Chhakoo Lal Bansal vs Nagar Palika, Morena

C.M. Lodha, J.—This is a plaintiff''s revision from a decree of dismissal of the plaintiff''s suit by Civil Judge, Class I, Morena.

The plaintiff''s case was that he had constructed a drain in pursuance of a written order by the President, Nagar Palika, Morena, and it was agreed between the parties that the plaintiff would be paid for constructing the drain at the rate of Rs. 8.60 per running metre. It is alleged by him that he completed the construction within 15 days measuring 23 metres in length and that the measurements were verified by the Overseer of the Municipality. Since the cost of construction was not paid to the plaintiff, he served a notice on the defendant and thereafter brought the present suit for recovery of Rs. 220.13.

The defendant pleaded inter alia that since no valid contract had been executed between the Municipality and the plaintiff as required by section 110(4) of the M.P. Municipalities Act, 1961, the plaintiff could not claim any amount on account of the construction of the drain. This plea found favour with the lower Court, which dismissed the suit on this ground alone.

In my opinion, the judgment of the lower Court is not sustainable inasmuch as it has been given in disregard of tie provisions of section 65 and section 70 of the Contract Act. There has been a string of rulings of the Supreme Court on the point and I may, here, usefully make reference to some of them.

It was held in State of West Bengal Vs. B.K. Mondal and Sons, that if a person does something for another, it would be open to the Utter person not to accept what has been done by the former; in that case section 70 does not apply. It is only where he voluntarily accepts the thing or enjoys it to his benefit that the liability u/s 70 arises. In that case, the appellant accepted the warehouse constructed by the respondent, used it and enjoyed it to its benefit. On these facts a claim for compensation made u/s 70 was held to be sustainable though not on the basis of any subsisting contract between the parties.

In The New Marine Coal Co. (Bengal) Private Ltd. Vs. Union of India (UOI), a contract entered into by A with the Government of India for supply of coal to the Railway Station in contravention of the provisions of section 175(3) of the Government of India Act, 1935 was held to be void and unenforceable but it was further observed that if in pursuance of the void contract A has performed his part and the Government of India has received the benefit of the performance of the contract by A, section 70 of the Contract Act would apply and the Government of India was bound to make compensation to A in the form of the value of the said coal under that section.

In Piloo Dhunjishaw Sidhwa Vs. Municipal Corporation of The City of Poona, it was held that a plaintiff without an enforceable contract in his favour, supplying goods to a Municipal Corporation, is entitled to a money equivalent of the goods delivered, assessed at the market rate prevailing on the date on which the supplies were made by virtue of section 70 of the Contract Act.

In M/s. Hansraj Gupta v. Union of India A I R 1964 S C 1724 it was held that section 70 enables the person who actually supplies goods or renders some services not intending to do so gratutiously could claim compensation from the person who enjoys the benefit of the supply made or of the services rendered. He is liable even though an express contract or agreement may not be proved.

Lastly in Municipal Committee, Kishangarh Vs. Maharaja Kishangarh Mills Ltd., it was held that where an agreement is discovered to be unenforceable and not illegal and when a party has not been guilty of any conduct which would disentitle him to come to Court, there is no reason why the principle underlying section 65 should not be given effect to. It was further observed that it would be extremely inequitable and unjust to hold that when a contract has been entered into by authorised persons and is found to be unenforceable for want of certain formalities, the advantage gained by that party should not be, when it was not intended to be gratuitous, restored or compensated. It was further observed that section 70 of the Contract Act is somewhat broader in its effect and that there should be no bar to the application of the principle underlying section 70 also to such class of cases.

In view of the foregoing discussion, I am of the opinion that the lower Court was not justified in dismissing the plaintiff''s suit merely on the ground of the contract being not valid on account of absence of certain formalities, but it ought to have decided the case on merits keeping in view the provisions of section 65 and section 70 of the Contract Act as discussed above.

Accordingly, I allow this revision in part, set aside the judgment and decree by the lower Court and send the case back to it for proceeding on the lines indicated above. The costs of this revision will be easy, but the costs hereafter will abide the result.