AJUDHIA PRASAD Vs. CHANDAN LAL

JUDGEMENT

(1.) This is a second appeal arising out of a suit for sale on the basis of a mortgage deed dated 15 October 1925 executed by the defendants in favour of the plaintiffs. The defendants pleaded that they were minors at the time of the mortgage deed, a certificated guardian having been appointed for them, and also pleaded that there was no necessity for contracting the debt. In the rejoinder the plaintiffs denied that the defendants were minors and also asserted that the defendants were liable to pay the amount under Section 68, Contract Act. The issues framed by the trial Court related to the minority of the defendants, the object of the debt and its proper attestation and consideration. The trial Court found that the defendants were more than 18 years of age but under 21 years, and that there was no evidence of representation either by the defendants or their father Sital Prasad. The Court held that the plaintiffs could not recover the amount under Section 68, Contract Act. The lower appellate Court held that the defendants were in fact minors, being under 21 years of age, and also held that the marriage expenses for which the money was said to have been advanced were not "necessaries," and therefore Section 68 had no application. But it held that the respondents and their father not only concealed the fact that there was already a guardian appointed for the minors, but the father even went to the length of declaring before the Sub-Registrar that his younger son was over 18, and that the dishonest suppression of the fact that the executants were under his own guardianship indicated to the plaintiffs that they were dealing with persons competent to contract, and then remarked: "Thus in my opinion there was a fraudulent misrepresentation made by or on behalf of the respondents."

(2.) Following the ruling of the Full Bench of the Lahore High Court in Khan Gul v. Lakkha Singh A.I.R. 1928 Lah. 609, it decreed the claim for the recovery of the amount with interest at the contracttual rate and future interest and in default for sale of the mortgaged property. Two of us before whom this appeal came up for disposal have referred the following question of law to this Full Bench: Where money has been borrowed by two minors under a mortgage deed at a time when they were minors, more than 18 years but less than 21 years of age, under a fraudulent concealment of the fact that the executants were minors because a guardian had been appointed for them under the Guardians and Wards Act, can the mortgagee in a suit brought against them get a decree for the principal money under Section 65, Contract Act or under any other equitable principle, and can he also get a decree for sale of the mortgaged property.

(3.) In the meantime the Bench also called for a finding on another point which will be disposed of by the Division Bench separately. The majority of the learned Judges of the Lahore Full Bench based their decision on a supposed rule of equity and not on any particular section of any Act. But in the course of the arguments before us the plaintiff's claim has been based on various alternative grounds which it may be convenient to take up seriatim : It is first argued that the case is covered by Section 65, Contract Act. No doubt the Contract Act draws a distinction between an agreement and a contract. Under Section 2(g) an agreement not enforceable by law is void, while under (h) an agreement endorsable by law is a contract. Section 65 deals with agreements discovered to be void and contracts which become void. A possible view might have been that Section 65 applies even to minors and that they can in every case, whether there is mistake, misrepresentation, fraud or not be ordered to restore any advantage that has been received or make compensation for it to the person from whom the minors received it. This would result in a suit being decreed for recovery of money received by a minor on a bond or promissory note even though the contract itself is void. The other view is that the Con. tract Act deals with agreements which may be void on the ground, for instance, that they are opposed to public policy or prohibited by law or they may be void because one of the parties thereto is not competent to contract, and Section 65 was really intended to deal with agreements which from their very nature were void and were either discovered to be void later or became void, and not agreements made by persons who were altogether incompetent to enter into an agreement, and the agreement was therefore a nullity from the very beginning. There is no section which in so many terms says that an agreement by a minor is void. Indeed, it was held in some earlier cases that it was only voidable see Saral Chand Mitter V/s. Mohun Bibi (1898) 25 Cal. 371 at p. 385.