Case Comment: Mohori Bibee v Dharmodas Ghose (1903) | Minor as a party to Contract

This case comment on Mohori Bibee v Dharmodas Ghose (1903 ILR 30 CAL 539 (PC)’ is written by Md. Tauhid Karim and Aman Kumar and analysis of the judgement of Mohori Bibee v Dharmodas Ghose.

I. Introduction

The case of Mohori Bibee v. Dharmodas Ghose is considered a case of significant importance in the sphere of studying contracts and their 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 are not legally competent 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 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, of 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.

II. Facts of the case

The respondent, in this case, was Dharmodas Ghose and was a minor (i.e. he hadn’t attained the age of eighteen) and also the sole owner of an immovable property that was in his name. The Calcutta High Court had appointed Dharmodas Ghose’s mother as his legal guardian. Dharmodas Ghose was a minor when he took out a mortgage on his behalf in consideration of his immovable property in favour of the appellant, Brahmo Dutta, who was a money lender and he had secured a mortgage deed for Rs. 20,000 at a rate of 12 % per annum.

Bhramo Dutta secured a loan of Rs. 20,000 at this point in time, the management of his firm was under the control of Kedar Nath, who also acted as Brahmo Dutta’s attorney. Brahmo Dutta received a notification from Dharmodas Ghose’s mother alerting him of Dharmodas Ghose’s minority on the date of the mortgage deed. However, the portion of the loan amount that was actually delivered was less than Rs.20,000.

The defendant’s negotiator or representative, who actually acted on behalf of the moneylender, delivered that portion of the total sum to the plaintiff, who was a minor, and he was fully aware of the plaintiff’s incompetency to perform or enter into a contract, as well as that he was legally incompetent to mortgage his own property for any other purpose.

After a while, the mother of the respondent that is Dharmodas Ghose, on September 10th, 1895, brought a legal suit or action against Brahmo Dutta, claiming that Dharmodas had entered into the mortgage or contract when he was a minor, and thus it does not hold any value for the same and that as a result, such mortgage is invalid from its conception only and shall be forfeited therein without the case being taken any further ahead.

During the time this petition was in movement, Brahmo Dutta breathed his last, thereafter, his claim was taken forward by his executioner, who was of the view that Dharmodas Ghose was fully aware of his doings and knew its consequences. Therefore no relaxation shall be provided for the same as he had maliciously and knowingly hidden the vital fact about his age and entered the contract.

III. Issue

1. Can the aforementioned deed be stated as void under Section 2, Section 10, Section 11 of the Indian Contract Act, 1872?
2. Is Dharmodas Ghose liable to pay the requisite amount to Mr. Brahmo Dutta’s executioner under the said Contract?
3. Whether the mortgage or contract commenced is void or not?

IV. Laws in question

Section 2 of the Indian Contract Act,1872 states under subclause (g) “An agreement not enforceable by law is said to be void.”[1]Section 10 of the Indian Contract Act,1872 states that “All agreements are contract if they are made by the free consent of the parties who are competent to formulate a contract, for a lawful consideration and with a lawful object, and not hereby expressly declared to be void.”[2]Section 11 of the Indian Contract Act,1872 states that “Every person is competent to contract who has attained the age of majority according to the laws which he is subject to and who is of sound mind and is not disqualified from contracting by any law to which he is subject to.”[3]

V. Arguments of the appellant

The respondent had attained majority [i.e the age of 18 or above] at the time of the execution of the contract. At the time when the contract was being formulated, both the appellant and his agent were unknown of the fact that Dharmodas was a minor and were kept in the dark knowingly by Dharmodas, who misrepresented his majority.

Dharmodas had misled the petitioners by hiding his age which was quintessential information in this case. Thus, he should be debarred of any relief from the court. Section 115 of the Indian Evidence Act, 1872 stops the respondent from taking shelter of the fact that he was a minor at the time of the execution of the contract. Sections 38 and 64 of the Indian Contract Act, 1872 and Section 41 of the Special Relief Act,1877, provide remedies for the petitioners.

VI.Arguments of the respondent

The petitioner and his agent, Brahmo Dutta and Kedar Nath, were very well aware of the actual age of Dharmodas Ghose but still entered into the contract at their own risk with mala fide intention. The respondent Dharmodas Ghose was a minor [i.e. less than 18 years of age] when he entered into the contract and as per Indian Contract Act,1855 it was void ab initio meaning it was void from the start, so there is no question of relief or remedy.

VII. Judgement

The trial court was of the verdict that any kind of mortgage, deed, sale, or contract which in itself involves a minor as a party to the contract cannot be enforced and is void ab initio and since Dharmodas Ghosh was a minor, the petition filed by Brahmo Dutta was rejected. The petitioners were not satisfied with the verdict of the trial court and moved to Calcutta High Court for the same.

However, Calcutta High Court seconded the decision given by the trial court and dismissed the appeal. He, later on, moved the petition to the Privy Council but to no avail as the Privy Council rejected the petition and agreed to the decision given by the trial court and Calcutta High Court. The minor in this case, Dharmodas Ghose, cannot be forced to pay the amount in question to the petitioners as he is a minor [i.e. not above the age of 18] and hence no contract has been formulated, and as such, he cannot be bound to pay any amount as relief, remedy or compensation.

VIII. Analysis

According to the judgment, any contract with a minor is null and void simply on the basis of the Indian Contract Act Sections 2, 10 and 11. When Section 11 is read with Section 10 the resulting outcome simply states that a contract with a minor is null and completely void. Section 10 of the Indian Contract Act requires the participating parties to a contract to be competent whereas Section 11 defines the parameter for competency wherein it completely bars minors, persons of unsound mind and individuals specifically barred by the law for the same.

The court after going through all the requisite laws and statutes made its stand clear that there is no provision for any relief or remedy available to the petitioner against the defendant in this case as he was a minor and as such no contract has been formulated, henceforth the petition was rejected.

IX. Conclusion

Any agreement can only be stated as a valid agreement or contract when the consent of both parties is free but in the 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 concluding 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.

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Author(s): Md. Tauhid Karim and Aman Kumar

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References

[1] INDIAN CONTRACT ACT, 1872

[2] INDIAN CONTRACT ACT, 1872

[3] INDIAN CONTRACT ACT, 1872

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