Monday, 7 February 2022

Doctrine of Restitution

                     DOCTRINE OF RESTITUTION

If an infant obtains property or goods by misrepresenting his age, he can be compelled to restore it, but only so long as the same is traceable in his possession. This is known as the equitable doctrine of Restitution. Where the infant has sold the goods or converted them, he cannot be made to repay the value of the goods, because this will amount to enforcing a void contract. Again, the doctrine of Restitution is not applied where the infant has obtained cash instead of goods. In a well known Landmark judgment of Leslie (R) ltd. versus Sheill :

          An infant succeeded in deceiving some money lender by telling them a lie about his age, and so got them to lend him $400 on the faith of him being an adult. Their attempt to recover the amount of principal and interest as damages for fraud failed for the reasons explained above. They then claimed the return of the principal money under a quasi-contract as “money had and received to the plaintiff’s use”. Finally, the money – lenders relied upon the doctrine of Restitution, contending that the infant should be compellable in equity to restore the money.

Rejecting this contention, Lord SUMNER said :

“I think that the whole current of decisions began down to 1913. It went to show that, when an infant obtained an advantage by falsely stating himself to be of full age, equity required him to restore his ill-gotten gains, or to release the party deceived from obligations or acts in law induced by the fraud, but scrupulously stopped short of enforcing against him a contractual obligation, entered into while he was an infant, even by means of a fraud. There is no question of tracing it, no possibility of restoring the very thing got by the fraud, nothing but compulsion through a personal judgment to repay an equivalent sum out of his present and future resources. I think this would be nothing but enforcing a void agreement. 

Minor seeking relief, compellable to restore

However, where an infant invokes the aid of the court for the cancellation of his contract, the court may grant the relief subject to the condition that he shall restore all benefits obtained by him under the contract, or make suitable compensation to the other party. 

            This aspect of the doctrine of restitution found expression in Section 41 of the original Specific Relief Act of 1877. The section authorised the courts to order any compensation that justice required to be paid by the party at whose instance a contract was cancelled. The first well known case decided under the section is that of Mohori Bibee versus Dhurmodas Ghose. In this case:

The plaintiff, a minor, mortgaged his house in favor of the defendant, a money lender, to secure a loan of Rs. 20,000. A part of this amount was actually advanced to him. While considering the proposed advance, the attorney, who was acting for the money lender, received information that the plaintiff was still a minor. Subsequently, the infant commenced this action stating the action stating that he was underage when he executed the mortgage and the same should, therefore, be cancelled. Finally, the money lender relied upon Section 41 of the Specific Relief Act, 1877.  


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