1. Legal Status of Minor in Digital Wallets

(A) Contract Law Principle

Under Section 11 of the Indian Contract Act, 1872:

• A minor is not competent to contract
• Any agreement to open or operate a wallet is void ab initio

This was firmly established in:

Mohori Bibee v. Dharmodas Ghose (1903)

• Contract with minor is void from the beginning
• No enforceable liability can be created against a minor
• Applies directly to wallet “terms & conditions”

(B) RBI Regulatory Position

RBI guidelines allow:

• Wallets linked to bank accounts operated by guardians
• Minors above 10 years may operate limited accounts (bank discretion)
• Accounts must never go into overdraft

So in digital wallets:

• Guardian control is default
• Minor control is only conditional and limited

2. Who Controls a Minor’s Digital Wallet?

(A) Below 10 years

• Only guardian can operate wallet
• Minor has no legal operational control

(B) Above 10 years

• May operate wallet with limits set by bank/platform
• Guardian retains legal ownership and liability responsibility

(C) Above 18 (majority)

• Full independent control
• Guardian control ends automatically

3. Legal Nature of Guardian Control

Guardian acts as:

• Fiduciary (trustee-like role)
• Not owner of funds
• Must act in best interest of minor

Key principle:

Guardian cannot treat minor’s digital funds as personal property

This principle is reinforced in:

Githa Hariharan v. Reserve Bank of India (1999)

• Mother can act as natural guardian in financial matters
• Welfare of minor is the controlling factor
• Banking authorities must treat guardian as lawful representative

4. Major Legal Risks in Minor Digital Wallets

(A) Unauthorized Use / Fraud

If a minor uses wallet independently:

• Transactions may still be traced to guardian account
• Bank may freeze wallet under cyber fraud investigation

(B) KYC Mismatch Issues

If guardian/minor details mismatch:

• Wallet can be suspended
• Treated as compliance breach

(Recognized in banking compliance practice and fraud prevention frameworks )

(C) Liability for Transactions

Courts generally hold:

• Minor is not personally liable
• Guardian may be questioned for negligence

5. Key Case Laws on Minor Financial Control (Applied to Digital Wallets)

1. Mohori Bibee v. Dharmodas Ghose (1903)

• Core principle: minor cannot contract
• Wallet agreements with minors are void

2. Githa Hariharan v. RBI (1999)

• Mother recognized as valid guardian for financial transactions
• Banks must accept lawful guardianship arrangements

3. Manik Chand v. Ramchandra (1980)

• Guardian may act on behalf of minor if for benefit
• Applies to digital wallet usage under supervision

4. Central Bank of India v. Ravindra (2002)

• Banks must ensure fairness in account handling
• Interest/settlement must protect account holder interest
• Applied in wallet fund handling disputes

5. Madhegowda v. Ankegowda (2001)

• De facto guardians cannot misuse minor property
• Any unauthorized dealing is invalid
• Applies to unauthorized wallet access by relatives

6. K.P. Natarajan v. Muthalammal (2021)

• Courts stress strict procedural safeguards for minors
• Any financial representation requires proper guardian validation

6. Digital Rupee (CBDC) and Minor Wallets

RBI’s Digital Rupee wallets:

• Treated like digital cash
• Controlled through regulated banking wallets
• Still require KYC + guardian linkage for minors

Key rule:

• Wallet cannot be overdrawn
• Transactions are traceable and reversible in fraud cases

7. Practical Legal Position Summary

A minor’s digital wallet is:

• Legally under guardian supervision
• Not independently contract-based
• Fully protected under minor welfare doctrine

Courts prioritize:

• Protection of funds
• Prevention of misuse
• Guardian fiduciary responsibility

8. Final Legal Principle

In India, a minor does not “own or control” a digital wallet in the legal sense—
the wallet is operated under a guardian-controlled fiduciary structure, and all transactions must ultimately serve the minor’s welfare.