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Land reforms in India



Prof. G. Ramachandrudu &

Mr. Abhishek Sinha



Objectives/Aims of the Study

The major objectives or aims of this research work are as follows:

To study about the capacity of a minor for entering into valid contracts
To study and understand the concept of partnership
To learn about the capacity of minor in partnerships

Significance & Benefit of the study

This study would be a decent research work on the topic of minor contracts and
minor in partnerships. The researcher would study and analyze judgments of various
landmark cases and understand various interpretations of the topic.

Scope of the Study

The scope of this research work would be limited to the Common Law
countries and would not touch upon other countries. The researcher would further limit the
scope by considering provisions only of Indian Contracts Act 1872.

Research Methodology
The researcher would like to do a doctrinal study about the topic by referring to
various books and articles available on the topic. The researcher would do a detail analysis on
the provisions and interpretations on the topic.

Section 10 requires that the parties to a contract must be competent and section 11 say that a
minor is not competent. But neither section makes it clear whether if a minor enters into an
agreement, the contract would be voidable at minor's instance or void as such, Thus causing a
lot of confusion. This controversy was resolved after the Mohri Bibi v. Dharmodas Ghose
Lord North observed "The question whether a contract is void or voidable presupposes the
existence of a contract within the meaning of the act, which cannot arise in case of a minor."
After this judgment the principle that minor's contract is absolutely void was laid down. This
law is not merely to protect the child from fraudulent manipulations by others but also to
provide him protection against his own ignorance and immaturity for a child may shoe poor
judgment in making a particular contract. The generally accepted doctrine that man is the best
judge of his own interests is not applicable in case of a minor.
The ruling of the Privy Council in the Mohri Bibi case has been generally followed by the
Indian courts and applied both to the advantage and disadvantage of the minors. Mir
Sarwarjan v. Fakhruddin Mohd. Chowdhury1 case is an example where the court ruled against
the minor.
Facts A contract to purchase certain immovable property had been made by guardian on
behalf of a minor, and the minor sued the other party for recovering the possession. His
action was rejected. The court held- The manager of the minor's estate or the guardian of the
minor were not competent to bind the minor's estate by a contract to purchase immovable
property and therefore there was no contract and so the minor could not abstain specific
performance of the contract.
But now as minors are coming to the forefront of society with the changing times the Privy
Council has had to modify its previous decision through the Subrahmanyam v. Kurra Sabha
Rao2 that the transfer of inherited property of a minor by his guardian pay off an inherited
debt was binding on him being for his benefit.


1 (1912) 14 BOMLR 5
2 (1948) 50 BOMLR 646

According to Section 3 of the Indian Majority Act, 1875, a person domiciled in India who is
under the age of eighteen years, is a minor.

An agreement with or by minor is void

Section 10 of the Indian Contract Act requires that the parties to a contract must be
competent and Section 11 says that a minor is not a competent. But either section makes it
clear whether the contract entered into by a minor is void or voidable. Till 1903, court in
india wee not unanimous on this point the privy council made it perfectly clear that a minor is
not competent to a contract and that a contract by minor is void ab initio.
The leading case is:
Mohri Bibi V. Dharmo Das Ghose (1903)3
"A minor borrowed Rs. 20000 from B and as a security for the same executed a mortgage
in his favor. He became

a major a few months later and filled a suit for the declaration that

the mortgage executed by him during his majority was void and should be cancelled. It was
held that a mortgage by a minor was void and B was not entitled to replacement of money.

No ratification
An agreement with the minor is completely void. A minor cannot ratify the agreement
even on attaining majority, because a void agreement cannot be ratified. A person who is not
competent authorize an act cannot give it validity by ratifying.
But If on becoming major, minor makes a new a new promise for fresh consideration, then
this new promise will be binding.

Minor can be a promise or beneficiary

If a contract is beneficiary to a minor it can be enforced by him. There is no restriction
on a minor from bring a beneficiary, for example, being a payee or a promisee in a contract.
Thus a minor is capable of purchasing immovable property and he may sue to recover the
possession of the property upon tender of the purchase money. Similarly a minor in whose
favor a promissory note has been executed can enforce it.

No estoppel against a minor

3 (1912) 14 BOMLR 5

Where a minor by misrepresenting his age has induced the other party enter into a
contract with him, he cannot be made liable on the contract. There can be no estoppel against
a minor. It means he is not estoppel from pleading his infancy in order to avoid a contract.

No Specific performance Except in certain cases

A minor's contract being absolutely void, there can be no question of the specific
performance of such contract. A guardian of a minor cannot bind the minor by an agreement
for the purchase of immovable property; so the minor cannot ask for the specific performance
of the contract which the guardian had no power to enter into.
But a contract entered into by guardian or manager on minor's behalf can be specifically
enforced if
(a) The contract is within the authority of the guardian or manager.
(b) It is for the benefit of the minor.4

Liability for torts

A trot is a civil wrong. A minor is liable in tort unless the tort in reality is a breach of
contract. Thus, where a minor borrowed a horse for riding only he was held liable when the
he lent the horse to one of his friends who jumped and killed the horse.
But a minor cannot be made liable for a breach of contract by framing the action on tort.
you cannot convert a contract into a tort to enable you to sue an infant.

No insolvency
A minor cannot be declared insolvent as he is incapable of contracting debts and dues
are payable from the personal properties of minor and he is not personally liable.

A minor being incompetent to contract cannot be a partner in a partnership firm, but
under Section 30 of the Indian Contract Act , he can be admitted to the benefits of

Minor can be an agent

4 Lalchand V. Narhar 89 Ic 896

A minor can act as an agent. But he will not to be liable to his principal for his acts. A
minor can draw, deliver and endorse negotiable instruments without himself being liable.

Minor cannot bind parent or guardian

In the absence of authority, express or implied, an infant is not capable of binding his
parent or guardian, even for necessaries. The parents will be held liable only when the child is
acting as an agent for parents.

Joint contract by minor and adult

In such a case, the adult will be liable on the contract and not the minor. In Sain Das
Vs Ram Chand, where there was a joint purchase by two purchaser, one of them was a minor.
It was held that the vendor could enforce the contract against the major purchaser and not the

Surety for a minor

In a contract of guarantee when an adult stands for a minor then he (adult) is liable to
third party as there is direct contract between the surety and the third party.

Minor as Shareholder
A minor, being incompetent to contract cannot be a shareholder of the company. If by
mistake he become a member, the company can rescind the transaction and remove his name
from register. But, a minor may, acting through his lawful guardian become a shareholder by
transfer or transmission of fully paid shares to him.

Effects of a Minors Contract

A minor's agreement being void should be wholly devoid of all effects. If there is no contract
then there should be no contractual obligation on either side therefore all effects of a minor's
contract are worked out independently of any contract.
In England in the case of Johnson v. Pyeit was laid own that "a minor who obtains a loan of
money by misrepresenting his age cannot be made to repay the amount of the loan of money
in form of damages for deceit." Hence a minor cannot be held liable for anything which

would be an indirect way enforcing his contract i.e. you cannot convert a contract into tort to
enable you to sue an infant.
Indian courts too follow this principle. The Calcutta High Court refused to hold a minor liable
in tort for money lent in bond in Had Mohan v. Dulu Miya. Where a tort is independent of
contract, the mere fact that a contract is also involved will not absolve the minor from
In Fawcett v. Smethurst a car was hired for the purpose of going to Cairn Ryan and back, but
was in fact driven further. It was held that nothing was upon that further journey which made
the defendant an independent tortfeasor and that if any damage was done to the car on the
journey the defendant would only be liable if he was liable under the contract.
In Jennings v. Rundall, the defendant infant had hired a horse to ridden for a short journey but
took it for a much longer journey as result consequence of which the horse was injured. The
court held the minor not liable based on the grounds that the action was founded in the
contract and that the plaintiff could not turn what was in substance a claim in contract to one
in tort.

Exception to General Rule : Valid Contracts by a Minor

Under section 69 of Contract Act 1950, it is said that if a person, incapable of entering into a
contract, or anyone whom he is legally bound to support, is supplied by another person with
necessaries suited to his condition in life, the person who has furnished such supplies is
entitled to be reimbursed from the property of such incapable person. Under necessaries a
minor can enter valid contract if only it is the basic need of the minor and suitable of his
station in life or lifestyle.
Contract of Scholarship between a minor and the government or non governmental
organizations is also valid under section 4 (a) Contracts (Amendment) Act 1976 - the scholar
entering into such agreement is not of the age of majority.
Similarly, a minor may enter into a contract of marriage or divorcement as provided by
section 4 (a) Age Majority Act 1971: Nothing in this Act shall affect the capacity of any
person to act in the following matters, namely, marriage, divorce, dower and adoption.
A minor may also enter into a contract of insurance, pursuant to the Insurance Act 1966.

Bowling v. Sperry5
Facts: Sixteen year old Larry Bowling (P) purchased a used car from Sperry (D) for $140.
Bowling attempted to return the car to Sperry after discovering that the main bearing was
defective and was informed that repairs would cost $45-$95. P left the car with D and mailed
a letter disaffirming the contract. P sued D for the return of his money and the trial court
entered judgment for D on the grounds that the contract was not voidable, because Ps aunt
and grandmother accompanied P when he purchased the car and gave him the money to
purchase it. P appealed.
Issue: Is a purchase contract by a minor voidable despite the participation of an adult in the
Holding and Rule: Yes. A purchase contract by a minor is voidable despite the participation
of an adult in the transaction.
The court held that the participation of Ps aunt and grandmother in the transaction did not
change the rule that contracts by a minor regarding personal property are voidable.
The evidence showed that the sale was made between P and D and not one of the adults. D
was fully aware of Ps age when the sale was negotiated and P had every right to disaffirm the
sale. D had the burden to show that the car was a necessity and D did not meet that burden.

Pettit v. Liston6
Pettit (P), a minor, contracted with Liston (D) for the purchase of a motorcycle. Pettit made
an initial payment of $125 and thereafter was to pay $25 per month. After one month Pettit
damaged the motorcycle and attempted to return it, demanding that Liston return the $125
dollars he had paid. Liston refused to refund the money because Pettit had caused $157 in
damage to the motorcycle. The trial court dismissed the case and Pettit appealed.

5 133 Ind. App. 692, 184 N.E.2d 901 (1962)

6 97 Or. 464 (1920)

If a minor seeks to rescind a sales contract after using and damaging the purchased product, is
the minor responsible for depreciation in value or damages?
Holding and Rule
If a minor seeks to rescind a sales contract after using and damaging the purchased product,
the minor must compensate the seller for depreciation and damages to the item if he or she
was treated fairly.
If the minor was treated fairly and as an adult consumer, as here, the law does not exempt
him from the obligation to compensate for damages and depreciation. There was no
allegation or evidence that Pettit was taken advantage of or overcharged.

To render minor's estate liable for necessaries two conditions must be

(a) The contract must be for the goods reasonably necessary for his support in his station in
(b) The minor must not have already a sufficient supply of these necessaries.

Liability for necessaries

The case of necessaries supplied to a minor or to any other person whom such minor
is legally bound to support is governed by section 68 of the Indian Contract Act. A claim for
necessaries supplied to a minor is enforceable by law. But a minor not liable for any price that
he may promise and never for more than the value of the necessaries. There is no personal
liability of the minor, but only his property is liable.

Doctrine of Restitution
If an infant obtains a property by misrepresenting his age, he can be compelled to restore it,
but only so long as the property remains in his possession. This is known as the equitable
doctrine of restitution.


A bare reading of Section 30 makes it clear that the aforementioned section deals with the
rights (including but not limited to, various protections) and liabilities of a minor who is
entitled to the benefits of a partnership. That being said, sub-section (1) makes it very clear
that the minor cannot in any case be a full-fledged partner in a partnership, but can only be
admitted to the benefits of a partnership by consent of all the partners. Further, the section
talks about the position of minor vis--vis the partnership post attainment of majority.
Furthermore, the said section also deals with the extent to which a minor can be made liable
with regard to acts of the firm.
A minor is someone who is yet to attain majority under the law of the land he is subject to.
The law of the land to which an Indian minor would be subject to is the Indian Majority Act,
1875. Section 3 of the aforementioned act makes it clear that eighteen is the age at which a
person domiciled in India is deemed to have attained majority.

Minor can be admitted only to the benefits of a partnership

The Special Committee consisting of Shri Brojender Lal Mitter, Sir Din Shaw Mulla, Sir
Alladi Krishnaswami Iyer and Sir Arthur Eggar which drafted the bill which lead to the
enactment of the present Act observed that they did not have any particularly satisfactory
reason to depart from the general principle of Contract Law stated in both Section 11 and the
judgment of the Privy Council in Mahori Bibis case. Moreover, they observed that it had
been the general law in India ever since 1866 that minors could be entitled to the benefits of a
partnership. Thus, in view of these observations the Committee decided not to allow minors
to be a part of the partnership since the partnership is the result of a contract which a minor is
incapable of being a party to. They, however, allowed a minor to enjoy the benefits of a
As has been observed in the Sanyasi Charan Mandal v. Krishnadhan case since a firm
under Section 4 (or the now repealed Section 239, Indian Contract Act, 1872) means a group
of persons who have entered into a contract of partnership. Since, under Section 11 a minor is
incapable of entering such a contract, he cannot be a part of this group of persons under
Section 4. Since a minor cannot form a firm, the minor can only be admitted to the benefits of
a partnership that already exists independently. Consequently, there can be no partnership

between only minors. To put it more simply, there must be an existing partnership between
two major partners before a minor can be admitted to its benefits.
The High Court of Allahabad held in the Hardutt Ray Gajadhar Ram v. Commissioner of
Income Tax7 that a deed which divided the rights and obligations equally amongst the three
major and the lone minor partner was invalid as it was in contravention of Section 30 as it
bestowed upon the minor not only the benefits of the partnership, but also the liabilities of
personal nature (including but not limited to his interest/share in the partnership). Earlier
there was some confusion in this regard as the Madras High Court in Jakka Devayya v.
Commissioner of Income Tax8 and Vincent and Ors. v. Commissioner of Income Tax9, the
Patna High Court in Sahai Bros. v. Commissioner of Income Tax10 and the Bombay High
Court in Dwarakadas Khetan & Co. v. Commissioner of Income Tax11 was of the view even if
the partnership deed did make minor a full-fledged partner like all other partners insofar as
making him personally liable, the deed should be read liberally and his liabilities to be
confined in accordance with Section 30. In the landmark Commissioner of Income-tax v.
Dwarkadas Khetan and Co case12, however, the Supreme Court of India overturned the
Bombay High Court judgment and held that a partnership wherein a minor is made a partner
to the extent that he was to be held personally liable for loses along with having the right to
vote and take part in the business could not be registered by the Income Tax Department.
Moreover, in case the Income Tax Authorities register the partnership as one being only
between the adult partners, where in fact there are certain minor partners as well, a new
contract is made which is substantially different from the one being executed and hence the
original contract cannot say to have been validly registered by registration of this new
contract. Therefore, it is clear that the position of the law is that a partnership deed should
7 [1950] 18 ITR 106 (All)
8[1952] 22 ITR 264 (Mad).
9 [1952] 22 ITR 285 (Mad)
10 [1958] 33 ITR 40 (Patna)
11 [1956] 29 ITR 903 (Bom)
12 AIR 1961 SC 680

clearly (or on a being read as a whole13) make it clear that the minor partners are not
personally liable for the losses suffered by the firm.
Further, in Banka Mal Lajja Ram & Co. v. Commissioner of Income Tax, Delhi14, it was held
that a minor (Satish Kumar) cannot legitimately become a full-fledged partner through his
guardian (his mother Shrimati Shakuntala Devi) even if the other partners are consenting. In
contrast, in the C.I.T., Mysore v. Shah Mohandas Sadhuram15, it was held that a contract of
partnership which only bestows its benefits upon the minor cannot be held invalid on merely
the ground that guardian purported to contract on the minors behalf until it is in
contravention of the provisions of Section 30. The deed in Hardutt Rays case was also
invalid on the ground that the natural guardian had lost the right of being the (natural)
guardian and consequently the right to enter into a contract on behalf of the minor due to
adoption of the minor (Krishna Murari). The question as to whether the guardian is himself a
partner or not is more or less insignificant. In C.I.T. v. Kedarmall Keshardeo16, it was held
that where the widowed mother (wife of deceased partner) entered into a partnership on her
own behalf and as the natural guardian of minor son, the minor son did not automatically
become a partner. Therefore, the clear position of law in this regard is that deed remains valid
even in cases where the guardian contracts on behalf of the minor insofar as the minor is not
made personally liable and the guardian still possessed the right of being the guardian when
he contracted on the minors behalf.
Also, a minors income under a partnership cannot be brought under the head of earning


income18 and hence cannot be considered for purposes of income tax.19

13 Narayan vs Commissioner of Income-Tax, 1976 102 ITR 748 Cal.

14 AIR 1953 Punj 270 (DB)
15 AIR 1966 SC 15.
16 AIR 1968 Assam 68 as cited in Singh 462
17 Adddepally v. Commissioner of Income-Tax, (1971) 79 ITR 396 as cited in ST
Desai (Desai), The Law of Partnership in India Vol II, 224 (S Desai ed., 2009)
18 AIR 1968 Assam 68 as cited in Singh 462

Rights and Liabilities of the minor

Under sub-section (2), a minor entitled to the benefits of a partnership is bestowed with the
right to share the profits as well as the property, as may have been decided at the time of
minors admission to the benefits of the partnership in question. Further, the minor has the
right to inspect any of the accounts of the firm. This access is however limited to only the
accounts and the minor does not have the right to access other books such as those which
may contain trade secrets. This limitation to the right of the minor, however seems
commonsensical and equitable as the minor is not liable to the extent to which the fullfledged partners are liable, i.e., personally. The minor also has the right to sue for benefits of
the partnership to which he is admitted.20
Under sub-section (3), the liability of a minor who is entitled to benefits arising out of a
partnership is limited with respect to that of a full-fledged partner. According to the holding
in the Sanyasi Charan Mandal v. Asutosh Ghose case21, the creditors of the firm can only
proceed to the extent of minors interest in the firm but not personally against the minor.
However, this protection is not enjoyed by the full-fledged partners of the firm who can be
personally liable with respect to the creditors. The position of a minor Hindu in a joint family
trade is similar a minor admitted to the benefits of a partnership insofar as the former can also
not be held personally liable for the debts of the family trade and only his share in the trade
can be made liable22. Thus, it can be concluded that the position of a minor Hindu in a joint
family trade is analogous to that of a minor who is entitled to the benefits of a partnership.
However, in cases where members of family carry on a business, there must be some positive
conduct on part of major members to show that they intended to admit certain minors to the
partnership23. If the major member by ignorance or error of law mistakenly assume that the
19 P.S. Narayana (Narayana), The Law of Partnership, 194 (2001)
20 A Singh, Introduction to Law of Partnership 93 (2011)
21 AIR 1915 Cal 482
22 Sanka Krishna v. The Bank of Burma,ILR (1912) 35 Mad 692 as cited in Singh
23 Venkatrama Iyer v. Balayya 97 ITR 730 referred in AIR 1985 Ker 265 at 273 as
cited in S Adhikari, Commentery on The Indian Partnership Act, 1932 469 (2008)

minors were automatically entitled to the benefits of such a partnership, the minor would not
be entitled to the benefits under Section 30 (erstwhile Section 247). Also, as has been held in
Shivgouda Rajiv Patil v. Chandrakant Neelkanth Sedalge24 and Sanyasi Charan Mandal v.
Ashutosh Ghose the minor who is entitled to the benefits of a partnership cannot be adjudged
insolvent even in cases where the other partners are adjudged insolvent.
Under sub-section (4), minors aforementioned right to sue for benefits of a partnership to
which he is entitled is limited. The minor is entitled to sue for his share only while severing
all connections from the firm. The sub-section further lays down that the resolution is to be
made in accordance with Section 48 as far as possible. The proviso to this sub-section
safeguards the full-fledged partners by allowing them to convert a suit by the minor for his
share in the partnership into one of dissolution of the firm. The same may be done by all
partners acting together or one partner who is entitled to dissolve the firm doing so after
giving notice to the other partners. Regardless of the mode, the share of the minor in such a
suit is to be decided upon along with those of the other partners. In cases where the dispute is
referred to arbitration, the minor is as much a party to the dispute as the partners. In cases
where the arbitration agreement has not been signed by the guardian of the minor on his
behalf, the agreement and (consequently) the arbitration award are not binding on the minor.

Position of a minor on attaining majority

Under sub-section (5), the minor has an option to either become a full-fledged partner of the
firm or severe his connections with the same. He may, within six months of attaining eighteen
years of age, choose to become or not, become a partner and signify the same by way of a
public notice as described under Section 72. Failing to do the same, results in his ispo facto
becoming a partner in the firm. The minor need not issue a public notice in case he wants to
continue being a partner because he would anyway, by default, become a partner on the
expiry of six months. The minor does continue to enjoy the rights, which he had enjoyed as a
minor, after he turns into a major till he decides to either continue or repudiate the partnership
or the expiry of the period six months, whichever is earlier25. If the minor did not have the
knowledge that he was entitled to benefits of the partnership, he may signify his will to
24 AIR 1965 SC 212.
25 HK Saharay (Saharay), Indian Partnership and Sales of Goods Acts 97 (2000)

repudiate the said contract within six months of his attaining knowledge of the fact that of he
was entitled to benefits of the partnership in question.
Under sub-section (6), the burden of proving that the minor did not have knowledge that he
was in fact entitled to the benefits of partnership rests with the party asserting the same. If the
person asserting so is the minor himself, then he would have the onus to prove the same in
accordance with Section 106 and if it is someone else then Section 101 and Section 103 will
throw the onus on him.
Under sub-section (7), clause (a), the minor, who has either chosen to continue as a fullfledged partner post attainment of majority or fails to signify his will to repudiate under subsection (5), becomes a full-fledged partner and such a minor can be held liable for not only
the debts incurred by the partnership after his becoming a partner, but also the ones which
had been incurred ever since he was entitled to benefits of the partnership. Thus, the minor in
a way becomes retrospectively liable. This is a major departure from English Law, wherein
the creditors are in a less favourable position26. In English Law, the minor would be liable
only for debts incurred by the firm since he attained majority.27
A minors share in the profits, on his joining the firm as a full-fledged partner post attainment
of majority, remains the same as was set out in the deed28. This is in line with the view taken
in Bhogilal v. Commissioner of Income-tax29 (sub-section (7), clause (b)) that there is no
break in the continuity of a partnership in the case where the minor elects to become a partner
and hence a new partnership does not come into existence.
In Shivgouda Rajiv Patil v. Chandrakant Neelkanth Sedalge the question arose as to whether
the minor partner (Chandrakant) who had attained majority subsequent to commitment of acts
of insolvency by the other partners could be held to be personally liable for the debts of the
firm. The Supreme Court held that it was legally impossible for the Court to hold the
26 Harmohan v. Sudarshan (1920) 25 CWN 847 as cited in Desai 232
27 Godde v. Harrison (1821) 5 B & Ald. 147, p. 157 as cited in Desai 232
28 Imadadali Tayabali v. C.I.T., Poona 1972 Mah LJ 285
29 AIR 1956 Bom 411 as cited in Desai 231

Chandrakant liable for the debts of a partnership that had already been dissolved before he
attained majority. This establishes that a minor who was entitled to benefits of a partnership
cannot be held personally liable for the debts of the firm when it had already been dissolved
before he attained majority, i.e., attained the capacity to be a party to losses of the firm along
with profits.
Under sub-section (8), the minor who elects not to be a partner his share in the firm will be
liable to the extent of losses and debts incurred until he gave public notice about his intention
to sever his connections with the firm. He might thereafter bring a suit to enforce this quasicontract like contract to receive his share. Sub-section (9) states that the two sub-sections
which immediately precede sub-section (9) do not in any way affect the rights of the party to
whom the minor after attaining majority might have misrepresented himself as a partner. He
will be liable for holding out.

A minor, except in some exceptional situations, will not be liable under the Indian Contracts
Act. Contracts by a minor are void or voidable. Similarly a minor cant be a partner of a
partnership, he can only be admitted, by the partners of any partnership, that to only for the
benefits of the minor. A minor partner is not a full fledged partner, he dont have any great
rights except from the right to share of profits. A minor will be given a 6 months ratification
period just after he attains majority, who upon ratification would become a complete partner
of that partnership. This is called doctrine of Ratification.

Indian Contract Act by Avtar Singh
Indian Partnership and Sales of Goods Acts 97 (2000) by HK Saharay
S Adhikari, Commentery on The Indian Partnership Act, 1932 469 (2008)
P.S. Narayana (Narayana), The Law of Partnership, 194 (2001)