MohoriBibbee v.
DharmodasGhose [(1903) 30 Cal 539] CASECOMMENT
Abstract
One of the essential elements of a valid contract
is the competence of the parties to make a
contract. Section 11 of the Indian Contract
Act,1872, defines the capacity to contract of a person
to be dependent on three aspects; attaining the
age of majority, being of sound mind, and not
disqualified from entering into a contract by any
law that he is subject to
According to Section 11, “Every person is
competent to contract who is of the age of majority
according to the 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.”
So, we have three main aspects:
1. Attaining the age of majority
2. Being of sound mind
3. Not disqualified from entering into a contract
by any law that he is subject to
Introduction
The
case of MohoriBibbee
v. DharmodasGhose is considered as a case of significant
importance in the sphere of studying contract and its different aspects as it covers
the entire scope of a minor’s involvement and position in any agreement. This
case is primarily concerned with a contract that involved a minor as a party to
their contract. In India, an agreement or contract with a minor is void
ab-initio, which means any contract with a minor is void from the start and
holds no value in front of the eyes of the law and cannot be enforced as such.
These
rules and restrictions are in place because such people do not have the legal
competence to enter into a contract or agreement as they are considered minors.
According to the courts, anyone under the age of 18 or who has not reached the
age of 18 (i.e., a minor) cannot intend to form a contract or make major
decisions related to any contract or an agreement herein.
This
case has essentially taught us that, because minors are legally incapable of
giving their consent, they must be entitled to or supplied with protection in
their relationships with adults. Following this instance, every attempt to
create a contract or agreement with the minor was null and void from the very
start. If we go through our books the Indian Contract Act, 1872 clearly states
under Section
11(4) who are the people who are deemed fit and competent
to enter into a contract and who else is barred from the same.
Keywords
Competence,
Legality, Minors, Valid contract, Necessaries, Compensation, Agreement
Facts of the case
The respondent DharmodasGhose on the 20th
July of 1895 executed a mortgage deed in the favour of a moneylender named
BrahmoDutt carrying on business in Calcutta and elsewhere but throughout the
transaction BrahmoDutt was absent from the Calcutta. The business was carried
out for him by his attorney KedarNathMitter. The respondent mortgaged immovable
property his house for the repayment of Rs. 20,000 at the rate of 12% (Twelve
Percent) interest, the amount increased in the dispute. At that time the
respondent was a minor. On the 15th of July 1895, KedarNath received
information that the respondent was still minor through a letter sent by BhupendraNath
Bose, an attorney. KedarNath denied receiving any conclusive.
ISSUE
1. Can a minor validly execute a mortgage deed?
2. What is the effect of minor’s
misrepresentation of his age?
3. If the deed of mortgage was cancelled, can the
court order the minor to refund the amount to lender?
Legal provision
involved
SEC 10 SEC 11 SEC 64, SEC 65, SEC 68 and SEC 115
of Indian evidence act 1872SEC 38 AND SEC41 of specific Relief act 1963SEC 4
and SEC 7 of TRANSFER ORF PROPERTY ACT 1882
Judgment
First, the trial court held that the contract
between the Plaintiff and Defendant was void because at the
time of the contract the Plaintiff was a minor.
Later Defendant filed an appeal in the
Calcutta High Court where the High Court agreed with the verdict of the trial
court and dismissed the appeal.
Again, Brahmo Dutta went to the Privy Council to
appeal and the Privy Council also dismissed the case and held that the contract
between appellant and respondent is void.
The final decision passed by The Privy Council
was:
The contract with any minor is void-ab-initio (from
the beginning).
The DharmodasGhose was not held liable for the
repayment of the loan because the contract was void-ab-initio.
Opinion
·
In my point of
view, any contract with a minor should be withheld null and void because a
minor cannot have sound reasoning and understanding for the same and as such
his consent cannot be free which a normal person would have.
·
Any agreement can
only be stated as a valid agreement or contract when the consent of both the
parties is free but in this case where one party is a minor and one is a major
the consent of a minor can be easily dominated or overshadowed by the major.
·
Another factor
that shall be taken into account is that a contract with a minor can lead to
social harm and create social, economic and legal complications.
·
One of the points
which came out of this judgement is that the parents of a minor cannot be held
accountable for the doings of a minor if it is done without their consent or
information, they can only be held liable when the minor is acting as an agent
for the same which in this case was not the case and nor can a minor can be
held liable for a contract which he entered as it is void ab initio.
Conclusion
The case of MohoriBibbee vs.
DharmodasGhose, covers the entire scope of minors’ agreements. This case
primarily concerns a contract involving a minor or a contract with a minor.
The plaintiff, Dharmodas Ghosh, mortgaged his
property to the defendant, a moneylender when he was a minor. The defendant's
attorney was aware of the plaintiff's age at the time. The plaintiff eventually
paid just Rs 8000 but refused to pay the remaining amount. The plaintiff's
mother was his next friend (legal guardian) at the time; therefore, he filed a
lawsuit against the defendant, claiming that because he was a minor at the time
of the contract's formation, he was not obligated by it.
In the judgment of the courts, anyone under the age
of 18 or who has not reached the age of 18 (i.e., a minor) cannot intend to
enter a contract or make major choices. This case has essentially taught us
that, because minors are legally incapable of giving their consent, they must
be entitled to or given protection in their relations with other adults.
Following this instance, every attempt to contact or agree with the minor was
invalid and void from the beginning. Such contracts are "void ab-initio”.
The following are the legal principles that were
established in this case:
1. Any contract with a minor or an infant is
neither valid nor voidable but is void from the beginning.
2.Section 64 of the Indian Contract Act, 1872
applies where the parties entering a contract are competent to do so, and
therefore does not apply in circumstances where no contract is created at all.
3. A representative's legal acts or any knowledge
of an agent's principle imply that such acts or knowledge are of his principle.
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