Indian Kanoon - Search engine for Indian Law

31. Navakoti Narayana Chetty v. Logalinga Chetty, where, the learned Judges held that a sale' to a minor in consideration of a debt already due to him was void, was the first which came up for decision after the judgment of the Privy Council. Krishnaswami Aiyar, J., came to the conclusion that there was nothing in the Contract Act to prevent a minor from being a promisee, provided of course there was competent consideration for that promise. The other learned Judge was evidently of the same opinion, for he was a party to the decision in Sathrurazu v. Basappa, where it was held that a minor can be a payee under a promissory note. Krishnaswamy Aiyar, J., also held that there was nothing in the Transfer of Property Act to prevent the minor from being a transferee ; but yet the sale was held void on two grounds:--(1) that antecedent to the transfer there must have been a bilateral agreement, viz., a promise to pay a price (in that case the consideration was the release of a debt due to the minor) and a promise by the vendor to transfer the property, which agreement must be void ; (2) that a transfer by sale imposes liabilities on the minor which involves the notion of competency to contract. It will be seen that the first argument assumes that if a transfer takes place in pursuance of an unenforceable agreement, the transfer is void. As I have already endeavoured to show, there is no warrant for this assumption. If consideration passes at the time of the transfer, the fact that the antecedent promise was unenforceable does not matter. The position is exactly the same as if there was no agreement at all. Even in cases where a transfer is made for an illegal purpose or in pursuance of an illegal contract, the transfer takes affect though it may be avoided by the transferor in certain cases. (See Section 84 of the Trusts Act). A transfer cannot be void unless (a) the transferor is incompetent to transfer or the transferee is incompetent to hold the property, (b) the transfer is conditional on the passing of consideration and the consideration did not pass, (c) the transfer is part of a transaction in which transfer is made in consideration of covenants or contracts to. be performed by the transferee and the transferee cannot be compelled to perform them. I am not considering cases of failure of consideration. I do not therefore think that the mere fact that there has been an agreement of parties for the settlement of the price or the other terms of the sale or an antecedent promise to pay or convey, in any way makes the subsequent transfer, though in pursuance of the antecedent unenforceable contract, void.