State of W.B. vs. B.K. Mondal and Sons

0
259

 

In The Supreme Court of India
Equivalent citations
1962 AIR 779, 1962 SCR Supl. (1) 876
Petitioner
State of W.B.
Respondent
B.K. Mondal and Sons
Date of Judgement
5th December 1961
Bench
B. Gajendragadkar, K. Sarka, N. Wanchoo, C. Das Gupta, Rajagopala Ayyanga

Chapter V of the Indian Contract Act 1872 deals with “quasi-contracts”, however the said term is not used as in view of the clear statutory authorization the courts in India are not hindered in allowing relief and I the different sections of Act by the theoretical considerations concerning quasi-contracts.

But English cases do provide valuable guidance not only as to scope of relief but also as to the way the provisions should be interpreted to keep them in tune with the changing notions of justice.

Sections 68 to 72

Provide for live kinds of quasi-contractual obligation. 

Supply of necessaries [S. 68]

Where necessaries are supplied to a person who is incompetent to contract or to someone whom he is legally bound to support, the supplier is entitled to recover the price from the property of the incompetent person.

Payment by interested person [S. 69] 

A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it is entitled to be reimbursed by the other. 

Liability to pay for non-gratuitous acts [S. 70] 

Section 70 creates liability to pay for the benefits of an act which the doer did not intend to do gratuitously. 

The 3 ingredients of Section 70 are:

a. Where a person lawfully does anything for another person, or delivers anything to him,

b. In doing the said thing or delivering the said thing he must not intend to do act gratuitously,

c. the other person for whom something is done must enjoy the benefit thereof.

Facts

1. The respondent’s case was that on February 8th, 1944, it offered to put up certain temporary storage godowns at Arambagh in the District of Hooghly for the use of the Civil Supplies Department of the State of Bengal and the sale offer was accepted by the said department by a letter dated February 12, 1944.

2. Accordingly, the respondent completed the said construction and its bill for Rs. 39,476 was duly paid in July 1944.

3. Meanwhile, on April 7, 1944, the respondent was requested by the Sub-Divisional Officer, Arambagh, to submit its estimate for the construction of a kutcha road, guard room, office, kitchen and room for clerks at Arambagh for the Department of Civil Supplies.

4. The respondent alleged that the Additional Deputy Director of Civil Supplies visited Arambagh on April 20, 1944, and instructed the respondent to proceed with the construction in accordance with the estimates submitted by it.

5. Accordingly, the respondent completed the said constructions and a bill of Rs. 2,322/8/- was submitted in that behalfto the Assistant Director of Civil Supplies on April 27, 1944.

6. Thereafter the Sub-Divisional Officer, Arambagh required the construction of certain storage sheds at Khanakul and the Assistant Director of Civil Supplies wrote to the respondent on April 18, 1944, asking it to precede with the construction of the said storage sheds.

7. This work also was completed by the respondent in due course and for the said work a bill for Rs. 17,003/ was submitted.

8. In the present suit the respondent claimed that the two bills submitted by it in which the respondent had claimed Rs. 2,322/8/- and Rs. 17,003/- respectively had remained unpaid and that was the basis of the present claim. 

Procedural History

1. This appeal by special leave arises out of a suit filed by me respondent B.K. Mondal and Sons against the appellant the State of West Bengal on the Original Side of the Calcutta High Court claiming a sum of Rs. 19,325/- for works done by it for the appellant.

2. This claim was made out in two ways. It was alleged that the works in question had been done by the respondent in terms of a contract entered into between the parties and as such the appellant was liable to pay the amount due for the said works.

3. The appellant disputed the correctness and validity of the said decree by preferring an appeal to the Calcutta High Court in its civil appellate jurisdiction.

4. The said appeal was heard by S.R. Das Gupta and Bachawat, JJ. The two learned Judges who heard the said appeal delivered separate though concurring judgments and substantially confirmed the material findings recorded by the trial court. In the result the appeal preferred by the appellant was dismissed. The appellant then applied for a certificate to come to this Court but the High Court rejected its application.

5. Thereupon the appellant moved this Court for a special certificate and on obtaining it has come to this Court; and the principal point which has been urged before us by Mr. Sen on behalf of the appellant is that Section 70 of the Contract Act does not apply to the present case.

Issues 

1. Whether plaintiff can claim under S.70 of Indian Contract Act, 1872?

2. Whether it can be said that when the respondent built the warehouse, for instance, without a valid contract between it and the appellant, it was doing something contrary to Section 175(3)?

 Arguments

1. Sen’s argument is that in dealing with the question about the effect of the contravention of Section 175(3) of the Act and the applicability of Section 70 of the Contract Act the decision in the case of Lawford[i]is irrelevent while that in the case of H. Young & Co.[ii] is relevant and material because here the concern is with the contravention of a statutory provision and not with the contravention of the provision of the rule of common law.

2. It is urged by Mr. Sen that the recognition of the respondent’s claim for compensation virtually permits the circumvention of the mandatory provisions of Section 175(3), because, he argues, the work done by the respondent is no more than the performance of a so-called contract which is contrary to the said provisions and that cannot be the true intent of Section 70.

3. The respondent says that it has done some work which has been accepted and enjoyed by the appellant and it is the voluntary acceptance and enjoyment of the said work which is the cause of action for the alternative claim.

4. Sen ingeniously suggested that the position of the appellant is like that of a minor in the matter of its capacity to make a contract, and he argues that just as a minor is outside the purview of Section 70 so would be the appellant. It is true as has been held by the Privy Council in Mohori Bibee v. Dhurmodas Ghose[iii] that a minor, like a lunatic, is incompetent to contract, and so where he purports to enter into a contract the alleged contract is void and neither Section 64 nor Section 65 of the Contract Act can apply to it. It is also true that Section 68 of the Contract Act specifically provides that certain claims for necessaries can be made against a minor and so a minor cannot be sued for compensation under Section 70 of the Contract Act[iv].

5. Sen pressed into service the analogy of the minor and contends that the result of Section 175(3) of the Act is to make the appellant incompetent to enter into a contract unless the contract is made as required by Section 175(3).

6. The question about the scope and effect of Section 70 and its applicability to cases of invalid contracts made by the Provincial Government to by corporations has been the subject-matter of several judicial decisions in this country[v].

Judgment  

With regard to 1st issue

1. It is plain that three conditions must be satisfied before section 70 can be invoked.

2. The first condition is that a person should lawfully do something for another person or deliver something to him.

3. The second condition is that in doing the said thing or delivering the said thing he must not intend to act gratuitously.

4. The third is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof.

5. When these conditions are satisfied Section 70 imposes upon the latter person the liability to make compensation to the former in respect of, or to restore, the thing so done or delivered. In appreciating the scope and effect of the provisions of this section it would be useful to illustrate how this section would operate.

6. 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 not come into operation.

7. Similarly, if a person does something for another it would be open to the latter person not to accept what has been done by the former; in that case again Section 70 would not apply.

8. In other words, the person said to be made liable under Section 70 always has the option not to accept the thing or to return it.

9. It is only where he voluntarily accepts the thing or enjoys the work done that the liability under Section 70 arises.

10. Taking the facts in the case before us, after the respondent constructed the warehouse, for instance, it was open to the appellant to refuse to accept the said warehouse and to have the benefit of it.

11. It could have called upon the respondent to demolish the said warehouse and take away the materials used by it in constructing it; but, if the appellant accepted the said warehouse and used it and enjoyed its benefit then different considerations come into play and Section 70 can be invoked.

With regard to 2nd issue:

1. In regard to the claim made against the Government of a State under Section 70 it may be that in many cases the work done or the goods delivered are the result of a request made by some officer or other on behalf of the said Government.

2. In such a case, the request may be ineffective or invalid for the reason that the officer making the request was not authorized under Section 175(3), or, if the said officer was authorized to make the said request the request becomes inoperative because it was not followed up by a contract executed in the manner prescribed by Section 175(3).

3. In either case the thing has been delivered or the work has been done without a contract and that brings in Section 70.

4. A request is thus not an element of Section 70 at all though the existence of an invalid request may not make Section 70 inapplicable.

5. An invalid request is in law no request at all, and so the conduct of the parties has to be judged on the basis that there was no subsisting contract between them at the material time. Dealing with the case on this basis we have to enquire whether the requisite conditions prescribed by Section 70 have been satisfied.

6. If they are satisfied, then a claim for compensation can and must be entertained. In this connection it is necessary to emphasize that what Section 70 provides is that compensation has to be paid in respect of the goods delivered or the work done. The alternative to the compensation thus provides is the restoration of the thing so delivered or done.

7. In the present case there has been no dispute about the amount of compensation but normally a claim for compensation made under Section 70 may not mean the same thing as a claim for damages for breach of contract if a contract was subsisting between the parties.

8. Thus considered it would, we think, not be reasonable to suggest that in recognizing the claim for compensation under Section 70 we are either directly or indirectly nullifying the effect of Section 175(3) of the Act or treating as valid a contract which is invalid.

9. The fields covered by the two provisions are separate and distinct; Section 175(3) deals with contracts and provides how they should be made.

10. Section 70 deals with cases where there is no valid contract and provides for compensation to be paid in a case where the three requisite conditions prescribed by it are satisfied.

The court, therefore, satisfied that there is no conflict between the two provisions. The result is the appeal fails and is dismissed with costs.

With regard to minor

1. Section 175(1) provides for and recognizes the power of the Province to purchase or acquire property for the purposes there specified and to make contracts. No doubt Section 175(3) provides for the making of contracts in the specified manner.

2. The court is not satisfied that on reading Section 175 as a whole it would be possible to entertain the argument that the appellant is in the position of a minor for the purpose of Section 70 of the Contract Act.

3. Incidentally, the minor is excluded from the operation of Section 70 for the reason that his case has been specifically provided for by Section 68.

4. What Section 70 prevents is unjust enrichment and it applies as much to individuals as to corporations and Government.

5. Therefore, the court does not think it would be possible to accept the very broad argument that the State Government is outside the purview of Section 70.

6. Besides, in the case of a minor, even the voluntary acceptance of the benefit of work done or thing delivered which is the foundation of the claim under Section 70 would not be present, and so, on principle Section 70 cannot be invoked against a minor.

Conclusions

1. Turning to the facts of this case it is clear that both the courts have found that the acts done by the respondent were done in fact in pursuance of the requests invalidly made by the relevant officers of the appellant, and so they must be deemed to have been done without a contract.

2. It was not disputed in the courts below that the acts done by the respondent have been accepted by the appellant and the buildings constructed have been used by it.

3. In fact, both the learned judges of the appellate court have expressly pointed out that the appellant did riot contest this part of the respondent’s case.

Therefore, once we reach the conclusion that Section 70 can be invoked by the respondent against the appellant; on the findings there are no doubt that the requisite conditions of the said section have been satisfied. That being so, the courts below were right in decreeing the respondent’s claim.

Edited by Parul Soni

Approved & Published – Sakshi Raje

Reference 

[i]Lawford (1903) 1 KB 772.

[ii]H. Young & Co (1882-83) 8 AC 517.

[iii]Mohori Bibee v. Dhurmodas Ghose (1901-03) 30 IA 114.

[iv]Bankay Behari Prasad v. Mahendra Prasad [(1940) ILR 19 Pat 739]

[v]Mathura Mohan Saha v. Ram Kumar Saha and Chittagong District Board [(1916) ILR 43 Cal 790] ; Abaji Sitaram Modak v. Trimbak Municipality [(1904) ILR 28 Bom 782] ; Pallonjee Eduljee & Sons, Bombay v. Lonavla City Municipality [(1937) ILR Bom 782] ; Municipal Committee, Gujranwala v. Fazal Din [(1930) ILR 11 Lah 121, 325, 387] ; Ram Nagin Singh v. Governor-General in Council [AIR (39) 1952 Cal 306] ; Union of India v. Ramnagina Singh [(1952) 89 CLJ 342] ; Union of India v. New Marine Coal Co. (Bengal) Ltd. [(1960-61) 65 CWN 441] ; Damodara Mudaliar v. Secretary of State for India [(1895) ILR 18 Mad 88] ; Corporation of Madras v. M. Kothandapani Naidu [AIR 1955 Mad 82] ; Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar [(1909) ILR 33 Mad 15] ; and, Ram Das v. Ram Babu [AIR 1936 Pat 194] . Sometimes a note of dissent from this view has no doubt been struck (Vide: Chedi Lal v. Bhagwan Das [(1889) ILR 11 All 234] Radha Krishna Das v. Municipal Board of Benares [(1905) ILR 27 All 592] ; Anath Bandba Deb v. Dominion of India [AIR 1955 Cal 626] ; Punjabhai v. Bhagwandas Kisandas [(1929) ILR 53 Bom 309] ; and G.R. Sanchuiti v. Pt. R.K. Choudhari [(1952) ILR 31 Pat 303] .