Aapka Consultant Judgment Series- In this series, we are providing case analysis of Landmark Judgments of Hon’ble Supreme Court of India.
Mohori Bibee and anr. Vs. Dharmodas Ghose
7CWN441, 30M.I.A.114
Hon’ble Judges/Coram: Sir Ford North, Lord Macnaghten, Lord Davey, Lord Lindley, Sir A. Scoble and Sir A. Wilson.
Decided On: March 4th, 1903
FACTS:-
On July 20th, 1985 Dharmodas Ghose (hereinafter the “plaintiff”) executed a mortgage in favour of Brahmo Dutt ( hereinafter the “defendant”), a money lender of Calcutta to secure repayment of Rupees 20,000 at 12% interest rate on some houses belonging to the plaintiff. At the time when the mortgage was executed the plaintiff was an infant. Throughout the course of the transaction Brahmo Dutt was out of Calacutta, and his attorney Mr. Kedar Nath Mitter looked after his business for him. The money from the mortgage was received by Dedraj, the local manager of Brahmo Dutt. Kedar Nath was informed of the plaintiff’s infancy before the money was advanced to the plaintiff and at the time the mortgage was executed, Kedar Nath had knowledge of the same. On September 10th, 1985, the plaintiff through his mother and guardian commenced action against Brahmo Dutt to have the mortgage cancelled, owing to the plaintiff’s minority when it was executed.
ISSUE:-
Whether the mortgage is valid or not considering the minority of the Child?
JUDGMENT:-
It was the argument of the defence that neither Brahmo Dutt nor Kedar Nath had any knowledge of the plaintiff being an infant, that even if he was a minor, the declaration about his age was made with an intention to fraudulently deceive the defendant, and that in any case the court should not grant any relief to the plaintiff without first recovering from him the money already advanced.
The court held that the knowledge of Kedar Nath must be imputed to the defendant. It was the defendant who had given to Kedar Nath to act on his behalf. Hence, the acts and knowledge of Kedar Nath was the act and knowledge of the principal. Even Dedraj, the ostensible representative of the defendant in Calcutta had admitted in his testimony that it was Kedar Nath who was handling the transaction and the pertinent issues about the plaintiff’s minority. The defence pleaded section 115 of the Indian Evidence Act, but the court dismissed this contention as in the present case, as Kedar Nath had the knowledge of the plaintiff’s minority. Hence, the party whose consent was so caused himself did not believe to be true, and there lay no estoppel. Section 64 of the Indian Contract Act was also argued, the defendant claiming that once the contract had been rescinded by the plaintiff, he ought to restore any benefits he had received under the rescinded contract. But the court held that this section only applied to contracts made between parties who were competent to contract, and thus not to minors.
Then the court sought to analyse the true construction of the Contract Act itself. Through an interpretation of sections 2, 10, 11, 68, 183, 184, 247 and 248, the court held that the question of void and voidable contracts can only arise in contracts between parties competent to contract, and hence not in contracts with minors. Thus in the present case, no voidable contract arose as provided for by section 64 of the Contract Act. The defendants also argued section 65, but its application was denied on the same grounds.
The defendants also relied on sections 41 and 38 of the Specific Relief Act, 1963 to give discretion to the court to make compensation which justice may require, but the court upheld did not see the need for intervention on the grounds of justice in the present case. Also, the court agreed that it is not equitable to pay any moneys in respect of a transaction which as against the person the legislature has declared to be void.
HELD:-
The appeal by the defendants was wholly dismissed. It was held that the contracts made with minors are void ab initio.
To Get Legal Opinion from Advocates/ Legal Experts, Please click here
To Get Legal Opinion from Retired Hon’ble Judges, Please click here
