INTRODUCTION 

A contract is a legally enforceable agreement, according to Section 2(h) of the Indian Contract Act of 1872 (1872). Under Section 11 of the Act, the competency requirements for entering into the contracts have been established, and it is not possible for any individual to enter into them. By Section 11 of the Indian Contract Act of 1872, a person is considered competent to enter into a contract provided they are of the age of majority, have a sound mind, and are not disqualified by law. Under the Indian Majority Act of 1875, the age of majority was established; Section 3 of the aforementioned Act states that a person is considered a major if they have reached the age of 18 and have completed their education.
Although the Contract Act establishes the legislation governing competency, it does not include any provisions about the consequences of a contract that was entered into by a minor by any means. The following precedent-setting decision has determined the answer to this perplexing question.

FACTS

1. Dharmodas Ghose was younger than 18 years old in Mohori Bibee vs. Dharmodas Ghose, so he was not old enough to properly sign contracts. He officially owned some land, and his mother was in charge. He promised Brahmo Dutta that he would pay Rs.20,000 plus 20% interest yearly in exchange for a loan. He used his land as security.
2. Brahmo Dutta was a lender at that time, and Kedar Nath ran his business for him. Brahmo Dutta’s agent was Kedar Nath.
3. Dharmodas Ghose’s mother told Brahmo Dutta that her son was too young to sign contracts about his land. Kedar Nath, who worked for Brahmo Dutta, knew Dharmodas Ghose was too old to sign such contracts.
4. Dharmodas Ghose and his mother sued Brahmo Dutta on September 10, 1895, saying that Dharmodas was too young to make the mortgage, so it was not legal and should not have been made. They wanted to get out of the deal.
5. Unfortunately, Brahmo Dutta died during the court case, so his lawyers took over the case.
6. The claimants said the contract should be thrown out because the defendant, Dharmodas Ghose, lied about his age when he applied for the mortgage.
7. The person fighting the case is Mohori Bibee, but she is an agent for the late Brahmo Dutta.

ISSUE RAISED

1. Was the deed void under sections 2, 10, and 11 of the Indian Contract Act, 1872, or not?
2. Was the defendant liable to return the amount of loan he had received under such deed or mortgage or not?
3. Whether the mortgage commenced by the defendant was voidable or not?

APPELLANT’S ARGUMENTS

• In the case of Mohori Bibee vs. Dharmodas Ghose, the respondent made the following points:
• In the case of Mohori Bibee vs. Dharmodas Ghose, the respondent says he was too young to sign the mortgage, but the appellant says the respondent was of legal age at the time. The appellant and their lawyer didn’t know the responder was a child. Their argument is that the responder lied about his age and shouldn’t be able to get any help because of that.
• The person who is appealing says that Section 115 of the Indian Evidence Act, 1872, applies to this case. This part says that if someone makes another person believe something to be true through their actions, words, or omissions and that person acts on that belief, then neither party nor their lawyers can later deny that it was true in a lawsuit or other proceeding.
• The person who is appealing in the case of Mohori Bibee vs. Dharmodas Ghose says that the person who was lent money must pay it back according to Sections 64 and 38 of the Indian Contract Act (1872) and Section 41 of the Specific Relief Act (1877).
• The Indian Contract Act of 1872 says that if a promisor offers to keep their end of the deal and the promisee declines, the promisor is not responsible for not keeping their end of the deal and does not lose their rights under the contract.
• Section 41 of the Indian Contract Act of 1872 says that if a promisee takes the performance of a promise from a third party, they cannot later use that promise against the person who made the promise.
• If someone with the power to void a contract decides to do so, Section 64 of the Indian Contract Act, 1872 says that the other party to the contract does not have to keep any promises made in the contract if they are the promisor.

RESPONDENT’S ARGUMENTS

1. As the case of Mohori Bibee vs. Dharmodas Ghose went on, Brahmo Dutta and his agent, Kedar Nath, knew how old the defendant really was.
2. It is not valid for the responder to have signed the mortgage since he was too young to do so.

JUDGEMENT

• When the Privy Council looked at the facts of the case, they decided that the deal made with a minor is void ab initio, which means it was not valid from the start. The court also heard the defendant’s side of the story.
• In the case of Mohori Bibee vs. Dharmodas Ghose, the court decided that the law of estoppel would not apply because Brahmo Dutta’s lawyer knew that Dharmodas was a minority.
• Second, the court clarified that Sections 64 and 65 of the Indian Contract Act would not apply because there was never a valid agreement. There must have been a valid agreement between the responsible parties for these sections to apply.
• In Mohori Bibee vs. Dharmodas Ghose, the court set an example by saying that agreements with children are not valid from the start.

CONCLUSION

The Law of Estoppel:

If someone gets sued because of someone else’s work, that person can’t change their mind, according to the law of estoppel.

There was no use of the law of estoppel in this case because the lawyer for the appellant knew that the child was not present. That being said, there have been times when the Law of Estoppel did not apply to the minor. This means that even if the minor lied intentionally, he could still use his youth as a defense to avoid being held responsible. The idea behind this is that minors shouldn’t be able to sign contracts because the law says they can’t. Using the law of estoppel would go against the goal of S.11 of the Contract Act, which says minors shouldn’t be able to sign contracts. Because of this, the rule of estoppel will not be used against the minor because it would make him responsible.

Sections 64 and 65 of the Indian Contract Act of 1872:

Section 64 and Section 65 of the Indian Contract Act talk about getting back the benefits you got from voidable and void contracts, respectively. The court pointed out that Sections 64 and 65 apply to the contract between responsible parties that has been ruled null or void. That being said, the people who signed the contract weren’t smart enough to do what they agreed to, so the Contract Act’s rules on benefit return won’t apply.

A refund under the Specific Relief Act of 1877:

While deciding to cancel a document, the court can ask the person who got the relief to pay the other party a fair amount. Section 41 of the Specific Relief Act, 1877, or Section 33 of the Specific Relief Act, 1963, says this. This part of the law basically says that the person who wants the court to cancel an instrument must pay back the gain they got from it. 

The Appellant wants the instrument to be canceled and the benefit to be restored. Because of this, he can’t use the Specific Relief Act to get a return.

To make things better for minor agreements, the Law Commission mentioned in its 13th Report that Section 65 should have an explanation added to it and that it should also apply to minor contracts.

In the case of a minor’s agreement, the courts have come up with the equitable concept of restitution. According to this principle, if the minor got something other than money as a gain from the deal, that something or goods must be given back to the real party to the agreement as long as they can be tracked. One area where the law hasn’t been settled yet is the restitution of money. This is when the benefit gained from the transaction is money. Different courts have different views on this issue.