| Citation | AIR 1962 SC 779, 1962 SCR SUPL. (1) 876 |
| Date of judgment | 05/12/1961 |
| Court | Supreme Court of India |
| Case type | Civil Appeal No.286 of 1958 |
| Appellant | B.Sen, P.K.Chatterjee and P.K.Bose |
| Respondent | N.C Chatterjee, P.K.Mukherjee and A.N.Sinha |
| Bench | Justice B. P Gajendragadkar, K.Sarkar, N.Wanchoo, C.Das Gupta, Rajagopala Ayyanga. |
| Referred | Section: 70, 65, 175 Indian contract ACT 1872.Section 299(1) Indian constitution 1949. |
FACTS OF THE CASE
- This case was a special leave petition arising out of the original case filed by respondent B.K Mondal & Sons against the appellant, in this case i.e, the State of West Bengal, originally in the Calcutta High Court.
- The respondent constructed certain structures including a kutcha road, guardroom, office, kitchen and storage sheds at request of some officers of the appellant, i.e., west Bengal for the use of the civil supplies department of the Government.
- The respondent claimed a sum of Rs.19,325 for these requests in pursuance of which constructions were made were invalid and unauthorized and did not constitute valid contract blinding the appellant, under section 175(3) of the Government of India ACT,1935.
ISSUES: –
- Whether there was any contract between plaintiff and respondent for building a warehouse and contrary section 175(3) of the Government of India ACT,1935?
- Whether the plaintiff can claim under section 70 of India Contract ACT 1872?
- Whether the state government enjoys the benefit of non- gratuitous work if bound to pay compensation – absence of the valid contract?
CONTENTIONS OF THE PARTIES: –
Appellant: – The appellant i.e., STATE OF WEST BENGAL alleged that the contract between plaintiff and respondent was invalid according to the section 175 of the Government India ACT,1935 which was intention of the parliament was that the state should not be burdened with liability based on unauthorised contract. It also contended that there was no privity of contract between respondent and itself and denied its liability for the claim.
Respondent: – The respondent i.e., B.K Mondal and Sons. Contended the appellant has enjoyed the work which was done and it is the voluntary acceptance and enjoyment of said work which causes action for the claim under the section 70 of India contract ACT, 1872. The respondent also contended that there was a contract vague by the plaintiff.
JUDGMENT: –
Court observed the issues the first issue aroused in the case was that whether a mandatory provision in a statute is merely direction or obligation should be decided on a careful examination of the scope of the statute and object of the particular provision. In enacting section 175 of the Government ACT, 1935, the intention of the parliament was that the state should not be burdened with liability based on unauthorised contracts. The provision made was in public interest and so the ‘shall’ used therein must be held to make it an obligation and not directory.
The court also decided the claim for compensation under section.70 therefore is not one based on any subsisting contract but proceeds on the basis that something was done or delivered to another who voluntarily accepted it even though he always had the option to refuse the same. Recognition of the claim in the present case, could not therefore, amount to a contravention of section 175(3) of Government ACT, 1935 either directly or indirectly. the word ‘lawfully’ in section 70 of contract ACT means that after something is done or delivered by one person to another and is voluntarily accepted and enjoyed by the latter, a lawful relationship arises between the two which attracts section 70 of the Contract ACT. In cases falling under the section, there cannot, the claim for compensation under the section being on the footing that there has been no contract and the conduct of prates has created a relationship resembling that arising out of a contract. There is nothing in section 175(3) of the Government of India ACT, tested in the light of section 23 of the contract ACT, that is no conflict between the two sections, each covering a distinct and separate field and section 70 of the Contract ACT should be regarded rather as supplementing section 173(3) of Government of India ACT.
Court further discussed whether the three requisites of section70 of the Contract ACT had been satisfied. There was no dispute that the Government had taken benefit of the work it urgently needed and put its use immediately. It was also clear that the respondent did not intend to do the work gratuitously. What the request made by the officers did was to inform the respondent that the Government needed the work immediately and would pay for it when done and been paid for, readily acted on it.
There can also be no doubt that the work was done lawfully. Even assuming that work done under a contract invalid under section 175(3) of the Government ACT, would be unlawful because of evasion of it , that section does not say that work done nor done without any contract at all, as in the instant case, would be work unlawfully done nor does it make it unlawful for it without any contract at all.
Section 175(3) of the Government of India ACT, applies to a consensual contract which the Government makes and not to something which is also called a contract but which law bring into existence by a fiction irrespective of the consent of the parties. Section 70 of the Contract ACT, applies where its requisites exist, if it is necessary to imply a contract or contemplate a quasi- contract for applying the section that must be done and neither section175(3) of the Government Indian ACT, nor any other impediment can stand in the way.
Court further held that a resort to English law is not justified for deciding a question arising on an Indian statute unless it is such that it cannot be reasonably understood without such assistance.
Conclusion: –
In this case it is observed that Section 70 prevents unjust enrichment and it applies as much to individuals as to corporations and Government. If the services rendered or goods supplied to the Government are under a purported contract, which does not materialize because of non-fulfilment of the formalities prescribed in Article 299 of the constitution (section 175, of Government India ACT,1935) the Government can still be made liable to compensate for the same under section 70 of the Contract ACT, if it has enjoyed the benefit of what has been done under the purported contract.
Reference: –
This Article written by Aarti Goyal of Sardar Patel Subharti Institute of Law, intern at Legal Vidhiya.
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