CHAPTER IV

ANALYSIS OF SECTION 70

SYNOPSIS

1. The Section 70 Generally 6. Application ofSection 70 against

2. English Principles oflaw PARI MA TERIA a minor corporations and the
3. The doctorine ofquantum meruit Government.
4. Unjust enrichment and doctorine of 6.1. Against the minor
restitution 6.2. Against die corporations
5. Analysis of the Section 70 6.3. Against the Government
5.1. Lawfully 7. Interpretation
5.2. Does anything 8. Pleadings
5.3. For anotherperson 9. Resume ofthe Chapter
5.4. No intention to do the act 10. Compared to the English Law
gratuitously. on Pari Materia.
5.5. Enjoys the benefit thereof
 147

1. THE SECTION GENERALLY:

1.1. Section 70 of the Indian Contract Act, 1872, provides that,

v

“Obligation of person enjoying benefit of non-gratuitous act. -

Where a person lawfully does anything for another person, or
delivers anything to him, not intending to do so gratuitously, and
such other person enjoys the benefit thereof, the latter is bound
to make compensation to the former in respect of, or to restore
the thing so done or delivered.”

If a party to a contract has rendered service to the other not intending to do

so gratuitously and the other person has obtained benefit, the former is

entitled to compensation for the value of the services rendered by him.1

»

The ingredients under Section 70, are :

(a) some benefit must have been legally conferred by an act.

(b) the act must have been done by the doer without intending to be
gratuitous, and

(c) that the person for whom it has been done must have enjoyed
the benefit arising out of such act.

1.2 Under Section 70 there is no reference to a person being interested in

making the payment unlike under Section 69. Rather it imposes an obligation
without any reference to mutual assent of the parties and that obligation is
enforceable only in special assumpsit, as if it was the result of an actual
contract. Where obligation is not based on any mutual consent of the parties,
r

it has to be found out whether that obligation can be inferred from an

express contract between the parties. Therefore, the section is applicable
even while there exists an express or implied contract and also where a
contract becomes unenforceable due to non-confirmity with certain

1. Hansaraj Gupta cfe Co. v. Union of India, AIR 1973 SC 2724 ; See also Subramanyam
v. B. Thayappa, AIR 1966 SC 1034.
 148

statutory provisions. In such and other cases of this nature Section 70 can
be applied and relief on quantum meruit can be granted.1

1.3. Section 70 is one of a fasciculus of sections dealing with what the Act

calls ‘certain relations resembling those created by contract’. By this

section three conditions are required to invo'king the aid of the section. In
State of West Bengal v. B.K.Mandal,2 Ganendragadkar,J., Observed :

“The first condition is that a person should lawfully do something

for another person or deliver something to him. The second
condition is that in doing the said thing or delivering the said thing,
he must not intend to act gratuitously and the third is that the other
person for whom something is done or to whom something is
delivered must enjoy the benefit thereof’.

“Thus, when these conditions are satisfied, Section 70 imposes the liability

on the latter to make- compensation to the former. If a person delivers

something to another it would be open to the latter person to refuse to

accept the thing or to return it; in that case Section 70 would hot come into
operation.’ It is only where he voluntarily accepts the thing or enjoys the
work done that the liability under Section 70 arises.’3

There is no contract in existence which can be enforced in a Court of law;

and yet a claim for compensation can be made under Section 70.4 In State

of West Bengal v. B.K.Mandal case, Gajendragadkar,J., observed as follows:

1. Nuli Kanaka Rao v. Tenali Sriranga Venkata Ramalinga Reddy, (1966) 1 Andh.
W.R. 275 ; See also Hyderabad State Bank v. Ranganath Eathi, AIR 1958 AP 605.
2. AIR 1962 SC 779; See also Jain Mills and Electrical Stores v. State of Orissa, AIR
1991 Orissa 117; C.I.Abraham v. KA.Cheriyan, AIR 1986 Ker. 60 ; Malik Abdul
Ahad & Shah v. State ofJ&K, AIR 1982 J&K 16; State of Utter Pradesh v. Mumtaz
Hussain, AIR1979 AIL 174; B.N.Ellias & Co. Ltd, v. State of West Bengal, AIR 1959
Cal. 247; Amarchand v. Union of India, AIR 1962 HP 43;
3. Ibid ; See also, Amarchand v. Union of India, AIR 1962 HP 43.
4. Venkataswami v. Narasayya, AIR 1965 AP 191. *
 149

“Therefore, in eases falling under Section 70 the person

doing something for another or delivering something to
another cannot sue for the specific performance of the
contract nor ask for damages for the breach of the contract
for the simple reason that there is no contract between him
and the other person for whom he does something or to
whom he delivers something.”

Gajendragadkar, J., further amplified the concept of relief or compensation

underlying the Section 70, thus,

“All that Section 70 provides is that if the goods delivered

are accepted or the work done is voluntarily enjoyed then
the liability to pay compensation for the enjoyment of the
said goods or the acceptance of the said work arises. Thus,
where a claim for compensation is made by one person
against another under Section 70, it is not on the basis of
any subsisting contract between the parties, it is on the basis
of the fact that something was done by the party for another
and the said work so done has been voluntarily accepted by
the other party. That broadly stated is the effect of the
condition prescribed by Section 70.”

The very purpose of the section is to enumerate the conditions under which
such compensation may be claimed.1 The basis of compensation does not
depend upon any agreement but would be in proportion to the benefit
enjoyed by the relevant party.2 In pursuance of a void contract, one party to
that contract had performed his part and the other had received benefit of
the performance of the contract by such party, Section 70 of the Contract
Act would justify the claim made by such party against the other.3
4

Where the manager of a school appoints a teacher who is not qualified and
whose appointment is not approved by the Government the teacher is entitled
to his salary under Section 70, even if the effect of refusal of approval by
the department has the effect not merely of terminating the appointment
but of rendering the contract altogether nonexistent.4
1. Pallanjee Eduljee & Sons v. Lonavala City Municipality, AIR 1937 Bom. 417.
2. Nathibai v. Wilaji, AIR 1937 Nag. 330
3. New Marine Coal Co. Ltd. v. Union of India, AIR 1964 SC 152
4. Bhavani v. Bhanee, AIR 1960 Ker. 133.
 150

In pursuance of a void contract, the principle underlying Section 70 extends

to cases where services were rendered or things delivered. The right of

contribution, in between co-owners, in cases relating to sums properly spent

on repairs of property held in common, is governed under Section 70.1

1.4 Section 70 of the Contract Act applies to those cases where irrespective
of any contract or agreement, a person lawfully does something for another
person or delivers anything to him which was never meant to be gratuitous

and the other person has enjoyed the benefit, the latter is bound to make
restitution to the former. It is true that, ordinarily, the provisions of Section
70 are not invoked where originally the obligations to restitution arises
under any agreement or contract; but there should be no bar to the
application of the principle underlying Section 70 also to such class of
cases. Section 70 proceeds upon a principle of quasi contractual
relationship; arid whether it be under Secton 65 or under Section 70, the

restitution or compensation is well in order not in any affirmation of the

agreement or the contract but in disaffirmation thereof.2 In order to attract

the application of Section 70, it is necessary to show that the person on

whose behalf the money was paid and from whom compensation is sought
was bound to pay the money which was paid on his behalf.3

Therefore, making payment for another tantamounts to doing something

for him. When a bank discounting an order of payment and giving credit to

the customer was allowed reimbursement from the customer for something

done for him.4

1. Chinni Veeraiah Chetty v. Morisetti Lakshmikantamma, AIR 1965 AP 322; See also
Srirama Raja v. Secretary of State for India in Council, AIR 1943 Mad. 85.
2. Oil and Natural Gas Commission v. M/s. Shyam Simdar Agarwal and Co., AIR 1984
Gauhati 11. ; See also Municipal Committee, Kishangarh v. Maharaja Kishangarh
Mills Ltd., AIR 1961 Raj.6.
3. Akella Surya Narayan Murthy v. Akella Ayappa Sastri, AIR 1960 AP 146.
4. Federal Bank v. Joseph, (1990) 1 Ker. LJ. 889; See also Haji Ad Sait v. Hameed,
(1985) Ker.LJ. 169.
 151

1.5 Section 70 embodies the principle of quantum meruit. The principle of

quantum meruit is often applied where for some technical reason a contract
is held to be invalid. Under such circumstances an implied contract is

assumed by which a person for whom the work is to be done contracts to

pay the person who does the work reasonably for the work done. But no

implied contract can be inferred where there exists an express contract.

Therefore, where the defendant was the highest bidder for the collection

of fees in the weekly markets and earl stands of the Panehayat Board and

the auction was confirmed, followed by the defendant benefiting himself

with collection of fees, he cannot raise the Board’s suit for dues from him

on the score that there was no lease deed executed as required by the

statutory provision and rules.1

1.6 A contingent contract is admissible and lawful under Section 70. The

plaintiff is entitled to restoration of the benefit enjoyed by the defendant

and refund of the amount both under Section 65 as well as under Section

70 of the Contract Act.2 Ordinarily, Section 70 of the Contract Act cannot

be invoked on an implied promise. If the promisor note is inadmissible in

evidence under Section 35 of the Stamp Act,the plaintiff will not be entitled

to claim compensation under Section 70 of the Contract Act.3

1.7 Of course, sometime an implied promise to repay arises even under Section

70. Where plaintiff’s money has been received by the defendant but the

plaintiff does not want that the money should go to the defendant, the law

implies an obligation to repay and for this reason, the defendant is liable to

1. Venkatsami v. Narasyya, AIR 1965 AP 191.

2. Durga Prasad Sharma v. Sadasib Biswal, AIR 1969 Orissa 171.
3. Lothamasu Sambasiva Rao v. Thadwarthi Balakotiah, AIR 1973 AP 342.
 152

pay llie consideration thereof.1 It is also applicable where there is a part

payment to the plaintiff and the balance remaining due. This is because
there has been a supply of goods by the plaintiff as well as acceptance by
the defendants. No express contract, rather an implied contract is infered
for which the defendant is liable to pay the remaining dues.2

1.8 As the section embodies an equitable principle, a co-owner of a property

who has done an act in respect of that property for the common benefit of
all co-owners will be entitled to relief under Section 70 on the basis of the
principle of contribution. Provided the property has to be saved from
danger,3 and not so entitled to relief if the expenditure was not incurred to
save the property from danger.4

2. ENGLISH PRINCIPLES OF LAW PARI MATERIA :

Money paid at the defendant’s request is the commonest form of quasi

contract actionable in England.5 The action ‘ for money paid’ is maintainable
in every case where there has been a payment of money by the plaintiff to
a third party at the request, express or implied, of the defendant and with an
undertaking, express or implied, on his part to repay it.6 This is better taken
care of by Section 69 of the Indian Contract Act, 1872.

It is immaterial whether the defendant is relived from a liability by the

payment or not. It is necessary in order to support this action that the money
sought to be recovered should have been paid to the use of the defendant. A
mere voluntary courtesy will not have a consideration to uphold an
assumpsit. But if the courtesy were moved by a suit or request of the party

.1. Modi Vanaspali Manufacturing Co. u Kalihar Jute Mills (Private) Ltd., AIR 1969
Cal. 496.
2. Haji Md. Ishaq Wd. S.K. Mohammed u Mohammed Iqbal and Mohammad Ali and
Co., AIR 1978 SC 798.
3. Ganga Saran v. Narayan Das, AIR 1971 All. 43.
4. Ramakrishna Mardi v. Vishnumurthi Mardi, AIR 1957 Mad. 86.
5. Chitty on Contracts,(1947) En. P.84.
6. Brittain v. Lloyd, (1895) 14 M&W 762(773)
 153

that gives the assumpsit, it will bind; for if the promise though if follows,

yet is not naked, but couples itself with the suit before and the merits of
the party procured by that suit which is the difference.1

2.2 Under English Law past consideration gives rise to no legal obligation.

The defendant’s express or implied request to the plaintiff, to pay the money

for his use, should be shown by the plaintiff. It is not sufficient merely to

prove that the defendant was liable to a third person and that the plaintiff

discharged such liability. It must appear that the plaintiff did so either
express or implied, of the defendant or that the act was subsequently
recognized by him.2 Therefore, no legal right will be established by the
mere voluntary payment of the debt of another person. So, one man cannot

be made the creditor of another without his knowledge and consent.3

Therefore, it is required by the plaintiff to prove whether money has been

paid of an actual request by the defendant. But where no actual request

exist, he must show that the payment was made under circumstances from
which a request would be implied, and it often becomes a matter of some
nicety to determine when such circumstances really exist.

In Indian Law the question of request of the defendant does not arise. It

concerned only whether the plaintiff has lawfully done anything for the

defendant, or delivering anything to him. If the plaintiff has lawfully done

something for the defendant and if the defendant had the benefit of it and

further if it was the plaintiff’s intention not to do it gratuitously then a

liability arises to reimburse on the defendant under Section 70.

1. Lampliegh v. Braithwait, (1915) 80 ER 255.

2. Sleigh v. Sleigh, (1850) 5 Exch. 514, 516.
3. Stockes v. Lewis, 1750 ER 1TR 20; Liggett (Liverpool) Ltd.v. Barclays Bank,( 1928)1
KB 48.
 154

The law in England is clearly different. In Sleigh v. Sleigh,' where the

plaintiff as drawer of a bill, even after dishonour paid if without notice of it
and without even a request from the defendant. This was held to be a voluntary
payment without any implied underktaking by the benefited party to repay.
If payment is made by mistake of law e.g., where plaintiff pays money

payable by defendant, it must be deemed as quite voluntary, there being no

compulsion to pay. So, there can be no recovery of such amount from the
defendant.2

Under English Law the request need not be expressed. It may even be
implied from the circumstances.3 A pure voluntary payment cannot be

recovered. It is an option to the recipient to accept or decline the benefit.

A voluntary act by plaintiff expending money for preserving defendant’s

property afford no claim in English Law for reimbursement. But if the act
is on request it has to be paid for. It is immaterial whether the act is
gratuitous or not. No voluntary act can be paid for. The only exception is
that the act done on request in which event an implied promise to pay is

presumed. In Leigh v. Dickeson,4 where a tenant in common did the repairs

and claimed unsuccessfully contribution from the other tenant, if was held
that the plaintiff repaired voluntarily without consulting the defendant. The
circumstances did not allow an implied request to go on with the repairs.

But in India a decree can be granted if the defendant had the benefit and the
repairs lawfully executed without intending it to be gratuitous. The

compensation will be only as to the share of the defendant’s benefit. It is

immeterial whether or not the plaintiff has also been benifitted. In India
past consideration is perfectly valid.
(1850) 5 Exch. 514, 517.
2. Aktieslaskabet Dampskibs Slehslad v. Person, (1927) 137 LT 533.
3. Kleinwort v. Raddawary, (1904) 9 Can Cas. 202,
4. (1884) 15 QBD 60.
 155

2.3 Under the English Lav/, where the plaintiff is compelled to pay the
defendant’s debt, in consequence of his neglect or omission so to do, the
law infers that the defendant requested the plaintiff to make the payment
for him and gives him the action for money paid.1 It is better taken care of
by Section 69 of the Indian Contract Act, -1872. The settled law is that
where one man is compelled to pay a debt for which another is legally
responsible, the law will imply a promise by the latter to indemnify the
former.2 So, where a person’s goods are lawfully seized by another’s debt,
the owner of the goods is entitled to redeem them, and to be reimbursed by
the debtor against the money paid to redeem them, and in the event of the
goods being sold to satisfy the debt, the owner is entitled to recover the
value of them from the debtor. The right to indemnify exists, although there
may be no agreement to indemnify.3 Thus, if a tenant pays ground rent due
from his landlord, or a stranger pay rent due from a tenant in order to prevent
the tenant’s or the stranger’s goods from being distrained from such rent
by the operation of the law that a landlord may with certain exception,
distrain on any goods found on the demised premises, notwithstanding any
sub-tenancy and to whomsoever belonging, he may recover it as money
paid to the landlord's use.4 Similarly, where a lessor paid a duly assessed
upon a house it was held that the lessee who had expressly convenanted to
pay such duties was liable to reimburse the amount so paid to the lessor
upon an implied promise, although the validity of the assessment had never
been tested by appeal.5

The obligation to pay reasonable remuneration for the work done when
there is no binding contract between the parties is imposed by a rule of

1. The Orchis,(1890) 15 PD 38: The Heather Bell, 1901 P. 143.

2. England v. Marsden, (1866) LR1C 529.
3. Edmunds v. Willingford, (1885) 14 QBD 811.
4. Sapsford v. Fletcher, (1792) 4 TR 511; Underhay v. Read, (1887) 20 QBD 209.
5. Eastwood v. McNab, (1914) 2 KB 361.
 156

law, and not by an inference of fact arising from the acceptance of services
or goods,. But where in spite of breach by the other party, the contractor
goes ahead with the construction and completes the project, his claim would
be limited only under the contract, there would be no need for law to fashon
a restitutionary remedy. Nor it would be right for the contractor to obtain
a possibly higher rate of compensation than that agreed under the contract.1
The rule under Section 70 will not apply.

2.4 Where in the course of carrying out a contract, from anything which the
parties had in contemplation is brought about by the conduct of one of
them, even though his conduct may not be breach of contract, he will not
be allowed to take advantage of the new situation to the detriment of the
other party, when it would be unjust to allow him to do so.2 If the special
contract be wholly abandoned or its terms be varied by the mutual consent
of the parties, the law implies a new promise. Thus, if work additional to
that contemplated in the original contract be done, at the request of the
party benefited by it, he will be liable therefor upon an implied promise to
pay for it. So also, where either party to an express contract is injured, or
the labour or expense sustained by him in doing the work is enhanced by
the neglect or omission of the other, an implied promise of indemnity
therefor will arise, additional Lo the express agreement. So also, if entire
performance, according to the express agreement be rendered impossible
through the fault of either party, the party in fault will be liable on a quantum
meruit. But where, the compensation beingjgraduated, by the terms of the
contract, Section 70 of the Indian Contract Act, 1872, will not applicable.

2.5 Under English Law the remedy is independent of contract. But if the contract
exists, it shall not be wholly irrelevant. Where a ship was delivered for

I. Morrison-Kundson & Co. v. B.C. Hydro c& Power Authority,- (1978) 85 DLR (3d) 186,
Brit Cl.C.A.
2. David Contractors Ltd. v. Faraham, U.D.C., (1955) I QB 302 : (1955) 1 All ER 275.
 157

repair and the contractor used more expensive material than that authorised
by the contract, he could not recover under the contract as he had not carried
it out precisely, nor under quasi-contract, because he had no chance to reject

the expensive material. He could not have rejected the ship after it was

already repaired and the mere taking of his own property was not the

something as an acquiescence in or acceptance of the work done.1 Similarly,

a party who abandons the future performance of the contract may not be
able to recover anything for the part performance.2 Where, however, a
building undertaken fora lump sum had been substantially performed, the
contractor was allowed to recover, but subject to some deduction for
defective performance here and there.3 This comes under breach of contract

or part performance, and not under Section 70 of the Contract Act.

2.6 It is therefore clear that Section 70 of the Indian Contract Act, 1872, has
an wider amplitude than in English Law. The form of the doctrine of quantum
meruit, the principles of unjust enrichment, the procedure and more or
less the interpretation of the terms by the Courts are peculiar under English

Law. Nevertheless, the principle of unjust enrichment in England is based

on the doctrine of restitution. The principle has been developed in India

with a greater scope and application in respect of Section 69 and 70. At

Common Law in England the remedy of restitution lay in Assumpsit for
‘money had and received’ or ‘goods sold and delivered’ or ‘reasonable
vi\\ue{q nan turn meruit)' for ‘work and labour services rendered’. In India
statutory recognition has been given for all forms of restitution, for unjust
enrichment, which are more flexible than what is comparably available in
England in Equity or at the Common Law.

Forman <& Co. Ltd. v. The Liddesdale, (1900) AC 190 PC

2. Sumpter v. Hedges, (1898) 78 LT 378.
3. It Dakin <H Co. Ltd. v. Lee, (1916) 113 LT 903.
 153

3. THE DOCTRINE OF QUANTUM MERUIT:

3.1 The provisions under Section 70 are based on the doctrine of quantum
meruit. The principle of quantum meruit is applied where for some
technical reason a contract is held to be invalid. Under such
circumstances an implied contract is assumed by which a person for
whom the work is to be done contracts to pay the person who does the
work. It arises on an implied contract only where there exists no express
valid contract.

The principle of quantum meruit contained in Section 70 can be invoked

only in cases where there is no contract or where the contract is void
*

and unenforceable.' Where the plaintiff enters into a contract with an

officer of the Government, who is not authorised to enter into the
contract on behalf, of the Government, the contract is ultra vires and
cannot be enforced against the Government. But under Section 70, the
plaintiff who has been lawfully supplying goods for the purposes of the
Government and not intending to do so gratuitously, and the Government
has accepted and enjoy the benefit thereof, the plaintiff is entitled to
compensation.12

A claim under quantum meruit arises where the work is done or goods
are supplied, not in pursuance of any express or tacit contract, but under
circumstances which would import in law an obligation to pay for the
services or goods.3 Where the defendant receives goods from the
plaintiff, the plaintiff is entitled to recover the reasonable value of the
goods so received by the defendant. A person who does a work or
supplies goods under a contract, express or implied, if no price is fixed,
1. D.Vaugeeswara v. District Board South Arcot, AIR 1941 Mad. 887.
2. State of West Bengal v. B.K.Mandal & Sons, AIR 1962 SC 779.
3. Village Panchayat of Jangareddigudem v. Komiredy Narosayya, AIR 1965 A.R 191.
 159

is entitled to be paid a reasonable sum for his labour and the materials
supplied. If the work is outside the contract, the terms of the contract
can have no application; and the contractor, in the absence of any new
agreement, is entitled to reasonable price for such work.'

Compensation under the principle of quantum meruit is awarded lor

work done or services rendered when the price thereof is not fixed by
a contact. In Messrs.. Patel Engineering Co. Ltd. V. Indian Oil
Corporation Ltd.,12the. rate for the finished concrete work expressly
included shuttering work and parties had limited their claim on the
express terms of the contract. It was held that there was no scope for
the application on the principle of quantum meruit.

h;t?)-wh o Ih-t-TT-pa rl

flipsms- offem^rptant^m^r^att. Where

a contract has not been neglected or repudiated and a claim is based
upon the terms of the contract. The principle of quantum meruit cannot
be invoked.3 Therefore, to make a claim under the principle of quantum
meruit, the person who has a right to insist on its performance has
elected to accept some benefit resulting from its partial or defective
performance. Where the contract has been partly performed, the mere
fact that the part performance has been beneficial is not enough to render
the party benefited to be liable to pay for it. It must be shown that he
has taken the benefit of the part performance under circumstances
sufficient to raise an implied promise to pay for the work done,
notwithstanding the non-performance of the special contract.

1. State o f Run jah r. I tiin/nshin Pcvc/o/uncnt lloartt /./</., AIR 1061) Punjab >S5.
2. AIR 1075 P.-U, 212.
3. Kotah Match Factory, Koiah u Stale of Rajasthan, AIR 1970 Raj 118; See also
Mir Querah Ali Khan v. Muzqffar Ali Khan, 1994 (1) An. LT 591.
 160

Where the entire performance by the plaintiff was in general a condition

precedent to his right to demand performance from the defendant, the
plaintiff cannot sue to recover a compensation for what he has done
until the whole is complete. He cannot be allowed to throw over the
terms of his bargain and recover on a quantum meruit for doing part

only of the stipulated work.

3.2 Under Section 70, it is necessary that the person against whom the claim
is made must have always had the option to voluntarily accept the thing
or enjoy the work done.1 If the option is not there, Section 70 is
excluded. Section 70 particualrly deals with obligations of persons
. voluntarily enjoying the benefit of gratuitous acts.2

Since the liability is not on the basis of any valid contract, there is no

scope for a suit for specific performance or for damages for breach of
contract. Where in a writ against illegal and premature retirement stay
order was granted, and the writ was ultimately dismissed, the petitioner
was entitled to full salary for the period from the date of dismissal of
writ to the date of removal from service.3 Here, the plaintiff had to be

recompensed for the work done during the period between the disposal

of the writ and his dismissal even if he was liable to be dismissed from

the date of disposal of the writ, rather more clearly from the date of his
compoulsory retirement.

3.3 In Pallonjee Eduljec and Sons v. Lonavala City Municipality,4 where

a building contract was unenforceable by reason of failure to conform
to the provisions of the Bombay Municipal Boroughs Act, but the
plaintiff has carried out all his obligations, the Bombay High Court held

1. Krishna v. Cochin Dewaswon Board, AIR 1963 Ker. 181.

2. State of West Bengal v. B.K.Mandai & Sons, AIR 1962 SC 779.
3. Ramakrislma Nair v. State of Kerala, AIR 1989 Lab. IC 1903.
4. AIR 1937 Bom. 417.
 161

that Section 70 specifically met the case and that its applicability was
*

not excluded by the fact that there was no enforceable contract. In order
to avail the remedy under quantum meruit, the original contract must
have been discharged by the defendant in such a way as to entitle
the plaintiff to regard himself as discharged from any further
performance and he must have elected to do so. The remedy is however,
not available to the party who breaks the contract even though he may
have partially performed his obligation. This remedy by way ofquantum
meruit is restitutory i.e., to recompense the plaintiff for the value of
the work done. Claim under Section 70 is different from claim for
damages as a compensatory remedy aimed at placing the injured party,
as near as may be in the position which he would have been in, had the
other party performed the contract.1

4. UNJUST ENRICHMENT AND DOCTRINE OF RESTITUTION:

4.1 In the case of quasi contracts under Section 70, the liability exists,
independent of the agreement, upon the equitable doctrine of unjust
enrichment. If services are rendered or goods supplied, la|ully and not
gratuitously, the party at the receiving end is required by law to
recompense the benefit. The obligation rests upon law of natural justice
and equity. Under Section 70 the employer is obliged to make payment
to the employee for the services rendered by him to the employer. In
Bihar Nurses Registration Council v. Uarendra Prasad Sinha,2 it is
made clear that the petitioners(employers) are under a legal obligation
►

to make payment for all the arrears of pay and allowances up-to-date,
less amount already drawn, and any omission on their part to do so will
prima facie be malafide. This principle under service jurisprudence bears
1. State ofRajasthan v. Motiramm, AIR 1973 Raj. 223; Puran Lai v. State of Utter Pradesh,
AIR 1971 SC 712; Alopi Prasad & Sons v. Union of India, AIR 1960 SC 588.
2. 1991 (2) BLJR 1222 at R 1226.
 162

consonance with the equitable rule against unjust enrichment. In Saijpur

Bogha Nagarpalika Octroi Karmachari Mandal v. Ahamadabad

Municipal Corporation,1 it was held that the amount of wages/salary is

nothing but the price of labour sold or the service rendered. If an

employee performs his part of contract and attends to duty, he will be

entitled to his wages. Delayed payment of wages will further entitle

him to interest because payment of wages regularly is an express term

of contract of service.

4.2 The foundation for the claim made under Section 70, is not a contract

express or implied. The liability is quasi contractual; it may resemble

as being that of a contract but in reality it does not rest upon contractual

obligation. It is immaterial therefore, that there is no contract executed

in such a case or that the alleged contract is found ab initio void or

rendered void subsequently for any reason.12 Conversely, therefore, the

person who seeks restitution has also a duty to account to the defendant

for what he has received in the transaction from which his right arises.

In Mulamchand v. State of Madhya Pradesh,3 the Supreme Court has

settled the law that under a void contract neither party can claim a

specific performance or damages. But the provision of Section 70 can

be invoked by the aggrieved for the purpose of restitution. Thus, if a

contract is void, then the payment which is made under such a contract

can be recovered on the ground that no unjust enrichment can be allowed.4

1. 1991 (2)Guj.LR956atpp. 971,972.

2. Asrar All Khan v. Baijnath Prasad, AIR 1983 All. 197.
3. AIR 1968 SC 1218
4. Balbubhai Jethabhai Shah v. Chhaganbhai Bamanbhai, AIR 1991 Guj. 85.
 163

In Bhagwandas v. P.S, Soma Iyer,1 the purchaser-plaintiff allowed the

seller-defendant to reside in the building, so sold and purchased, till

the defendant gets an alternative accommodation. This permission was

held to be non-gratuitous; and it was held that the plaintiff was entitled
to damages from the defendant for use and occupation of the building.

In Fakir Clutnd Seth v. Damburudhar Bania2 the plaintiff advanced

money under an agreement without knowing that the agreement was

forbidden by law. It was held that the plamtiff is entitled to relief under

Sections 70 and 65.

Section 70 provides the theoretical foundation for the law governing

restitution.3 From the above instances it is clear that the principle of
restitution under Section 70 is not primarily based on loss suffered by
the plaintiff but on the benefit which is enjoyed by the defendant at the
cost of the plaintiff.4 Therefore, one cannot unjustly enrich himself by

retaining anything delivered to him which does not belong to him and

he must return it to the person from whom he has received it.

5. ANALYSIS OF THE SECTION 70 :

The section itself is divided into three parts i.e.,

(i) that the person must have done the thing ‘lawfully5

(ii) that the person must not have intended to do the act gratuitously,
•*

and

(iii) that the other person must have enjoyed the benefit.

1. AIR 1969 Ker. 263.

2. AIR 1987 Orissa.50.
3. Great Eastern Shipping Co. v. Union of India, AIR 1971 Cal. 150; Pannalal v. Deputy
Commissioner, Bhandara. AIR 1973 SC 1174.
4. Renusagar Power Co. Ltd. v. GEC, AIR 1994 SC 860.
 164

5.1. LAWFULLY:

The term ‘lawful’ used under Section 70 has a wider meaning than the
term legal. ‘Legal’ is that which is in conformity with the letters or
rules of law as administered in the Courts of law. ‘Lawful’ is what is in
conformity with the principle or spirit of law, whether moral or judicial.1
There is no law or moral principle involved to pay a stranger who does
an act for the defendant without even a request from him. In every case
it is required to see whether the person making the payment of money
has any lawful interest in making it.2 So the word ‘lawful’ in the section
excludes the protection to such volunteering and officious persons who
are paying without a request. But once the defendant elected to enjoy
the benefit, it is quite legal and moral that the plaintiff should be
compensated for his lawful act.

The meaning of the word ‘lawful’ under Section 70 is merely bona fide.3
Thus, to be ‘ lawful’ it must be shown that the payment (a) has been made
in good faith, (b) has not been an unlawful payment, (c) has not been
intended to be gratuitous, (d) and the compensation for it was expected.4

In State of West Bengal v. B.K.Mandal,5 the Court observed that the

word ‘lawfully’ in the context indicates that after something is delivered
or something is done by one person for another and that thing is accepted
and enjoyed by the latter, a lawful relationship is borne between the two
-i

which under the provision of Section 70 gives rise to a claim for

compensation. So. in order to ascertain whether an act is lawfully done
L Motilul v. Btulrilal, AIR 1057 M.U. 183. '
2. Bhagiraihibai u Digambar Ambadas, ILR 1945 Nag. 247 : 1945 NLJ 98; Jai Indra
Bahadur Singh v. Mst. Dilraj Kuai; 61 IC 278.
3. Village Panchayat v. Narasayya, AIR 1965 A.P. 191; Challa Appayya v. Desetti
Chandrayya, (1950) 1 MLJ 306. Muthayya v. Narayana, AIR 1928 Mad. 317.
4. Venkata Krishna Charlu v. Aruna Chalam Pillay, AIR 1919 Mad.526.
5. AIR 1962 SC 779 at p.788.
 165

within the meaning of Section 70 of the Contract Act, it must be

ascertained whether the person so acting held such a position to the
other as either directly to create or by implication reasonably to justify

the inference that by the act done for the other person, he has entitled

to look for compensation for it from the other person for whom it was

done.'

A lawful relation must subsist between the petitioner and the person
for whom the thing is done or to whom it is delivered. So, where a
person makes a payment voluntarily, against the will of the party
benefiting, it cannot be recovered under this section.12 3But, if a person

holding a charge on the property, makes a payment in order to save it

from being sold, in the bona fide belief that it is necessary to do so in

order to keep it intact for satisfaction of his debt, the payment is made
‘lawfully\J

The right to compensation arises not merely by the doing or the delivery
of the thing by the plaintiff but by its acceptance and enjoyment by the
defendant. The thing done or delivered must not be done or delivered
dishonestly or gratuitously. The party for whom the thing is done or to
whom it is delivered must accept and enjoy it. The acceptance and
enjoyment of the thing done or delivered by the other party must be
voluntary, if the thing done or delivered is rejected by the other party,
there is no right to compensation. The relationship which arises between
the parties under this section is one resembling that arising under a

contract, express or implied.

1. M/s. Cauvery Sugars and Chemicals Lid. K.Sundararajan, (1970) 2 MLJ 256.
2. Ram Tuhul Singh v. Bisseswar Led, L.R. 2 I.A. 131.
3. Bhagiralhibai v. Digambar Ambadas, AIR 1945 Nag. 179.
 166

A request is not an element of Section 70. Things done or delivered,

even under compulsion, if accepted and enjoyed by the other party, create

a right to compensation under the section. The section can apply only if

there was no subsisting contract between the parties at the time when

the thing was done or delivered by one party and accepted or enjoyed by
the other. If there subsists a valid contract, the parties shall be bound by
the terms of the contract; whereas in the absence of a valid contract,
due to acts of parties a quasi contractual relation/obligation develops.

Section 70 cannot apply if a payment is made at a request of another for

creating a contractual relationship. But if the request is by one who

cannot create a contractual relationship, the section will be applicable

if all the ingredients thereof are fulfilled.1 Payments under protest only
safeguard the person who makes the payment in the sense that the
payment will not be called a voluntary. But if such a payment is made
for a third person and it ultimately turns out that the money was really

not due from the third person, Section 70 is of no avail to the person

paying even under protest.2 Even the person cannot recover the amount
he paid with the fraudulent purpose of manufacturing evidence of title.3

Voluntary acceptance of the benefit of the work done or thing delivered

is the foundation of the claim under Section 70.4 If once the benefit of
the work done or thing delivered is accepted, it can be presumed that

the said work was done or thing was delivered, not intending to do so

gratuitously. Similarly, it can as well be presumed that the person who

has accepted the work done or thing delivered, has enjoyed the benefit

also.
1. Punjabhai \\ Bhagwandas, 53 Bom. 309.
2. Municipal Council Dindigul v. Bombay Co. Ltd., AIR 1929 Mad.409; 52 Mad.207.
3. Janki Prasad Singh v.' Baldeo Prasad Singh,30 All. 167.
4. Haji Abdulla H.A.S. Dharmaslhapanam v. T.V. Hameed, AIR 1985 Ker.93.
 167

Section 70 deals with cases where there is no valid contract. However,

it is possible to infer from the circumstances of a given case that a
lawful relationship is borne between the two and such a relationship is
recognised under the provision of Section 70. Section 70 cannot be
extended to help persons who are guilty of officious interference with
the affair or property of another. The law will not impose any obligtation
as to services unwanted and protested against by the other party.1 A
purchaser from a person having no title if he expended on saving the
property from sale cannot claim reimbursement.2 A stranger if chooses
to spend on improving an estate cannot claim anything as his act in no
sense creates a lawful relation between him and the beneficiary.3

It is settled that an agreement is lawful unless it is forbidden by law or

would defeat the provisions of any law or is fraudulent or involves injury
to persons or property of the other person. A thing can be said to be
lawfully done or delivered, if the person doing or delivering the thing
can look for remuneration or compensation to the person for whom the
thing is done or to whom the thing is delivered. The important condition
*

is that the act of the person and the right to remuneration or

compensation should not be barred by some law.

Relief under Section 70 of the Contact Act is not available where the
act done is not lawful. In Rita Mishra v. Director, Primary Education,
Bihar* where the letter of appointment was itself a forged document,
the petitioner appointee could derive no, legal right even if she had
worked on the post for some time. Section 70 embodies on equitable
principle; and the claim gets defeated if the petitioner approaches the
Court with dirty hands.

1. Yogambal Boyee Ammani Animal v. Naina Pillai Markayar, 38 Mad. 15.

2. Gaya Prasad v. Metheilal, AIR 1923 All. 404.
3. Champ Kuar u Mina Mai, 1887 AWN 1; Velayutham Pandaram v. Nallalhambi, AIR
1928 Mad.541.
4. 1987BLJR 1000 at pp. 1097, 1098 (F.B.)
 168

Section 70 cannot justify the officious obligations in respect of services

which the person sought to be charged with did not wish to have rendered.
Therefore, where a tenant who renovates the house against the will and
without the consent of the landlord cannot invoke the aid of this section.1

Where the defendant wants something to be done, and after it is done,

approves of it, and admits that the work is done only on payment, the
act done is neither gratuitous nor purely voluntary, but is an act which
was done in pursuance of the wishes of the defendant, and must be taken
as lawfully done within the meaning of this section.2 The section does
not empower the court to interpret the word ‘lawfully’ to determine
according to its own notions of justice what relation must entitle the
plaintiff to obtain compensation.3

5.2 ‘Does anything*:

The term ‘lawfully’ used in Section 70 qualifies only the term ‘does’
and not word ‘delivers’.4

The section says ‘where a person lawfully does anything’. The word
‘does’ used in Section 70 is not confined in doing of an act rather
includes the payment of money.5 But where a person bound to pay a sum
of money may not be benefited by its payments by another.6 Therefore,
such type of cases are though not coming under Section 70, falls under
Section 69. Section 69 clearly speaks payment of money which another
is bound by law to pay. But Section 70 provides of doing of an act not
gratuitously and benefits the other person. So, a special emphasis has
been given to the word ‘benefit’ in Section 70.

1. Doraipandi Konar v. P.SUndara Pathar,AIR 1970'Mad. 291.

2. Ramakrishna u Rangoohai, AIR 1959 Bom. 519.
3. Pallonji & Sons v. Lonavala Municipality; AIR 1937 Bom. 417.
4. M/s. Bengal Coal Co. Ltd. v. Union of India, AIR 1971 Cal. 219.
5. Nagendra Nath u Jufal Kishore, 1925 Cal. 1097;Nab in Krishna v. ManmohanJ Cal.
573; Smith v. Dinanath,\2 Cal.213; AIR 1927 Nag.241.
6. Smith v. Dinonath, ILR 12 Cal. 213.
 169

The expression ‘does anything’ includes some services, under English

Law, this principle has received high reognition in India. In Powell v.
Brown,1 the plaintiff being an employee to the defendant, the defendant
had agreed to give bonus on the basis of profit, but subsequently stopped

the bonus. Applying the principle of quantum meruit, the court held

that the plaintiff is entitled to recover the bonus even if the defendant

has no trading profit. Basing on this English pronouncement, in India,

the Allahabad High Court, in Indu Mehta v. State of Utter Pradesh,2
observed that the plaintiff being an advocate appointed as Assistant
District Counsel (Criminal) and rendered her services. The appointment

being subsequently found void, the Government cannot recover the fees

paid even though, the said appointment is void. Because the Government

has enjoyed the benefit of the services rendered by the plaintiff.

It is therefore clear from the words used under Section 70 that a person
is entitled to recover the remuneration or compensation for the act or
services rendered, depends on the person’s intention at the time of doing
the act. Where the act is gratuitous he cannot recover anything, So, a

positive approach is necessary while doing of an act. When tlie act is

merely so refrain from doing something, the person is not entitled to

claim compensation under Section 70.

In Kirorilal v. State of Madhya Pradesh.*

3, the
2 Mining Engineer of the
State of Rajasthan executed a lease deed'in favour of the plaintiff for
extraction of sand for both the States of Rajasthan and Madhya Pradesh.
But as he is incompetent to execute the lease deed under law, refrained

the plaintiff from extraction of sand. The plaintiff then brought an action
against both the Government to recover compensation as he was deprived
_ ________ _ _
2. AIR 1987 All. 309.
3. AIR 1977 Raj. 101.
 170

of extraction of the sand and the State of Madhya Pradesh has gained an
advantage by removing the same. The Court held that the plaintiff is not
9

entitled to recover anything as nothing positive has been done by him to

confer any benefit on the defendants.

5.3 For another Person :

Under Section 70 the other person for whom a thing is done or delivered
includes an individual, a corporation or a Government. Where an act is
done for the benefit of other is clearly a question of fact in each case.1

In Nabia Krishna Bose v. Manmohan Bose,2 the Court held that where a

payment has been made by one person for the benefit of another, and that
other afterwards adopts that payment and avails himself of it the sum
becomes money paid for his use. Therefore .emphasis has been given on
the payment for another person. It is quite clear that where the object of a
payment is to benefit the plaintiff himself, the payment cannot be said to

have been made for the benefit of the defendant,3

Where a person does an act for his own benefit, and that act incidentally
benefits his neighbour or any other person, the act cannot be said to have
been done for another.4 A payment of revenue by a person in wrongful
possession of another’s land for his own benefit and on his own account

cannot be said to have been made for the real owner.5

Making payment for another tentamounts to doing something for him. A

bank discounting an order of payment and giving credit to the customer
was allowed reimbursement from the customer for something done for
1. Asadullah Khan u Bibi Khasiram Nisc, 1969 Pat. LJR 227.
2. (1881)7 Cal. 573; 12 Cal.213; Raghvan v. Alamelu,3\ Mad.35.
3. Rangya u Trimhak,40 Bom.646.
4. B.T.S.Naicker v. R.G.Orr.,MR 1919 Mad. 1145; Vishwanath v. On: 45 IC 786; See also 1934
Oudh. 307.
5. Binda Kuar v. Bhonda Das, 7 All.302.
 171

him.1 Where a person on being assessed by the Income-tax authorities

protests that another person is liable, but pays the tax, he cannot sue the
latter for the recovery of the tax amount as he cannot be said to have paid
the tax for the benefit of the latter.2 But once it is proved that, in fact the
other person is liable, the tax payer should be entitled to reimbursement
from the Government for tax paid in ©tcess than the liability.

5.4 No intention to do the act gratuitously:

Section 70 does not apply where the thing has been done or delivered
gratuitously. There must be a clear intention evidenced by the circumstances
and facts of the case that the act was not done gratuitously. But under English
Law a voluntary act made al the request of the other can be compensated.

Under Section 70 no voluntary and gratuitous act can be the basis of action
for reimbursement and no personal decree can be passed.3

In Jarao Kumari v. Basant Kumar Roy,4 Section 70 goes for beyond the
Enlglish Law. If goods, work or anything of value is offered in the way of
business, and not as a gift, the acceptance of them is evidence of an implied
agreement to pay what the consideration so given and taken is reasonably
worth, though a man is not bound to pay for what he has not the option of
refusing. In other words, the person said to be liable must have the option
not to accept the thing. It is only where he voluntarily accepts the thing or
enjoys the work done that a liability arises under Section 70.

Section 70 clearly speaks of a person who finds and restores lost property
is entitled to compensation for his trouble,if he did not intend to act

gratuitously. One who supplies something for Government’s use to the order
of some authority, who has no authority for the purpose, can recover the
value from the Government according to market rules, if the supplies are,

in fact, accepted and used.5

T Federal Bank v. Joseph, (1990)1 Ker. L.I 889; See also Haji Ad Sail v. Hameed, (1985) Ker.
LJ 169.
2. Haghavan v. Alaiuelii Animal, 31 Mad. 35.
3. George v. South Indian Bank Ltd., AIR 1959 Ker. 294.
4. ILR 32 Cal. 374.
5. Secretary ofState v. G.T.Sarin & Co., ILR II Lah. 375 : AIR 1930 Lah. 364.
 172

Section 70 deals with cases where despite there being no valid contract, it
is possible to infer from the eircumstances of a given case that a lawful
relationship is borne between the two.

In Haji Abdulla.H.A.S. Dharamsthapanam v. T. V.Hameed,1 the tenant of

the property makes improvements and additions in the property and the
landlord accepts the same, the presumption is that the tenant did hot intend
to do so gratuitously and he can recover compensation for the same from
the landlord. Therefore, a presumption is to be taken into consideration
whether the act has been done gratuitously or noh-gratuitously. In
Bansidhar Joshi v. Chandra Kuamr,2 the High Court required a proof for
non-gratuitous act. A tenant was occupying & house, the electricity was cut
off for non-payment of dues. As the tenant was anxious to have electricity
he paid the arrears from his own pocket. Even if the landlord too was
benefited, the tenant could not prove that his act was non-gratuitous and
thus could not maintain a suit for compensation.

Under Section 70 there is an exception on officious interference by any

person in (lie affairs of another for reimbursement.3 The Court should not
compel a person to pay for services which have been thrust upon him against
his will.4 In Damodar Mudaliar v. State,5 the tank used for irrigating the
land of the defendant required repairs. The Government repaired it and called
upon the defendant to pay his share of expenses for the repairs. The defendant
pleaded absence of privity of contract and that the Government’s act was
unilateral, voluntary and gratuitous. The Court held that repairing of a tank
for the benefit of owners using the tank is not gratuitous. Those who enjoyed
the benefit should pay for it.

_ _______ — _ . • — "

2. AIR 1964 All. 348. ; 4

3. Municipal Council, Rajgarh v. MPSRTC, (1991) MPJLJ 910; Bihar Nurses' Registra­
tion Council v. HP. Sinha, (1991) 2 BLJR 1024.
4. Suchand Chosal v. Balaram Mardana, (1911) 38 Cal.l
5. ILR 18 Mad.88.
 173

Under Section 70 it is necessary that the services should have been

rendered without any request.1 Of course, reasonable compensation can as
such be recovered for services rendered at request.2 When a person lawfully
delivering goods to another without intending to do so gratuitously, is
entitled to demand for return of the goods delivered, or.a compensation
for the goods shall be made. Compensation would normally be the market
price of the goods on the relevant date.3

When a person gives some advance in respect of an agreement which is:

subsequently discovered to be void, he can recover back under Sections 65
and 70. Under Section 70, he can claim back the advances as the advance
payment was not intended to be gratuitous.4 When the consideration is
paid under an agreement whereby property is transferred and the transfer
is void the transferee can recover the money advanced.5 Where a tenant
enters into possession but refuses to pay rent on the point that the agreement
was void for uncertainty in that it did not fix the rent, the Court has power
under Section 70 to decree the claim fixing it at a reasonable rent.6

Although the claim under Section 70 is not based upon any contract, yet
the contract between the parties is relevant at least for indicating the fair
measure of comensation.7 Where a contractor whose work has been accepted
by the other parly claims compensatin under an oral agreement, which he
is not able to prove, he would still be entitled to compensation under Section
70.8 But an executory contract not complying with the statutory
requirements cannot be enforced.9

1. Jain Mills & Electrical Stores v. State of Orissa, AIR 1991 Orissa 117.
2. Sibkishore Ghose v. Manik Chandra, (1915) 29 IG453.
3. Jain Mills & Electrical Stores v. State of Orissa, AIR 1991 Orissa 117; See also Pillo
Dhunjishaw Sidhwa v. Municipal Corporation, Poona, AIR 1970 SC 1201, followed in
Dinsaw <V Dinhmv v. Indoswe, Engineering (P) Ltd., AIR 1995 Bom. 180.
4. Fakir Chand Seth u Dcunburudhar Bania, AIR 1987 Or.50.
5. Balubhai Jelhabhai Shah v. Chhaganbhai Bainanbhai & another, AIR 1991 Guj.85.
6. Padtnavali u Pyarelal Vacher, 1966 All. LJ 688.
7. Pannalal v. Dy. Commissioner, Bhandara, (1961) 3 SCR 663 : AIR 1966 SC 1034.
8. V.R.Subramanyam v. B.Thayappa, (1961) 3 SCR 663 : AIR 1966 c 1034
9. Union of India v. Sahab Singh, AIR 1977 All. 277; KJethabhai Somayya v.. State of
Bombay, AIR 1964 SC 1714.
 174

Section 70 will not be applicable where overpayment has been made under
the express terms of contract.1 On the other hand, payment for extra work
done in connection with a contract without any agreement has been allowed
to be recovered under this section.2

5.5 Enjoys the Benefit thereof:

Under Section 70, one of the essential condition which is required to be
proved is that the person for whom the act was done or the thing delivered
must have enjoyed the benefit.3 Voluntary acceptance and enjoyment of
the thing delivered or done is the basis for the claim of compensation under
Section 70.4 Section 70 provides an option to the person who enjoys the
benefit. If it is a spurious and an officious act, it is open to the relevant
party to refuse to accept the benefit. If a person accepts the benefit of the
work done it can raise a presumption that the work was not intended to be
done gratuitously.5 Therefore, acceptance of the benefit is indicative of an
implied request and an implied acceptance which attracts an implied
liability to reimburse.

Section 70 has been couched to cover broad spectrum; narrow

interpretation there of would defeat the legislative intention that once the
defendant voluntarily accept and enjoys a thing done by the plaintiff he
cannot plead that the act was done gratuitously without any liability on his
part to recompense. This position of law has been unequivocally pronounced
by the Supreme Court in 1962 in State of West Bengal v. B.K.Mandal &
Sons,6 ‘An enjoyment against one’s own will is definitely a contradiction
in terms’. '

1. Kochu Devassy v. State of Kerala, (1982) Ker. LT 100.

2. State of Utter Pradesh v. Chandra Gupta & Co., AIR 1977 All. 28.
3. Muthuswami v. Velannnal, 1947 Mad. Ill; Lakshmanany. Arunachalam 1932 Mad.
151.
4. Haji Abdullah H.A.S. Dharamasthapaham u TV Hatneed, AIR 1985 Ker.93; State of
W.B. v. B.K.Mandal A- Sons, AIR 1962 SC 779.
5. Ibid..
6. AIR 1962 SC 779.
 175

In Mulam Chand v. State ofMadhya Pradeshthe question arose whether

the appellant can sue for refund of deposit in a Government contract on the
footing of an invalid contract. The Court held in the affirmative. The juristic
basis of the obligation in such a case is not founded upon any contract or
tort but upon a third category of law, namely, quasi-contract or restitution.

The work done by the plaintiff must have benefited the defendant, so that
Section 70 can be availed. But it must not be understood that benefited in
remote sense can at all attract Section 70. A work done by a railway company
might develop the adjoining lands and consequently the defendant
municipality might receive more revenue, but this would not be a sufficient
benefit to enable the railway company to recover compensation from the
municipality.12

In Mir Abdul Jalal v. State of West Bengal,3 the appellant undertook the
task of completion of the scheme on the assurance of the Government
representative without entering into a formal contract. It was held that the
appellant was entitled to get compensation in proportion to the benefit
enjoyed by the Government.

6. APPLICATION OF SECTION 70 AGAINST A MINOR,

CORPORATIONS AND THE GOVERNMENT:

6.1 Minors cannot be made liable under Section 70 of the Indian Contract Act.
As minor’s agreement is void because of his incompentency, he has been
excluded from any contract. So, for any services rendered to a person
incompetent to contract, action cannot be made under Section 70.4 But if
necessaries supplied to a minor, his estate can be made liable under Section

1. AIR 1968 SC 1218.

2. Governor-General-in-Council v. Madura Municipality, AIR 1949 PC 39.
3. 1985 (I)CCC 791
4. Stale of West Bengal v. B.K. Mandal <& Sons, AIR 1962 SC 779; See also AIR 1950
Cal.491.
 176

68 which has been specifically dealt with, as the obligation is one of quasi
contractual in nature.

6.2 Juristically defined ‘person’ includes an aggregate of persons and bodies

with common seal with capacity to sue and liability to be sued. Person in
law represents a body with rights and duties-they are termed as artificial
person.

The word ‘person’ in Section 70 means a person recognised as such in the

eyes of law and also a body o? persons, thus, the ‘person occurring in
Section 70 includes a corporation. The advance of a loan to a corporation
or the delivery of a certain thing must be on conformity with the constitution
of the corporation.1

A corporation having enjoyed the benefit, cannot disown its liability to pay
compensation on the plea that the contract was illegal or defective.2 “Once
the money has gone into its coffer the corporation is liable”.3

6.3 Under Section 70, the essential condition provided is that a person must
do something for another and the other person must have enjoyed the benefit
thereof and the person who enjoyed the benefit, is bound to make
compensation to the other. So, the application of this section again falls
on an equitable principle of restitution and preventing unjust enrichment
which is an important aspect of quasi-contractual obligation and hence the
Government cannot escape from this obligation.

The contractual liability of the State is the same as that of an individual. In

normal circumstances, the work done or the goods delivered are the result
of a request made by some officer or other on behalf of the Government.
1. Pallonji Edulji & Sons v. Lonavala City Municipality, ILR 1937 Bom. 782.
2. Raghvan v. Alamelu Ammal, 31 Mad. 35.
3. Analh Dandhu v. Dominion of India, AIR 1955 SC 626.
 177

The request may be ineffective or invalid. It is ineffective where the request

was made by person or official not authorised by the provision contained
under Section 175 (3) of the Government oflndia Act, 1935. Similarly, it
is invalid, where the request becomes inoperative. But a request is not an
essential element while invoking the aid of-Section 70. To seek the aid of
Section 70, there need not be any subsisting contract between the parties
at the material time; and a claim for compensation can be made in respect
of the goods delivered or the work done.1 If the Government has accepted
the things delivered to it and enjoyed the work done, such acceptance and
enjoyment would afford a valid basis for claim of compensation.

In analysing a series of cases on the provisions contained in Section 175

(3) of the Government oflndia Act, 1935 as well as Article 299 (1) of the

Constitution of India 1950, the Court finally came to a conclusion that

both apply with equal force; and Section 70 of the Indian Contract Act,
1872 can be invoked against the Government, if the person has acted
lawfully and has not intended to act gratuitously and the State has actually
enjoyed the benefit.2

In Rawat Hardeo Singh v. State ofRajasthan,3 some apartments belonging

to the plaintiff were taken on rent by the State of Rajasthan for locating the
Ranger Office of the Forest Department of the State. The contract was
executed by the Ranger, but the provisions under Article .299 were not
complied with. On default in the payment of'rent, the plaintiff sued for the
recovery of the arrears. It was observed that the defendant State cannot
allow to take the benefit of the plea of invalidity of the contract, on account
1. . Stale of West Bengal v. B.K.Mandal & Sons, AIR 1962 SC 779. •
2. State ofBihar v. Karam Ch'and Thapar, Brother Ltd., AIR 1962 SC 110; followed with Bikhraj
Jaipuria v. Union of India, AIR 1962 SC 113; State of West Bengal v. B.KMandal & Sons,
AIR 1962 SC 779; Chaturbhuj Vithaldas Jasani v. Moreshwar Parashram, AIR 1954 SC 236;
Union of India v. A.L. Rallia Ram, AIR 1967 SC 203 at p. 206; See also Mulamchand u State
of MR ', AIR 1968 SC 1218; Pillo Sidwa v. Municipal Corporation, AIR 1970 SC 1201;
Pannalal u Deputy Commissioner, AIR 1973 SC 1174; Hansaraj Gupta v. Union of India,
AIR 1973 SC 2724. '
3. AIR 1981 Raj. 280.
 of non-compliance with the provision of Article 299 of the Constitution
of India in order to remain in perpetual possession of the property belonging
to the plaintiff. The Court held that even though there was no lawful
contract the plaintiff is entitled to take possession of his property and
arrears under Section 70 of the Contract Act.

. In the State of Orissa v. Anand Prasad,' the plaintiff submitted tender for
transportation of certain materials at a certain rate. The Executive Engineer,
acting on behalf of the Government asked the plaintiff to transport the
materials and the plaintiff executed the work. But the Superintending
Engineer rejected the tenders and ordered the carriage to be done at the
lower rales than agreed to between the plaintiff and the Executive Engineer.
It was held that the plaintiff is entitled to the payment at the rate agreed
earlier.

Similarly, in P.C.Wadkwa v. State of Punjab,1 2the State was allowed to

recover the cost of the training from a candidate who refused to join the
Government services, the Government could have waived but there was no
evidence of waiver. The candidate was sent to the training on his agreeing
to serve the Government. He could not say,that no advantage or benefit
came to him from the training.

To sum up, under circumstances of compelling necessity, services rendered

must be compensated. In Ramakrishna Nair v. State of Kerala,1 it was
observed that where a teacher who was proposed to be retired at the age of
55 obtained a stay and continued, he was allowed his remuneration till his
continuation was held to be not justified.

1. AIR 1985 Orissa 142; See also Abdul Jalii v.State ofWesl Bengal, AIR 1984 SC 860.
2. AIR 1987 Punjab & Haryana 117.
1. (1989) 2 Ker. LJ 100.
 179

7. INTERPRETATION:

The language of the Section 70 is wide and easier than in English Law where
it creates an obligation to pay for services voluntarily rendered,1 for this
reason the section can be interpreted basing of its own structure. In
Damodara Mudaliar v. Secretary of State,2 the rule of Section 70 has
been furnished. The Court observed :

‘‘Certainly there must be difficulties in applying a rule stated

in such a wide terms as is that expressed in Section 70.
According to the section it is not essential that the act shall
have been necessary in the sense that it has been done under
circumstances of pressing emergency, , or even that it shall
have been an act necessary to be done at some time for the
preservation of property. It may, therefore, be extended to
cases in which no question of salvage enters. It is not limited
to persons standing in particular relation to one another and
except in the requirement that act shall be lawful, no condition
is prescribcd.as to the circumstances under which it shall be
• done."

Here, Section 70 candidly prescribes the Courts to take a liberal attitude

and not to deny the beneficient provisions of this section to all cases of
bona fide conferral by one person to another who actually enjoys the fruit
of that benefit.3

The logic underlying Section 70 is based on the doctrine of quantum meruit

of English Common Law but the rule as embodied in the Indian Contract
Act, 1872, admits of liberal interpretation. When a rule of English Law
receives a statutory recognition by Indian Legislature it is the language of
the Act which determines the scope, uninfluenced by the manner in which
the analogous provision is construed in English Law. The language of the
provisions of the Indian Contract Act, cannot be enlarged or construed
1. Tanoo Kumari v. Basanta Kumar Roy, (1904) 32 Cal. 374, 377; See also 33 Mad. 189, 195.
2. 18 Mad. 88, 91.
3. Gajapathy Kristian Chandra v. VP.Srinivasa C/tarlu, AIR 1925 Mad.95; 38 Mad.235.
 180

narrowly, or otherwise modified in order to bring the construction in accord

with the scope and limitations of the rule governing the English doctrine.

In Suchanand v. Bahrain,1 the Court has struck a word of caution to all

final Courts that the terms of the section are unquestionably wide, but
applied with discretion. The term of the section fep enable the Courts to
do substantial justice in cases where it would be difficult to impute to the
persons concerned relation actually created by contract. The facts are to
be guarded and circumspect in their conclusions and never to countenance
acts or payments that are clearly officious. Therefore, the benefit of this
section can be extended to cases in which no question of salvage enters.
Where one repairian owner excavated a tank against the will of another and
so was held not entitled to any claim of contribution against the later.2

As the language of the section is broad, the terms of the section should not
be interpreted to justify the officious interference of one man with the
affairs and property of another man or to impose obligations in respect of
services which the person sought to be charged did not wish to have been
rendered. It is not essential that the act shall have been necessary in the
sense that it has been done under circumstances of pressing necessity,3 or
even it shall have been an act necessary to be done at some time for the
preservation of property.

8. PLEADINGS:

As the terms of the section are unquestionably wide, the pleading should
be construed liberally and not stringently. -A party should be given the
equitable relief if he deserved notwithstanding lacuna in pleadings, if the
evidence in the case permits such relief being granted. A contract pleaded
may be found to be void and yet the evidence may justly relief under Section

1. (1910) 38 Cal. 1
2. Fischer v. Kanaka, 5 IC 742.
3. Jauhari v. Tundey, AIR 1933 All. 21-29.
 181

70 though not specifically pleaded.1 In other words, pleadings of parties

may offer sufficient particulars to apply Section 70, even if it is not
specifically pleaded. It is not necessary that the provision in Section 70
should be specified in the plaint.2 It is enough if the facts alleged and proved
are adequate to grant relief. Because, the relief under Section 70 is an
equity relief condoning the strict jacket of legal formalities. Relief under
Section 70 stems out of the conduct of parties.3

^ An alternative pleading under Section 70 is always advisable if one is not

sure of the validity of the contract under which the act conferring the benefit
was done. Where the contract fails as invalid there is the equitable protection
offered under Section 70. In New Marine Coal Company v. Union ofIndia,4
the appellant sued the Government on a contract by which they supplied
Coal. But as the contract subsequently was found invalid, the appellant took
care to include the alternative claim under Section 70, It was held that the
appellant had a successful claim under Section 70 as the contract was void
and unenforceable and since the respondent accepted and enjoyed the
benefit of the supply of coal.

Even if the plea of Section 70 was not raised before the trial court, it could
be so raised in the Court of appeal. In Kotah Match Factory, Kotah v.
State of Rajasthan,5 the plaintiff did not raise the plea for compensation
under Section 70 in its plaint, nor was any issue framed, nor were the parties
given an opportunity to lead any evidence on the point. It was held that the
parties had not gone to the trial on the question of compensation under
Section 70 of the Contract Act, 1872. If the contention of the appellant is
allowed to prevail at this stage, it would amount to taking the respondent
by surprise. However, to do complete justice the appellant may be allowed
to raise this condition only with a full scope for rebuttal by the respondent.
1. Mohan Monucha v. Manzoor Ahmed Khan, AIR 1943 PC 29.
2. Ram Pvatap K. Mills v. State of Bihar, AIR 1963 Pat. 153..
3. Dominion of India v. Preety Kumar, AIR 1958 Pat. 203. see also. Kedari Lai v. Hari Lai, AIR
1952 SC 47.
4. AIR 1964 SC 152.
5. AIR 1970 Raj. 118 at pp. 124, 125.
 182

10. RESUME OF THE CHAPTER:

In order to claim relief under Section 70 there need not be a pre-existing

legal obligation on the part of the claimant to supply or to serve. So long
as it is not an officious over-bearance or a gratuitous act on the part of the
plaintiff, he can claim compensation.1 Of course, the act has to be lawful
and the defendant must have derived benefit. The section takes care to avoid
unjust enrichment and envisages the principle of restitution closely to the
equitable relief of quantum meruit.

Under Section 70, it is not essential that the act shall have been done, or
9

the thing delivered, under circumstances of pressing emergency, or even

that it shall have been an act necessary to be done at sometime. It is not
limited to person standing in particular relations to one another as
contractual parties under a regular or orderly or valid contracts. ;

Under Section 70, no condition has been prescribed as to the circumstances

under which the act or the delivery of the thing shall be done. A discretion
has been provided to the Courts for application of Section 70 with a view
to do substantial justice in cases where it would be difficult to impute to
the persons concerned relations actually created by contract.2 The
circumstances and the conduct of parties, rather an expressed or implied
contract and apply its judicial discretion to grant the eqyitable relief
provided under Section 70.

No general line can be drawn to define the term ‘lawful’ act. It simply
requires the act or services to be free from illegalities; no matter it may
be irregular or improcedural. Acts immoral, act fraudulent or malafide or
unjust, however are not lawful acts. It should be considered in each individual
1. Madasami Nadar v. Virudhunagar Municipality, (1977) 1 MLJ 257 at p.263.
2. Suchand v. Balaram, ILR 38 Cal.l
 183

case, whether the person who did anything for another person, or delivered
anything to him did it lawfully, or had a lawful interest in doing or delivering
the thing.1 A thing done or delivered fraudulently and dishonestly, or
unlawfully, is not lawful within the meaning of Section 70 of the Contract

Act, 1872.2

By interpretation, a minor has been excluded from liability under Section

70, because he cannot be said to have voluntarily accepted the benefit.3 Of

course, Section 68 shall govern the contemplated situations in respect of
supply of necessaries.

The j udicial interpretation, thus made, excluding a minor from the liability

under Section 70, and rather limiting the liability of a minor only to the

extent of necessaries and chargeable to his estate under Section 68, appears

to have served the purpose of law. Section'70 contemplates a personal

liability not charged upon estate only; and if liability under Section 70
could perchance be extended to cover minors then intermeddlers would
turn promoters defeating the protection of contractual incapacity attributed
to minors.

10. COMPARED TO THE ENGLISH LAW OR PARI MATERIA:

Indian law appear to be wider and liberal and more on the line of equity.
Past consideration, repairs undertaken by one of the many joint tenants,
performance of a contract abandoned after a part performance4 are instances
where English law refuses a relief; whereas Indian law, in Section 70,

recognises them as quasi-contracts. Sections 69 and 70 contain a wider

1. Gopeshar Bamrjee v. Brojo Sundari Devi, ILR 49 Cal. 470.
2. Govind Ram v. Ram Kishore, AIR 1953 Pat. 145.
3. State of West Bengal v. B.K.Mandal & Sons, AIR 1962 SC 779
4. Sumpter v. Hedges, (1.898) 78 LT 378 (Contra) H.Dakin & Co. Ltd. v. Lee, (1916) 113
LT 906
 184

flexibility than the English limitations in respect of quantum meruit or

unjust enrichment. English law however governs the idea of‘money had
and received’ or ‘goods sold and delivered’. Indian Law recognises all forms
of restitution. Only an express or implied request shall entail a relief for a
w •

voluntary act even ifgratuitous, under English Law. Under Indian Law request

is not necessary and gratuitous acts entail no claim under Section 70.