http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: MANIK CHAND AND ANR.

       Vs.

RESPONDENT: RAMACHANDRA SON OF CHAWRIRAJ

DATE OF JUDGMENT08/05/1980

BENCH: KAILASAM, P.S. BENCH: KAILASAM, P.S. FAZALALI, SYED MURTAZA

CITATION:  1981 AIR  519            1980 SCR  (3)1104  1980 SCC  (4)  22

ACT:      Specific performance-Enforceability  of a  contract for purchase of  property by  a guardian  for the benefit of the minor-Contract  Act,  Section  11-Section  8  of  the  Hindu Minority Act  read with  Section  55(5)(b)  of  Transfer  of Property Act.

HEADNOTE:      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 money and the balance  was to  be paid at the time of the registration of the sale deed. Since the respondent did not carry out his part of  the agreement,  the appellants  filed  a  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 appellants 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  holding that  as the  contract was entered into on behalf of the minors a decree for specific performance could not be granted for want of mutuality.      Allowing the appeal by special leave, the Court ^ HELD :  1. The  contract entered  into by  the  guardian  on behalf of the minors is enforceable. [1108 E]      2. 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. [1106 B]      Krishnaswami  v.   Sundarappayya,  ILR  18  Mad.,  415; referred to.      Mir Sarwarjan  v. Fakhruddin  Mohd. Chowdhary,  ILR  39 Cal. I  (PC); Srikakulam  Subrahmanayam v.  Kurra Subba Rao, ILR 75 Mad. 115; Hanuoomanprasaud Pandey v. Mussamat Nabooee Munraj Koonwaree  (1856) 6  Moor I.A.  393; Mohori  Bibee v. Dhuramodas Ghose, L.R. 301 I.A. 114, Srikakulam Subrahmanyam v. Kurra  Subba Rao,  ILR 1949  Mad. 143;  Suryaprakasam  v.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

Ganga Raju, A.I.R. 1956 Andh. 33; explained.      3. After  the passing  of the 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’s  estates. 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 Act  is in no way restricted than that was 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 1105 minor when  the minor  is convinced it is in his benefit and that it is worth pursuing the litigation upto Supreme Court. [1107 G-H, 1108 A-B]      4.  The  guardian  by  the  contract  for  purchase  of property does  not bind  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. [1108 D-E]

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1548 of 1970.      Appeal by  Special Leave 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 Respondent.      The Judgment of the Court was delivered by,      KAILASAM. J.  This  appeal  is  by  the  plaintiffs  by special leave granted by this Court against the judgment and decree dated  9-2-1968 passed  by the  Division Bench of the Madhya Pradesh  High Court  in first  appeal No.  21 of 1966 dismissing the suit for specific performance. 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.      Mr. Shiv  Dayal Srivastava,  learned counsel  appearing for the  appellants, submitted that the lower Court erred in holding that  the contract  for purchase  of property by the guardian on behalf of the minors is 1106

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

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 that  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  for necessity  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 contract  on behalf  of the minor if  it is  for necessity  or for  the benefit  of  the estate, but contended that 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  Mohomad Chowdhury, which  reversed  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 agreement is enforceable against the minors and that the acts of the guardian in this country bind the minor though there is no difference between his position  and powers  and those  of a manager. 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 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 and  that the  minor was not bound by the contract  for want  of mutuality, the Privy Council held that a decree for specific per- 1107 formance 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 Mulla’s Indian Contract and Specific Relief Acts wherein  the observation of the Privy Council in Mohori Bibee v.  Dhuramodas Ghose,  that "it is, however, different

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

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  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 1108 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 of 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 the minor.      Finding  himself   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  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. The  appeal is,  therefore,  allowed with cost  and the  decree passed  by  the  Trial  Court  is

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

restored. S.R.                                         Appeal allowed. 1109