High Court Of Delhi
PUNJAB AND SINDH BANK - Appellant
Versus
LABH SINGH - Respondent
Suit 420 of 1978
Decided On : 02/13/1995
{'KEYWORD': 'MINORITY', 'SUBJECT': 'Enforceability of Contract', 'ACT SECTION LIST': [], 'SUMMARY': 'A minor who enters into a contract by falsely representing himself as an adult cannot avoid liability by claiming minority, especially if he has derived benefit from the contract.'}
Fact of the Case:
Jaspal Singh, a minor, took a loan from a bank to purchase a truck. He defaulted on the loan payments, and the bank sued him for recovery of the loan amount. Jaspal Singh claimed that he was a minor at the time of the contract and therefore not liable to repay the loan.
Finding of the Court:
The court found that Jaspal Singh had falsely represented himself as an adult at the time of the contract and had derived benefit from the loan. Therefore, he was liable to repay the loan amount, even though he was a minor at the time of the contract.
Issues: 1. Whether Jaspal Singh was a minor at the time of the contract? 2. Whether Jaspal Singh had falsely represented himself as an adult at the time of the contract? 3. Whether Jaspal Singh had derived benefit from the loan? 4. Whether Jaspal Singh was liable to repay the loan amount?
Ratio Decidendi: A minor who enters into a contract by falsely representing himself as an adult cannot avoid liability by claiming minority, especially if he has derived benefit from the contract.
Final Decision: The court passed a decree in favor of the bank for the recovery of the loan amount, with interest and costs.
( 1 ) HISTORY of this case starts from June 21, 1994 when defendant No. I took a loan of Rs. 56,000. 00 for purchase of a truck against its security and hypothecation and on surety and guarantee of defendant No. 2. Whereas defendant No. I executed the agreement of hypothecation. Demand Promissory Note besides other documents undertaking thereby to pay the loan amount on demand together with interest, defendant No. 2 executed letter of guarantee standing surety and guarantor for the refund of the loan amount and interest thereon at the agreed rate. The grievance of the plaintiff Bank is that defendant No. l made only two payments one of Rs. 2,200. 00 ondecember 17, 1974 and the second of Rs. 2,500. 00 on July 1, 1976 and thus committed default in payment of the amount of the Demand Promissory Note, interest and other charges. Hence this suit for the recovery of Rs. l,09,991. 50p. inclusive of interest.
( 2 ) DEFENDANT No. 2 was proceeded against ex-parte.
( 3 ) DEFENDANT No. 1 has contested the suit.
( 4 ) THOUGH the pleadings of the parties led to the framing of as many as nine issues, at the time of arguments the suit was contested only on the plea that at the time of the agreement, that is, June 21,1974, defendant No. I was a minor and as such the entire transaction was unenforceable as against him and further that 669 he was made to sign the documents by defendant No. 2 who alone had taken the truck. However, for the sake of facility I may reproduce below the issues framed: "1. Is the suit time barred? (OPD) 2. Whether defendant No. 2 is the person who obtained loan from the plaintiff Bank? OPD 3. Whether defendant No. 1 was a minor on the date loan was granted and given to him? If so, its effect? OPD 4. Whether defendant No. 1 received any advantage out of the loan granted? OPP 5. Did defendantno. l adopttheagreementoflaon?lf so,itseffect?opp 6. Relief. " Additional issues framed on 15. 4. 85: (1) Whether the defendants have not derived benefit unde the transaction, if so, its effect. (2) Whether defendant No. I was only a name lender as alleged? Its effect. (3) Whether defendant No. 2 had represented that defendant No. I was major at the time of transaction? Its effect.
( 5 ) BEFORE I proceed further, I may well mention here that the plaintiff-Bank does not admit that defendant No. I was minor at the relevant time. However, it was argued that even if it be taken that he actually was minor, he having received advantage out of the transaction, the Bank was entitled to the relief though it may also be mentioned that during arguments, it was not admitted on behalf of defendant No. I that he had derived any benefit.-
( 6 ) FOR what has been recorded by me above I need not pause to deal with issue No. 1. Not only because nothing was said insupport but also because there is nothing to sustain the objection leading to the of the issue. framing7. The rest of the issues need to be clubbed and discussed together.
( 7 ) WAS defendant No. I minor on the date loan was granted to him? This, I feel, is the principal question. The agreement, as we know by now, was executed on June 21,1974. Defendant No. I claims that he was born on December 27,1957 and in order to prove the same he has examined his elder brother Niranjan Singh (DW-1) besides examining himself as DW 2.
( 9 ) WHAT does the evidence led by defendant No. I show? As per Niranjan Singh defendant No. I was born on 27th December, 1957. He gave his own age as "about 40 years" and claimed to be the eldest child of his parents while defendant No. I was stated to be the fifth. As per him a sister was born to him after "about 2% years" of his own birth. She died. After 2 years of the birth of that deceased sister yet another sister was born. After a fur ther passage of 2 years a brother by the name of Ram Singh was born followed 2years thereafter by the birth of defendant No. 2. He further claims that no other child was born between Ram Singh and defendant No. 1. If all thi
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