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Appavoo Nadar Vs. Chellian Nadar and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai High Court
Decided On
Reported in(1985)2MLJ179
AppellantAppavoo Nadar
RespondentChellian Nadar and ors.
Cases ReferredSita Ram v. Ramchandra
Excerpt:
- - 50,000/- to the first defendant for the purpose of defraying the marriage expenses as well as for conveying a suitable property by the first defendant in favour of the plaintiff's daughter. that the plaintiff failed to establish that the defendant received rs. the submissions made by both the sides lead us to concentrate on three questions for which answers have got to be found one way or the other, both on assessment of facts as well as the law. learned counsel would like to support this prayer on principles of equity found countenance in statute law also. 50,000/- was parted with by the plaintiff to the first defendant and the first defendant did enjoy the benefit of this sum of rs. chellaswami, learned counsel for the plaintiff, would like to support the claim of the plaintiff.....nainar sundaram, j.1. the plaintiff in o.s.no. 15 of 1977 on the file of the subordinate judge of kuzhithurai, is the appellant in this appeal. the respondents are the defendants in the suit. the suit was laid for specific performance of an agreement of sale or, in the alternative, for recovery of the sum of rs. 80,000/-. the allegations on the basis of which the plaintiff wanted the reliefs may be set out as follows: on 18.5.1976, the first defendant orally agreed to sell the suit property to the plaintiff for a consideration of rs. 80,000/-. in pursuance of the said agreement, the plaintiff paid a sum of rs. 30,000/- in cash on 18.6.1976. he also paid another sum of rs. 50,000/- on 21.6.1976 by a draft as per pay order no. 1028 of the union bank of india, marthandam. the said draft was.....
Judgment:

Nainar Sundaram, J.

1. The plaintiff in O.S.No. 15 of 1977 on the file of the Subordinate Judge of Kuzhithurai, is the appellant in this appeal. The respondents are the defendants in the suit. The suit was laid for specific performance of an agreement of sale or, in the alternative, for recovery of the sum of Rs. 80,000/-. The allegations on the basis of which the plaintiff wanted the reliefs may be set out as follows: On 18.5.1976, the first defendant orally agreed to sell the suit property to the plaintiff for a consideration of Rs. 80,000/-. In pursuance of the said agreement, the plaintiff paid a sum of Rs. 30,000/- in cash on 18.6.1976. He also paid another sum of Rs. 50,000/- on 21.6.1976 by a draft as per Pay Order No. 1028 of the Union Bank of India, Marthandam. The said draft was encashed by the first defendant on 23.6.1976. As the plaintiff's daughter was proposed for marriage to the first defendant's son, the plaintiff did not get the sale deed executed immediately. After the marriage, the plaintiff was pressing the first defendant to execute the sale deed on various occasions. Ultimately on 2,10.1976, the plaintiff pressed the first defendant to return the amount or to execute the sale deed and there was a wordy altercation between the plaintiff and the first defendant, but the first defendant did not yield to the request of the plaintiff but ill-treated his daughter and sent her away. Das, Dasayyan, Kamalam, Elias, Sivagnanam, John James and Velappan were present at the time of the oral agreement for sale. In spite of notices dated 23.10.1976 and 23.11.1976, the first defendant has not executed the sale deed. On 2.11.1976, the first defendant sent a reply through his counsel raising false allegations. The plaintiff is entitled to get a sale deed executed and registered in his favour by the defendants and to get a decree for specific performance of the agreement of sale entered into on 18.5.1976 and for recovery of the suit property from the defendants. If, however, the Court is of the opinion that the plaintiff is not entitled to specific performance of the agreement of sale of the suit property, the defendants may be directed to pay the plaintiff the sum of Rs. 80,000/-with future interest at the rate of 6 per cent per annum. Defendants 2 to 4 are the children of the first defendant. Subsequent to the notice dated 23.10.1976 issued by the plaintiff to the first defendant, the first defendant alienated the suit property to defendants 2 to 4.

2. The written statement of the first defendant ran as follows: The allegation that the first defendant agreed to sell the suit property in favour of the plaintiff for Rs. 80,000/- is false and the further allegation that the first defendant received an advance of Rs. 30,000/- is also denied. In connection with the marriage of the first defendant's son, who is an advocate, with the plaintiff's daughter, it was agreed by the plaintiff that he shall pay Rs. 50,000/- to the first defendant for the purpose of defraying the marriage expenses as well as for conveying a suitable property by the first defendant in favour of the plaintiff's daughter. Accordingly, the plaintiff gave the draft for Rs. 50,000/-in favour of the first defendant on 23.6.1976, the date of the draft being 21.6.1976. As per that agreement, the first defendant executed a sale deed of a property consisting of nearly 1.75 acres of coconut garden and 1.50 acres of rubber plantation in favour of the plaintiff's daughter on 23.6.1976 itself. In the sale deed, the consideration was mentioned less to save registration expenses. It was the plaintiff who spent for the registration of the document. Because he had to meet the expenses, the plaintiff suggested that the consideration can be given at a low figure and the document be registered in Kulathoor Sub Registrar's Office in Kerala. The allegation that the plaintiff was pressing the first defendant to return the amount or to execute the sale deed is without basis. There was no ill-treatment of the plaintiff's daughter, nor did the first defendant send her away. The draft for Rs. 50,000/- was received and the amount was utilised in the manner referred to above. The other allegation with regard to the wordy altercatin between the plaintiff -and the first defendant is also denied. No amount is due from the first defendant to the plaintiff. There was no demand on 2.10.1976 as alleged. The averment that the persons mentioned in the plaint were present at the time of the alleged oral agreement is false and is denied. The plaintiff is not entitled to any relief and the claim for specific performance is without basis. The description of the property is vague, erroneous and misleading. In the additional written statement, the first defendant attacked the alternative claim for the return of Rs. 80,000/- by stating that so far as there was no agreement to sell the property, the question of return of Rs. 80,000/- does not arise. The only amount received was Rs. 50,000/- and the first defendant reiterated in his additional written statement the circumstances under which and the purposes for which the said amount was received as set out in his original written statement.

3. Defendants 2 to 4 also contested the suit. Besides adopting the written statement of the first defendant, these defendants wanted to maintain the alienation in the form of settlements in their favour effected by the first defendant.

4. The pleadings put forth by the parties led the Court below to formulate the following issues:

1. Whether the plaintiff paid Rs. 30,000/-on 18.6.1976 as alleged?

2. Whether the oral agreement to sell claimed by the plaintiff is true?

3. Is the plaintiff entitled to specific performance?

4. To what relief?

Additional issue framed on 23.6.1977:

1. Is it true that the defendant sold his properties to the plaintiff's daughter for Rs. 50,000/-?Additional issued framed on 14.10.1977:

1. Whether the defendant has received Rs. 80,000/- from the plaintiff?

2. Whether the alternative claim for the return of Rs. 80,000/- with interest is tenable in case the court is of the opinion that the plaintiff is not entitled to specific performance of the contract for sale of the suit property?

3. Whether the plaint schedule property belonged to the defendant?

The parties placed their evidence, oral and documentary. The court below assessed the evidence and on issues No. 1 and 2, Additional issue No. 1 framed on 23.6.1977 and Additional issues Nos. 1 and 2 framed on 14.10.1977, held that the claim of the plaintiff that he paid Rs. 30,000/- on 18.6.1976 is not proved; that the oral agreement of sale claimed by the plaintiff is not true; that the claim of the first defendant that he sold his properties to the plaintiff's daughter out of the amount received, namely, Rs. 50,000/- from the plaintiff is true; that the plaintiff failed to establish that the defendant received Rs. 80,000/- for the alleged agreement of sale; and that the plaintiff is not entitled to the relief on the alternative claim for the return of Rs. 80,000/- with interest. On additional issue No. 3 framed on 14.10.1977, the Court below held that the suit property did belong to the first defendant. On issues Nos. 3 and 4, the Court below held that the plaintiff is not entitled to the relief of specific performance and the plaintiff is also not entitled to any relief in the suit. As a result, the suit of the plaintiff was dismissed with costs. This appeal is directed against the judgment and decree of the Court below.

5. Mr. S. Chellaswami, learned Counsel appearing for the plaintiff, appellant herein, would first endeavour to demonstrate that there was in fact an agreement of sale on 18.5.1976; and pursuant to such an agreement of sale, a sum of Rs. 30,000/-was paid in cash on 18.6.1976 and a further sum of Rs. 50,000/- was paid by a draft on 21.6.1976 and hence, his client is prima facie entitled to the relief of specific performance of the agreement of sale. In the alternative, learned Counsel for the plaintiff would contend that even if this Court should not accept the case of the plaintiff with regard to the agreement of sale, this Court must countenance the case of the plaintiff for the return of the sum of Rs. 80,000/- to the plaintiff. As against these contentions put forth on behalf of the plaintiff, Mr. T.R. Rajagopalan, learned Counsel for the defendants, respondents herein, would submit that the materials placed in the case do not make out a case of an agreement of sale as alleged by the plaintiff and hence, the plaintiff could not get specific performance of the agreement of sale at all. With regard to the alternative prayer for the return of the sum of Rs. 80,000/- learned Counsel for the defendants would contend that the payment of Rs. 30,000/- in cash alleged by the plaintiff has not been substantiated at all and with regard to the payment of Rs. 50,000/-, the case of the first defendant that it was so paid to defray the marriage expenses of the plaintiff's daughter to the first defendant's son and for giving a property in favour of the plaintiff's daughter deserves acceptance since such a case has been made out on evidence. Learned Counsel for the defendants would also contend that the legal basis of the alternative prayer for the return of the money has not at all been set out in the plaint and in the absence of specific pleadings, this Court shall not proceed to countenance such an alternative prayer for the refund of the money. The submissions made by both the sides lead us to concentrate on three questions for which answers have got to be found one way or the other, both on assessment of facts as well as the law. The first question is as to whether there was an agreement of sale on 18.5.1976 as alleged by the plaintiff. If the first question is answered in favour of the plaintiff, accepting his case in toto, the other two questions may not arise for consideration. If, however, the first question is to be answered in the negative, then, the other two questions follow. The second question is, whether there was a payment of Rs. 30,000/- in cash on 18.6.1976. There is no dispute about the payment of Rs. 50,000/- by draft, though there is a controversy with regard to the purpose for which it was paid and this controversy requires advertence to and scrutiny while considering the third question. The third question is as to whether the plaintiff is entitled to get a return of the sum of Rs. 80,000/- or Rs. 50,000/-, as the case may be.

6. Coming to the first question, the plaintiff covets specific performance of an agreement of sale stated to have been entered into by him with the first defendant on 18.5.1976. Was there such an agreement as pleaded by the plaintiff in the present case?

* * * Discussion of evidence omitted.

7. Hence, we have to eschew and discountenance the plea of the plaintiff for specific, performance of the alleged oral agreement of sale stated to have been entered into on 18.5.1976.

8. Mr. S. Chellaswami, learned Counsel for the plaintiff, would plead that if this Court should choose not to accept the case of the plaintiff that there was an oral agreement of sale on 18.5.1976, this Court should at least direct the first defendant to refund the sum of Rs. 80,000/-parted with by the plaintiff to the first defendant. Learned Counsel would like to support this prayer on principles of equity found countenance in statute law also. Before we advert to this question, we must be convinced that the plaintiff did part with the sum of Rs. 80,000/- to the first defendant. Only when this is accepted, there may be need to examine the question as to whether the plaintiff can claim back the amount paid. We may straightaway point out that with regard to the payment of Rs. 50,000/- by bank draft dated 21.6.1976, such payment is admitted by the first defendant, though the first defendant would contend that it was meant to serve different purposes and such purposes got factually served and hence, there is no warrant for claiming refund. But the factum of receipt of Rs. 50,000/- by bank draft is the admitted position. Hence, we have to examine as to whether the payment of the other sum of Rs. 30,000/- stated to have been made by the plaintiff to the first defendant in cash on 18.6.1976 is true.

* * * Discussion of evidence omitted.

9. The case of the plaintiff in this regard is totally unacceptable to us and no conviction has been brought to our mind on the evidence placed in the case that the plaintiff did part with this sum of Rs. 30,000/- on 18.6.1976, as pleaded by him. Hence, we have to negative this case of the plaintiff.

10. With regard to the sum of Rs. 50,000/-, we have already found that there was a payment, which stands established by evidence and which is also the admitted position. Of course, the first defendant would plead that the said sum of Rs. 50,000/- was paid to serve specified purposes and it got adjusted and discharged. If this plea of the first defendant is eschewed, then the question that will arise for consideration is - can the plaintiff in the present suit claim the refund of atleast the sum of Rs. 50,000/-? We must straightaway point out that we are not accepting the plea of the first defendant that this sum of Rs. 50,000/- was paid to meet different exigencies and got discharged and we shall give our reasons therefor shortly. We are proceeding on the basis that this sum of Rs. 50,000/- was parted with by the plaintiff to the first defendant and the first defendant did enjoy the benefit of this sum of Rs. 50,000/-.

11. Mr. S. Chellaswami, learned Counsel for the plaintiff, would like to support the claim of the plaintiff for the refund of the moneys paid, under the equitable principles prohibiting unjust enrichment and countenancing restitution which principles are the inspiration behind Section 70 of the Indian Contract Act, hereinafter referred to as the Act. Section 70 of the Act reads as follows:

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.

The conditions to be satisfied for invoking the aid of Section 70 of the Act are three-fold. First, a person must lawfully do anything for another person or deliver anything to him. Second the person so doing must have done it with no intention to do so gratuitously. Third, the other person must have enjoyed the benefit thereof. If these three conditions stand fulfilled, then the latter is bound to make compensation to the former in respect of or to restore the thing so done or delivered. In State of West Bengal v. B.K. Mondal and Sons : AIR1962SC779 , with regard to the conditions to be fulfilled, it was observed as follows:

It is plain that three conditions must be satisfied before this Section can be invoked. 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. 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.

12. In Mulamchand v. M.P. State : [1968]3SCR214 , the necessity to have the three conditions satisfied was adverted to in the following terms:.But if money is deposited and goods are supplied or if services are rendered in terms of the void contract, the provisions of Section 70 of the Indian Contract Act may be applicable. In other words, if the conditions imposed by Section 70 of the Indian Contract Act are satisfied then the provisions of that Section can be invoked by the aggrieved party to the void contract. 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 condition is that the other person for whom something is done or to whom something is delivered must enjoy the benefit thereof. If 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.

13. In Ramaboyan and another v. State of Tamil Nadu A.S.No. 59 of 1970, judgment dated 31.10.1974 - concisely reported in (1974) TNLJ 495 a Bench of this Court, consisting of Ramaprasada Rao, J. as he then was, and Ratnavel Pandian, J. recapitulated the three limbs of Section 70 of the Act in the following terms:.Section 70 postulates three limbs. The first one is a person lawfully does anything for another or delivers anything to him. The second is that he does so or delivers so not intending to do so gratuitously. And the third is that the other person enjoys the benefit thereof. If all the limbs postulated in the Section are cumulatively and concurrently satisfied, then the law imposes a quasi contract as between these two persons and compels the other person to make compensation to the first person in respect of such thing done or thing delivered by the former to the later.

14. In Madasami Nadar v. Virudunagar Municipality : AIR1977Mad147 , the very same Bench reiterated the fulfillment of the three conditions before there could be an invocation of Section 70 of the act.

15. In Union of India v. Sita Ram : [1977]1SCR979 , the three ingredients to support the cause of action under Section 70 of the Act and their significance were adverted to in the following terms:

The three ingredients to support the cause of action under Section 70 of the Indian Contract Act are these: First, the goods are to be delivered lawfully or anything has to be done for another person lawfully. Second, the thing done or the goods delivered is so done or delivered 'not intending to do so gratuitously.' Third, the person to whom the goods are delivered 'enjoys the benefit thereof.' It is only when the three ingredients are pleaded in the plaint that a cause of action is constituted under Section 70 of the Indian Contract Act. If any plaintiff pleads the three ingredients and proves the three features the defendant is then bound to make compensation in respect of or to restore the things so done or delivered.

16. Apparently the three ingredients do stand satisfied in the present case. The plaintiff had delivered the draft for Rs. 50,000/- to the first defendant. The plaintiff certainly had not done it with a gratuitous intention. Of course, the plaintiff would say that the payment was in pursuance of an agreement of sale. But we have found that the agreement as such stands unsubstantiated. Yet, the fact remains that the payment of Rs. 50,000/- was not certainly a gratuitous payment. Thirdly, the defendant did enjoy the benefit of this payment of Rs. 50,000/-. His case of payment towards different purposes and discharge of the sum of Rs. 50,000/- is not being accepted by us for reasons to be expressed hereinafter. Hence we would be inclined to order refund of this sum of Rs. 50,000/- to the plaintiff. But before we countenance this claim, we have to advert to and dispel certain contentions, which have been conceived of and expressed before us by the learned Counsel for the defendants as coming in the way of this Court granting this relief. One such contention that was advanced by Mr. T.R. Rajagopalan, learned Counsel for the defendants, is that the principles under Section 70 of the Act could be. invoked only when there was in fact a contract, the result of consensus between the parties, but the contract could not be enforced for one reason or another, or becomes invalid and according to the learned Counsel, then only the plaintiff could fall back upon Section 70 of the Act to get the relief of restitution. We are not able to subscribe our support to this theory. In Fibrosa v. Fairbairn (1943) A.C. 32 Lord Wright stated the legal position as follows:.any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep. Such remedies in English Law are generally different from remedies in contract or in tort, and are now recognised to fall within a third category of the common law which has been called quasi-contract or restitution.

In Nelson v. Larholt (1948) 1 K.B. 330, Lord Denning observed as follows:

It is no longer appropriate to draw a distinction between law and equity. Principles have now to be stated in the light of their combined effect. Nor is it necessary to canvass the niceties of the old forms of action. Remedies now depend on the substance of the right, not on whether they can be fitted into a particular framework. The right here is not peculiar to equity or contract or tort, but falls naturally within the important category of cases where the court orders restitution if the justice of the case so requires.

In Mulamchand v. M.P. State : [1968]3SCR214 , the observations of Lord Wright and of Lord Denning, extracted above, were adverted to and it was further observed as follows:.The important point to notice is that in a case 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. So 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 but on a different kind of obligation. 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.

17. In Hansraj Gupta and Company v. Union of India : AIR1973SC2724 , it has been countenanced that the liability under Section 70 of the Act arises on equitable grounds, even though express agreement or a contract may not be proved.

18. In Madasami Nadar v. Virudhunagar Municipality : AIR1977Mad147 , Ramaprasada Rao, J. as he then was, and Ratnavel Pandian, J. summed up the position under Section 70 of the Act in the following terms:

From the foregoing discussion, it is clear that in order to rest a claim under Section 70 of the Contract Act, 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 on the part of the plaintiff to intermeddle and cause the supply to be made or cause the work to be done, he can claim compensation provided he did make such supply or did the work not intending to do so or supply so, gratuitously. If it is fairly clear that the plaintiff bona fide acted with the genuine intention of supplying the goods or doing the work, then if it is not intended to be a free or gratuitous act, he is bound to be compensated by the other party for such an overt but sincere act done by the initiating party did not go waste since the party against whom compensation is claimed did have the benefit of the supply of the goods or the performance of the work. So long as the act is not illegal the jurisdiction of the court to grant relief is always available so as to avoid unjust enrichment and also on the basis of an implies forging of a quasi contract between the two parties.

19. In Chitty on Contracts, Twenty-fifth edition, in the chapter dealing with restitution, the passage under the heading, General Principles, in Paragraph 1964, runs as follows:

Where money has been paid under a transaction that is or becomes ineffective the payer may recover the money provided that the consideration for the payment has totally failed. Although the principle is not confined to contracts most of the cases are concerned with ineffective contracts.

20. We are clear in our mind that the basis for the liability to pay back or to compensate under Section 70 of the Act is not either a subsisting or an ineffective and unenforceable contract, but the absence of a contract and de hors it on voluntary acceptance and enjoyment of the thing done. The Supreme Court, in State of West Bengal v. B.K. Mondal and Sons : AIR1962SC779 , while expounding the implication of the word 'lawfully' in Section 70 of the Act, observed as follows:.It is of course true that between the person claiming compensation and the person against whom it is claimed some lawful relationship must subsist, for that is the implication of the use of the word 'lawfully' in Section 70; but the said lawful relationship arises not because the party claiming compensation has done something for the party against whom the compensation is claimed but because what has been done by the former has been accepted and enjoyed by the latter. It is only when the latter accepts and enjoys what is done by the former that a lawful relationship arises between the two and it is the existence of the said lawful relationship which gives rise to the claim for compensation.

The doing of a thing or delivering of a thing lawfully by one to another need not necessarily have the origin in a contract, which may prove abortive; but also in other contingencies outside the sphere of contract. The terms of the Section are indisputably wide, to clothe the Courts with the power and discretion to meet out substantial justice in those cases where there would be difficulties to demonstrate the existence of any relationship traceable to a contract. Our attention has not been drawn to any authority, which has countenanced a proposition that the operation of Section 70 of the Act should be confined only to those cases where there was, in fact, a contract, but which could not be fulfilled or implemented for one reason or another. The principle is not to be confined to contracts which have proved ineffective, although as per the passage in Chitty on Contracts, extracted above, most of the cases may be concerned with ineffective contracts.

21. In Union of India v. Lal Chand and Sons : AIR1967Cal310 , Bijayesh Mukherji, J. after adverting to the pronouncement of the Supreme Court in State of West Bengal v. B.K. Mondal and Sons : AIR1962SC779 , held that the basis for Section 70 of the Act is not a subsisting contract but just the opposite, absence of the contract, and its basis is something done by one for another coupling with the work so done having been accepted by the other. In Dominion of India v. Pretty Kumar : AIR1958Pat203 , C.P. Sinha, J. observed at page 209 as follows:.This section, in my opinion, is not founded on contract but embodies the equitable principle of restitution and prevention of unjust enrichment.

and Dayal, J. the other learned Judge, who constituted the Bench, expressed his concurrence for the above propostition.

22. In our considered view, the principle under Section 70 of the Act has no foundation in contract. It adumbrates the equitable principles inhibiting unjust enrichment and enabling the Court to order restitution. The principles may come into play even when there was a contract which proved abortive and ineffective. Even then relief could be asked for and granted not on the ground that there was a contract, but on the principle that no man should unjustly enrich himself without compensating for the same to the other, who gave the benefit and disgorging what he received, when what he received was not paid or delivered gratuitously. In order to maintain the action, it is not essential that the money sought to be recovered should have been received by the defendant under such circumstances so as to create a privity between him and the plaintiff. The Court imposes an obligation to repay, on the defendant, on the ground that it is just and reasonable to do so. This obligation is independent of any consent or intention of parties or any privity of contract, and this obligation has got the foundation only in equity. It is only this equitable principle which has found expression in Section 70 of the Act.

23. The doctrine of unjust enrichment was discussed by P.N. Ramaswami, J. in Nityananda Mudaliar v. Arunachalam Chettiar (1958) 71 L.W.50 : I.L.R. (1953) Mad. 233. In the light of English pronouncements and other treatises on the subject as well as pronouncements of this country, the learned Judge summed up the position in paragraph 20 of the judgment as follows:

To sum up: Bonus Judex secundum aequum et bonum Judicat aequitatem stricto Juri praefert - (Coke on Littleton 24) - a good Judge decides according to Justice, and right and prefers equity to strict law. 'I commend the Judge' observed Lord Hobart, 'that seems fine and ingenious, so it tend to right and equity; and I condemn them that either out of pleasure to show a subtle wit will destroy, or out of incuriousness or negligence will not labour to support, the act of the party by the art or act of the law.

24. In Nellie Wapshare v. Pierce Leslie and Company : AIR1960Mad410 , P.N. Ramaswami, J. and Anantanarayanan, J. as he then was, adverted to the origin and development of the doctrine of unjust enrichment in the following terms:

The doctrine of unjust enrichment was originally based in English Law upon the principle of assumpsit or 'had and received.' It underwent certain changes through judicial interpretation, and came to be based more and more on the doctrine of restitution. In India the principle was developed under Sections 69 and 70 of the Contract Act, and it is generally recognised that these Sections (Sections 69 and 70) are much wider in scope than the doctrine as applied in England, and go far beyond it.

25. In Thomas Abraham v. National Tyre and Rubber Company : AIR1974SC602 , the Supreme Court observed as follows:.It is an established principle of common law that an action for money had and received is a practical and useful instrument to prevent unjust enrichment. The law implies an obligation to repay the money which is an unjust benefit.

26. Chitty on Contract, Twenty-fifth Edition, in the chapter dealing with the subject 'restitution' in paragraph 1932, under the heading, Equity, observes as follows:

The common law has not been alone in providing a remedy for unjustifiable enrichment. Equity independently developed some principles which are aimed at the same result, viz., to force a man to disgorge property in his possession which rightly 'belongs' to the plaintiff....

27. In view of the above discussion of the legal position, we do not find any difficulty in according the relief of repayment of the money paid by the plaintiff when there is no factual impediment in the way. Once we do not accept the case of the first defendant that the payment of Rs. 50,000/- was meant to serve different purposes and got discharged by the said purposes, and we are expressing the reasons therefor hereinafter, then it has got to be held that the defendant did receive and enjoy the benefit of the payment made by the plaintiff. Merely because we have eschewed the case of the plaintiff that there was an oral agreement of sale on 18.5.1976 for want of substantiation of the same, we cannot shut our eyes to the factum of payment of Rs. 50,000/-. Our inability to accept the plaintiff's case of oral agreement of sale will not provide a cover for the defendant with regard to his liability to refund this payment, in the absence of any convincing answer for the same both in law and on facts. As pointed out by the Supreme Court in Hansraj Gupta and Company v. Union of India : AIR1973SC2724 , the remedy under Section 70 of the Act could be accorded on equitable grounds, even though express agreement or a contract may not be proved. The words in the section 'such other person enjoys the benefit thereof referable to the defendant in the suit, mean a conscious receipt of the benefit and utilising the same. It would be a different matter if the payment was voluntary and was intended to be gratuitous. As observed by the Supreme Court in State of West Bengal v. B.K. Mondal and Sons : AIR1962SC779 , lawful relationship arises not because the party claiming compensation has done something for the party against whom the compensation is claimed, but because what has been done has been accepted and enjoyed by the latter. When the payment has been made by the plaintiff to the defendant without any gratuitous intention and the defendant receives it and enjoys it, though he would offer a discharge for the same, which is being found to be not tenable, the defendant must be deemed to have accepted and enjoyed that benefit and the principle inhibiting unjust enrichment would intervene and would enable the Court to direct restitution of that benefit to the plaintiff by the defendant. As we observed earlier, the principles do not present any difficulty for us for countenancing the case of the plaintiff for refund of the sum of Rs. 50,000/-.

28. Mr. T.R. Rajagopalan, learned Counsel for the defendants, would contend that Section 70 of the Act has no application to the case of payment of money, and in the present case, the plaintiff cannot be deemed to have delivered anything to the defendant and 'anything' could only mean in specie and not payment of money. In support of this submission, learned Counsel relies on the following observation of Varadachariar, J. in a Full Bench decision of this Court in Perumal v. Kamakshi : AIR1938Mad785 :.It only remains to add that Section 70, Contract Act, which has sometimes been appealed to, is scarcely appropriate to a case of money lent to the defendant. There is no possibility in such a case or even a contemplation of the 'thing delivered' being restored - which obviously means in specie; and lending money to the defendant cannot be described as something done for the defendant.

Learned Counsel also relies on a Full Bench decision of the High Court of Allahabad in Sheo Nath Prasad v. Sarjoo Nonia : AIR1943All220 , wherein the observations of Varadachariar, J. extracted above, had found approval. First of all, we must point out that the case dealt with by the Full Bench of this Court related to an insufficiently stamped promissory note and the Full Bench was directly called upon to decide the question as to whether a person, who has lent money on a promissory note, can sue to recover the debt apart from the note when the note embodies the terms of the contract with the borrower, but is inadmissible in evidence owing to a defect in the stamping, and we find that no question under Section 70 of the Act directly came up for consideration before the Full Bench. In the case dealt with by the Full Bench of the Allahabad High Court, it was found that the promissory note was executed in proof of a debt and the promissory note was insufficiently stamped, and was therefore inadmissible in evidence and the plaintiff could not prove the loan by oral evidence. In that contingency, the Full Bench of the Allahabad High court declined to fall back upon Section 70 of the Act. We are not prepared to cull out the observations in the above pronouncements out of the context of the cases dealt with therein to hold authoritatively that Section 70 of the Act could never cover up a case of payment of money. The set of expressions 'delivers anything to him' is of wide amplitude and would certainly cover a case of delivery of money. Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar I.L.R. (1909) Mad. 15 : (1909) 19 M.L.J.489 was a case where money was deposited to set aside a sale in execution of money decree against the defendant and the amount was paid to the decree--holder and the sale v/as set aside and the defendant got back the land sold, the decree debt due by the defendant having been extinguished by the plaintiff's payment. The application of Section 70 of the Act was invoked and this Court did not discountenance it on the ground, it would not cover a case of payment of money, but the case of the plaintiff was rejected on the other ground that it was a case of voluntary payment to protect his own interest. In Chengalroya Reddi v. Udai Kavour (1936) 44 L.W.214 : A.I.R.1936 Mad. 752, a Bench of this Court invoked Section 70 of the Act, where the plaintiff paid the money due to the Government for arrears of revenue on behalf of other villagers and saved their villages being sold. In Khader Khan Sahib v. Doraiswami Chettiar : AIR1974Mad371 , Anr. Bench of this Court countenanced the invocation of Section 70 of the Act to a case where the plaintiff paid money which went in to discharge the mortgage decree, but for which payment the property would have been sold in court auction. In Mulamchand v. W.P. State : [1968]3SCR214 , it has been countenanced that 'if money is deposited' (emphasis supplied by underlining) and goods are supplied or if services are rendered in terms of the void contract, the provisions of Section 70 of the Act may be applicable. In Thomas Abraham v. National Tyre and /Rubber Company : AIR1974SC602 , the observations already extracted supra, clearly establish that the principles to prevent unjust enrichment and order restitution could be clearly invoked even to the case of delivery of money. The observations in the pronouncements of the highest Court in the land settle the principle beyond any controversy. Furthermore, the following passage in Cheshire and Fifoot's Law of Contract, Tenth Edition, do indicate that the case of payment of money could also come within the operation of the rule.

The plaintiff may have paid money to the defendant in pursuance of a transaction which he thought to be a valid contract, but which in truth, through the operation of some rule of law, is null and void. As a matter of logic such money should be recoverable in quasi-contract. The hypothesis upon which its payment rested is erroneous, and, as the event shows, it was in fact paid for nothing at all. This logical conclusion is, as a general rule, accepted by the common law.

Equally so, paragraph 1964 in Chitty on Contract, Twenty-fifth Edition, already extracted above, also contemplates the invocation of the principle where money has been paid.

29. Mr. T.R. Rajagopalan, learned Counsel for the defendants, would contend that in the absence of specific pleadings under Section 70 of the Act, this Court shall not countenance a prayer for refund of the money paid. In support of this submission of his, learned Counsel would rely on two pronouncements of the Supreme Court. The first is the one reported in Union of India v. Sita Ram : [1977]1SCR979 . There, the Supreme Court, after adverting to the three ingredients to support the cause of action under Section 70 of the Act, found on facts that the plaint lacked two essential features to constitute a cause of action under Section 70 of the Act and they were that the respondent delivered the goods lawfully to the appellant and that the appellant enjoyed the benefits thereof. We do not think that the plaint in the present case should be construed as totally lacking in the essential features under Section 70 of the Act. V/e will come to the factual discussion shortly. The other pronouncement is the one reported in Devi Sahai v. Union of India : AIR1977SC2082 . There, the only dispute raised on behalf of the appellant was that the respondent did not deliver vacant possession in accordance with the contract and therefore, the respondent is liable for mesne profits. On examination of the plaint, the Supreme Court found that there is no allegation in the plaint to support any pleading under Section 70 of the Act. Such is not the factual position here and this, we say, on our construction of the pleadings in the present case. In Raja Mohan v. Manzoor Ahmad the Privy Council discountenanced the attitude of Courts towards the question of pleadings being unduly rigid especially when the defendant did voice forth a counter case with regard to the relief asked for and he could not be stated to have been taken by surprise by any relief claimed. In Kedar Lal v. Hari Lal : [1952]1SCR179 , with regard to the construction of pleadings and the method of computation, the following observations occurring in paragraphs 51 and 41 of the judgment are elucidative:

I would be slow to throw out a claim on a mere technicality of pleading when the substance of the thing is there and no prejudice is caused to the other side, however clumsily or inartistically the plaint may be worded. In any event, it is always open to a Court to give a plaintiff such general or other relief as it deems just to the same extent as if it had been asked for, provided that occasions no prejudice to the other side beyond what can be compensated for in costs..The method of computation is a matter of law and it is for the Judges to apply the law to the facts stated and give the plaintiff such relief as is appropriate to the case.

30. In Ram Nagina Singh v. Governor General in Council : AIR1952Cal306 , it was observed that there was preponderance of authority in favour of the view that if the facts of a case could be fairly brought within the terms of Section 70 of the Act and the conditions expressly laid down therein were satisfied, the section should be given effect to and applied irrespective of the fact that there was in fact no contract between the parties.

31. In Nagubai v. B. Sharma Rao : [1956]1SCR451 , the Supreme Court countenanced that though evidence let in on issues on which the parties actually went to trial should not be made the foundation for decision of another and different issue, which was not present to the minds of the parties and on which they had no opportunity of adducing evidence, yet, the rule has no application to a case where parties go to trial with knowledge that a particular question is in issue, ever when no specific issue has been framed thereon and evidence adduced relating thereto and, in those circumstances, the absence of a specific pleading on the question was a mere irregularity, which resulted in no prejudice to the parties.

32. In Dominion of India v. Pretty Kumar : AIR1958Pat203 , a Bench of the Patna High Court held that though the plaintiff in his plaint did not refer to Section 70 of the Act, yet, from the materials on record if it could be gathered that the ingredients of Section 70 of the Act are present, the Court shall not be justified in refusing relief to the plaintiff. In R.P. Kamalia Mills v. State of Bihar : AIR1963Pat153 , it was countenanced that although the plaintiff did not refer to Section 70 of the Act in the plaint, yet, if the facts disclosed either in the plaint or in the written statement are sufficient for giving relief to either party there can be no bar to the application of the provisions of Section 70 of the Act.

33. In Bhagwati. v. Chandramauli : [1966]2SCR286 , the position with regard to pleadings and grant of relief was set out in the following terms:

There can be no doubt that if a party asks for a relief on a clear and specific ground, and in the issues or at the trial, no other ground is covered either directly or by necessary implication, it would not be open to the said party to attempt to sustain the same claim on a ground which is entirely new....

But in considering the application of this doctrine to the facts of the present case, it is necessary to bear in mind the other principle that considerations of form cannot over-ride the legitimate considerations of substance. If a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely, in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. What the Court has to consider in dealing with such an objection is: did the parties know that the matter in question was involved in the trial, and did they lead evidence about it? If it appears that the parties did not know that the matter was in issue at the trial and one of them has had no opportunity to lead evidence in respect of it, that undoubtedly would be a different matter. To allow one party to rely upon a matter in respect of which the other party did not lead evidence and has had no opportunity to lead evidence, would introduce considerations of prejudice, and in doing justice to one party, the Court cannot do injustice to another.

34. In Hansraj Gupta and Company v. Union of India : AIR1973SC2724 , the Supreme Court observed as follows:

We may now turn to the plaintiff's claim to the benefit of Section 70 of the Contract Act put forward in this Court for the first time. It was urged, on the strength of Piloo Dhunjushaw Sidhwa v. Municipal Corporation of the City of Poona : [1970]3SCR415 , that, so long as the claim is there, this Court is not precluded from applying Section 70 of the Contract Act for the first time even on appeal by special leave. We, however, think that the conditions for the applicability of this Section must at least be set out in the pleadings and proved.

35. In R.G. Vakil v. Ramendra Nath Banerjee 88 C.W.N.905 : A.I.R. 1984 N.O.C.303 Calcutta, page 149, it was countenanced,

If the plea has not been specifically made and yet it is covered by an issue by implication and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon if it is satisfactorily proved by evidence.

36. Coming to the facts of the present case, in paragraph 3 of the plaint, the plaintiff has referred to the alternative relief in the following terms:.If however, the Court is of the opinion that the plaintiff is not entitled to specific performance of the contract for sale of the suit property the defendants may be directed to pay to the plaintiff the sum of Rs. 80,000/-(Rupees eighty thousand only) received by him, with future interest at the rate of 6% per annum.

In the prayer in paragraph 6, the plaintiff has asked for the following relief:.or in the alternative, the plaintiff be allowed to recover from the defendants the sum of Rs. 80,000/-(eighty thousand) only with future interest at the rate of 6% per annum ill the date of recovery.

The original written statement of the first defendant with regard to the payment of Rs. 50,000/- sets forth the following allegation:

In connection with the marriage of the defendant's son who is an advocate with the plaintiff's daughter, it was agreed by the plaintiff that he shall pay Rs. 50,000/- to the defendant for the purpose of defraying the marriage expenses as well as for conveying a suitable property by this defendant in favour of the plaintiff's daughter. Accordingly the plaintiff gave a draft for Rs. 50,000/- in favour of the defendant on 23.6.1976 the date of the draft being 21.6.1976. As per that agreement the defendant executed a sale deed of his property consisting of nearly 1 3/4 acres of yielding coconut garden and 1 1/2 acres of planted rubber area in favour of the plaintiffs daughter on 23.6.1976 itself. The plaintiff had inspected the properties and had selected the same and with his knowledge, consent and approval alone the sale deed was executed. In the sale deed the consideration was mentioned less to save the registration expenses. It was the plaintiff who spent for the registration of that document. Because he had to meet the expense he suggested that the consideration be given at a low figure and that the document be registered in Kulathoor Sub Registrar's Office in Kerala .... The draft for 50,000/- was received and the amount was utilised in the manner stated above.

Paragraph 1 of the additional written statement of the first defendant on this aspect runs as follows:

The alternative claim made for the return of Rs. 80,000/- is baseless and is quite untenable. In so far as there was no agreement to sell the property, the question of return of Rs. 80,000/-does not arise. The only amount received was Rs. 50,000/- and the circumstances under which, and the purpose for which the said amount was received has been already stated in paragraph 4 of the written statement dated 7.3.1977.

Additional issue No. 2 framed on 14.10.1977 adverts to the questions as to whether the alternative claim for return of Rs. 80,000/- is tenable in case the Court is of the opinion that the plaintiff is not entitled to specific performance of the contract for sale of the suit property. Prior to the suit, there was exchange of notices. In Ex.A-2 dated 23.10.1976 the plaintiff has made a demand for return of the amounts paid. There was a reply as per Ex.A-3 dated 2.11.1976 and, of course, the first defendant has put forth his answer of adjustment and discharge with regard to this payment of Rs. 50,000/-. Ex.A-4 is the rejoinder dated 23.11.1976. Here again, the plaintiff has consciously made the demand for the return of the amounts paid. These notices have been referred to in the plaint. The fact that there was a payment of Rs. 50,000/- by the plaintiff to the first defendant has been set out in the plaint. Though the plaintiff would state that the payment was made in pursuance of an oral agreement of sale, the factum of payment to and receipt by the first defendant is not in issue in the case. The first defendant only puts forth an answer of adjustment and discharge. We are eschewing this case of the first defendant on facts. It is not the case of either the plaintiff or the first defendant that the payment was a gratuitous one. The first defendant obviously enjoyed the benefit of the same. All the three essential ingredients under Section 70 of the Act come out on the basis of the pleadings put forth by the parties and the factual materials disclosed in the case. The non-reference to Section 70 of the Act is a matter of no consequence. The parties knew that the return of the money paid was very much in issue. We find that a specific issue has been raised relating to this controversy. The parties placed their evidence on this issue. The first defendant could not be stated to have been taken by surprise by any new plea. We are not able to spell out that there is no indication in the plaint for a case under Section 70 of the Act and the essential ingredients of Section 70 of the Act have not come out from the pleadings as a whole. Hence, we could not countenance the contention put forth by the learned Counsel for the defendants that on account of lack of pleading, this Court shall not indulge in granting the alternative relief of return of the money paid.

37. The last lap of the discussion in this judgment is meant to cover the case of the first defendant that a sum of Rs. 50,000/- was paid to serve different purposes and the said purposes got served and hence, there is no question of refund of this sum of Rs. 50,000/-. In the reply notice, Ex.A-3 dated 2.11.1976, the first defendant only stated that the amount was given to him for the purpose of defraying the marriage expenses as well as for conveying a suitable property by him in favour of the plaintiff's daughter. There is no indication as to what was the quantum that should be allocated for the marriage expenses and what was the quantum that should be appropriated towards the sale of a property in favour of the plaintiff's daughter. In the original written statement of the first defendant also, we do not get any indication of the apportionment of this sum of Rs. 50,000/-for each of these two items, namely, marriage expenses and consideration for sale in favour of the plaintiff's daughter. The additional written statement of the first defendant is also portently silent on this aspect. The first defendant was examined as D.W.1. It is only for the first time in his evidence, the first defendant ventured to speak about the allocation and appropriation of the sum of Rs. 50,000/-under the two heads. He would depose that Rs. 40,000/- was meant for the property and Rs. 10,000/- was meant for the marriage expenses. The plaintiff, examined as P.W.1, has stated that the marriage expenses should be borne by the respective parties and that is the custom in his community. On the other hand, D.W.1 would state that there is a custom that the bride's party pays for the marriage expenses. Apart from D.W.1, none has been examined to establish this custom in the community. We cannot lose sight of the fact that the first defendant is a person who received the sum of Rs. 50,000/- and if he wants to say that the sum of Rs. 50,000/- was adjusted towards particular expenses, he must demonstrate it before this Court by convincing evidence, D.W.2 is none else than the son-in-law of the first defendant and he also speaks about Rs. 40,000/- being meant for the purchase of a property and Rs. 10,000/- being meant for marriage expenses. D.W.3 is the second defendant, who married the plaintiff's daughter, and he also deposes to the above effect. The details of the marriage expenses to the tune of Rs. 10,000/- have not been exposed. We cannot take the bare statements of the first defendant and his witnesses, for the first time coming in the course of evidence, that a substantial sum of Rs. 10,000/- was appropriated towards the marriage expenses, in the absence of details therefor. We also find that while the plaintiff was in the box, as P.W.1, no suggestion was put to him specifically that this sum of Rs. 10,000/- was meant for the marriage expenses. We are not satisfied on evidence that the first defendant could claim appropriation of the sum of Rs. 10,000/- out of the sum of Rs. 50,000/- towards marriage expenses and put forth an answer for the claim of the plaintiff to this extent.

38. The case of the first defendant is that a sum of Rs. 40,000/- was appropriated towards the sale of a property by him to the plaintiff's daughter, P.W.3. The deed of sale dated 23.6.1976 has been marked as Ex.A-12. The consideration quoted therein is only Rs. 13,000/-. Neither in Ex.A-3 nor in the written statements, original and additional, the first defendant put forth a case that a sum of Rs. 40,000/-was appropriated towards this sale. The evidence of D.W.1 is that Ex.A-12 was registered at 12 noon on 23.6.1976 and the draft for Rs. 50,000/- was encashed only at 1.30 P.M. on that day. The registration endorsement on Ex.A-12 shows that the document was presented for registration at 11 A.M. on 23.6.1976. The recitals in Ex.A-12 are to the effect that the cash of Rs. 13,000/- was received by the vendor, the first defendant, from the vendee, P.W.3, from out of the amount which she received from her father, the plaintiff. There is no reference in the document to the payment by draft. The draft itself was encashed subsequently. Apparently we do not find any nexus between the draft and the payment made for Ex.A-12, It is not the case of either party that cash was paid before the Registrar and hence, the adverse comment by the learned Counsel for the defendants in this behalf is of no avail to his clients. It is true, in the course of evidence, the plaintiff, as P.W.1, would depose that Rs. 30,000/- was given for purchasing the property in the name of his daughter, P.W.3, who also supports this version of the plaintiff. Learned Counsel for the defendants would stale that there is contradiction in the evidence, in that in Ex.A-11 dated 23.10.1976 and Ex.B-10 dated 23.11.1976, the counsel notices issued on behalf of P.W.3, only Rs. 13,000/- was stated to have been paid for the sale deed, Ex.A-12. Mr. S. Chellaswami, learned Counsel for the plaintiff, would submit that if the averments in Ex.B-11 and B-10 should be put and used against P.W.3, she ought to have been confronted with them while she was being examined in Court, so that she could have had an opportunity of explaining them and clearing up the point of ambiguity or dispute, and in the present case, it was not so done. For this proposition, learned Counsel for the plaintiff relies on a pronouncement of the Supreme Court in Sita Ram v. Ramchandra : [1977]2SCR671 . We find that this is the factual position. But we, need not stand straining over this aspect because we are duty bound to go by the principle of burden of proof in the present case. The first defendant, who wants to wipe out this sum of Rs. 50,000/-which he admittedly received, must demonstrate that there was in fact due adjustment and discharge of this amount as pleaded by him, by placing convincing and unimpeachable evidence therefor. Learned Counsel for the defendants would state that the property conveyed under Ex.A-12 was worth much more than the value quoted in the document and the very evidence of the plaintiff and his daughter supports the case of the defendants. The first defendant's specific case is that Rs. 40,000/- was appropriated towards Ex.A-12, The plaintiff's evidence is that the consideration for the sale under Ex.A-12 was paid separately and it was Rs. 30,000/-. Both the cases stand irreconcilable and the endeavour on the part of the learned Counsel for the defendants to reconcile them and to persuade this Court to draw the inference that the real consideration for Ex.A-12 ought to have been Rs. 40,000/- and it came out of the draft for Rs. 50,000/-cannot succeed. The first defendant must discharge his burden and he must do so to the satisfaction of the Court. The recital in Ex.A-12 being specific that cash was paid and the document having been presented for registration at 11 A.M. it is not possible to establish a nexus between Ex.A-12 and the draft for Rs. 50,000/-, which admittedly got encashed only at 1.30 P.M. The evidence placed on behalf of the defendants has not persuaded us to accept their case that Rs. 40,000/- was appropriated out of the sum of Rs. 50,000/- towards the consideration for Ex.A-12. If this is the factual position which we could deduce from the evidence placed in the case, then, we find no answer for the claim of the plaintiff for the refund of this sum of Rs. 50,000/-.

39. The result is, this appeal is allowed to the following extent; only:

i) The judgment and decree of the Court below, dismissing the suit of the plaintiff in toto with costs, are set aside;

ii) the plaintiff is granted a decree for Rs. 50,000/- with interest thereon at 6 per cent per annum from 23.6.1976 till date of realisation, recoverable from the first defendant; and

iii) the plaintiff is entitled to proportionate costs, both in the suit as well as in this appeal from the first defendant.


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