Obligation to Pay for Non-Gratuitous Act (Section 70)
Introduction
Sometimes a person does something useful for another person or delivers goods to him without a formal contract. If the act was not intended to be done for free and the other person accepts the benefit, the law requires that compensation be paid.
Section 70 of the Indian Contract Act, 1872 creates this obligation. It prevents a person from receiving benefits unfairly at the expense of another person.
Meaning / Definition
Section 70 states that when a person lawfully does something for another person or delivers something to him, and does not intend to do it for free, the person who receives and enjoys the benefit must either:
- Pay reasonable compensation, or
- Return the thing delivered
This rule is based on the principle that a person should not unfairly benefit (gain an advantage without paying) from the work or property of another person.
Essential Conditions
Lawful Act or Delivery
The person must have lawfully done something for another person or delivered goods to him.
The act must not be illegal or wrongful.
No Intention to Do the Act for Free
The person performing the act must not intend to do it gratuitously (not intended to be free).
This means the person expects reasonable payment for the work done or goods supplied.
Voluntary Acceptance of Benefit
The other person must voluntarily accept and enjoy the benefit of the act or goods.
If the person accepts and uses the benefit, the law assumes that compensation should be paid.
Unfair Benefit Must Exist
Section 70 is based on the rule that a person should not receive an unfair benefit (unjust gain) at another person’s expense.
If the person receiving the service does not gain any advantage, Section 70 will not apply.
Important Case Law
Indu Mehta v. State of U.P.
Miss Indu Mehta was appointed as Assistant District Government Counsel (Criminal) and performed her duties. Later, her appointment was found to be legally invalid.
The court held that even though the appointment was void, the government had enjoyed the benefit of her services. Therefore, the government could not recover the fees already paid to her.
C.I. Abraham v. K.A. Cheriyan
A purchased property for B and collected rent on B’s behalf. Later, A claimed payment for his services.
The court held that A had not proved that the services were performed with the intention of receiving payment. Also, B had not gained any unfair benefit. Therefore, A was not entitled to compensation under Section 70.
State of West Bengal v. B.K. Mondal & Sons
Contractors constructed structures for the government at the request of government officers. The contract was later found invalid because legal formalities required by the Constitution were not followed.
The court held that since the government accepted and used the structures, it was required to pay compensation under Section 70.
Application Against Government
Section 70 applies not only to private individuals but also to companies and government authorities.
Even if a contract with the government is invalid because proper procedures were not followed, the government must still pay compensation if it has accepted and used the benefit of the work done.
Limitation: Cannot Be Used Against a Minor
Section 70 cannot be used against a minor.
A minor is legally incapable of entering into a contract. Therefore, compensation cannot be recovered from a minor under Section 70.
However, if necessaries (basic essential goods) are supplied to a minor, recovery may be possible from the minor’s property under Section 68.
Practical Example
A trader accidentally delivers goods to B’s house. B keeps the goods and uses them as his own.
Since B has accepted and enjoyed the goods, he must pay the trader the value of the goods under Section 70.
Summary
- Section 70 deals with payment for lawful acts done without a formal contract.
- The act must be lawful and not intended to be done for free.
- The other person must voluntarily accept and enjoy the benefit.
- The rule prevents unfair benefit (unjust gain) at another person’s expense.
- The section applies to individuals, companies, and government authorities.
- Section 70 cannot be used to claim compensation from a minor.