MANIK CHAND AND ANR. v.

RAMACHANDRA SON OF CHAWRIRAJ

May 8, 1980

[S. MURTAZA FAZAL ALI ANO P. S. KAILASAM, JJ.]

1-~

Specific performance-Enforceability of a contract for purchase of property by a guardian for the benefit_ of the 1ninor--Contract Act, Section I I-Section 8 of the Hindu .Winority Act read with Section 55(5)(h) of Transfer of Property Act.

The appellants-plaintiffs who were minors entered into an agreement on 30-9-1961, through their mother and guardian with the respondent to purchase a house for a sum of Rs. 11000/-. A sum of Rs. 1000/- was paid as earnest 1noney and the balance was to be paid at thei time of the registration of thC sale deed. Since the respondent did not carry out his part of the agreement, the appellants filed a suit for specific perlormance 1 ofi the contract on 28-3-1962 in the Cou11 of Additional District Judge, Gwhlior. The suit was decreed on 15-4-1966. The appellants deposited J1s. 10,500/- the balance of the price on 13-7-1966. The respondent appealed -, o the High Court against the judgment

and decree of the trial court which 'J.llowed the appeal and dismissed the suit: holding that as the contract was entered into on behalf of the minors a decree for specific performance could not be granted ro( want of mutuality.

AIJowing the appeal by special leave, the Court

HELD : I. The contract entered into by the guardian on behaJf of the minors is enforceable. [1108 EJ

2. A minor has no legal con1petence to enter into a contract or authorise someone else on his behalf to enter into a: contract. But under the Hindu Law, the natural guardian is empowered to enter into a contract on behalf of the minors and the contract would be binding and enforceable if the contract is for the benefit of the minor. [1106 Bl

Krishnaswami v. Sundarappayya, IL~ 18 Mad., 415; relferr'edl to.

Mir Sarwarjan v. Fakhruddin Mohd. Chowdhary, JLR 39 Cal.

(PO); Srikakulam Subrahmanyam v. Kurra Subba Rao, 1 Il..R 75 Mad. 115; HanUlJO.. 1nanPrasaud Pandey v. Mussamat Nabooee Munraj Koonwaree (1856) 6 Moor I.A. 393; Mo/10ri Bibee v.

Dhuramodas Ghose, LR. 301 IA 114, Srik(lkulam Subrahmanyam v. Ku"a Subba Rao, ILR 1949 Mad. 143; Suryaprakasam

v. Ganga Raju, A.I.R. 1956 Andb. 33; explained.

3. After the passing of the Hindu Minority i\ct, 19'56, the 1 guardian of a llindu -minor ha') power to do all acts which are necessary or reasonable and proper for the benefit of the minor's estates. Theguardian is entitled to act so as to bind the minor if it is necessary or reasonable and proper for thei behefit of the minor. 'fhe power thus conferred by the Act is in no way restricted than that wa.s recognised under the Hindu Law. Here,· it is quite strange that the respondent should plead that the transaction is not for the benefit of the

(1104)

. .. ,..

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MANIK CHAND v. RAMCHANDRA (Kailasam, !.) 1105

nliner when the minor is convinced it is in his benifit and that it is worth A pursuing the litigation upto Supreme Court. [1107 GH, 1108 A-BJ

4. The guardian by the contract for purchase of property does not bind the minor by bis personal covenant. As it is within tho competence of the guar~ dian, the contract is entered into effectively on behalf of the minor ;; nd tbe1 liability to pay the money is the liability of the minor under the Transfer of Property Act. [1108 D~EJ B

CIVIL APPELLATE JURISDICTION : Ovil Appeal No. 1548 of .. 1970.

Appeal by Special Leav!:' from Judgment and Decree dated 9-2-1968 of the M.P. High Court in First Appeal No. 21 of 1976.

Shiv Dayal Srivastava and T. C. Sharma for the Appellant.

Y. S. Chitale, and Rameshwar Nath for Respopdent.

The Judgment of the Court was delivered by,

J(AILASAM. J.

This appeal is by the plaintiffs by special leave granted by this Court against the judgment and decree dated 9-4-1968 pasi; ed by the Division Bench of the Madhya Pradesh High Court in first appeal No. 21 of 1966 dismissing the suit for specific pedormance.

The plaintiffs l and 2 who were minors entered. into an agreement on 30-9-1961 through their mother and guardian Smt.

Pboolibai with the respondent to purchase a house situated in Thandi

Sllrak 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 outi his part of the agreement and the appe!lants 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. 'Thfl 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 perforanance could not be granted to the appellants for want of mutuality.

Mr. Shiv Dayal Srivastava, learned counsel appearing for the appel- B !ants, submitted that the lower Court erred in holding that the contract for purchase of property by the guardian on behalf of the minors is

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A unenforceable due to lack of mutuality and submitted that so long as the transaction is for the benefit of the minor, the defendants. cannot resist the decree for specific performance.

A minor has no legal competence to enter into a contract or authorise someone else on his behalf to enter into a contract.

But under the Hindu Law the natural guardian is empowered to enter into, a contract on behalf of the minors and the contract would be binding and enforceable if the contract is for the benefit of the minor.

One of the earliest cases which dealt with the right of the guardian to enter into a contract on behalf of the minor, is Krishnaswami v.

Sundrappayyar, where a Bench of the Madras High Court held tbat S.11 of the Contract Act does not exclude the power of the guardian of a minor to represent him and enter into contracts on his behalf either beneficial or necessary to the minor under Hindu Law and that the English Law that a minor cannot claim specific performance which proceeds on the ground of want of mutuality, has no application to this country.

The position under the Hindu Law is that a guardian has legal competence to enter into a contract on behalf of the minor fot necessit~· or for the benefit of the estate.

Dr. Chitale, learned counsel for the respondent submitted that he does not dispute the competence of a guardian to enter into a con tract on behalf of the minor if it is for necessity or for the benefit of the estate, but contended tliat the right can only be confined to sale of property and would not extend to the purchase of property. His submission is that regarding the purchase of the property, it involves a minor into an obligation of making a payment and that it would amount to personal covenant by the guardian binding the minor.

In support of his contention, he strongly relied on a decision of the Privy Council in Mir Sarwarjan v. Fakhruddin Molwmad Chowdhury('), which re" versed the view of a Bench of the Calcutta High Court which held that there was no want of mutuality in the case and that the agreementis enforceable against the minors and that the acts of the guardian in thiis country bind the minor though there is no difference between his position and powers and those of a manager. The Privy Conncil held that they were unable to accept the view of the Divisior\ Bench that there was no difference between the position and powers of the manager and those of a guarddn. Holding that it is not within the competence of a manager of a minor's estate or of a guardian of a minor to. bind the minor or the minor's estate by a contract for the purchases of immovable property arid that the minor was not bound by the contract for want of mutuality, the Privy Council held that a decree for specific• per-

(!) !LR 18 Mad 415

(2) !LR 39. Cal. I.

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MA NIK CHAND v. RAMCHANDRA ( Kailasam, J.) 1 10 7

fonance cannot be granted. The Privy Council in a later decision in Stikakulem Subrahmanyam and Anr. v. Kurra Subba Rao(1), held that a ; guardian of a mrnor is competent to enter into a contract on behalf of the mfnor so as to bind him if it is for the benefit of the mmor.

Though the decision of the PriNy Council in Mir Sarwarian v. Fakhrud- ' dm Mohomed Chowdhury (supra) was brought to its notice, tlm

l'iiv1 Council did not refer to it but referred.to its earlier decision in Han; toumanpersaud Pandey v. Mussumat Nabooee Munraj Koon-

WlirEt(') where it was stated that "the act of the mother and guardian in enterig into a contract of sale was an act done on behalf of the minGr appellant." A passage from Pollock and Mulla's Indian Contract l\{lci Specific Relief Acts wherein the observation of the Privy Connell in lvlolwri Biee v. Dhuramodas Ghose( 3 ), 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 ciise it has been held by the High Courts of India, in cases which arose subseqncn! 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

t~ benefit to'the minor. But if either of these two conditions i~ wanting, , the contract cannot be specifically enforced at all Though the earlier decision of the Privy Council in Mir Sarwarian v. Fakhruddin lffohomed Chowdhury (supra) was not referred to, the observation~ make it clear that it was not followed.

In Srikakulam Subrahmcmyan'

v. Kurra Subba Rao(') the Madras High Court expressed its view that it hod 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 I in Suryaprakasam v. Gangaraju( 5 ), where he held that there could not b~ any essential distinction betwen 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, 1g56, 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 minor's 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

(I) !LR 75 Mad. 115

(2) [1856] 6 Moo. I A. 393.

(3) L. R. 301 T. A. 114.

(4) TLR 1949 M2.d. 143. (') AIR 1956 Andh .. 11.

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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 th"at the contract entered into by the guardian is for the benefit .of the minor. It appears quite strange that the respondent should plead that the transaction is not for the benefit of the minoi: when the minor is convinced it is in his behefit and that it is worth pursuing the litigation uptq this Court. It is common knowledge tflat the prices of immovable property have been on the rise and there clin

be no doubt that the transaction is for the benefit of the minor.

Finding himsel( faced with these insurmountable difficulties, Dr.

Chitale, sought to plead that in any event S.8 of the Hindu Minority Act specifically prohibits the guardian from binding the minor by his personal covenant.

The submission was that the contract by the guardian which binds the minor to make a payment, would be in the nature of a personal covenant and as such is excluded by S. 8. In support of his plea, the learned counsel relied on S.55(5)(b) of the Transfer of Property Act and submitted that so far as the payment of the purchase price is concerned, there is personal covenant.

We are 1 unable to accept this contention for it cannot be said that the guardian by the contract was binding the minor by his pernonfil 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.guardioan 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. The appeal is, therefore, allowed with cost and the decree passed by the Trial Court is restored.

S.R.

Appeal allowed.

I f.