Aspire Law: How to write a short answer in competitive exam ? 'Restitution stops when repayment begins'.

Restitution stops when repayment begins

The doctrine of Restitution simply means that if a person has unjustly enriched himself, the benefits need to be returned in light of golden principles of equity and justice. Doctrine gains prominence when applied in the case of minor because of the rule that minor’s agreement is void ab initio. The question which arises here thus is, Whether minor also need to return benefits unjustly taken?

The issue first arose in an English case Leslie Ltd. v. Sheill1, whereby a creditor wanted to restitute/recover £ 475 from a minor who had taken loan by falsely representing himself to be a major. The creditor only claimed restitution of money which was given under deception. However, the Court of Appeal held that repayment by minor is not restitution. It is rather a way to enforce a void agreement which cannot be permitted. Court further held that “Restitution stops when repayment begins”. Basically in the cloak of restitution, a void agreement cannot be enforced. Hence under English law, a minor is not liable to pay the money back even if unjustly taken.

Indian Position:

In India, the point was first raised in the landmark case of Mohori Bibee V/S Dharmodas Ghose2 which was decided by a bench of judges comprising of Lord Mcnaughton, Lord Davey, Lord Lindley, Sir Ford North, Sir Andrew Scoble and Sir Andrew Wilson, JJ. In this case, a Mahajan Brahmo Das had advanced money to minor Mr. Dharmodas Ghose despite being aware of the fact that Mr. Ghose is minor. Mahajan claimed restitution of benefits under Sections 64, 65 of Indian Contract Act, 1872 (hereinafter IC Act), and Ss. 38 and 41 of the Specific Relief Act,1877 (hereinafter SR Act). Court refused to give relief under IC Act as minor’s agreement is void ab initio and further seceded help under SRA as Mahajan had not approached the court with clean hands. He was well aware of the minor’s age. In reality, he wanted to usurp the house of minor.

After the Mohiri Biwi case, many conflicting views came by different Indian courts, and finally, the issue was settled in famous case of Khan Gul v. Lakha Singh3 in which Shadi Lal J. held that this English doctrine is not applicable in Indian law. This view was also incorporated under Section 33 of the Specific Relief Act, 1963. Thus in India, both minor, as well as major both, have to return benefits if unjustly taken in light of Section 33 of SR Act,1963. Hence, English doctrine ‘Restitution stops when repayment begins’ is not applicable in India.