Important obligations that the Contract Act deals with ‘quasi-contractual are discussed below:
1. Claim for necessaries supplied to a person incapable of contracting or on his account (Sec. 68):
ADVERTISEMENTS:
“If a person, incapable of entering into a contract, or any one whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.”
With a view to recapitulate it may be stated here that although agreements by minors, idiots, lunatics, etc., are void ab-initio, but Section 68 makes an exception to this rule by providing that their estates are liable to reimburse the supplier who supplies them or to someone whom they are legally bound to support with ‘necessaries’ of life. The following points need to be emphasised:
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(i) The Section does not create any personal liability but only the estates are liable.
(ii) The things supplied must come within the category of ‘necessaries’. The word ‘necessaries’ here covers not only bare necessities of existence, e.g., food and clothes, but all things which are reasonably necessary to the incompetent person, having regard to his status in society, e.g., a watch, a radio, a bicycle may be included therein.
ADVERTISEMENTS:
(iii) Necessaries should be supplied only to such incompetent person or to someone whom he is legally bound to support, such as his wife and children.
(iv) Incompetent person’s property is liable to pay only a reasonable price for the goods or services supplied and not the price which the incompetent person might have ‘agreed to’ (legally speaking an incompetent person cannot agree to anything).
Illustrations (To Sec. 68):
(a) A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from B’s property. (b) A supplies the wife and children of B, a lunatic, with necessaries suitable to their condition in life. A is entitled to be reimbursed from B’s property.
ADVERTISEMENTS:
2. Reimbursement of person paying money due by another, in payment of which he is interested (Sec. 69):
“A person, who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.”
Illustration (To Sec. 69):
B holds land in Bengal, on a lease granted by A, the zamindar. The revenue payable by A to the Government being in arrear, his land is advertised for sale by the Government. Under the revenue law, the consequence of such sale will be the annulment of B’s lease.
B, to prevent the sale and the consequent annulment of his own lease, pays to the Government the sum due from A. A is bound to make good to B the amount so paid. In order to make Section 69 applicable, the following conditions must be satisfied:
(i) The plaintiff should be interested in making the payment in order to protect his own interest and the payment should not be voluntary one. Moreover, the payment must have been done in good faith and not to manufacture evidence of title to land or any other thing.
Illustrations:
(a) A sub-tenant pays the arrears of rent due by the tenant to the landlord, in order to save the tenancy from forfeiture. The sub-tenant is entitled to recover from the tenant, the amount paid by him to the landlord, although there is no contract between the two.
(b) A, pays the arrears of rent of his neighbour B, just to avoid a struggle between B and his landlord. A cannot recover from B as he acted voluntarily and had no interest of his own in the payment. [But if B should agree to reimburse A, this would be a good contract under Section 25(2).]
(ii) The payment must be such as the other party was bound by law to pay.
Illustration:
A’s goods were wrongfully attached to realise the arrears of Government revenue due by B. A pays the dues to save the goods from being sold. He is entitled to recover the amount from B. (A bid Hussain vs Ganga Sahai).
(iii) The payment must not be such as the plaintiff himself was bound to pay. He should only be interested in making the payment. In other words, a suit under this Section is maintainable only for reimbursement and not for contribution.
Thus, where there is a joint liability on joint wrong doers and only one of them discharges the liability, no suit for contribution from the other would be ‘maintainable under this Section. (Ramkrishna vs Radhakrishnc?). [A suit for contribution from the other joint promisor would be maintainable under Section 43.]
Illustration:
A and B have been fined jointly Rs 500 for selling adulterated ghee. A alone pays the amount of fine in good faith. A cannot later claim contribution from B under Section 69.
Notice that although B was bound by law to pay and A has paid B’s share in good faith, yet A cannot recover as he himself was bound to make the payment, being jointly liable with B and was not simply interested in making the payment. [A can, however, claim contribution from B under Section 43.]
3. Obligation of person enjoying benefit of non-gratuitous act (Sec.70):
This is the third type of quasi-contract provided in the Contract Act. Section 70 lays down thus, “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.”
For giving rise to a right of action under this Section, the following three conditions must be fulfilled:
(i) The thing must have been done lawfully in good faith. This means that the act done must be in pursuance of the implied wishes (because there should not be any request in the case of a quasi-contract) and in the presence of the other party, giving him the full choice to reject the thing or service.
(ii) The thing must have been done by a person not intending to act gratuitously, i.e., it must have been done with the intention of being paid for.
(iii) The person for whom the act is done must have enjoyed the benefit of the act.
Illustrations:
(a) A, a tradesman, leaves goods at B’s house by mistake. B treats the goods as his own. He is bound to pay A for them. [Illustration to Section 70]
(b) A saves B’s property from fire. A is not entitled to compensation from B if the circumstances show that he intended to act gratuitously. [Illustration to Section 70]
(c) Where a coolie takes the luggage at the railway station without being asked by the passenger or a shoe-shiner starts shining shoes of the passenger without being asked to do so, and if the passenger does not object to that, then he is bound to pay reasonably for the same as the work was not intended to be gratuitous.
4. Responsibility of finder of goods (Sec. 71):
Section 71 lays down another circumstance in which also a quasi-contractual obligation is to be presumed. It says: “A person who finds goods belonging to another and takes them into his custody, is subject to the same responsibility as a bailee.” Thus an agreement is also implied by law between the owner and finder of the goods and the latter is deemed to be a bailee.
Duties of finder of goods:
He must try to find out the real owner of the goods and must not appropriate the property to his own use. If the real owner is traced, he must restore the goods to him on demand. If he does not take these measures, he will be guilty of criminal mis-appropriation of the property under Section 403 of Indian Penal Code.
Further, till the goods are in possession of the finder, he must take as much care of the goods as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value (Sec. 151).
The rights of a finder of goods have been discussed in Sections 168-169 which provide as follows:
Rights of finder of goods:
Till the true owner is found out, he can retain possession of the goods against everybody in the world. He is entitled to receive from the true owner, all expenses incurred by him for preserving the goods or finding the true owner.
He has a lien on the goods for the money so spent, i.e., he can refuse to return the goods to the true owner until these moneys are paid.
He is not entitled to file a suit for the recovery of such sums. But he can file a suit against the owner to recover any reward, which was offered by the owner for the return of the goods, provided he came to know of the offer of reward before actually finding out the goods.
The finder of goods is entitled to sell the goods if the owner cannot be found out or if he refuses to pay the lawful charges of the finder, in the following two situations only:
(a) When the thing is in danger of perishing or of losing the greater part of its value, or
(b) When the lawful charges of the finder amount to at least two-thirds of the value of goods found.
The true owner is entitled to get the balance of sale proceeds, if there is surplus after meeting the lawful charges.
It is to be noted that no one except the real owner can claim possession of goods from the finder. If anybody deprives him of the possession of the goods, he can file a suit for damages for trespass.
Illustration:
Picked up a diamond on the floor of Fs shop and handed it over to F to keep it till the owner appeared. In spite of best efforts the true owner could not be searched.
After the lapse of some weeks, H tendered to F the lawful expenses incurred by him for finding the true owner and an indemnity bond and requested him to return the diamond to him (i.e., H). F refused to do so. Held, F must return the diamond to H as he was entitled to retain the goods as against everybody except the true owner (Hollins vs Fowler).
5. Liability of person to whom money is paid, or thing delivered by mistake or under coercion (Sec. 72):
This is the fifth and the last kind of quasi- contract mentioned in the Act. Section 72 declares thus, “A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.” Accordingly, if one party under a mistake pays to party money which is not due by contract or otherwise, that money must be repaid.
The term ‘mistake’ has been used in the Section without any qualification or limitation whatever and comprises within its scope a mistake of law as well as a mistake of fact. (Sales Tax Officer vs Kanhaiyalal Mukundlaf).
The term ‘coercion’ has been used in its ordinary sense and not as defined in Section 15 (Peplad Bulakhidas Mills is Union of India). Here ‘coercion’ means ‘under pressure’.
Illustrations:
(a) A and B jointly owe Rs 100 to C. A alone pays the amount to C, and B, not knowing this fact, pays Rs 100 over again to C. C is bound to repay the amount to B [Illustration to Section 72].
(b) A railway company refuses to deliver up certain goods to the consignee, except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to recover so much of the charge as was illegally excessive (Illustration to Section 72).
(c)A pays some money to B by mistake. It is really due to C. B must refund the money to A. C, however, cannot recover the amount from B in the absence of privity of contract between B and C.
(d) A fruit parcel is delivered under a mistake to R who consumes the fruits thinking them as birthday present. R must return the parcel or pay for the fruits. Although there is no agreement between R and the true owner, yet he is bound to pay as the law regards it a quasi-contract.
It is to be noted that this Section does not cover a case where money has been paid in payment of a natural obligation. Thus, where one has paid up a time-barred debt, he cannot recover it.
Similarly, the Section does not apply when there is a deliberate disregard of law, e.g., where moneys are paid voluntarily knowing full well that the contract has become void, it cannot be recovered under the Section. (Ananth Bandhu vs Dom. of India).