AT RAGAHAV CHARIAR vs. SRINIVASA RAGHAVA CHARIAR 36 Ind Cas 921, (1916) 31 MLJ 575
The Plaintiff entered into a mortgage with the defendant who is major, dated 23rd March 1903 The moneys for which that mortgage was executed as security were wholly advanced to the mortgagor, but at the time of mortgage the mortgagee (Plaintiff) was an infant. The Plaintiff performed his part of obligations and extended monetary amount to the defendant. Despite Plaintiff performing his obligations, the defendant refused to honour the agreement. The suit has been brought for the recovery of the sum of Rs 1100 and odd due on the mortgage The case is an appeal against the decree of the District judge of Chingleput.
Whether a mortgage executed in favor of a minor who has advanced the whole of the mortgage money is enforceable by him or by any other person on his behalf.
- Section 11 of Indian Contract Act 1872
- Section 6 of Transfer of property Act 1882
- Section 7 of Transfer of property Act 1882
- Section 54 of Transfer of Property Act 1882
- Section 55(5) (a) of Transfer of Property Act 1882
The court ruled that, the agreement is enforceable by law, as the mortgagee has already fulfilled his part of obligations and has already advanced the money which is nothing but the consideration of the promise of the mortgagor.
The rationale behind the judgment was when a transfer to a minor by way of a lease he is agreeing to pay rent or to perform any particular covenants which form an essential part of the transaction, may prevent this transfer from taking effect. In a sale, gift or mortgage ordinarily there are no suck essential consensual obligations. A mortgage is however is only a conditional transfer’, and when the condition is fulfilled (as when the debt is discharged) the property revests in the transferor. Though the minor cannot enter into a contract and provide his consent as such contracts would be void but the act does not preclude him been the promisee because the requirement of competence is only required for promisor.
Current Day Significance
The case law holds a lot of significance as it helped in widening the scope of providing protection to minors in the contracts. This was limited in the case of Mohiri bibi vs Ghose. The motive behind this decision was to allow minors to enter into contracts while giving them the protection accorded by the English common law—thereby avoiding the harshness of Mohori Bibee. However, this solution had its shortcomings. It excluded from its scope, contracts where the consideration on behalf of the minor was only part-performed or partly-executed. Such contracts were deemed to not create any rights in favor of the minor because the liability of the minor under the contract remained the same.