1. The facts found in this case are that certain immoveable property was purchased for the benefit of the plaintiff in the suit by one Ramasami Konan his maternal uncle and that it was subsequently sold by the 3rd defendant, the plaintiff's father as if it belonged to the family of which he and the plaintiff were members. Defendants Nos. 1 and 2 claim under the sale by the 3rd Defendant. The contention on the merits in the lower Courts was that the purchase in the name of the minor was really benami for the 3rd defendant or the family, and that therefore the plaintiff had no exclusive right to the property, and the sale by the 3rd Defendant was valid.
2. On the finding of the District Court that the purchase was made by the maternal uncle and for the benefit of the minor the sale by the 3rd defendant cannot be upheld and defendants Nos. 1 and 2 have no title. It is contended that on the finding that the sale was for the benefit of the minor, it must be held to be a void transaction as a minor is incompetent to purchase property. The answer to this is substantially what is given by the District Judge viz., that the minor was not a contracting party in the transaction of purchase by Ramasami Konan although the minor became the beneficial owner under the deed of purchase. This case is on all fours with S.A. No. 881 of 09 decided by Munro and Sankaran Nair JJ. In that case a person executed a deed of sale of certain property in the name of his wife, and when she sued for the recovery of the property, it was contended that the sale was void. The learned judges answered this contention thus : 'The decree is right, the contract being found to have been between the plaintiff's father (i.e., father of the wife) and the appellant (i.e., her husband) 'We might be contention thus: ourselves on the authority of this case, but out of deference to the arguments that have been urged on behalf of the appellant we shall state our reasons a little more fully.
3. According to the Indian Contract Act a minor is incompetent to make a contract. The Judicial Committee of the Privy Council decided in Mohori Bibee v. Dharmodas Ghose I.L.R. (1903) C. 539 that a contract by a minor must, according to the Contract Act, be regarded as void and not merely voidable. The case before their Lordships was one of a mortgage made by a minor. Of course a mortgage by a minor is a contract by him to pay a. sum of money which he borrows on the security, of certain property. Many transactions resulting in the creation of rights over property arise out of contracts, and where a minor enters into any such transaction where a contract by him is an essential condition preliminary to the transaction or contractual obligations on his part flow from the transaction, it must be regarded as void.
4. In Kampti Prasad v. Sheogopal Lal I.L.R. (1904) A. 342 the decision of the Privy Council was followed and a mortgage by a minor was held to be void. On the other hand in Ulfet Rai v. Gouri Shanker I.L.R. (1911) A. 657 it was held that, where money is already due to a minor beneficiary by his trustee on accounts between them, a conveyance by the trustee in favour of the minor for the amount so due was valid. That case perhaps is not quite reconcilable with the decision of this Court in Navakoti Narayana Chetti v. Chokalinga Chetty I.L.R. (1909) M. 312. There in answer to a suit for possession of certain property, the defendant, a minor, set up a claim to the right obtained under a sale deed. Benson and Krishnasami Aiyar JJ. held that the sale was void. It is there pointed out that the creation of a right in the property by a sale must necessarily be preceded by an agreement between the minor and the vendor and the minor being incapable of entering into the agreement the resulting transaction, the sale must also be held void. Krishnasami Aiyar J. points out that even where money is already due to the minor and is used as consideration for the sale, it is necessary in order that the sale may be upheld, the minor should enter into an agreement, that the debt already due to him should be appropriated as consideration for the sale and he being incompetent to enter into such an agreement, the sale, must be void. But in all these cases where a transaction by a minor has been held to be void, the essential fact which rendered it void was that some agreement by the minor was necessarily an essential part of the transaction. Now, it cannot be denied that a person may purchase property and hold it as trustee for a minor. There is no reason why he should not create a trust by purchasing it in the name of the minor. No contractual obligations are undertaken by the minor in such a case. Any personal obligations arising as between the vendor and the vendee would have to be discharged by the party contracting with the vendor i.e., Ramasami Konan in this case. If there are obligations enforceable against the property purchased, no doubt the property in the hands of the minor would be liable for the satisfaction of such obligations. We can see no reason for holding that when a contract by the minor is not a necessary condition for upholding the rights of the minor in the property his right should not be maintained. In Meghan Dube v. Bran Singh I.L.R. (1908) A. 53, where a mortgage was taken in the name of a minor but for the benefit of the joint family of which he was a member, Barner JJ and Richards JJ. observed that 'the contract in this case was made by persons of full age, (i.e. adult members of the joint family) but the person in whose favor the mortgage deed was executed was a minor. The question of the validity of the mortgage does not in our opinion arise.'
5. For the reasons mentioned above we are of opinion that the decision of the Lower Appellate Court is right.
6. The finding of the Lower Appellate Court on the merits was also attacked by the learned Vakil for the Appellant but we are unable to see any legal objection to it. The second appeal is dismissed with costs.