Ajudhia Prasad vs. Chandan Lal
AIR 1937 ALLAHABAD 610
Case Summary
FACTS
This appeal was from a suit for sale based on a mortgage deed dated 15th October 1925 executed by the defendants (who were minors at the time) in favor of the plaintiffs. The defendants pleaded that they were minors at the time of the mortgage deed, and a certificated guardian had been appointed for them. The trial court found that the defendants were more than 18 years but under 21 years of age and held that the plaintiffs could not recover the amount under Section 68 of the ICA. The lower appellate court held that the defendants were minors (under 21 years), the marriage expenses for which the money was advanced were not "necessaries," and Section 68 had no application.
However, it decreed the claim in favor of the plaintiffs based on the finding of "fraudulent misrepresentation" by the defendants.
ISSUES
Whether the plaintiff can enforce the mortgage deed, or the defendant are liable to pay as they are incompetent to contract?
Whether a contract within the Act's meaning necessitates its existence, which cannot occur in a child's case?
RELEVANT PROVISIONS
Sections 64 and 65 of the ICA: In Ajudhia Prasad v. Chandan Lal (1937), the court addressed issues related to void and voidable contracts. Section 64 states that if a voidable contract is rescinded, benefits received must be restored, while Section 65 mandates restitution when an agreement is later found to be void. In this case, a money-lending transaction was challenged due to excessive interest rates, and the court applied these principles to ensure that any undue advantage gained under an unenforceable contract was returned, reinforcing the importance of fairness in contractual dealings.
JUDGEMENT
The court’s judgement in Ajudhia Prasad v Chandan Lal emphasised the contractual obligation of the minor respondents to a loan agreement and the acknowledgement that enforcing legal action in this scenario would effectively enforce the contract. The court noted that historically and currently, there had been no instance in the Court of Equity where a minor was held liable for a loan contract entered into based on fraudulent statements about their age.The court ruled in Ajudhia Prasad v Chandan Lal that the respondents’ status as minors was sufficient grounds to exempt them from liability. As minors, any contract they entered into was considered null and void under Indian law and therefore, no estoppel claim could be established. In essence, the court ruled in favour of the respondents, asserting that minors could not be held liable for debts arising from contracts they entered into while being minors.
-Kush Kuthiala
Himachal Pradesh National Law University.
Commentaires