MOHORI BIBEE V. DHARMODAS GHOSE (1903) 30 I.A. 114
FACTS
- Dharmodas Ghose, a minor, had taken a loan from Brahmo Dutt, a moneylender, and mortgaged his property as security for the loan.
- At the time of the contract, the moneylender's agent was aware that Dharmodas Ghose was a minor.
- Subsequently, Dhurmodas Ghose, through his mother as his legal guardian, filed a suit stating that he was a minor at the time of the contract and, therefore, the mortgage was void and not enforceable.
ISSUES
The key issue in the case was whether a contract entered into by a minor is void or voidable and whether the moneylender could enforce the mortgage against Dharmodas Ghose.
CONTENTIONS
Plaintiff
Argued that since he was a minor at the time of entering into the contract, the contract was void. He claimed that a minor is incapable of entering into a binding contract under Indian law, and thus, the mortgage should be set aside.
Defendant
Argued that the contract should be considered voidable, not void. They argued that the minor had misrepresented his age, and therefore, the law of estoppel should be enforced. Additionally, they claimed that if the contract was voided as requested by Dharmodas, he should still be required to repay the loan under Sections 64 and 65 of the Contract Act.
ANALYSIS
- The Privy Council analyzed the legal capacity of a minor to enter into a contract under Indian law.
- It examined the provisions of the Indian Contract Act, 1872, particularly Sections 11 and 2(g), to determine whether a contract entered into by a minor could be enforced.
JUDGMENT
- The Privy Council held that the contract was void ab initio as Dharmodas Ghose was a minor at the time of entering into the agreement.
- The court ruled that a minor is not competent to contract, and any agreement with a minor is void from the outset.
- The court further ruled on the defendant's arguments, stating first that the law of estoppel would not apply since Brahmo Dutt's attorney was aware of Dharmodas' minority. Secondly, Sections 64 and 65 of the Indian Contract Act would not be applicable, as there was no valid agreement in the first place, and these sections require the contract to be between competent parties
- Consequently, the mortgage was set aside, and the moneylender could not enforce the contract.
COMMENTARY
The case of Mohori Bibee v. Dharmodas Ghose is a foundational case in Indian contract law, establishing the principle that any contract entered into by a minor is void ab initio.
- This case has significant implications for ensuring the protection of minors from being bound by agreements they are not legally competent to understand or execute.
- The judgment serves as a critical precedent, ensuring that minors cannot be held liable for contracts, thus protecting them from exploitation and undue influence.
- It also clarifies that restitution (returning the money or benefits received) is not required in such cases, as the contract is void from the beginning.
- This case highlights the importance of understanding the legal capacity of parties before entering into contracts and reinforces the protective approach of Indian contract law towards minors.