Report No. 13
35. Section 11.-
There is conflict of authority upon the question as to how far in the case of a minor's agreement procured by him by fraudulent concealment of his age, the Court will relieve the other party to the agreement from the effects of the fraud. One view is represented by the Full Bench case in Khan Gul v. Lakha Singh, AIR 1928 Lah 609. In that case two questions were referred to for decision:
(i) Whether a minor who, by falsely representing himself to be a major, has induced a person to enter into a contract, is estopped from pleading his minority to avoid the contract?
(ii)Whether a party who, when a minor has entered into a contract by means of a false representation as to his age, whether he be defendant or plaintiff, in a subsequent litigation, refuse to perform the contract and at the same time retain the benefit he may have derived therefrom?
Shadi Lal, C.J., delivering the majority judgment held that?
(i) Where an infant has induced a person to contract with him by means of a false misrepresentation that he was of full age, he is not estopped from pleading his infancy in voidance of the contract and that section 115 of the Evidence Act should be read subject to section 11 of the Contract Act;
(ii) a false representation by an infant that he was of full age, gives rise to an equitable liability. The Court while relieving him from the consequences of the contract, may in the exercise of its equitable jurisdiction, restore the parties to the position which they occupied before the date of the contract; and
(iii) the doctrine of restitution which finds expression in section 41 of the Specific Relief Act is not confined to the cases covered by that section and rests upon the principle that an infant cannot be allowed to take advantage of his own fraud. This doctrine is applicable whether the minor is the plaintiff or the defendant.
In arriving at the above conclusions, the learned Chief Justice emphasised that the Court in granting the above relief does so, not because there is a contract which should be enforced but because the transaction being void, does not exist and the parties should revert to the condition in which they were before the transaction. This is not the performance of the contract but the negation of it.
36. The opposite view is represented by the case of Ajudhia Prasad v. Chandanlal, AIR 1937 All 610 in which Sulaiman, C.J., delivering the judgment of the Full Bench, while holding that the minor is not estopped from pleading that the contract is void on the ground of his minority, held that?
(i) Where a contract had been induced by a false representation made by an infant as to his age, he is liable neither on the contract nor in tort;
(ii) Where a contract of transfer of property is void and such property can be traced, the property belongs to the promisee and can be followed; but where the property is not traceable, the grant of compensation would be tantamount to enforcing a void contract under the cloak of an equitable doctrine.
In both the above cases reference was made to the case of Mohori Bibi v. Dharmodas Ghose, 30 Cal 539. where the Judicial Committee, in a suit by a minor through his next friend for a declaration that a mortgage deed executed by him was void and for its cancellation, had arrived at the following conclusions:-
(i) The question whether a contract is void or voidable presupposes the existence of a contract and cannot arise in the case of an infant;
(ii) sections 64 and 65 start from the basis of there being an agreement between competent parties; and
(iii) section 41 of the Specific Relief Act applies to the case of instruments executed by minors.
37. Pollock and Mulla,1 have expressed the view that judgment of Shadi Lal, C.J., in the Lahore case is correct and we share this view. Indeed, we have already expressed our preference in favour of the judgment of Shadi Lal C.J., in our report on the Specific Relief Act.2 We agree with the proposition that in ordering compensation, the Court is not giving effect to a contract but is doing its best to put the parties, so far as possible, in the position which they occupied before the void transaction took place and from which one of them was induced to depart by reason of the minor's fraud. This view appears to be more in consonance with the principles of equity and justice.
It appears to us incongruous that while sections 38 and 41 of the Specific Relief Act apply to cases of minors, the principles underlying those sections should not be applicable to cases under the Contract Act. We feel that the Judicial Committee had not correctly interpreted section 65 and we are of the opinion that an agreement is 'void' or 'is discovered to be void' even though the invalidity arises by reason of the incompetency of a party to a contract. We recommend that an Explanation be added to section 65 to indicate that section should be applicable where a minor enters into an agreement on the false representation that he is a major.
1. Pollock & Mull; Op. Cit., p. 77.
2. Report on Specific Relief Act, para. 90.