Decided On: 04.03.1903
Appellants: Mohori Bibee and Ors.
Respondent: Dharmodas Ghose
Hon'ble Judges/Coram: Lord McNaughten, Lord Davey, Lord Lindley, Sir Ford North, Sir A. Scoble, and Sir A. Wilson
Area: Minor’s capacity to enter into a contract
Facts: The minor person bringing the legal action put up their houses as collateral to secure a loan of Rs 20,000 at an interest rate of 12% from the party being appealed against, who was a money lender. The money lender only gave them part of the loan. During the process of deciding whether or not to give the loan, the lawyer representing the money lender discovered that the young person was actually under the age of majority. However, the lawyer still obtained a statement from the young person claiming that they were of legal age when they entered into the contract. Later on, the minor person refused to pay back the loan, stating that they were still a minor and that the mortgage should be cancelled.
Issues: Whether the contract entered into by a minor is voidable at his option or void altogether?
Judgment: The principle of Estoppel under section 115 of the Indian Evidence Act does not apply to a person who is under the age of majority. This is especially true in this case because the lawyer who dealt with the minor knew his age and was not deceived. After examining Section 11, the judges concluded that the law requires all parties to a contract to have the ability to contract, and explicitly states that a person who is legally considered a minor cannot enter into a contract. A minor individual might display inadequate decision-making abilities when entering into a specific agreement, and implementing measures to prevent their own lack of knowledge and maturity, as well as deceitful exploitation by others, is crucial. Therefore, an agreement made by a minor is considered void ab initio.
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