JUDGMENT : ( 1. ) THIS is an application by the plaintiff from the concurrent judgments of the lower Courts dismissing his suit for Rs. 850 principal, and interest in addition, based on a number of pro-notes all dated 6-1-1962, when as it was discovered later, the defendant borrower was less than eighteen years of age. The ground for dismissal is that the transactions were void ab initio. The finding of fact is that the monies had been actually given to the defendant, and further there was no device or want of diligence on the part of the plaintiff who had been innocently persuaded that the defendant had come of age was genuine. Accordingly the plaintiff sought help of the doctrine of equitable restoration, that is, prayed that the status quo ante should be restored by getting the defendant, who had since become a major, to return the monies he had actually received. This has been refused. ( 2. ) 1 he facts being themselves clear and undisputed, the problem for us is to decide whether in a case like this we can apply the principle of equity that the minor though legally incompetent to contract, still having got an advantage should before pleading his own incompetence and misrepresentation be compelled to restitute the advantage he had gained; secondly, whether this principle of equity can be derived from section 65 of that Contract Act on the theory that it is possible to discover at a later date the initial voidness of a contract, though one of the parties has been innocently persuaded of its validity. In many of the reported cases, the equity implied in section 41, Specific Relief Act has also been considered ; but that will be nothing more than an analogy in the instant case, where the ex-minor is the defendant and is resisting a suit for the repayment of the money ; and is not himself asking for the cancellation of any instrument. ( 3. ) THIS subject has come up before the Courts quite often ; but owing to the variety of the circumstances attending each of the cases, the judgments have at times the appearance of mutual conflict of views without there being a theoretically consistent doctrine that can straightway be applied to all such contexts. ( 3. ) THIS subject has come up before the Courts quite often ; but owing to the variety of the circumstances attending each of the cases, the judgments have at times the appearance of mutual conflict of views without there being a theoretically consistent doctrine that can straightway be applied to all such contexts. The difference are for one thing whether the doctrine of equitable restoration is inherent in the Act or is implied in section 65 of the Contract act and for another, assuming such a doctrine, whether in the cases before them, the party other than the ex-minor had by his negligence or device disentitled himself to any equitable relief. ( 4. ) AS far as this case is concerned, the following points have to be noted because they distinguished it sharply from some of the other cases, the judgments on which have been cited indiscriminately by the parties. The plaintiff seems to have been having dealings with the defendant for some time before 6-1-1962 when the four pro-notes were executed and the total of Rs. 850 were taken. He had always believed that the defendant was a major, that is, over 18 years there being no guardian or other disqualification raising the age of majority to 21 in this case. Everything the defendant had done was calculated to nurse the impression. Again, the plaintiff had given the money and there was no other complication throwing doubt on the bona fides of the plaintiff or suggesting some ulterior device. When there was a default in the payment plaintiff filed a suit in time. The defence was, firstly, that there had been no consideration ; and secondly, consideration or no consideration, the defendant being a minor at the time of these loans, was not liable. The Courts have found that the money had been paid and yet have dismissed it for the second reason. ( 5. ) THE legal position is clear enough. Section 11 of the Contract Act is categorical, namely, that a person who is not of the age of majority is incompetent to enter into a contract, and thus the contract to repay the total of rs. 850 is void. ( 5. ) THE legal position is clear enough. Section 11 of the Contract Act is categorical, namely, that a person who is not of the age of majority is incompetent to enter into a contract, and thus the contract to repay the total of rs. 850 is void. The application of section 65 however is not so clear : "when an agreement is discovered to be void or when the contract becomes void any person who has received any advantage under such an agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it. " the two phrases "discovered to be void" and "becomes void" should be understood to denote different situations. In the one case at least the person who has given the advantage to the incompetent party has believed the agreement to be valid, and has at a later stage discovered that it was really void from the very beginning or at all events from an earlier date. When a contract becomes void the position is materially different; it is not void from before, but something has happened after the execution of the contract which has made it void. Thus, while it is clear that in the case of a contract becoming void it should have been valid ab initio; it is rot necessary for an agreement to be discovered to be void, that it should necessarily have been valid from the beginning. The voidness should have been all the time unknown to one or the other of the parties. The party who would naturally be the one seeking restoration of the advantage given by him to the other, must have believed or led to believe that it is not void. Where both parties know that the agreement is void ab initio, and one of the m later on claims restoration under section 65 the latter cannot be held to have discovered the voidness of the agreement and as much will not be entitled to it. There seems to be some difference on this topic between the the reported decisions; we shall revert to it later on. ( 6. ) IN this connection the principles implied in section 41 of the Specific relief Act have been referred to by the Court. There seems to be some difference on this topic between the the reported decisions; we shall revert to it later on. ( 6. ) IN this connection the principles implied in section 41 of the Specific relief Act have been referred to by the Court. In fact in several of the cases there was the prayer for the cancellation of an instrument, whether a bond or an agreement to do something in future. Whenever the Court is persuaded on any ground to adjudge the cancellation of such an instrument it may require the party getting this relief to compensate the other which justice might require. Ultimately the basic principle of equity behind section 41, Specific relief Act and section 65 of the Contract Act is the same, namely, a person who wants to get out of his obligation under an agreement or a contract, whether or not evidenced by an instrument, he may, if equitable considerations require, be compelled to disgorge the advantage gained by him. It is conceivable that the party seeking such restoration has by its own inequity forfeited the right to get it; but that would be another matter. As in all equitable matters, the Court will before granting relief consider whether the hands oft he proposed recipient are clean. But broadly speaking, the principle of equity is what we have stated above. ( 7. ) BUT in applying it to the cases of transactions by minors there have apparently been different schools ; may be, most of the difference is not basic but due to difference in the circumstances. The earliest authentic version in this regard is contained in a Privy Council decision in Mohori Bibee v. Dharmodas Ghose (I L R 30 Cal. 539.) There the position was that the minor had, as it were, been led into executing a mortgage and into representing" himself falsely to the know of the mortgagee that he was competent to enter into the transaction; and all this in spite of a written notice by the guardian served on the mortgagee, that the mortgagor was really incompetent. 539.) There the position was that the minor had, as it were, been led into executing a mortgage and into representing" himself falsely to the know of the mortgagee that he was competent to enter into the transaction; and all this in spite of a written notice by the guardian served on the mortgagee, that the mortgagor was really incompetent. At all events, the Privy Council did not apply the principle of equitable restoration in that case ; but there seems to have been a misunderstanding as to whether this amounts to a denial of the existence of this doctrine or whether it was only with reference to the special circumstances of that case, the plaintiff mortgagee knowing the incompetence and having, as it were, egged on the minor into the void transaction. ( 8. ) THE rulings on this subject would broadly speaking fall under one or the other of the two headings, the one represented by Khan Gul v. Lakha Singh (AIR 1928 Lah. 609 (FB))where the equitable principle was recognised and applied; and as against it, ajudhia Prasad v. Chandan Lal (AIR 1937 All. 601 ] (FB ).)where in principle this equitable restoration was rejected. Subsequent rulings by different High Courts would seem to fall under one or the other of the two headings some of them reading the Privy council ruling in Mohori Bibees case, as the case may be, a refusal of the application of the equity in those particular circumstances or, or as the non-recognition in principle of the doctrine of equitable restoration. ( 9. ) THE Madhya Pradesh rulings placed before me are only two. There is an old ruling in Pundlik v. Bhagwantrao (AIR 1926 Nag. 491.) which seems to apply the same principles as were later on enunciated by the Allahabad High Court, that is, the non-recognition at any rate, the non-application of the principle of equitable restoration. Similarly, the. ruling reported in Lal Chandrawaj Deo v. Lal Artraran Deo (AIR 1936 Nag. There is an old ruling in Pundlik v. Bhagwantrao (AIR 1926 Nag. 491.) which seems to apply the same principles as were later on enunciated by the Allahabad High Court, that is, the non-recognition at any rate, the non-application of the principle of equitable restoration. Similarly, the. ruling reported in Lal Chandrawaj Deo v. Lal Artraran Deo (AIR 1936 Nag. 15.) which was about a disqualified proprietor under the Court of Wards also seems to follow the earlier Nagpur ruling and to hold that there was no estoppel of a minor who had earlier represented himself as a major, and again that section 65 had no application to a case where in view of the incompetency of a party there could have been no valid contract These two rulings for what they are worth belong to the time of the Judicial Commissioners Court; no reported case of the Nagpur High Court on this subject has been placed by the parties. ( 10. ) STUDYING the problem in the light of the wording of section 65 the later of these two Nagpur cases seems to hold that the section would not apply where the contract is void ab initio. But the Privy Council in Thakurain Har-nath Kaur v. Thakur Indar Bahadur Singh (AIR 1922 P. C. 403.) has taken another view : "section 65 deals with (a) agreements enforceable by law and (b) with agreement not so enforceable. By clause (g) of section 2 an agreement not enforceable by law is said to be void. An agreement discovered to be void, is one discovered to be not enforceable by law, and, on the language of the section, would include an agreement that was void in that sense from its inception as distinct from a contract that becomes void. " It was also held by the Privy Council in this case that where a plaintiff discovers the pre- existent voidness of an agreement limitation would start against him from the date of the discovery. Actually in that case the discovery was made when there was a resistance to the plaintiffs demand for the protection of his property. The point for our guidance is that it is not necessary for the application of section 65 that the agreement should have been valid from the beginning. Actually in that case the discovery was made when there was a resistance to the plaintiffs demand for the protection of his property. The point for our guidance is that it is not necessary for the application of section 65 that the agreement should have been valid from the beginning. This heading is different from the second where a contract (and not merely an agreement) being valid ab initio becomes void by a subsequent happening. But apart from it, there are agreements, which being really void and believed by one or both parties to be valid, till either or both of them learn of their voidness as discovered them to be void. ( 11. ) FOR some reason that Privy Council ruling seems to have been overlooked in Ltd Chandradwaj Deo v. Lal Artraran Deo (supra ). ( 12. ) LOOKED at this way in the light of the Privy Council ruling I would hold that the agreement by a minor whose pretence to majority has been innocently accepted by the opposite party, or as lor that matter an agreement by an incompetent party whose pretence to competence has been accepted by the other, is certainly void ab initio; but one of the parties may be believing that it is valid till something happens and he discovers the voidness. The wording of one of the headings of section 65 as already pointed out in the beginning is such as precisely to cover the cases of this type. Therefore it is unnecessary for our purposes to examine whether apart from section 65 this doctrine of equitable restoration is derivable from principles of equity and good conscience not inconsistent with the provisions of the Indian Contract Act. ( 13. ) BUT as the parties having touched on this, it may not be out of place to note my views, though I would hold to the interpretation of the words "discovered to be void" given above. As is clear from the preamble, and as in fact has been laid down by the Courts, the Act is not exhaustive of the law in this country on the subject of contracts : "whereas it is expedient to define and amend certain parts of the law relating to contract. . . . . . As is clear from the preamble, and as in fact has been laid down by the Courts, the Act is not exhaustive of the law in this country on the subject of contracts : "whereas it is expedient to define and amend certain parts of the law relating to contract. . . . . . " (Italics are mine)As it happens, most of the parts of the law relating to contract which have been codified in the Indian Contract Act are derived either from the principles of the british common law of the contract or from those of equity and good conscience accepted in all civilized societies. But if there is a principle which is inevitable in any civilized society, it will have to be applied even if there is no express text to that effect in the Contract Act. Certainly some limitations are necessary before we apply such principles ; for example, it should not conflict with any of the express provisions in the legislation ; secondly, if on that topic there is an express provision, the equitable principle should not be such as intentionally to avoid any limitation imposed by such a provision; and certainly, it should not be repugnant to the large broad scheme of the Act. But as far as we are concerned, even on the assumption that section 65 in terms does not cover agreements ab initio valid, and discovered later to be void, still the very wording of that section does not show that it was intended to exclude such cases from the operation of the doctrine of equitable restoration. Thus even as a principle of equity analogous to that contained in section 65 as narrowly interpreted and not dissimilar to what is contained in section 41 of the specific Relief Act, I would apply to appropriate cases the doctrine of equitable restoration. ( 14. ) COMING to the Privy Council ruling in Mohori Bibees case (supra)the question before it was not so much whether in principle there was a valid doctrine of equitable restoration, but whether in the circumstances of that case the doctrine should be applied, and the mortgagee compensated by repayment if the consideration. ( 14. ) COMING to the Privy Council ruling in Mohori Bibees case (supra)the question before it was not so much whether in principle there was a valid doctrine of equitable restoration, but whether in the circumstances of that case the doctrine should be applied, and the mortgagee compensated by repayment if the consideration. The position there was that before the mortgage was executed, the mortgagee had been cautioned that there had been a guardian appointed by Court and that at that time the mortgagor was a minor in the eyes of law, and therefore incompetent to execute the deed of transfer. Worse still, on the day the mortgage was executed the attorney of the mortgagee got the mortgagor to sign a long declaration which he (the attorney) had prepared for him containing a statement that he had come of age on an earlier date, and further that the mortgagee relying on his assurance that he had attained majority had agreed to advance him 20,000. Thus, in that case, the minor mortgagor had been egged on to enter into the transaction by the mortgagee who had every reason to know of the incapacity even at the time of the transaction. Certainly, the Privy Council held that in that particular case there was no justification for the grant of compensation to the mortgagee under any equitable principle or under section 65 of the Contract Act. I do not find in this ruling any categorical pronouncement that, in principle the doctrine of equitable restoration has no application to cases where a minor not being egged on by the lender persuades him honestly to believe in his majority and to give a loan. ( 15. ) THEN we have Khan Gul v. Lakha Singh (supra) which enunciated that in principle this doctrine of equitable restoration is applicable to such cases; whether or not in a particular set of circumstances it should be actually invoked would depend upon the facts of each, primarily on whether the party asking for restoration has forfeited the equity. As it was, the Lahore judgment was by a Full Bench, four members holding that the doctrine was applicable while the fifth held to the contrary. As it was, the Lahore judgment was by a Full Bench, four members holding that the doctrine was applicable while the fifth held to the contrary. The majority view is summed up after an elaborate examination of the case law in the following words, (a) On the first question whether a minor who by falsely representing himself to be a major has induced a person to enter into a contract is estopped from pleading his minority to avoid the contract-the answer was : "he is not estopped from pleading his infancy in avoidance of the contract. Though section 115, Evidence Act, is general in its terms, it must be read subject to the provisions of the Contract Act declaring a transaction entered into by a minor to be void. " (b) On the second question-whether a party who when a minor has entered into a contract by means of a false representation as to his age, whether he be the defendant or the plaintiff in a subsequent litigation, can refuse to perform the contract and at the same time retain the benefit he may have derived therefrom, the answer was- "an infant though not liable under the contract, may in equity, be required to return the benefit he has received by making a false representation as to his age. " ( 16. ) THIS doctrine has been followed in a number of cases of which the following are typical. In T. R. Appasami Ayyangar v. Narayanaswami Iyer (AIR 1930 Mad. 945.) it was held- "where a minor fraudulently representing himself as major, induces an innocent person to purchase property from him, and then sues for the recovery of that property on the ground that, owing to his minority, the transaction was void ab initio, his case is covered by section 65, Contract Act. In detail that case differs from one of the present type because, for one thing, it involved receipt of money by selling property, and a subsequent demand for the return of the property also while here it was a simple money loan and a refusal to repay it; and for another, the ex-minor is the plaintiff in the Madras case and the defendant in the instant one. Still the principle of equitable restoration is common, as also the finding that the discovery for the purpose of section 65 can be of an agreement which though void ab initio has been believed to be valid by one of the parties. ( 17. ) ON the exact purport of section 65 the Mysore High Court has ruled in Dyaviah v Shivamma (A I R 1959 Mysore188.)- "it is difficult to accept that the word agreement used in the first part of section 65 indicates that it must have been entered into by a person competent to contract i. e. by one who is a major. It is wide enough to include cases where the agreement was entered into by a minor also. In that case, no doubt the agreement is unenforceable in law and is, therefore, void. Even then, it comes within the ambit of the provisions of section 65. . . . . . . . . The benefits under section 65 of the Contract Act cannot be claimed if the party claiming them had received the benefit after the agreement or transaction was discovered to be void. This involves an equitable principle that if a party deliberately received benefits knowing full well that it is illegal and void, he does not come to Court with clean hands and therefore he will not be entitled to any equitable relief. " The effect of this ruling is that the principle of equitable restoration is applicable even where the agreement is void ab initio. But the claimant to restoration will not get it if it is sought on the benefit given to the minor after his minority is discovered. In the instant case, however, the money was advanced to the minor before discovery of his incapacity. ( 18. ) AS against this line we have Ajudhia Prasad v. Chandan Lai (supra)also a decision of a Full Bench of three Judges in which it was held that section 65 presupposes an agreement between competent parties and has no application where a party to the agreement is a minor and therefore incapable of contracting. ( 18. ) AS against this line we have Ajudhia Prasad v. Chandan Lai (supra)also a decision of a Full Bench of three Judges in which it was held that section 65 presupposes an agreement between competent parties and has no application where a party to the agreement is a minor and therefore incapable of contracting. With all respect I feel that this line ignores the distinction made in section 65 itself between two different kinds of situations-one in which the agreement being is discovered void, at a later stage and, the other, where the contract being valid in the beginning has by a subsequent happening become void. It is also significant that the words used are respectively, "agreement" and "contract". Certainly, a discovery is made of something that is pre existent but not yet known to the discoverer. Starting from the dictum that section 65 does not apply when the pre- existent voidness is discovered, the allahabad Full Bench naturally goes one step further and holds that in principle the doctrine of equitable restoration has no application where a minor has by fraudulent representation concealed his minority and persuaded another party either to enter into an agreement or to lend him money : "where money has been borrowed by two minors under a mortgage deed at a time when they were minors, more than 18 years but less than 21 years of age, under a fraudulent concealment of the fact that the executants were minors because a guardian had been appointed for them under the Guardians and Wards Act, the mortgagee in a suit brought against them cannot get a decree for the principal money under section 65, contract Act nor under any other equitable principle, and he also cannot get a decree for sale of the mortgaged property. " ( 19. ) THIS principle has been followed in the ruling reported in Gokeda latcharao v. Viswanadham Bhimayya (A I R 1956 Andh. 182.) Expressly dissenting from the Lahore view that Court has held : "a contract entered into with a minor is a nullity for want of legal competency. Except otherwise provided by statute, it is not enforceable and it does not give rise to any rights or liabilities. . . . . . 182.) Expressly dissenting from the Lahore view that Court has held : "a contract entered into with a minor is a nullity for want of legal competency. Except otherwise provided by statute, it is not enforceable and it does not give rise to any rights or liabilities. . . . . . It follows from this legal position that a person, who parted with his goods can trace them into the hands of the quondam minor and recover them back in specie, for he has not lost his title to them. But he cannot seek to recover their price or damages, for, if allowed, he would be indirectly asking for the enforcement of the contract and recover damages for the breach. Nor can a person who lends money to such a minor, recover it. If allowed to do so, the Court would be enforcing a contract of loan. The English decisions graphically describe this position as restitution stops where repayment, begins. " With all respect it is not possible for me to make the distinction sought to be made here. 1 he doctrine of restoration will be applicable in both types of cases. But the Courts will have to answer the further questions whether in the particular case the party seeking equitable restoration-whether he is a plaintiff claiming against the minor, or is the defendant in a suit by him has really disqualified himself by acting inequitably i. e. not coming with clean hands. But that will have nothing to do with the applicability in principle of the doctrine of equitable restoration. 1 here are cases no doubt [and the one in Mohori Bibee v. Dharmodas Ghose (supra) is a typical one] where this doctrine notwithstanding, in the particular set of circumstances the claimant to restoration has disqualified himself. ( 20. ) IN the instant case the plaintiff asking for the restoration of the benefit derived by the minor by his false representation has been an innocent victim and has done nothing to disqualify himself from the equitable relief. In these circumstances it is our duty to apply this principle. As the result shapes it turns out that the plaintiff gets exactly the same thing as he would get if the contract had been a valid one; but it cannot be refused simply because the equitable route leads to the same result as the contractual. ( 21. In these circumstances it is our duty to apply this principle. As the result shapes it turns out that the plaintiff gets exactly the same thing as he would get if the contract had been a valid one; but it cannot be refused simply because the equitable route leads to the same result as the contractual. ( 21. ) IN the circumstances of the case I would allow the application and direct that a decree be made in favour of the plaintiff for the principal of rs. 850. There will be no interest till the date of the suit; but the amount will bear future interest from the date of the suit till realization at 6 p. c. p. a. The defendant shall also pay the costs in all the three Courts along with pleaders fee calculated according to rules. Application allowed.