This case deals with the competency of minors in contract law under Indian law.
- Dharmodas Ghose, a minor (below 18 years old), took a loan of ₹20,000 from Brahmo Dutt, a moneylender, by mortgaging his property.
- At the time of the transaction, the attorney of Brahmo Dutt was aware that Dharmodas Ghose was a minor.
- Later, Dharmodas Ghose, through his mother (Mohori Bibee), filed a suit claiming that the mortgage was void because he was a minor and thus incapable of entering into a valid contract under the Indian Contract Act, 1872.
- Brahmo Dutt’s successors (since he had passed away) argued that either the mortgage should be upheld or Dharmodas Ghose should be asked to return the loan amount.
Final Order (Judgment)
The Privy Council ruled in favor of Dharmodas Ghose, holding that:
- A contract with a minor is void ab initio (from the beginning) under Section 11 of the Indian Contract Act, 1872, which states that only a person competent to contract (i.e., a major) can enter into a valid contract.
- Since the contract itself was void, there was no legal obligation for Dharmodas Ghose to repay the money.
- The doctrine of restitution (returning benefits received) does not apply when the contract itself is void from the start.
Thus, the mortgage was declared void, and Dharmodas Ghose was not liable to repay the loan, setting an important precedent in Indian contract law regarding agreements with minors.
