CHAPTER-6

CONCLUSION AND SUGGESTIONS

CONCLUSION-

In view of the above discussion, it is submitted that a „quasi

contract‟ is neither based on a proposal nor on an acceptance- express or
implied. Accordingly, it does not depend on a promise. It is inferred by
law from conduct of, for example, A and B where A renders some lawful
service voluntarily in favour of B and benefit of such service is enjoyed
by B.

Various dictionaries, Judiciary and different jurists have defined

the term quasi contract in their own ways but they all reach a common
conclusion that a quasi contract is neither an express promise nor an
implied one. Unlike a contract, it is not a consensual relation between the
persons covered by it. For example, according to Chambers Dictionary
„Quasi‟ as a Latin term has been defined in the words- 'as if' and the
term ‘contract‟ means an agreement, especially a legally binding one.
Thus, the Chambers Dictionary may be taken to define the quasi contract
in the words ‘as if a contract’ i.e. similar to contract. Similarly, on the
basis of Random House Webster‟s Dictionary which also defines the
terms ‘quasi’ and ‘contract’ separately. A quasi contract can be said to be
a relation resembling to those created by a contract. To Oxford
Dictionary quasi contract is an obligation of one party to another
imposed by law independently of an agreement between the parties.
 Anson1 is of the opinion that what is restitution today was known
as quasi contract in the past. To support his view he quotes statements of
certain Lord Justices like, Bowen L. J., Lord Sumner and Sir William
Holdsworth. Thus, it follows that Anson regards quasi contract as
restitution. But at the same time, his book also mentions that a quasi
contract is a relation not created by contract and is based on notion of
prevention of unjust enrichment. Paton2 while classifying the term
obligation, says that it may arise from 1) contract, 2) quasi-contract, 3)
tort or delict, 4) quasi-delict. So, it is obvious that Paton has mentioned
the term quasi contract and quasi contractual obligation. To P.S. Atiyah3
a quasi-contractual action which was taken earlier is called today, a
claim for restitution. Chitty4 uses both the terms ‘quasi contract’ and
‘restitution’ frequently for each other. Williston5 is of the opinion that
quasi contractual obligations are imposed by the law for the purpose of
bringing about justice without references to the intention of the parties.
Pollock & Mulla6 point out that a quasi contract belongs to an entirely
different legal category, having nothing to do with genuine contracts,
express or implied. Munkman uses the term a quasi-contract as an
obligation to pay a sum of money (liquidated or unliquidated) which
arises independently of any contract or tort.7 Bracton8, a leading lawyer
of medieval age was of the opinion that the quasi-contract was

1 th
Anson’s Law of Contract, 28 ed., p. 17.
2 th
G.W. Paton, A Text Book Of Jurisprudence, 4 ed., 2007, p. 276.
3 th
P.S. Atiyah, Atiyah’s Introduction to The Law of Contract, 6 ed., p. 408.
4 th
Chitty on Contracts, 24 ed., Vol. I, 1977, p. 843.
5 rd
Williston, A Treatise On The Law of Contracts, 3 ed., Vol. I, 1957, p.13.
6 th
Pollock & Mulla, Indian Contract & Specific Relief Acts, 14 ed., Vol. II, p. 1041.
7
John H. Munkman, The Law Of Quasi-Contracts, Sir Isaac Pitman & Sons Ltd. (London)- Publisher,
pp. 1 & 2.
8
See John H. Munkman, The Law Of Quasi-Contracts, p. 2.
2
recognised under Roman Law. The quasi-contractual obligations were
called under Roman Law as obligations quasi ex contractu.

For judicial support to quasi contractual obligations and basis of

it, we are naturally attracted to the landmark judgment delivered by
Lord Mansfield in Moses v. Mc. Ferlan.9 In the instant case, it was laid
down that an unjust enrichment by the defendant at the cost of plaintiff
has to be prevented on the basis of natural justice and equity. Thus, he
treated the theory of ‘unjust enrichment’ which the quasi contract
depends on. It is why Lord Mansfield is recognised as founder of quasi
contractual obligations by expressing his opinion in the present case.
However, the opinion of Lord Mansfield was not accepted by the House
of Lords in Sinclair v. Brougham10as in this case, the judgment was
relied on an implied-in-fact contract theory. The plaintiffs were
allowed to recover money on the basis of this theory. That is, the money
was allowed to be recovered on the basis of rateable (pari passu)
distribution of the mixed fund but not on the basis of quasi contract.
Lord Haldane, Lord Sumner and Lord Parker forming the majority
preferred the term ‘implied contract’ rather than quasi contract in the
present case. This view of House of Lords continued to prevail for a long
time but again it was not considered good in Fibrosa Spolka Akeyjna v.
Fairbairn Lawson Combe Barbour Ltd.11. In the present case implied
in fact contract theory was not relied upon and again the theory of
unjust enrichment was restored. Lord Wright pronouncing the
judgment of the House of Lords in this case, preferred the view
expressed by Lord Mansfield that an unjust enrichment is the basis of

9
(1760) 2 Burr 1005, at p. 1012: (1558-1774) All E.R. 581.
10
(1914) A.C. 398.
11
(1943) A.C. 32: (1942) 2 All E. R. 122, H. L.
3
quasi contract. So, briefly stating prevention of an unjust enrichment can
be regarded as the basis of quasi contractual obligation.

Regarding remedies for breach of a contract or quasi contract

during medieval period it can be mentioned that- 1) wager of law (i.e.
social action), 2) covenant 3) account, 4) debt, 5) assumpsit, and 6)
indebitatus assumpsit have been the remedies available to the aggrieved
party at different intervals of time. However, these forms of actions were
abolished by S. 49 of Common Law Procedure Act, 1852. The
procedure was further simplified by Judicature Act, 1873. Further, the
doctrine of laissez faire developed in England in 19th century as one of
the prominent aspects of economic changes provided opportunities for
freedom of contract and gave radical contribution to the speedy and
viable development of horizon of law of contact. It is well settled that
contract is known as Law of Obligation. Further, Law of Obligations
has been classified into three categories- 1) contractual obligations, 2)
tortious obligations, and 3) restitutionary obligations. Thus, it is the quasi
contractual obligation as called in early days, is now called as
restitutionary obligation.

Quasi contract differs from contract primarily, on the ground

that a quasi contract is not based on a promise: it is inferred by law from
conduct of the parties while a contract depends on a promise- express or
implied. On the other hand, a Trust is creation of a contract, but a quasi
contract is not creation of a contract. Similarly, a quasi contract has
basically, different feature from a tort in respect that in a quasi contract
obligation is limited to its parties and does not extend to any other
person. However, in a tort the liability of the defendant (i.e. tort feasor)

4
is limited not only to the plaintiff (i.e aggrieved person) but it also
extends to public in general.

Under the English Law, the quasi contractual obligations have

been basically classified into four categories as follows :

1. Obligation to repay money had and received, or cases of

restitution.

2. Obligation to repay money paid at the defendant’s request,

or cases of reimbursement.

3. Obligation to pay the fair value of goods delivered or

services rendered (quantum valebat, or quantum meruit) or
cases of recompense for benefits conferred.

4. Obligation to account or money had and received from a

third party.

 Under the category of ‘obligation to repay money had and

received, or cases of restitution,’ claim for recovery of such money is
allowed which is paid under mistake of fact, fraud, undue influence,
extortion, under pressure of legal proceedings, duress and quasi
duress and thereby the contract becomes void ab initio. To illustrate, the
case of Kelly v. Solari12 may be quoted here. The life policy taken by
the Director of an assurance company was lapsed. But this fact was
forgotten by the Director and he made the payment or premium. It was
held by the Court that though the payment was made by the Director
under influence of mistake of fact even though it was recoverable as the
contract was void ab initio. Similarly, in Refuge Assurance Co. Ltd. v.

12
(1841) 9 M. & W. 54.
5
Kett Lewell13 it was held that if the fraud is committed by the agent, the
principal can be held liable to refund the money under quasi contractual
obligation. In Moore v. Fulham Vestry14 it was observed by Lord
Halsbury, the Lord Chancellor of the House of Lords that money paid
under a judgment is recoverable if it has been paid under pressure of
legal process. He further observed that the money so paid can be
recovered when the plaintiff proves that the judgment was obtained by
fraud.

Upon happening of certain events, the plaintiff is entitled to

recover money paid to the defendant. The events may be failure of
consideration, breach of contract, frustration of contract and abortive
contracts. For example, in Holmes v. Hall15 it was held that where
consideration of contract completely fails, the money paid by the
plaintiff in respect of such contract can be recovered. Regarding
recovery of money had and received we can trace orders in equity. There
are some rules in equity which are helpful in supporting quasi
contractual obligations. In Re Diplock‟s Estate16 the refund of money
and charities were allowed in favour of legal heir on the ground of the
principle of equity.

Under the sub-head of „obligation of reimbursement: money

paid at the defendant‟s request, or cases of reimbursement,‟ claim
for reimbursement is allowed for such money which is paid voluntarily
on behalf of the defendant. Where, for example, the defendant is under
legal obligation to pay some money and the plaintiff was under some
13
(1909) A.C. 243.
14
(1797) 7 T. R. 269.
15
(1704) 6 Mod. 161.
16
(1947) 1 All E.R. 522.
6
legal compulsion to discharge the defendant’s liability, and he actually
pays the money voluntarily, he can recover it from the defendant under
quasi contractual obligation.

Within the scope of the classification of „obligation under

quantum meruit‟ (cases of recompense), claim for compensation on
the basis of quantum meruit or restitution is allowed for voluntary act or
delivery of goods by the plaintiff to defendant where the benefit of such
act or goods is enjoyed by the defendant. Sometimes, remuneration in
the form of value of goods is awarded on the ground of quantum
valebat. For example, in Craven Ellis v. Cannons Ltd.17 it was laid
down that 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 law, and not by an inference of fact arising from the acceptance
of services, or goods. It is one of the quasi contractual obligations.
Again, compensation for necessaries supplied to a minor, lunatic etc. can
be sought under the sub-head of quantum meruit. In Nash v. Inman18 it
was held that in a case where necessaries are supplied to an infant, the
real foundation of an action is an obligation which the law imposes on
the infant to make a fair payment in respect of his needs satisfied.
Further, a quasi contractual obligation may arise even in the case
where breach of a contract is caused especially, where breach occurs
due to partial performance of the contract. Again, frustration of contract
and maritime salvage also provide the situation where claim for
compensation can be allowed in pursuance of quantum meruit.

17
(1936) 2 K.B. 403.
18
(1908) 2 K.B. 1.
7
 Under the category of obligation to recover money had and
received from a third party: (the obligation to account) claim for
money received from a third person is allowed since the time of Henery
VIII. Such money could be recovered by the plaintiff from the
defendant19through the writ of Account before the development of writ
of Indebitatus Assumpsit. The writs of Debt and Account were
replaced by the writ of Indebitatus Assumpsit. To examine the point
Williams v. Everett20 may be quoted. In the instant case Kelly had given
some bills of exchange to his bankers with instructions to collect bills
and pay his creditors. This information was also given by Kelly to the
creditors. The plaintiff who was one of the creditors sued the bankers for
his debt. His claim was not allowed. The Court observed that as the
bankers (defendant) still hold the money according to Kelly’s directions
and had not assented to hold it to the plaintiff’s use. Again, as it was held
in A.G. v. Goddard,21 even bribes received by a servant during course
of his employment on behalf of employer for providing service or
ensuring any other work of the person giving the bribes is recoverable by
the employer as such money can be treated to be the money for use of
the employer.

In United States of America (U.S.A.), quasi contract or

restitution has been dealt with in the Restatement (Second) of The Law
of Contracts in a pragmatic way. Especially, after amendment of Ss. 158
and 272 of the Restatement (Second), restitutionary remedy is available
to the plaintiff when he has discharged the contract or when performance
of the contract becomes impracticable on account of frustration, mistake,
19
John H. Munkman, The Law of Quasi-Contracts, p. 52.
20
(1811) 14 East. 582.
21
(1929) 98 K.B. 743.
8
fraud, duress or in a like situations. It is also remarkable to note that after
such amendment, now the Court has liberty to grant either restitution to
the party falling victim of avoidance of contract due to reasons as
mentioned here or it may grant, instead of restitution, such a relief which
appears to it as a requirement of justice. Such requirement may include
parties’ reliance interest. Here the term reliance interest refers to the
interest of parties relying on performance of the contract.

When attention is drawn on quasi contract in India, it can be

submitted that the term like ‘quasi contract’ or ‘quasi contractual
obligation’ or ‘restitution’ has not been expressly mentioned in any of
the provisions of the Indian Contract Act, 1872. What has been
incorporated in this Act on this point is the expression „of certain
relations resembling those created by contract‟ in Chapter V of the
Act. This chapter spreads over five Sections namely, Section 68 to 72 of
the Act. It is these provisions which make principles equivalent to the
English doctrine of quasi contract or restitution. Sections 68 & 69 of the
Act incorporate provisions supporting the claim for necessaries
supplied and claim for money paid respectively.

Section 68 of the Indian Contract Act, 1872 deals with the

principle of law which helps a person to seek reimbursement for
necessaries supplied by him to a person incapable of entering into a
contract or to persons to whom such incapable person is legally bound to
supply necessaries. It is pertinent to mention that this Section does not
apply where necessaries are supplied to a person who is competent to
contract. For instance, in Kanhayalal Bisandayal Bhivapurkar v.

9
Indarchand ji Hamirmal ji Sisodia22 it was held that S. 68 of the
Indian Contract Act, 1872 will not apply where necessaries have been
supplied to someone, who as a person competent to contract is bound to
support. In such a case reimbursement cannot be sought. The expression
“a person incapable of entering into a contract” has neither been
defined in S. 68 of the Act nor has it been explicitly defined in any of the
Sections in Indian Contract Act. But by virtue of the provision of S. 11,
minor, lunatic and persons debarred by law can be put in category of
persons who are incapable entering into a contract. It is well known that
an agreement made with any of such person is void ab initio. For
example, where one party to an agreement is minor, the agreement is
void ab initio in the light of the principle laid down by the Privy Council
in the leading case of Mohori Bibi v. Dharmodas Ghose.23 However,
reimbursement under S. 68 of the Act is made for necessaries only
through the property of such minor, lunatic or a person disqualified from
contracting by law because such liability is not personal but it is
proprietary. It is worth mentioning that where an agreement has been
made on behalf of a minor for his benefit by his guardian having an
authority in this respect, the agreement may be allowed. But a minor has
an authority to avoid the agreement made by his guardian after attaining
majority by way of filing a suit or by any other act or omission. In Surta
Singh v. Pritam Singh24 it was held by the Court that a contract within
the competence of the guardian and for the benefit of the minor is valid

22
A.I.R. 1947 Nag. 84.
23
(1903) 30 Cal. 539, 548 (P.C.): (1903) 30 I.A. 114.
24
A.I.R. 1983 P. & H. 114. See also Jagdamba Prasad Lalla v. Anadi Nath Roy, A.I.R. 1938 Pat. 337;
Hari Satya Banerjee v. Mahadev Banerjee, A.I.R. 1983 Cal. 76; Subrahmanyam v. Subba Rao,
A.I.R. 1948 P.C. 95.
10
and binding on the minor, but the minor may avoid the transaction on
attaining the majority.

The term necessaries has not been defined in the Indian Contract
Act, 1872. So, it’s meaning in common parlance, can suffice the purpose
and consequently, it can be defined to include all such goods and money
which are necessarily required to support a person so that he can live a
dignified life as well as his reasonable requirements are fulfilled. In
Jogan Ram Marwari v. Mahadev Prasad Sahu25 briefly stating
meaning and scope of necessaries it was observed by the Court that
objects of mere luxury or excessively costly articles though of real use
are not necessaries. It further opined that interest on value of goods
supplied as necessaries cannot be included in necessaries. Sometimes,
old age of a person may render him disqualified from contracting under
S. 12 read with S. 11 of the Indian Contract Act, 1872. But in such a
case, it is necessary that the old person on account of his age must not be
in a mental position to understand nature of transaction and its effect
upon his interest. If it is so, an old aged person may be treated as a
person of unsound mind.26 However, mere weakness of mind of a
person is not unsoundness of mind provided he is in a mental capacity to
understand nature and effect of contract made by him. Such principle of
supported by the Court in Kanhaiyalal v. Harring Laxman Wanjari.27

Section 69 of the Act provides “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.” Thus, under

25
(1909) 36 Cal. 768.
26
See Ram Sundar Saha v. Kali Narain Sen Choudury, A.I.R. 1927 Cal. 889.
27
A.I.R. 1944 Nag. 232.
11
S. 69 of the Act an idea of quasi contractual liability is implicit. The
liability is related to reimbursement to a person who is interested in
payment of money which the person making the reimbursement is
legally bound to pay and who actually pays it. The special mentioning of
the term „reimbursement‟ under S. 69 clearly shows that claim can be
made only for reimbursement and not for repayment of money.
Moreover, claim for reimbursement can be allowed only when the
plaintiff proves the existence of three conditions- i) the plaintiff is
interested in payment, ii) the defendant is legally bound to make such
payment, and iii) the plaintiff actually pays such amount. Again, the
reimbursement can be sought only for such money which the defendant
was legally bound to pay to a third person and not to the plaintiff. For
example, in Rasappa Pillai v. Mittu Zamindar Dorai Swami
Reddiar28 it was observed by the Court that the term ‘bound by law’
does not mean bound by law to the plaintiff, but that the defendant, at the
suit of any person, might be compelled to pay. It is relevant to mention
that the obligation of the defendant must be an existing obligation.

Quasi Contractual or Restitutionary Obligations have also

been impliedly dealt with under Sections 70, 71 and 72 of the Indian
Contract Act, 1872. The principle incorporated under S. 70 of The Act
is based on the judgment delivered in the English case of Lampleigh v.
Brathwait29 and on the English doctrine of quantum meruit. Here the
doctrine of quantum meruit means „as much as he deserves‟ and the
doctrine of quantum valebat means „as much as it is worth‟. Section

28
A.I.R. 1925 Mad. 1041.
29 th
(1615) Hob. 105. See also Pollock & Mulla, The Indian Contract & Specific Relief Acts 14 ed.
(2012), vol. 2, p. 1072.

12
70 of the Act aims at supporting, for example, the plaintiff to claim
compensation from defendant when the plaintiff lawfully does anything
for defendant, or delivers anything to him, not intending to do so
gratuitously provided the defendant enjoys the benefit thereof. For
claiming remedy under this Section, the plaintiff is required to establish
that - i) he has done some act (i.e. has rendered some service) or
delivered some goods to the defendant lawfully, ii) the act was done or
goods were delivered not intending to do so gratuitously (i.e. with
intention to receive compensation, and iii) the defendant reaped the
benefit of such act or goods. Though, all the elements have equal gravity
yet, the element that ‘the other person for whom something is done or to
whom something is delivered must enjoy the benefit thereof’ has been
emphasised by the Hon’ble Mr. Justice Gajendragadkar (afterwards C.J.
of India) in the leading case of State of West Bengal v. B. K. Mondal
& Sons.30 Quantum meruit is an alternative remedy to damages. It is not
available upon breach of a contract because it does not provide a right to
claim damages which is available upon such breach. It is beyond
contractual domain. It is a kind of quasi contractual right enabling a
person to claim compensation and not the damages. So, the doctrine of
quantum meruit or quantum valebat provides for a remedy to the
plaintiff against the defendant for voluntary act of the plaintiff. If the
price of such work or service is fixed by a contract, compensation on the
basis of quantum meruit cannot be awarded. Such principle was laid
down in Alopi Prasad & Sons Ltd. v. Union of India.31Again, as it was
laid down by the Supreme Court in Mulamchand v. State of Madhya

30
A.I.R. 1962 S.C. 779.
31
A.I.R. 1960 S.C. 588 at 593. See also Puran Lal Sah v. State of Uttar Pradesh, A.I.R. 1971 SC 712 at
716.
13
Pradesh,32 S. 70 of the Act, embodies the equitable principle of
restitution and unjust enrichment and it is not based on a contract. The
Supreme Court further observed, in the instant case, held that though a
contract made with the Government cannot be enforced under Art.
299(1) of the Constitution on account of being invalid yet if
requirements of S. 70 of the Contract Act have been fulfilled, it can still
be enforced because even the Government cannot be allowed to enrich
itself unjustly at the cost of people. Thus, the observation of the S.C. in
the present case makes it clear that the principle underlying S. 70 of the
Act has its edifice on the principle of restitution or unjust enrichment.

The doctrine of quantum meruit is applicable in a number of

different situations. Some of them can be mentioned here. For example,
where a contract is declared invalid, the doctrine of quantum meruit is
applicable. Similarly, it may be applied in a void agreement. Again, in
an illegal agreement, the doctrine is applicable. The Principle of
Salvage under the English law is also relevant to be quoted here as it is
very similar to the doctrine of quantum meruit. But in case of
repudiation of a contract the principle of quantum meruit does not
apply. The principle stated in this section is based on equitable principle
of restitution or quasi contract. Again, in Mulamchand v. State of
Madhya Pradesh33 it was observed by the Supreme Court that S. 70 of
the Act is not based on a contract but it embodies the equitable principle
of restitution and unjust enrichment.

32
A.I.R. 1968 S.C. 1218. See also Modi Vanaspati Mfg. Co. v. Katihar Jute Mills Pvt. Ltd., A.I.R. 1969
Cal. 496; C.I. Abraham v. K.A. Cheriyan, A.I.R. 1986 Ker. 60; Jain Mills & Electrical Stores v. State
of Orissa, A.I.R. 1991 Ori. 117.
33
A.I.R. 1968 S.C. 1218.
14
 On the other hand, in U.S.A., when some benefit is given by one
person to another by doing some work or rendering some service without
latter’s request the person conferring the benefit is entitled to
reimbursement from the person receiving the benefit. But for this
purpose it is necessary that- i) the benefit has been given voluntarily, ii)
with intention not to confer such benefit gratuitously and, iii) the benefit
is enjoyed by the person to whom it is given.34

My submission is that payment of money should also be

considered to be included in the expression ‘does anything’ under S. 70
of the Act. The reason lies in the logic that since payment of money has
not expressly been excluded by the provision of the S. 70 of the Act
therefore, its implied inclusion under the Section finds sense bearing and
logical support.

The principle relating to responsibility of finder of goods has

been stated under S. 71 of the Act. It provides by this Section that where
a person finds goods belonging to some other person and takes it into his
custody, he by implication of law enjoys status of a bailee. As a result,
he is under a liability to preserve the goods, discover true owner and
deliver the goods when true owner is found. However, responsibility of a
finder of goods under S. 71 of the Act is based on three fundamental
elements that- (i). The goods was found by the finder, (ii). The goods
belongs to some other person and it does not belong to the finder, and
(iii). The finder picked up the goods and took it into his custody.

The finder of goods has to take care of the goods in the same way
as a bailee is required under S. 151 of the Indian Contract Act, 1872 with

34 th
See Pollock & Mulla, Indian Contract & Specific Relief Acts, 14 ed., Vol. II, p. 1072.
15
regard to the goods bailed. Thus, a cumulative effect of provisions
ensconced under Ss. 71, 148, 149, 151, 152, 159, 160 and 161 is that a
finder of goods is placed under the same liability regarding goods as it is
undertaken by bailee under a contract of bailment. In Municipal Board
of Revenue v. Abdul Razzak35 it was observed by the Court that where
bailee dies after committing any default, his estate can be held liable to
the bailor for such default. The heir of the bailee acquires the status of a
constructive trustee with regard to goods bailed. It can be submitted on
the strength of this judgment that since a finder acquires status of a
bailee therefore, even after death of the finder of goods his legal heirs
can be held responsible to the true owner of the goods through estate of
deceased finder. However, where goods is not taken into custody by a
person, he cannot be held liable to the owner for any damage to the
goods. For instance in Union of India v. Mahommad Khan36 where
some land was leased out to the defendant and on such land, plaintiff’s
timber was lying which was not taken away by the plaintiff even after
notice given by the defendant, the Court did not hold the defendant liable
for damage cause to timber in course it’s removal because the defendant
did not take the timber into his custody.

The finder of goods has right of lien over the goods for trouble
and expenditures incurred by him in preservation of such goods. He is
also entitled to receive compensation from the owner in lieu of trouble
and expenditures which he spends in keeping the goods safe while in his
custody. But he cannot sue for such expenses because his act is
gratuitous and he acquires a status just like that of a gratuitous bailee

35
A.I.R. 1931 Oudh 15.
36
A.I.R. 1959 Ori. 103.
16
under S. 159 of the Act. However, where some specific reward is offered
by the owner of goods, the finder of the goods has right to sue the owner
for such reward under S. 16837 of the Act and upon refusal by the owner
to pay the reward, the finder of goods has even right to sue the owner for
such reward under this Section.

It can be pointed out that liability under S. 72 of the Indian

Contract Act, 1872 exists not because of a contract but because of a
quasi contract. It is because it depends primarily, on equity though in
India it is statutory as it is provided under the codified law i.e. the Indian
Contract Act, 1872. It covers within its scope the liability of a person to
whom money is paid or anything is delivered by mistake or under
coercion. Thus, liability under S. 72 is restricted to the circumstances
where money is paid or anything is delivered by one person to another
due to mistake or coercion. Such liability can be said to be based on the
equitable principlce of unjust enrichment. In Thomas Abraham v.
National Tyre & Rubbder Co. of India Ltd.38 the Supreme Court
regarding basis of S. 72 and an unjust enrichment observed that the law
under this Section implies an obligation to repay the money which is an
unjust benefit.

Recovery of payment of extra taxes under mistake of fact or

mistake of law can be allowed within ambit of this Section provided the
plaintiff establishes that he has suffered loss or injury. To explain this

37
S. 168 of Indian Contract Act, 1872- “Right of finder of goods; may sue for specific reward
offered.-The finder of goods has no right to sue the owner for compensation for trouble and
expense voluntarily incurred by him to preserve the goods and to find out the owner; but he
may retain the goods against the owner until he receives such compensation; and, where the
owner has offered a specific reward for the return of goods lost, the finder may sue for such
reward, and may retain the goods until he receives it.”
38
A.I.R. 1974 S.C. 602
17
point, in Mafatlal Industries Ltd. v. Union of India,39 the tax burden of
the assessee was passed on to a third person by mistake. The claim of
assessee for refund of such extra payment was not allowed by the
Supreme Court on the ground that the plaintiff had not suffered any loss.

It is relevant to mention here that the term ‘coercion’ used in S.

72 of the Contract Act may not be the same as it has been defined under
S. 15 of the Act. It is because where money has been paid by a person
under pressure of prevailing situation, it can be recovered under S. 72 of
the Act even though such pressing situation is not covered by S. 15 of
the Act defining the term coercion.

It is pertinent to submit that the quasi contract and provisions

incorporated under Section 68 to 72 of the Act are founded on the
concept of social justice. Basically, Social Justice may be said to be
justice to all the members of society irrespective of their personal status,
wealth, property, education, religious leaning, political affinity, ethical
values and so on. Broadly speaking, the concept of social justice is based
on distributive justice. The noble idea underlying the distributive
justice40 depends on reasonable distribution of wealth, properties, taxes,
opportunities among persons in all the fields of life. It follows therefore,
that social justice does not only mean formulation and implementation of
reservation policies for weaker sections of society but it also means
justice to every member of society including downtrodden by providing
them necessary facilities and opportunities to lead a dignified life and
develop according to their talent, qualities and merit.

39
(1997) 5 S.C.C. 536.
40
Lingappa Pochanna Appelwar v. State of Maharashtra (1985) 1 S.C.C. 472.
18
 Efforts have been made by several distinguished jurists, thinkers
and philosophers to define the terms ‘justice’ and ‘social justice’
according to their own perceptions and ideologies during different age of
time. Prominent among them are, for example, Socrates, Plato, Aristotle,
Thomas Aquinas, Blaise Pascal, Jethro Brown, Paton, Kelsen, Roscoe
Pound, Karl Marx, Swami Vivekanand, Mahatma Gandhi- the Father of
the Nation, Pt. Jawahar Lal Nehru, the first Prime Minister of free India,
Dr. B.R. Ambedkar. The approach of the S.C. with regard to the concept
of social justice as expressed especially in pursuance of Art. 38 of the
Constitution in Air India Statutory Corporation v. United Labour
Union,41 is also extremely relevant on the point. But the essence of
justice is giving each man or group his or its due, what is due to each
depends on the ethos of political system, and the property relations
governing a given society.42

The Preamble of our Constitution which can be regarded as its

soul reflects the noble idea of our forefathers- the Constitution makers,
for promotion of inter alia social justice. Further, guaranteeing the
Fundamental Rights (e.g. Articles 14,15,16,17,21,29,30 etc),
Constitutional Rights, provisions relating to Directive Principles of State
Policy and a number of other provisions of the Constitution of India
consist of the idea of social justice directly of indirectly. For example,
Clauses (1) & (2) of Art. 16 provide for equal opportunity to all the
citizens for employment or appointment under the State and expressly
prohibit discrimination only on the ground of religion, race, caste, sex,
descent, place of birth, residence or any of them. Art. 16(4) stands for

41
A.I.R. 1997 S.C. 645.
42 nd
Justice V. R. Krishna Iyer, Social Justice- Sunset or Dawn, 2 ed., p. 2.
19
protective discrimination as it protects discrimination. By 77th
Amendment Act to the Constitution in 1995 Clause (4-A) was added to
Art. 16. This amended clause i.e. Art. 16(4-A) empowers the State to
make any provision for reservation in matters of promotion for
Scheduled Castes and Scheduled Tribes which, in the opinion of the
State, are not adequately represented in the services under the State.
Similarly, the Constitution 81st (Amendment) Act, 2000 has also added
in new clause (4-B) to Art. 16 of the Constitution. This amendment
enables to end the 80% limit for Scheduled Castes and Scheduled Tribes
and Other Backward Classes in backlog vacancies which could not be
filled up due to the non availability of eligible candidates of these
categories in the previous year or years.

The implementation of recommendation of Mandal

Commission for reservation to persons of backward classes by Sri V.P.
Singh, then the Prime Minister of India and upholding its constitutional
validity by the Supreme Court of India with slight modifications are
relevant examples of steps taken by the Government and the Judiciary in
furtherance of social justice. After overruling Devadasan’s case, the
principle laid down by the S.C. in Indra Sawhney v. Union of India,43
that the carry forward rule is valid so long as it does not, in a particular
year, exceed 50 percent of vacancies. The limit of 50 percent can only be
exceeded in an extra ordinary situation prevailing in a State (i.e. far flung
States, Nagaland etc.). Such approach of the S.C. is great and can be held
in high stream in establishing and promoting the concept of social justice
in the Nation.

43
A.I.R. 1993 S.C. 477.
20
 The drastic measures taken by the U.N.O. can be treated, in one
way or another, as dynamic endeavour for promotion of social justice.
For example, one of the basic objectives of World Health Organisation
is to ensure proper health care to each and every person in the world
especially of such persons who are too poor to take medical help.
Similarly, the Preamble of International Labour Organisation
provides for reasonable pay for work of every labourer and equal
distribution of necessary resources among them. Universal Declaration
of Human Rights which makes it clear that every human being in the
world is entitled to exercise all the human rights equally. Such notion of
the Declaration can also be considered in promotion of the concept of
social justice not only at the local level but also at the global level.

In this stride, it is relevant to submit that the idea of social

justice has been promoted for example, not only by the Constitutional
provisions, criminal law, industrial law, judicial approach, efforts taken
by the Indian Legislature, by various policies and schemes of the
government, U.N.O. etc. but it can also be said to be promoted by the
Law of Contract. The whole domain of the Law of Contract can be
treated to be based on the idea of social justice. A contractual relation is
consensual but at the same time a contract can also be regarded as
potential means to fulfil needs of parties to it and achieve the ultimate
goal underlying the contract. Likewise, a quasi contract or restitutionary
obligation can also be said to have the idea of social justice implicit
under it. In the light of the provisions impliedly relating to it
incorporated under Section 68 to 72 of the Indian Contract Act, 1872
with the title ‘certain relations resembling those created by contract‟

21
an effort has been made to correlate such provisions with the concept of
social justice.

Thus, the principle ensconced under Section 68 of the Act does

justice to incapable person on the one hand and on the other hand, justice
is also done by such principle to the person furnishing the necessaries by
granting reimbursement to him. So, it can be submitted that the provision
of the Section is though directly related to the parties but indirectly it
promotes the idea of social justice, social solidarity and social security
among members of society. Section 69 of the Act provides that 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. It therefore, follows that the provision of this Section implies an
idea of promoting the feeling of brotherhood and mutual cooperation
among society and impliedly promotes the concept of social justice in
addition to remedial justice to the concerned parties. Likewise, it is
evident that provision mentioned under Section 70 of the Act represents
the English doctrine of quantum meruit and suggests that the person
should be reimbursed for the voluntary act done by him or voluntary
service rendered by him to another person provided such other person
derives benefit of the act or service so rendered. The principle
underlying this Section aims at preventing unjust enrichment. It is from
this standpoint that in spite of doing justice to the party who has done
voluntary act or rendered service voluntarily, this principle gives a
message of social justice impliedly. Again, the principle of law stated
under Section 71 of the Act places a finder of goods in the same status
where a bailee stands. It gives right to the finder of goods to seek
compensation from true owner of the goods for discovering, finding and
22
delivering the goods to the true owner. A quasi contract can be inferred
between finder of goods and the true owner whereby the true owner
owes an obligation by implication of law to make compensation to the
finder of goods. Therefore, it can be submitted that the provision of this
Section stands not only for justice to the finder of goods but it also
implies the idea of social justice. Similarly, Section 72 of the Act makes
it clear that a person to whom money has been paid, or anything
delivered, by mistake or under coercion, must repay or return it. The
principle incorporated under this Section also stands for preventing an
unjust enrichment by one person at the cost of another person.
Consequently, provision of this Section can be looked at from the stand
point that it also implies the idea of quasi contract by providing remedy
to the party paying the money or delivering the goods and at the same
time it can be said that it implies the concept of social justice as well in
the sense that no person in society doing such act which has been
mentioned under it can be left unremedied.

It can therefore, be submitted that the provisions of Section 68 to

72 of the Indian Contract Act, 1872, in addition to providing remedial
justice can also be said to reverberate with the rhythm of social justice.
That is to say, quasi contractual obligations can be regarded to imply, in
one way or other, the idea of social justice; rather it would be more
appropriate and logical to say that the social justice is a current flowing
under quasi contractual or restitutionary obligations because principles
of law incorporated under these provisions of the Act despite providing
justice to the aggrieved party also send a noble message of social justice
to the public at large that whosoever falls victim of an unjust enrichment
would positively be entitled to the appropriate remedy.
23
SUGGESTIONS-

On the strength of above discussion the following suggestions

can be submitted –

1. Regarding nomenclature, my submission is that it would not

be illogical if nomenclature to such relation is attributed as a quasi
contract. The reason lies in the logic that quasi contract and restitution
are frequently used by various jurists and Judiciary for one another
despite the fact that what was called quasi contract earlier is called
restitution in the modern age. However, Chapter V of the Indian Contract
Act, 1872 neither mentions the term ‘quasi contract’ nor ‘restitution’ but
it mentions the expression, ‘certain relations resembling those created by
contract’ as title of the chapter. The dictionary meaning of quasi contract
is ‘just like a contract’ or ‘relation similar to that created by a contract.’

2. Another reason advanced by the researcher for preferring

the use of term ‘quasi contract’ over ‘restitution’ is that restitution is
generally considered as a remedy for reimbursement, restoration of
thing, or refund of money while quasi contract denotes a relation inferred
by law between two persons.

3. Section 69 of the Indian Contract Act, 1872 deals with the

cases of reimbursement by plaintiff to the defendant where the defendant
is interested in payment of some money which the plaintiff is legally
bound to pay and the defendant actually pays it. My submission is that
the cases of claiming contribution by the plaintiff from the defendant to
the money for which both are bound but it is wholly paid by the plaintiff
cannot be said to be relevant to be covered by S. 69 of the Act. The

24
language of the Section is quite clear in its meaning therefore, there
appears no much need to accept the recommendation of the Law
Commission of India in its 13th Report (submitted in 1958, under para
90) whereby it has proposed insertion of a new expression ‘who though
not bound by law to pay’ before the term is interested in the payment of
money… under S. 69 of the Act.

4. I feel it appropriate to propose that the inclusion of claim

for recovery of money paid by one person to another voluntarily may
also be considered within the spirit of Section 70 of the Act as in no way
such inclusion will tarnish the very foundation of the Section. In this
regard, I find myself in a position to be absolutely inconsonance with the
recommendation of the Law Commission of India in 1958 by para 92 of
its 13th Report. After such modification S. 70 of the Act will run as
under:

“Where a person lawfully does anything for another person, or

delivers anything or pays any money to him, not intending to do
so gratuitously, and such other person accepts and enjoys the
benefit thereof, the latter is bound to make compensation to the
former in respect of, or restore, the thing so done or delivered
or the money so paid.”

5. Agreeing completely with the recommendation of the Law

Commission of India submitted in 1958 through its 13 th Report (paras 95
to 100), I submit that cases of money paid or thing delivered under fraud,
misrepresentation etc. may also be covered by S. 72 by an amendment so
as to make the Section more exhaustive I its application and scope. After

25
such amendment and accepting the concerned recommendation of the
Law Commission the Section will run in the following words-

“a person to whom money has been paid, or anything delivered

by mistake or under coercion or by fraud or misrepresentation
or undue influence must repay or return it.”



26