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1956 Supreme(AP) 39

Andhra Pradesh High Court
Gokeda Latcharao - Appellant
Versus
Viswanadham Bhimayya - Respondent
Decided On : 02-03-56

Headnote:

CONTRACT - MINOR - VOID CONTRACT - RESTITUTION - SECTION 65 OF THE CONTRACT ACT - SECTIONS 39 AND 41 OF THE SPECIFIC RELIEF ACT - APPLICABILITY - DISTINCTION BETWEEN PLAINTIFF AND DEFENDANT - EQUITABLE DOCTRINE - LIMITS.

Fact of the Case:

The appellant, a minor, executed two promissory notes in favor of the respondent. The appellant made a fraudulent representation to the respondent that he was a major. A suit was filed to enforce the said two promissory notes. The appellant contended that the suit promissory notes were not supported by consideration and that they were not enforceable as he was a minor on the date of their execution.

Finding of the Court:

The learned District Munsif and, on appeal, the learned Subordinate Judge Kakinada, held that the appellant was a minor on the date of the execution of the promissory notes. The Subordinate Judge further held that he made a fraudulent misrepresentation of his age. The District Munsif found that the promissory notes were supported by consideration of Rs. 250, whereas the appellate Court came to the conclusion that the entire money was paid under the promissory notes. The appellate Court, in modification of the first Court’s decree, applied the provisions of section 65 of the Indian Contract Act and gave a decree in favor of the respondent for recovery of the entire amount due under the promissory notes.

Issues: Whether, in the circumstances stated above, the plaintiff can recover the amounts paid by him under the promissory notes to a minor.

Ratio Decidendi: 1. Section 65 of the Indian Contract Act applies only to contracts entered into between persons with legal competency to do so. 2. A contract entered into with a minor is a nullity for want of legal competency. 3. Except as otherwise provided by statute, it is not enforceable and it does not give rise to any rights or liabilities. 4. A person who parted with his goods can trace them into the hands of the quondam minor and recover them back in specie, for, he has not lost his title to them. 5. But he cannot seek to recover their price or damages for, if allowed, he would be indirectly asking for the enforcement of the contract and to recover damages for the breach. 6. Nor can a person, who lends money to such a minor, recover it. 7. If allowed to do so, the Court would be enforcing a contract of loan. 8. The principle is embodied in sections 39 and 41 of the Specific Relief Act.

Final Decision: The decree of the lower appellate Court is set aside and the appeal is allowed with costs throughout.

SUBBA RAO, C. J.

( 1 ) I think this is a case which mm I be heard by a Bench, as there is no authoritative decision covering the question raised in the case. The suit out of which the second appeal arose was instituted on foot of two promissory notes. Exhibit A-1 dated 14th June, 1947, for Rs. 1500 and Exhibit A-2 dated 10th August, 1947, for Rs. 1,000 executed by the defendant in favour of plaintiff. The defence to the suit was that the promissory notes were executed when the defendant was a minor and that the suit notes were not supported by consideration.

( 2 ) THE plaintiff relied on a fraudulent misrepresentation made by the defendant regarding his age and he also raised the contention that the amount was supplied for the necessaries of the defendant and his family. The trial Court found that as admitted by the defendant only Rs. 250 was received under the promissory notes by the defendant and that the balance of the consideration was not paid. It was also found that the defendant as a minor on the date of the execution of the promissory notes and that there was no fraudulent misrepresentation regarding the age. On these findings, he dismissed the plaintiff s claim.

( 3 ) ON appeal, the lower appellate Court found that the defendant received full consideration under the promissory notes ; that he was a minor on the date of the execution of the promissory notes and that there was a misrepresentation by the defendant regarding his age on the date of the execution of the notes. It granted a decree against the defendant for the full amount applying section 65 of the Indian contract Act and held that as the agreement was discovered to be void the defendant should return the advantage received under Exhibits A-1 and A-2.

( 4 ) THE principal question for consideration in Second Appeal is, assuming that the finding regarding the payment of the consideration is true the decree against the defendant granted by the lower Court could be justified in law. Mr. Rama Rao wanted to atttack the finding regarding the payment of consideration and also the finding of the learned Judge that there was misrepresentation by the defendant at the time of the execution of the notes regarding his age. As I am referring the entire , case before a Bench, no useful purpose would be served by going into the question, whether there is any justification for upsetting the findings of fact arrived at by the lower appellate Court.

( 5 ) SECTION 65 of the Contract Act has no application because as pointed out by the privy Council in Moharibi Bi v. Dharmados Ghosh. , (1902) L. R. 30 I. A. 114 : I. L. R. 30 Cal. 539 (P. C. ). Both the agreement and the contract contemplated by section 65 must be between persons who are sui juris and has no application to the agreement by a minor. If section 65 has no application, under the principles established in England in Leslie Limited v. Sheill , L. R. (1914) 3 K. B. 607. no relief can be granted in favour of the plaintiff against the defendant. But, apart from equitable principles applicable to a situation like this which were established in england, we have the statutory provision in section 41 of the Specific Relief Act which; was applied in cases where the plaintiff sought cancellation of an instrument and if it was found that he had derived any advantage under the instrument he must return the advantage before he recovers the property in consequence of the cancellation of the instrument. Reading section 41 in collocation with sections 38 and 39, it would appear that section 41 would apply only to cases where at the instance of the plaintiff the instrument is cancelled though the language of section 41 by itself is wide enough to cover a case where the document is cancelled or declared void at the instance of the defendant as well. This was the view accented bv the Allahabad high Court in Ajudhia Prasad v. Chandan Lal,i. L. R. (1937) All. 860. and also in Hanumantharao v. Seetharamayya, (1939) 2 M. L. J. 195: I. L. R.





























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