RETURN OF BENEFIT SECURED BY A FRAUDULENT MINOR
THE DOCTRINE OF RESTITUTION
ENGLISH LAW:
According to English law
if a minor has obtained undue benefit in any transaction, he is required to restore back the benefit so received by him, under the equitable doctrine of restitution,
Under the doctrine he is asked to restore back the exact things taken by him.
It is applicable only to goods or property received by a minor so long as they can be traced, and are still in his possession. Since it is difficult to identify money and to prove whether it is the same money or different one, the doctrine does not apply to money. Even as regards goods or property, if the same have been consumed or transferred and are no more traceable, the doctrine of restitution does not apply there.
LESLIE V. SHEILL[(1914) 3 K.B. 607.]
The case of explains the doctrine.
Where the question of repayment is there, the doctrine of restitution does not help, or as stated by Lord Sumner, "Restitution stops where repayment begins."
The rule of English law laid down in Leslie v. Sheill is not applicable in India.
POSITION IN INDIA
Two kinds of problems has arisen before the Courts
Whether a minor can be asked to pay compensation under sections 64 and 65, Indian Contract Act for the benefit obtained by him under a void agreement?
In Mohori Bibee v. Dharmodas Ghose the Privy Council had held that the question of compensation under sections 64 and 65, Indian Contract Act, arises where the parties are competent to contract, and these provisions do not apply to the case of a minor's agreement.
It has been held that section 70 cannot be invoked against a minor.Bankay Behari Prasad v. Mahendra Prasad, A.I.R. 1940 Pat. 324 State of West Bengal v. B.K. Mondal & Sons, A.I.R. 1962 S.C. 779.]
Whether a minor can be asked to pay compensation in view of the provisions contained in sections 39 and 41, Specific Relief Act, 1877?
In Mohori Bibee's case, the minor had applied for the cancellation of the mortgage deed, executed by him, under sec. 39, Specific Relief Act and the Privy Council considered the question of compensation to be paid by him under sec. 41 of that Act.
It was held that since in this case the loan had been advanced to the minor with the full knowledge of hisminority, the question of payment of compensation to such a money-lender did not arise.
On the question of compensation under sec. 41, Specific Relief Act, there is a sharp difference of opinion between two sets of High Courts,one view having been expressed by the Lahore High Court and another by the Allahabad High Court.
LAHORE HIGH COURT
KHAN GUL V. LAKHA SINGH SIR SHADI LAI, C.J.
In its view the other party deserves to be compensated by a fraudulent minor, in equity, irrespective of the fact that the minor is the plaintiff or the defendant.
Asking a minor to return the ill-gotten gain in the form of money, is not the enforcement of contract, but it is only the restoration of the pre-contract position.The relief is allowed not because there is a contract between the parties, but it is because there is no contract but one of the parties has unjustly benefited at the cost of the other.
ALLAHABAD HIGH COURTAJUDHIA PRASAD V. CHANDAN LAL SULAIMAN, C.J
(i) Regarding the minor's responsibility to compensate under Specific Relief Act, it was held that
1. a minor cannot be asked to give any relief to the other party when the minor is a defendant in the case.
2. A minor can be asked to give relief when he himself is plaintiff and wants some relief for himself.
If the minor, who is defendant in a case, is asked to provide relief, that is contrary to the spirit and language of section 41, Specific Relief Act, 1877 and will also amount to enforcing a contract, which is void.
(ii) Regarding the question of paying money compensation by a minor, the rule laid down in Leslie v. Sheill [(1914) 3K.B. 607.] was followed, and it was held that
1. a minor may be asked to restore back the property if the same can be traced, but he cannot be asked to pay money compensation because that would amount to enforcing void contract against a minor.
The view expressed by Sir Shadi Lal, C.J. in the Lahore case has been considered to be better, by Pollock and Mulla.
LAW COMMISSION
The Law Commission also has preferred the views of Shadi Lal, C.J. expressed in the Lahore case on both the points.
In accordance with the recommendation of the Law Commission the principle of compensation has now been incorporated in section 33, Specific Relief Act, 1963.This provision now requires the payment of money compensation by a minor irrespective of the fact whether the minor is the plaintiff or the defendant in the case.
PRESENT POSITION IN INDIA CAN BE SUMMARIZED AS UNDER
1. If a minor goes to the Court as plaintiff for the cancellation of an instrument, the Court may, on adjudging the cancellation, require such a minor, to restore the benefit and to make such compensation to the other party as justice may require. The object of the present provision is to restore the parties to their original position, as far as possible.
2. When the minor is the defendant in a case and he resists the enforcement of the suit on the ground that he is incompetent to contract, the Court may ask him to restore such benefit to the other party, to the extent his estate has been benefited thereby. Through this provision the parties are tried to be put to the pre-contract position. Moreover, compensation in terms of money is also permitted.
