It appears to be clearly established that the guardian of a minor has the power to incur debts on behalf of the minor if there is an urgent need for it. A debt contracted with without any necessity is not binding on the minor. It appears that the guardian has also the power to execute a promissory note on behalf of the minor in those cases where the incurring of debt is justified.
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In India there has been conflict of judicial opinion as to whether the guardian of a minor (both under Muslim law as well as Hindu law) can enter into a contract on behalf of the minor, and whether such a contract is especially enforceable against the minor.
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In Mir Savarjan v. Fakhruddin, the question before the Privy Council was whether the specific performance of a contract validly entered into on behalf of a minor could be granted? The Privy Council held that it was not within the power of the guardian to bind the minor’s estate by contract for the purchase of immovable property.
In Shri Kakulam v. Kurra Subba Rao, (a case under Hindu law but observations were made in a manner as to be applicable under the personal law of all communities in India), the Privy Council said that a contract entered into by a guardian on behalf of the minor which is within the competence of the guardian and which is for the benefit of the minor, is enforceable specially against the minor.
It can also be enforced by the minor. This case was followed by a Full Bench of the Hyderabad High Court in Amir Ahmed v. Mir Nizam All the question before the Full Bench was: Whether a minor who has agreed to purchase property through his guardian can bring a suit for a specific performance of the contract?
Mir Saidat Ali Khan J. (with whom Siddiqi J agreed) said that in those cases where the dejure guardian enters into a contract on behalf of the minor and the contract is for the benefit of the minor, the minor can bring a suit for specific performance of the contract.