By Amit Sheoran (Symbiosis Law School, Nagpur)
Bench:-Sir Andrew Scoble, Lord Lindley, Lord Davy, Sir Andrew Wilson, Lord Mcnaughton, Sir Ford North
Facts of the case
In this case, Dharmodas was the defendant. He was minor and he was also the sole owner of the property (immovable). As per Calcutta High court, The mother of Dharmodas has authorized as his legal custodian. One day Dharmodas mortgaged his property for taking a loan with Bharmo Dutt. He was minor when he mortgages his property with Dharmodas. He secured his mortgaged deed at the rate of 12% interest on 20,000. Bharmo Dutt was moneylender when he signed a mortgage with Dharmodas. Kedar Nath acted as the attorney or agent of Bharmo Dutt. One day respondent mother sent a notification to Bharmo Dutt about telling about the minority of Dharmodas at the time of mortgaged deed and also said the loan amount was less than 20,000. Kedar Nath was aware of the fact that respondent was minor at the time of mortgage deed and he was not entitled to make a contract with him and also not entitled to mortgage his property.
Dharmodas along with his mother brought legal action against the BharmoDutt on 10 September 1985 by saying that he was minor at the time of mortgage of the property that’s why the contract is void and should be revoked. When the petition was in process, BharmoDutt died and the remaining petition was litigated by his agent Kedar Nath.
Issues of the Case
- Whether the mortgage deed was void or not that was signed between Dharmodas and Bharmo Dutt, under section 2, 10, and 11 of the Indian Contract Act 1972.
- Whether the respondent was liable to return the loan amount or not that was received at the time of the mortgaged deed.
- Whether the mortgage deed commenced by Dharmodas was avoidable or not.
The argument of Plaintiff
- Dharmodas was major at the time of mortgage of property.
- Appellant and his agent were not aware of the fact that the respondent was minor at the time of the mortgaged deed.
- Respondent made a fraudulent statement about the age that’s why not entitled to take the relief of age.
- Rule of estoppel should be applied to respondent under the section of 115 of the Indian Evidence Act 1972.
- Respondent is liable to pay the entire amount that he takes during the mortgaged deed under section 38, 64 of the Indian Contract Act 1872 and section 41 of the Specific Relief Act 1877.
The argument of Respondent
- Bharmodas and his agent were aware of the fact that the respondent was minor at the time of the mortgaged deed.
- Respondent was minor at the time of mortgage deed that’s why no contract takes place and not entitled to return the loan amount.
Trial court passed verdict by saying that the contract between Dharmodas and Bharmo Dutt was void because Dharmodas was minor at the time of execution of the mortgage and the contract with minor is void. So there was no contract take place. After trial court passed judgement When Bharmo Dutt was not satisfied with the judgement. He filed an appeal in Calcutta high court. After seen the trial court judgement HC dismissed the appeal of Bharmo Dutt by saying that contract with minor is null and void in the eyes of law. After dismissed the appeal by High Court, he sent a letter of appeal in the privy council. The privy council also dismissed the appeal of Bharmodutt by saying that there can not be any contract take place between the major and minor party. Dharmodas was not competent to make a contract because he was minor, That’s why Bharmo Dutt can does not seek for taking relief.
The final decision passed by the council was that the contract with minor or infant person or party will be void from the beginning (Void ab Initio). Because minor and infant person is not able to understand the nature and manner of the contract in the eyes of law. That’s why minor was not competent to make any such contract or mortgage deed with any person or party. Such a contract will be void from the very beginning in the eyes of law and Dharmodas was not entitled to return the money that he takes during mortgage deed.
In the case of Mohori Bibee versus Dharmodas Ghose, we conclude that any agreement or deed between the minor and major or with the minor party is void ab initio. Making a contract with a minor is null and void in the eyes of law. Hence Dharmodas was not entitled to return the amount that was taken as a loan at the time of the mortgage. If any minor deal on the behalf of self without consulting his parents then the parents of minor will not be liable for the dealing of the minor.