Mohori Bibi v. Dharmodas Ghose (1903) ILR 30 Cal (PC) is the landmark judgment that defined the position of a minor under the Indian Contract Act, 1872. A minor, in simple words as defined under the Indian Majority Act, 1875, is a person who is yet to complete 18 years of his/her age. The nature of a minor’s agreement was voidable, which means the contract can be struck down if the minor wishes so, from the year of enactment of the act till 1903 i.e. the year when the landmark judgment of Mohiri Bibi was passed. After the passing of the judgment, the nature of minor’s agreement was made void-ab-intio which means not valid since the beginning.
To sum up the facts of the case briefly, Dharmodas Ghose was a minor who mortgaged his property in favour of Brahmo Datt, appellant for a loan of Rs. 20000 at a 12% interest rate. A part of this amount, Rs. 8000, was advanced in name of Dharmodas. Brahmo Datt did not take part in the negotiations himself; it was his attorney Kedarnath who took part in the proceedings. The day when the mortgage deed was finalised the respondent’s mother informed the Attorney about his minority. The Attorney prepared a long declaration which was then signed by the respondent and it contained a statement which stated that the respondent had already achieved the age of majority a month ago. Brahmo Datt acknowledging the declaration paid the remaining amount to the minor. Despite the attorney being aware of the minority of the respondent, he mortgaged the property in favour of the appellant.
On 10th September 1895, the respondent along with his mother brought legal action against the appellant, stating that Dharmodas was a minor when the deed was commenced and therefore the contract should be revoked. When the legal action was brought the appellant passed away and the appeal was then handled by his wife, Mohori Bibee. Mohori Bibee put in defence that neither the Attorney nor her husband was aware of the minority of the respondent nor even if he was a minor the signing of the declaration was a fraudulent act. Therefore, he should not be entitled to any money that has been paid.
The court held that an agreement with the minor would be void-ab-initio and that Rule of Estoppel which according to Section 115 of Indian Evidence Act, 1872, means when a person intentionally makes another person believe a thing to be true and causes another person to act upon such belief, neither the person nor his representative can deny the truth of that thing. The Doctrine of Restitution mentioned in Section 64 of the Indian Contract Act 1872 is not applicable in a minor agreement because the agreement is void since the beginning and not voidable. Similarly, no relief can be claimed by the appellant under Section 65 of the Indian Contract Act, 1872 because under its mandate cases of voidable contract fall and not void contracts.