Contracts entered into by minors are void, not enforceable under law: Supreme Court

The Supreme Court on Tuesday reiterated that contracts entered into by minors are not enforceable under the law. Justices Hrishikesh Roy and Prashant Kumar Mishra’s bench upheld the High Court’s decision, which had declared null and void the sales agreements entered into by minors. They stated, “There is no dispute on the argument raised by the appellants in the case that at the time of the said agreements dated 03.09.2007, the appellant was a minor. Therefore, the contract with the minor was rightly found to be a void contract by the High Court.

The dispute between the appellant (minor) and respondents (sellers) regarding the execution of the agreement for the purchase of certain immovable property was settled.

 Under the said agreement, the minor had consented to purchase some immovable property, and an advance amount was paid to the sellers. The appellant sought directions from the trial court through his mother to fulfill the contractual obligation of the sellers. However, based on the consent of the appellant’s mother, the sellers applied under Order 12 Rule 6 of the Civil Procedure Code for the dismissal of the application, arguing that at the time of the sales agreement on September 3, 2007, the appellant was a minor, and therefore, no specific performance claim could be made based on such void sales agreement. 

The trial court rejected the respondent sellers’ application to consider the appellant’s mother’s consent and directed the respondents to raise their arguments during the trial.

 Against the decision of the trial court, the respondent sellers prioritized an amendment before the High Court. The High Court allowed the revision application, stating that since one party to the agreement is a minor, the agreement is void ab initio, and therefore, the sales agreement entered into by the minor is also considered void. Ultimately, the minor challenged the High Court’s order before the Supreme Court, arguing that the agreement with the minor is capable of enforcement and is not void.

 Resolving such disputes, the Supreme Court said that parties should be capable of entering into contracts, and a contract cannot be enforceable under the Contract Law if it is executed by a minor at the time of entry.

 Referring to Mathai Mathew vs. Joseph Mary Alias Marykutty Joseph (2015) 5 SCC 622, the Supreme Court stated, “Under the Contract Act, 1872, it is clearly stated that for an agreement to be a contract, the parties must be capable of contracting, which includes an age of majority as a condition. 

A minor’s contract is void, and we cannot consider a contract binding on a minor solely because it is in the minor’s interest unless his representation is not made by his natural guardian or a guardian appointed by the court.”

 The Supreme Court found no infirmity in the High Court’s perspective. Accordingly, the appeal by the minor was dismissed.

Under Indian law, it is imperative to understand that minors are prohibited from entering into any contractual agreements, including property purchases. However, parents or legal guardians are authorised to purchase properties on behalf of their minors, wherein the property will be registered in the minor’s name and held in trust by the parent or guardian until the minor attains legal adulthood. During the purchase process, the parent or guardian must act in the best interests of the minor, ensuring that all necessary permissions and legal requirements are fulfilled and that the property is free from any encumbrances or disputes.