Case: Shri Manik Chand and Anr Vs. Shri Ramchandra, Son of Chawiraj

The plaintiffs 1 and 2 who were minors entered into an agreement on 30-9-1961 through their mother and guardian Smt. Phoolibai with the respondent to purchase a house situated in Thandi Sarak for a sum of Rs. 11, 000/-. A sum of Rs. 1000/- was paid as earnest money and the balance was to be paid at the time of the registration of the sale-deed. According to the plaintiffs/appellants, the respondent did not carry out his part of the agreement and the appellants filed the present suit for specific performance of the contract on 28-3-1962 in the Court of Additional District Judge, Gwalior. The suit was decreed on 15-4-1966. The plaintiffs deposited Rs. 10, 500 the balance of the price on 13-7-1966. The respondent appealed to the High Court against the judgment and decree of the trial court which allowed the appeal and dismissed the suit. The High Court agreed with the findings of the Trial Court on the merits and found that it was the respondents who committed breach of contract but dismissed the suit on the ground that as the contract was entered into on behalf of the minors, a decree for specific performance could not be granted to the appellants for want of mutuality.

Court's reasoning:
The Privy Council held that they were unable to accept the view of the Division Bench that there was no difference between the position and powers of the manager and those of a guardian. Holding that it is not within the competence of a manager of a minors estate or of a guardian of a minor to bind the minor or the minors estate by a contract for the purchases of immovable property and that the min or was not bound by the contract for want of mutuality, the Privy Council held that a decree for specific performance cannot be granted. The Privy Council in a later decision in Srikakulem Subrahmanyam and Anr. v. Kurra Subba Rao, held that a guardian of a minor is competent to enter into a contract on behalf of the minor so as to bind him if it is for the benefit of the minor. Though the decision of the Privy Council in Mir Sarwarian v. Fakhruddin Mohomed Chowdhury (supra) was brought to its notice, the Privy Council did not refer to it but referred to its earlier decision in Hanuoomanpersaud Pandey v. Mussumat Nabooee Munraj Koonwaree where it was stated that "the act of the mother and guardian in entering into a contract of sale was an act done on behalf of the minor appellant." A passage from Pollock and Mullas Indian Contract and Specific Relief Acts wherein the observation of the Privy Council in Mohori Bibee v. Dhuramodas Ghose, that "it is, however, different with regard to contract entered into on behalf of a minor by his guardian or by a manager of his estate, " was referred to. In such a case it has been held by the High Courts of India, in cases which arose subsequent to the decision of the Judicial Committee, that the contract can be specifically enforced as being within the competence of the guardian to enter into on his behalf so as to bind him by it, if it is for the benefit to the minor. But if either of these two conditions is wanting, the contract cannot be specifically enforced at all. Though the earlier decision of the Privy Council in Mir Sarwarian v. Fakhruddin Mohmed Chowdhury (supra) was not referred to, the observations make it clear that it was not followed. In Srikakulam Subrahmanyan v. Kurra Subba Rao the Madras High Court expressed its view that it had no hesitation to hold that the considered judgment of the Judicial Committee in ILR 75 Mad. 115 must be taken as overruling all the previous decisions based on 32 Cal. 232 (P.C.). The same view was expressed by Subba Rao C.J. of the Andhra Pradesh High Court (as he then was) in Suryaprakasam v. Gangaraju, where he held that there could not be any essential distinction between the contract of sale and contract of purchase. It is unnecessary to go into this question any further as after the passing of Hindu Minority Act, 1956, the guardian of a Hindu Minor has power to do all acts which are necessary or reasonable and proper for the benefit of the minor or for realisation, protection or benefit of the minors estate. This provision, makes it clear that the guardian is entitled to act so as to bind the minor if it is necessary or reasonable and proper for the benefit of the minor. The power thus conferred by the Section is in no way restricted than that was recognised under the Hindu Law. It is not disputed in this case that the contract entered into by the guardian is for the benefit o f the minor. It appears quite strange that the respondent should plead that the transaction is not for the benefit of the minor when the minor is convinced it is in his benefit and that it is worth pursuing the litigation upto this Court. It is common knowledge that the prices of immovable property have been on the rise and there can be no doubt that the transaction is for the benefit of thee are unable to accept this contention for it cannot be said that the guardian by the contract was binding the minor by his personal covenant. As it is within the competence of the guardian, the contract is entered into effectively on behalf of the minor and the liability to pay the money is the liability of the minor under the Transfer of Property Act. We are unable to accept the plea that in a contract for purchase of property, the guardian would be binding the minor by his personal covenant. In the result we find that the contract entered into by the guardian on behalf of the minors is enforceable