All India Bar Examination (AIBE) 6-VI Previous Year Question Papers with Answers

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38.

A sells a TV to a minor, who pays for it by means of a cheque. A indorses that cheque to X. X takes it in good faith and for value. This cheque was dishonoured one presentation. X can enforce payment of the cheque

A: Against Minor
B: Against Minor and A
C: Against A only
D: Cannot enforce against any body

The answer is: C

Explanation

The correct option is C: Against A only. 

The reason is that a minor's agreement is void from the beginning and has no legal effect. Therefore, a minor cannot be held liable for any breach of contract or any tort arising out of contract. This means that X cannot enforce payment of the cheque against the minor, who is not bound by his own promise to pay for the TV. 

However, A, who is a major and a competent party to contract, can be held liable for the cheque as he has indorsed it to X. An indorsement is a transfer of the right to receive payment under a negotiable instrument, such as a cheque, by signing one's name on the back of it. By doing so, A has made an implied promise to pay X in case the cheque is dishonoured by the minor's bank. This promise is independent of the original contract between A and the minor, and is not affected by the minor's incapacity. Therefore, X can enforce payment of the cheque against A only, who is bound by his own indorsement. 

This principle was established in the case of Mohori Bibi v. Dharmodas Ghosh, where the Privy Council held that a minor's contract is void ab initio and cannot be ratified by him even after attaining majority. The court also held that the doctrine of estoppel does not apply to a minor, and that he cannot be held liable for any tort arising out of contract.