Mohori Bibee v. Dharmodas Ghose (1903): The Landmark Case on Minor’s Capacity to Contract

Contracts form the backbone of legal and commercial relationships. However, not everyone is legally capable of entering into a contract. One of the most important cases explaining this principle is Mohori Bibee v. Dharmodas Ghose (1903). This landmark judgment clarified the position of minors under the Indian Contract Act, 1872, and laid down that a contract with a minor is void ab initio, meaning void from the very beginning. This case is still widely cited and forms the foundation of contract law in India.

Background of the Case

Dharmodas Ghose was a minor who owned immovable property. His mother, Mohori Bibee, was his legal guardian. While Dharmodas was still a minor, he mortgaged his property to a moneylender named Brahmo Dutt to secure a loan.

Importantly, Brahmo Dutt was fully aware that Dharmodas Ghose was a minor at the time of the mortgage. The money was advanced despite this knowledge.

Later, Mohori Bibee filed a suit on behalf of her son seeking to declare the mortgage void on the ground that the contract was entered into by a minor.

Key Legal Issues Before the Court

The Privy Council was required to decide:

• Whether a minor is competent to enter into a contract under the Indian Contract Act.

• Whether a contract with a minor is void or merely voidable.

• Whether the lender could recover the money advanced under the principle of equity or restitution.

These questions had far-reaching implications for contract law.

Relevant Provisions of the Indian Contract Act

The decision primarily revolved around Section 11 of the Indian Contract Act, 1872, which states that:

“Every person is competent to contract who is of the age of majority according to the law to which he is subject…”

This clearly implies that a minor lacks contractual capacity.

Judgment of the Privy Council

The Privy Council held that:

• A minor is not competent to contract.

• Any agreement entered into with a minor is void ab initio.

• Since the contract was void, it could not be ratified after the minor attained majority.

• The lender could not claim restitution under Section 65, as the section applies only to agreements that are discovered to be void, not those that were void from the beginning.

Principle of Void Ab Initio Explained

The court clarified that a contract with a minor has no legal existence from the start. It is not voidable at the option of the minor; instead, it is completely void.

This interpretation protects minors from exploitation and ensures that they are not bound by legal obligations they may not fully understand.

Doctrine of Estoppel and Minor

The court rejected the argument that the minor should be estopped from denying the contract merely because he had misrepresented his age. The court held that:

• Estoppel does not apply against minors

• Protection of minors is more important than fairness to adults who knowingly deal with them

This ruling emphasizes that adults must exercise caution while contracting with minors.

Restitution and Equity

A key issue in the case was whether the moneylender could recover the money advanced to the minor. The Privy Council refused restitution, stating that:

• Section 65 does not apply to void agreements entered into by minors

• Granting restitution would indirectly enforce a void contract

However, later courts have allowed limited restitution in cases where the minor still possesses the benefits, under equitable principles.

Impact and Significance of the Judgment

The Mohori Bibee case settled the law regarding a minor’s capacity to contract and has been followed consistently in Indian courts. It ensures:

• Strong protection for minors

• Legal certainty in contractual relationships

• Clear guidance to lenders and businesses

The judgment serves as a warning that anyone dealing with a minor does so at their own risk.

Subsequent Developments and Related Case Laws

Khan Gul v. Lakha Singh (1928)

The court allowed restitution where the minor still possessed the benefits, showing a more balanced approach.

Leslie Ltd. v. Sheill (1914)

It was held that money advanced to a minor cannot be recovered under a quasi-contract.

These cases built upon the principles laid down in Mohori Bibee while introducing equitable flexibility.

Relevance in Modern Contract Law

Even today, the principles from Mohori Bibee apply to:

• Loan agreements

• Property transactions

• Online contracts involving minors

• Educational and employment agreements

With the rise of digital transactions, the case remains highly relevant in protecting minors from contractual exploitation.

Conclusion

The Mohori Bibee v. Dharmodas Ghose (1903) case is a cornerstone of Indian contract law. By declaring contracts with minors void ab initio, the Privy Council ensured strong legal protection for minors and clarity in contractual dealings. The judgment continues to guide courts and legal practitioners and remains a fundamental case every law student must understand.