Mohori Bibee v. Dharmodas Ghose

Facts

• Dharmodas Ghose, a minor, executed a mortgage of his property on 20 July 1895 in favour of Brahmo Dutt (a money-lender) to secure repayment of Rs. 20,000 at 12% interest
• Brahmo Dutt's agent, Kedar Nath, who executed the transaction on behalf of the lender, had notice that Dharmodas was a minor
• The mother of Dharmodas was his legal guardian (next friend)
• Dharmodas, through his mother, filed suit to set aside the mortgage on the ground of minority
• Brahmo Dutt (who died during proceedings; his executors, including Mohori Bibee, continued) argued: (a) the contract was merely voidable, not void; (b) the minor should refund the money advanced under Sections 64/65; (c) estoppel applied because the minor misrepresented his age

Issues

1. Whether an agreement entered into by a minor is void ab initio or merely voidable under the Indian Contract Act, 1872?
2. Whether the minor is liable to refund money received under Sections 64 or 65?
3. Whether the doctrine of estoppel applies against a minor who has misrepresented his age?

Held

• A minor's agreement is void ab initio; it is not a contract at all under Indian law
• Section 11 states that only persons who are competent to contract (major, sound mind, not disqualified) can enter agreements that are contracts. Since a minor is not competent, there is no contract
• Sections 64 and 65 do not apply because they presuppose a valid contract that is later discovered to be void or voidable. A minor's agreement was never a contract
• Estoppel does not apply against a minor; a rule of evidence cannot override a substantive rule of law (incapacity)
• The mortgage was declared void; Dharmodas was not required to refund any money

Ratio Decidendi

Under Indian law, an agreement by a minor is void ab initio and not merely voidable. Section 11 prescribes capacity as a prerequisite for a valid agreement to be a contract. Since a minor lacks capacity, no contract ever comes into existence. The provisions relating to restitution (Sections 64, 65) do not apply to void agreements. The doctrine of estoppel cannot be invoked to give validity to what the law declares void.