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Jaykant Harkishandas Shah Vs. Durgashanker Valji Pandya - Court Judgment

LegalCrystal Citation
SubjectProperty;Contract
CourtGujarat High Court
Decided On
Case NumberSecond Appeal No. 1190 of 1965
Judge
Reported inAIR1970Guj106; (1970)GLR178
ActsIndian Contract Act, 1872 - Sections 11; Transfer of Property Act, 1882 - Sections 6, 7 and 108-B
AppellantJaykant Harkishandas Shah
RespondentDurgashanker Valji Pandya
Appellant Advocate H.M. Chinoy, Adv.
Respondent Advocate Suresh M. Shah, Adv.
Cases ReferredTattaya Mohyaji v. Rabha Dadaji
Excerpt:
- - he is merely a person who has assumed without authority to act as guardian, and it is a strong thing to hold that by such assumption he has acquired the right to deal with the minor's immoveable property......of the minor and if such lease deed is executed the same would be null and void and that the de facto guardian has no right to start a new business on behalf of the minor and the minor is not bound if any liability is incurred for any such business. he relied upon a privy council decision in mohori bibee v. dharmodas, (1903) 5 bom. l.r. 421, where their lordships held that a contract entered into with an infant is not voidable but void and the infant is not under any obligation to repay the money that he received under the contract. this decision was considered by the bombay high court in vijayakumar motilal v. newzealand insurance co. ltd. : air1954bom347 , where desai j., after considering the decision of the privy council in mohori bibee's case (1903) 5 bom l.r. 421, observed:-'the.....
Judgment:

1. It is the contention of Mr. Chinoy that a de facto guardian cannot impose liability by executing a lease deed on behalf of the minor and if such lease deed is executed the same would be null and void and that the de facto guardian has no right to start a new business on behalf of the minor and the minor is not bound if any liability is incurred for any such business. He relied upon a Privy Council decision in Mohori Bibee v. Dharmodas, (1903) 5 Bom. L.R. 421, where their Lordships held that a contract entered into with an infant is not voidable but void and the infant is not under any obligation to repay the money that he received under the contract. This decision was considered by the Bombay High Court in Vijayakumar Motilal v. Newzealand Insurance Co. Ltd. : AIR1954Bom347 , where Desai J., after considering the decision of the Privy Council in Mohori Bibee's case (1903) 5 Bom L.R. 421, observed:-

'The proposition laid down by their Lordships of the Privy Council being in general terms would have led to startling that case instead of guarding the interest of minors over whom the law throws its aegis of protection, it would have done incalculable harm to their rights and caused much hardship. Pushed to a logical conclusion the Privy Council decison would have made it impossible for a minor to get benefit under or enforce any contract entered into by him when the consideration had been wholly received by the other contracting party. But no such difficult position has arisen, since the Courts in India have, as a rule, in effect, confined the application of the Privy Council ruling only to cases where a minor is charged with obligations and the other contraacting party seeks to enforce those obligations against the minor.' Under the circumstances, where the minor is being charged with obligations by the other contracting party, the dictum laid down by the Privy Council in Mohori Bibee's case, (1903) 5 Bom L.R. 421, that a contract entered into with an infant is not voidable but void will apply. Regarding the position of a de facto guardian, in a Full Bench decision of the Bombay High Court in Tulsidas Jesingbhai v. Raisingji Fulabhai : AIR1933Bom15 , Chief Justice Beaumont at p. 1493 observed as under:- 'Dealing with the matter as one of principle I apprehend that if a person claims the right to sell the property of another, he must establish his title so to do. In many cases the right to deal with the property of another may arise from the legal relationship between the parties. But it is extremely strange to suggest that such a power can be acquired by a relationship which has no legal sanction. A so-called gurdian de facto is not a guardian at all. He is merely a person who has assumed without authority to act as guardian, and it is a strong thing to hold that by such assumption he has acquired the right to deal with the minor's immoveable property.'

In that case the Full Bench held that under the Hindu Law a de facto guardian of a minor can validly sell the property of the minor to a third person for legal necessity. After referring to the above case, in Malkarjun Annarao v. Sarubai Shivyogi. 45 Bom L.R. 259, at p. 265 : (AIR 1943 Bom 187, at p. 190), Divatia J., observed:-

'In the case of a person who is not a manager but a de facto guardian it has been held by a Full Bench of our High Court in 34 Bom L.R. 1483 : (AIR 1933 Bom 15 (FB)), that such guardian can validly sell the minor's property only for his benefit or legal necessity. It would therefore be void if no legal necessity was proved. It is thus quite clear that if such alienation is made either by a manager of a Hindu family or a de facto guardian of the minor's interest in the property, it is not voidable but is void in its inception. If the alienation is made by a natural guardian or a guardian appointed by the Court then only it is required to be avoided within years after attaining majority.'

Again the question regarding the alienation by a de facto guardian had come up for consideration before a Division Bench of the Bombay High Court in Tattaya Mohyaji v. Rabha Dadaji : AIR1953Bom273 . After referring to the observations made by Mr. Justice Divatia in Malkarjun's case, 45 Bom L.R. 259 : (AIR 1943 Bom 187), their Lordships observed at p. 46 (of Bom L.R.) : (at p. 276 of AIR) as under:-

'Apart from authorities it seems to us that an alienation by a de facto guardian of the minor's property without justifying necessity must be held to be voi ab initio, as has been held by Mr. Justice Divatia in 45 Bom, L.R. 259 : (AIR 1943 Bo. 187).'

2. Under the circumstances, it is clear that a de facto guardian cannot alienate the property of a minor without legal necessity. In the present case, it is clear from the evidence that the business started in the suit premises in the name and style of Jaykant Dinner Club was a new business. In the case of Benaras Bank Ltd., v. Hari Narain the Privy Council held that a manager of a Joint Hindu family has no power to impose upon a minor member of the family the risk and liability of a new business started by him and that it makes no difference that the manager is the father of the minor. Under the circumstances it is clear that a de facto guardian of a minor cannot start a new business on behalf of the minor, which would impose liability on the minor. Hence he cannot enter into a new business on behalf of the minor, by which the liability to pay the rent would be incurred on behalf of the minor. It is no doubt true that the above decisions refer to alterations of immoveable properties on behal of minors by a de facto guardians, but the same principle would equally apply where the de facto guardian enters into a contract on behalf of a minor by which a liability for the minor is created and the act of the de facto guardian is without any legal necessity.

3. Mr. Shah supported the reasoning of the learned District Judge. The District Judge dismissed the first appeal filed by the minor confirming the trial Court view that the minor was bound by the transactions, on the ground that there wa snothing in law preventing the minor from being a transferee under the Transfer of Property Act. He relied upon Sections 6 and 7 of the Transfer of Propety Act, 1882. According to Section 6(h) of T.P. Act, no transfer can be made to a person legally disqualified to be transferee, Section 7 of the said Act provides that every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part. There is nothing in the Transfer of Property Act according to which it can be said that a minor is disqualified to be a transferee. There is no question of application of Section 7 because in the case under appeal the minor is not the transferor. Section 11 of the Indian Contract Act, 1872, would not come in the way of transfer of property in favour of the minor. But when a lease is created, it is not the transfer of immoveable property or interest therein simpliciter in favour of a minor. The ame is coupled with an obligation on the part of the minor to pay stipulated rent, and when obligation is created against a minor by such transfer, one has to consider whether the minor is bound by such transfer. Ordinarily, in a gift or other transfer of property in favour of a minor there is no receiprocal obligation cast on the minor, but in a lease reciprocal obligation is cast on the lessee (minor) to perform several obligations as mentioned in Section 108-B of the Transfer of Property Act. In this case, the lease deed dated 4th April 1953, is produced at Ex. 26. The same provides for a yearly rent and the time limit fixed is one year. The document is signed both by the lessor and the lessee and defendant No. 2 has signed therein as a guadian on behalf of defendant No. 1. By a lease deed, transfer of interest in the immoveable property is created in favour of the lessee. But that transfer of interest is not similar to that where property is transferred to a minor by gift or otherwise. Here, by transfer of interest an obligation is cast upon the lessee to observe and perform several covenants entered into by the parties. Under the circumstances, for the creation of the lease an agreement between two parties is necessary and for entering into that agreement there is a bar of Section 11 of the Indian Contract Act, according to which all agreements are contracts if they are made by free consent of the parties competent to contract for a lawful consideration and with lawful object and not expressed or declared to be void. In the present appeal, we are not concerned present appal, we are not concerned with an act directly of a minor but of a de facto guardian on behalf of a minor. Under the circumstances, in cases of lease even it is clear that the de facto guardian has no authority to create obligations to bind the estate of a minor by acts which are not for necessity.

4. Appeal allowed.


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