because such a defense would
deprive a creditor of his money, the defendant infant is using his minority as a sword.”

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 Whether the defendant was liable under the principle of estoppel?

1. After referring to the case of Khan Gul v. Lakha Singh it can be said that as the case
was considered under as an agreement or contract under Section 65 of Indian Contract
Act. Similarly, in this case even though the one of the party is minor it can be considered
as an agreement or a contract because there was a fraudulent concealment of the fact that
they were minor at the time of signing the mortgage deed and the principle of estoppel is
applicable to the defendants.

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 CONCLUSION

1. After analyzing issue 1, it can be concluded that the plaintiff is liable to get either the
principal amount by the minors under Section 65 of Indian Contract Act or to get a decree
for sale of the mortgaged property.
2. After analyzing issue 2, it can be concluded that the defendants are liable under the
principle of estoppel as they have wrongfully hidden the fact that they were minor as they
were granted guardianship certificate.

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 REFERNCES

1. AIR 1928 Lah 609

2. (1914) 3 K.B. 607
3. (1903) 30 Cal. 539
4. Indian Contract Act, 1872
5. Indian Evidence Act, 1872

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