State Of West Bengal vs M/S. B. K. Mondal And Sons

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 286 of 1958

Decision Date: 5 December 1961

Coram: P.B. Gajendragadkar, A.K. Sarkar, K.N. Wanchoo, K.C. Das Gupta, N. Rajagopala Ayyangar

In this case the Supreme Court recorded that the petition was filed by the State of West Bengal against M/s B K Mondal and Sons, and that the judgment was delivered on 5 December 1961. The judgment was authored by Justice P B Gajendragadkar and the bench comprised Justices P B Gajendragadkar, A K Sarkar, K N Wanchoo, K C Das Gupta, and N Rajagopala Ayyangar. The citation of the decision is 1962 AIR 779 and 1962 S C R Suppl. (1) 876. The case has been referred to in later reports, for example 1964 SC 152 (pages 6, 11, 12), 1966 SC 580 (page 9), 1967 SC 203 (page 8), 1968 SC 1218 (page 6), 1971 SC 2210 (page 3), 1973 SC 1174 (page 6), 1977 SC 2149 (page 8), 1980 SC 1109 (page 3), 1980 SC 1285 (page 18), and 1980 SC 1330 (page 8). The statutory provisions discussed were Section 70 of the Indian Contract Act, 1872 and Section 175(3) of the Government of India Act, 1935, together with the provisions dealing with non‑gratuitous work and the liability of the State Government when there is no valid contract.

The headnote explained that Section 70 of the Contract Act provides that when a person lawfully does something for another person or delivers anything to him not intending to do so gratuitously, and the other person enjoys the benefit, the latter is bound to pay compensation or to restore the thing done or delivered. Section 175(3) of the Government of India Act declares that all contracts made in the exercise of the executive authority of a province shall be expressed to be made by the Governor of the province and shall be executed on behalf of the Governor by persons and in the manner he may authorize. The respondent, a firm of building contractors, performed certain additional construction works for the Provincial Government after being requested by its officers. The firm’s bills for these additional works were not paid, and it sued the Government, claiming a right to payment on the basis of a contract and alternatively on the basis of Section 70 of the Contract Act. The Provincial Government contended that there was no valid and binding contract and that Section 70 did not apply. The trial judge found that although there was no valid contract under Section 175(3) of the Government of India Act, the claim was justified under Section 70 of the Contract Act and decreed the suit in favour of the contractor. The Court of Appeal affirmed that decree, and the State subsequently obtained special leave to appeal. The Supreme Court, sitting per curiam, held that the lower courts were correct in applying Section 70 of the Contract Act to the facts, and consequently the appeal failed. Justices Gajendragadkar, Wanchoo and Ayyangar observed that determining whether a mandatory statutory provision is merely directory or obligatory requires a careful examination of the scope and purpose of the statute. In enacting Section 175(3) of the Government of India Act, 1935, Parliament intended that the State not incur liability for unauthorised contracts, and therefore the word “shall” in that provision was to be read as obligatory rather than directory.

In this case the Court observed that the State should not be held liable for contracts that were not authorized, and that the statutory provision was enacted in the public interest, making the word “shall” obligatory rather than merely directory. The Court cited the decision in Seth Bhikraj Jaipuria v. Union of India, [1962] 2 S.C.R. 880, as approved authority, and explained the earlier case of Chatturbhuj Vithaldas Jasani v. Moreshwar Prashram, [1954] S.C.R. 817. The Court explained that a person wishing to rely on section 70 of the Contract Act must demonstrate three facts: first, that his act was lawful; second, that he did not intend to act gratuitously; and third, that the other party enjoyed the benefit of the act. Accordingly, a claim for compensation under section 70 is not based on an existing contract but on the principle that one party performed or delivered something which the other party voluntarily accepted, even though the latter always had the option to refuse. The Court held that recognizing such a claim in the present proceedings would not contravene section 175(3) of the Government of India Act, either directly or indirectly. The term “lawfully” in section 70 was interpreted to mean that once something is delivered and voluntarily accepted, a lawful relationship arises between the parties, and that relationship draws the protection of section 70. Consequently, in matters governed by section 70 there is no scope for claims of specific performance or damages for breach of contract, because the claim rests on the absence of a contract and on a relationship that merely resembles a contractual one. The Court found that nothing in section 175(3) of the Government of India Act, read in the light of section 23 of the Contract Act, prohibits a claim under section 70, and that the two provisions operate in separate fields without conflict; section 70 therefore supplements section 175(3). The Court disapproved the earlier authority Chedi Lal v. Bhagwan Das, (1889) I.L.R. 11 A 11 234. It further held that it would be unreasonable to rely on English case law for interpreting a specific Indian statutory provision such as section 70. The Court referred to Ramanandi Kuer v. Kalawati Kuer, (1927) L.R. 55 I.A. 18, and noted that the State Government, like any ordinary citizen, must be subject to section 70 and cannot claim a position similar to that of a minor to escape its operation. The Court also referred to Suchand Ghosal v. Balaram Mardana, (1911) I.L.R. 38 Cal. 1. Finally, per Justices Sarkar and Das Gupta, the issue was whether the three requisites of section 70 had been satisfied; there was no dispute that the Government had taken the benefit of the work carried out.

The Court observed that the work which the Government urgently required was immediately put to use, and it was evident that the respondent did not intend to perform the work without compensation. The officers’ request merely served to notify the respondent that the Government needed the work at once and that payment would be made after the work was completed; having previously performed similar work and received payment, the respondent promptly complied. The Court further held that there was no doubt that the work had been carried out lawfully. Even if it were assumed that work performed under a contract later held invalid by section 175(3) of the Government of India Act would be unlawful because of evasion of that provision, the section does not state that work undertaken without any contract at all, as was the case here, would be unlawful, nor does it render it unlawful for the Government to enjoy the benefit of work performed without a contract. Section 175(3) of the Government of India Act applies only to a consensual contract entered into by the Government and not to a situation that, although termed a contract, is created by law through a legal fiction without the parties’ consent. Section 70 of the Contract Act applies where its conditions are satisfied, and if it is necessary to imply a contract or a quasi‑contract for the purpose of applying that section, it must be done, and neither section 175(3) of the Government of India Act nor any other obstacle can prevent its operation. The Court also affirmed that recourse to English law is not justified for interpreting a question that arises under an Indian statute unless the question cannot be reasonably understood without such assistance. The judgment recorded that this appeal by special leave arose out of a suit filed by the respondent, B K Mondal & Sons, against the appellant, the State of West Bengal, in the Calcutta High Court, seeking a sum of Rs 19,325 for work done for the State. The claim was advanced in two alternative bases: firstly, that the work had been performed under a contract between the parties, making the State liable to pay the amount due; and secondly, that if the contract were deemed invalid, the respondent’s claim would fall under section 70 of the Contract Act.

In this case the respondent asserted that it had lawfully performed certain works for the State of West Bengal without intending to do so gratuitously and that the State had consequently received a benefit. The respondent relied on section 70 of the Indian Contract Act, contending that the works it performed created a legal obligation on the part of the State to pay for them. According to the respondent, on 8 February 1944 it offered to erect temporary storage godowns at Arambagh in the Hooghly district for the use of the Civil Supplies Department of the State, and that the Department accepted this offer by a letter dated 12 February 1944. Upon acceptance, the respondent completed the construction and subsequently submitted a bill for Rs 39,476, which was duly paid in July 1944. Later, on 7 April 1944, the Sub‑Divisional Officer of Arambagh requested that the respondent submit an estimate for constructing a kutcha road, a guard room, an office, a kitchen and a clerks’ room for the Department of Civil Supplies. The respondent alleged that the Additional Deputy Director of Civil Supplies visited Arambagh on 20 April 1944 and instructed the respondent to proceed with the works in accordance with the estimates it had submitted. The respondent then completed these constructions and sent a bill for Rs 2,322 8/‑ to the Assistant Director of Civil Supplies on 27 April 1944. Subsequently, the Sub‑Divisional Officer required the erection of additional storage sheds at Khanakul, and the Assistant Director of Civil Supplies wrote to the respondent on 18 April 1944, authorising the commencement of that work. The respondent completed the sheds and submitted a bill for Rs 17,003. The respondent claimed in the present suit that the two later bills—amounting to Rs 2,322 8/‑ and Rs 17,003—remained unpaid, forming the basis of its present monetary claim.

The State of West Bengal denied every material allegation made by the respondent in its plaint. The State contended that the requests which allegedly led to the respondent’s constructions were invalid, unauthorised, and did not give rise to a binding contract within the meaning of section 175(3) of the Government of India Act, 1935. The State further asserted that there was no privity of contract between itself and the respondent and therefore it bore no liability for the amounts claimed. The State’s written statement was described as vague and general, lacking any specific or detailed pleas. The trial judge, G.K. Mitter, J., identified five material issues from the pleadings and recorded findings on each. He concluded that, applying section 175(3) of the Act, no valid and binding contract existed between the respondent and the State for the construction of huts and sheds at Khanakul and Arambagh, a finding that favoured the State. Nevertheless, the judge held that the respondent’s claim against the State was justified under section 70 of the Indian Contract Act, and that the claim was not barred by limitation. He also rejected the State’s contention that liability under the Indian Independence (Rights, Property and Liabilities) Order 1947 did not extend to the State. Consequently, the trial judge’s findings on those points were adverse to the State, while he found that section 65 of the Contract Act did not apply, a finding in the State’s favour. The net result was that the respondent’s claim was upheld under section 70 of the Contract Act and a decree awarding the claimed amount was entered against the State.

The trial judge applied section 70 of the Indian Contract Act and concluded that the respondent’s claim was not barred by limitation. He also rejected the appellant’s contention that liability of the Province of Bengal had not transferred to the appellant under the Indian Independence (Rights, Property and Liabilities) Order 1947, thereby finding against the appellant on three principal issues. It was recorded that the respondent, during the trial, also relied on section 65 of the Indian Contract Act to support its claim. The learned judge held that section 65 was inapplicable to the facts, which resulted in a finding in favour of the appellant on that point. Consequently, the respondent’s claim was upheld under section 70 of the Contract Act and a decree for the amount claimed was passed in the respondent’s favour. Dissatisfied with the decree, the appellant challenged its correctness and validity by filing an appeal in the civil appellate jurisdiction of the Calcutta High Court. The appeal was heard by Judges S R Das Gupta and Bachawat, who each delivered separate yet concurring judgments that essentially affirmed the trial court’s material findings. As a result, the appellant’s appeal was dismissed. Following the dismissal, the appellant sought a certificate to approach this Court, but the High Court refused the application. The appellant then applied to this Court for a special certificate, obtained it, and now stands before us. The primary argument advanced on behalf of the appellant, through counsel, is that section 70 of the Contract Act should not apply to the present dispute. Before addressing that argument, it is necessary to recall the lower courts’ finding that the contract relied upon by the respondent was invalid under section 175(3) of the Government of India Act, 1935. Counsel for the appellant, Mr Sen, maintains that this finding is correct, whereas counsel for the respondent, Mr Chatterjee, suggested only faintly that the contract could not be deemed invalid. Section 175(3) provides, among other things, that all contracts made in the exercise of a province’s executive authority must be expressed as made by the Governor of the province and must be executed on the Governor’s behalf by persons and in a manner authorized by the Governor. It is undisputed that the contracts in question were not executed by any persons duly authorized by the Governor. The pivotal question, therefore, is whether those contracts can be regarded as valid despite non‑compliance with the mandatory requirements of section 175(3). In our view, there is no doubt that failure to observe the mandatory provisions of that section renders the contracts invalid.

The Court observed that the issue of whether mandatory statutory provisions are to be treated as merely directory or as truly obligatory has been examined repeatedly in judicial decisions, and that no single, inflexible rule can be laid down for all cases. It explained that the proper approach requires ascertaining the true intention of the legislature when it employed imperative language, and that such intention must be derived from a careful examination of the entire statute and the specific objective sought to be achieved by the provision containing the mandatory clause. The Court noted that if a mandatory clause is held to be obligatory, then any breach of that clause inevitably leads to the contract being declared null and void. It further observed that, in enacting section 175(3), Parliament evidently intended to prevent the State from incurring liability on the basis of contracts that had not been authorised, and that the plain purpose of the provision was to protect the State from spurious claims founded on such unauthorized agreements. Consequently, the provision was enacted in the public interest, and the word “shall” used in the provision clearly signals that the requirement is obligatory rather than merely directory. The Court referred to the decision in Seth Bhikraj Jaipuria v. The Union of India (1), stating that it fully concurred with the view expressed in that case that the mandatory language creates an enforceable obligation. The Court then turned to the argument advanced by counsel, who contended that the conclusion regarding the obligatory character of section 175(3) was inconsistent with the earlier decision in Chatturbhuj Vithaldas Jasani v. Moreshwar Parashram (2). In that earlier case, the Court had considered a contract for the supply of goods entered into by the Central Government that failed to comply with the mandatory requirements of Article 299(1) of the Constitution, which is substantially analogous to section 175(3) of the Act. The issue before the Court was whether the breach of Article 299(1) rendered the individual named Chatturbhuj disqualified from being chosen as a Member of Parliament under section 7(d) of the Representation of the People Act, 1951. The Court, speaking through Bose, J., observed that section 7(d) does not require the contracts to be enforceable against the Government; it merely requires that the contracts be for the supply of goods to the Government, and therefore the contracts in question fell within the ambit of the provision. Thus, the Court clarified that the decision in Chatturbhuj dealt with the narrow question of the contractual requirement for disqualification and did not resolve the broader issue of whether a breach of a mandatory statutory provision renders the contract void.

In this case the Court examined whether the contract that had been challenged for the supply of goods would cease to fall within the operation of section 7(d) of the Representation of the People Act on the ground that it did not satisfy the requirements of Article 299(1) of the Constitution. The Court held that, although the contract could not be enforced against the Government, it nevertheless fell within the mischief that section 7(d) was intended to address. Counsel for the petitioner, Mr Chatterjee, argued that Justice Bose, while considering the effect of non‑compliance with Article 299(1), had observed that “the Government may not be bound by the contract but that is a very different thing from saying that the contract was void and of no effect and that it only meant that the principal (Government) could not be sued but there will be nothing to prevent ratification if it was for the benefit of the Government.” Mr Chatterjee maintained that this observation indicated that the contract under consideration was not treated as “void and of no effect.” The Court, however, noted that the passage cited by Mr Chatterjee must be read in the context of the specific question presented for decision, and its effect should be assessed accordingly. The Court explained that the observation meant that a contract made in contravention of Article 299(1) could be ratified by the Government if it served the Government’s benefit, and that such a possibility prevented the contractor from being placed outside the scope of section 7(d). The Court further clarified that a contract that is truly void cannot be ratified; nevertheless, because the Court found that the contract in question could have been ratified, it was not void in the technical sense. Accordingly, the Court refused to accept the proposition that the failure to comply with Article 299(1) rendered the contract valid. Justice Bose had expressly stated that the contract could not be enforced against the Government and was not binding upon it. Consequently, the Court concluded that Mr Chatterjee could not successfully challenge the finding of the lower courts that the contracts were invalid, and therefore the Court proceeded to address the principal issue concerning the applicability of section 70 to the facts of the present matter.

Counsel for the State, Mr Sen, then argued that in order to resolve the question regarding the scope and effect of section 70 it was necessary to consider the historical background of that provision. He suggested that the rule embodied in section 70 was grounded in the commentary found in Smith’s Leading Cases to Lampleigh v Brathwaite, and therefore, in construing the provision, reference should be made to the relevant English authorities. Mr Sen identified the decision of the House of Lords in H Young & Co v The Mayor and Corporation of Royal Leamington Spa as the first authority on which his argument relied. He proposed that the reasoning in that case, which dealt with the application of a statutory requirement that contracts exceeding a certain monetary threshold be executed in writing and sealed, was pertinent to the interpretation of section 70. By invoking this precedent, Mr Sen sought to demonstrate that the statutory language was intended to be mandatory rather than merely directory, and that such a construction should guide the Court’s analysis of the present dispute.

The Court examined the authority of the case of H. Young & Co. v. The Mayor and Corporation of Royal Leamington Spa as a principal source of guidance. In that decision the House of Lords was required to interpret the effect of section 174(1) of the Public Health Act, 1875 (38 & 39 Vict c 55). That statutory provision mandated that “every contract made by an urban authority whereby the value or amount exceeds $50 shall be in writing and sealed with the common seal of such authority.” The Lords held that this provision was mandatory and not merely directory, and that it applied to a contract which had already been executed, had been fully benefited and enjoyed by the urban authority, and which had been entered into by an agent properly appointed under the authority’s common seal. The factual background described the Corporation of Leamington entering into a contract with a contractor named Powis for the execution of works to supply water to the district. Powis’s contract was terminated before the works were completed. Subsequently the Council, acting as the urban authority, passed a resolution that was not under seal but authorised its engineer to enter into a new contract to finish the unfinished works. The engineer then employed the plaintiff, who carried out the remaining work and later sued the Corporation for the balance due for his performance. The Corporation defended the plaintiff’s claim by asserting that section 174(1) was a mandatory requirement and that because the plaintiff’s contract had not been executed under the seal, the Corporation could not be liable. The Queen’s Bench Division upheld the Corporation’s defence, and that judgment was affirmed by the Court of Appeal and subsequently by the House of Lords. When considering the argument that the contract should not be deemed void, Lord Blackburn quoted with approval the observations of Lindley, L.J., made in the Court of Appeal. Lindley warned that holding the defendants liable would effectively repeal the Act of Parliament and deprive ratepayers of the protection Parliament intended for them. He added that although the approach might appear harsh and narrow, Parliament had deliberately chosen that approach and it was not for any court to refuse to give effect to a clearly expressed statutory requirement because of perceived hardship. Lord Bramwell further expressed regret at reaching the conclusion but emphasized that the Legislature had provided protection for ratepayers, shareholders and others, and that such protection must not be undermined through the agency of a representative body.

In this case, the Court observed that the requirement to observe certain solemnities and formalities, which demand deliberation and reflection, is the reason why a seal holds significance, and it dismissed the remark that there is no “magio in a water” as idle. The Court recorded that counsel for the respondent, identified as Mr. Sen, contended that the decision in the case of H. Young & Co. (1) provides useful assistance for deciding the effect of non‑compliance with section 175(3) of the Act and for determining the applicability of section 70 of the Indian Contract Act. Counsel further pointed out that, in England, the decision in Young’s case (1) has become obsolete because the relevant provisions of the Public Health Act, 1875, were repealed in 1933 by the Local Government Act, 1933. The Court then turned to the present statutory framework and explained that section 266 of the said Act empowers a local authority to enter into contracts necessary for the discharge of its functions, and it mandates that all contracts entered into by a local authority or by a committee thereof must be executed in accordance with the authority’s standing orders. In respect of contracts for the supply of goods or materials, or for the execution of works, the standing orders require, unless otherwise provided, that notice of the authority’s or committee’s intention to contract be published and that tenders be invited, and they also prescribe the manner in which such notice must be published and tenders invited. The proviso to this section, the Court noted, declares that a person contracting with the local authority is not obligated to inquire whether the authority’s standing orders applicable to the contract have been complied with, and that all contracts with the local authority, if otherwise valid, shall retain full force and effect even though the relevant standing orders have not been observed. The Court further informed that, in 1960, the Corporate Bodies Contract Act (8 & 9 Eliz., 2 c. 46) was enacted, and that section 1 of that Act now governs contracts entered into by corporate bodies wherever they are incorporated. Section 1 provides that a contract which, if made between private persons, would be required by law to be in writing and signed by the parties may be executed on behalf of the corporate body in writing signed by any person acting under its express or implied authority; likewise, a contract which would be valid between private persons even if made orally may be made orally on behalf of the corporate body by any person acting under its authority, whether express or implied. The section further declares that any contract made under its provisions shall be effective in law, binding the corporate body, its successors and all other parties thereto. Finally, the Court highlighted that sub‑section (4) of section 1 stipulates that nothing in that section shall be construed as preventing a contract under seal from being made by or on behalf of a corporate body.

The Court observed that, after the enactment of the Corporate Bodies Contract Act, a contract could be made by or on behalf of a body corporate without the need for a seal. Consequently, the strict technical requirement that a corporation execute its contracts under a seal had become redundant, and the rule established in Young’s case (1) no longer carried any practical significance. The Court noted, however, that prior to the statutory amendment, the law distinguished between two situations. In the first situation, the obligation to use a seal originated from the common‑law rule governing contracts entered into by corporations. In the second situation, the seal requirement stemmed from a specific statutory provision, such as section 174(1) of the Public Health Act, 1875. The Court explained that where a contract that fell within the scope of such a statutory provision was not put in writing and sealed with the corporation’s common seal, the contract was rendered void. This void status insulated the corporation from any liability to pay compensation for the performance of the contract, even if the corporation had received the full benefit and enjoyment of the contractual arrangement.

In contrast, the Court held that when the seal and writing requirement derived not from a statute but from common‑law principles, a corporation could not rely on non‑compliance with that requirement as a defence against a contractor’s claim for compensation, provided the corporation had accepted the benefit and enjoyment of the work performed. This principle had been articulated by the Court of Appeal in Lawford v. The Billericay Rural District Council (2). In that decision, the Court declared that “where the purposes for which a corporation is created render it necessary that work should be done or goods supplied to carry those purposes into effect and orders are given by the corporation in relation to work to be done or goods to be supplied to carry into effect those purposes, if the work done or goods supplied are accepted by the corporation and the whole consideration for payment is executed, there is a contract to pay implied from the acts of the corporation, and the absence of a contract under the seal of the corporation is no answer to an action brought in respect of the work done or the goods supplied.” The Court further explained that Vaughan Williams, L.J., followed the rule recognized by Lord Denman in Doc v. Taniere (1), wherein Lord Denman stated that “where the corporation have acted as upon an executed contract, it is to be presumed against them that everything has been done that was necessary to make it a binding contract upon both parties, they having had all the advantage they would have had if the contract had been regularly made. That is by no means inconsistent with the rule that, in general, a corporation can only contract by deed, it is merely raising a presumption against them, from their acts, that they have contracted in such a manner as to be binding upon them.”

In this case, the Court observed that the earlier decision was based on the principle that a party may rely on an implied contract when consideration has been executed and the benefit of the contract has been accepted. The Court recorded that counsel for the appellant, Mr. Sen, contended that, for the question concerning the effect of the breach of section 175(3) of the Act and the applicability of section 70 of the Contract Act, the decision in Lawford was irrelevant, whereas the decision in H. Young and Co. was relevant and material because the matter involved a statutory violation rather than a breach of a common‑law rule. The Court stated that it was not persuaded by this argument. It further explained that the issue raised by the appellant had to be examined in the light of the provisions of section 70 and that the answer required a fair and reasonable construction of the terms of that section. The Court added that, when construing a specific statutory provision, it would be unreasonable to rely on English decisions that interpret analogous statutory provisions in English law.

Reliance on Indian statutory language was emphasized by citing the observation of Lord Sinha in the Privy Council judgment of Ramanandi Kuer v. Kalawati Kuer, which held that where the Indian Legislature has enacted a positive provision, the proper approach is to examine the language of that provision and determine its meaning without being influenced by earlier English law. The Court clarified that if the words of an Indian statute are obscure or ambiguous, it may be permissible to consider the background of the law or to look to English decisions dealing with a similar point. However, where the statutory language is clear and unambiguous, it would be unreasonable to interpret it on the basis of any alleged background and to force the interpretation to conform to that background. Accordingly, the Court said that the primary task was to examine section 70 itself and to give it a fair and reasonable construction. Section 70 provides that when a person lawfully does something for another person, or delivers something to that person, without intending to do so gratuitously, and the other person enjoys the benefit, the latter is bound to compensate the former or to restore the thing done or delivered. The Court identified three conditions that must be satisfied before section 70 can be invoked. The first condition requires that a person lawfully do something for another person or deliver something to him. The second condition requires that, in doing the act or delivering the thing, the person does not intend to act gratuitously.

In the Court’s analysis, three conditions were required before Section 70 could be invoked. First, a person had to lawfully do something for another person or deliver something to that person. Second, the person performing the act must not intend to act gratuitously. Third, the recipient of the act or delivery had to enjoy the benefit of what was done or delivered. When all three conditions were satisfied, Section 70 imposed on the recipient a liability to compensate the performer for the thing that had been done or delivered, or to restore it. The Court explained that the purpose of the provision could be illustrated by simple examples. If a person delivered an item to another, the recipient could refuse to accept the item or could return it; in such a case Section 70 would not become operative. Likewise, if a person performed work for another, the other party could decline to accept the work that had been performed; again Section 70 would not apply. In other words, the person who might be held liable under Section 70 always retained the option of not accepting the thing or of returning it. Liability under the section arose only when the recipient voluntarily accepted the thing or enjoyed the work that had been done. Applying this principle to the facts before the Court, after the respondent had constructed the warehouse, the appellant could have refused to accept the warehouse and thereby avoided receiving its benefit. The appellant could even have demanded that the respondent demolish the warehouse and remove the materials used in its construction. However, if the appellant chose to accept the warehouse, used it, and enjoyed its benefit, then different considerations applied and Section 70 could be invoked. The Court noted that Section 70 is situated in Chapter V, which deals with certain relations that resemble those created by contract, but does not govern rights or liabilities arising from an actual contract. Consequently, after the respondent built the warehouse, the respondent could not compel the appellant to accept it, because the construction was not performed under any valid contractual obligation and the respondent bore the risk that the appellant might reject the work. Therefore, in matters falling within Section 70, a person who does something for another or delivers something to another cannot sue for specific performance of a contract nor claim damages for breach of contract, since no contract exists between the parties. The provision merely states that if the delivered goods are accepted or the performed work is voluntarily enjoyed, then the

Liability to pay compensation arose when the appellant enjoyed the goods or accepted the work performed by the respondent. Thus, where one party claimed compensation from another under section 70, the claim was not founded on any existing contract between them but on the fact that the claimant had performed an act for the other party and that act had been voluntarily accepted. In broad terms, that description captured the effect of the conditions laid down in section 70. Nevertheless, counsel for the appellant argued that recognising the respondent’s claim for compensation would effectively allow the parties to avoid the mandatory provisions of section 175(3), because, in his view, the work done by the respondent amounted to performance of a contract that contravened those provisions and could not represent the true purpose of section 70. He further contended that if a decree were granted in favour of the respondent for the alternative claim of compensation, the decree would, in substance, treat an invalid contract as if it were valid. In the Court’s opinion, that line of argument was not well founded. While it is true that the provisions of section 175(3) are mandatory and that any contract formed in contravention of those provisions is void, it must be remembered that the cause of action for the respondent’s alternative claim did not arise from any breach of contract by the appellant. Rather, the alternative claim was premised on the assumption that the contract under which the respondent had undertaken the construction was ineffective and, consequently, amounted to no contract at all. The respondent maintained that it had carried out work that the appellant had accepted and enjoyed, and that the voluntary acceptance and enjoyment of that work constituted the basis of the alternative claim. The Court therefore examined whether the respondent, by constructing a warehouse without a valid contract with the appellant, could be said to have acted in contravention of section 175(3). As previously clarified, even if the respondent had erected the warehouse, it could not have forced the appellant to accept the structure; the appellant could have demanded demolition and removal of the materials. Accordingly, the mere act of constructing the warehouse could not be characterised as a violation of section 175(3). In this regard, the Court found it useful to refer to illustration (a) to section 70. That illustration explains that if a tradesman A mistakenly leaves goods at his own house and a second party B treats those goods as his own, B becomes liable to pay A for them. Assuming that B represents the State Government, the Court considered whether A could be said to have been acting against the provisions of section 175(3) by leaving the goods mistakenly at B’s premises. The answer to that hypothetical question was clearly negative, reinforcing the view that acceptance and enjoyment of mistakenly delivered goods or voluntarily accepted work do not give rise to a claim that validates any contravention of section 175(3).

The Court examined whether a person who, by mistake, left goods at the house of the State Government could be said to have contravened the provisions of section 175(3). It concluded that such a suggestion was plainly incorrect. Consequently, when goods are mistakenly delivered to the State Government and the State Government accepts and enjoys those goods, the owner may institute a claim for compensation against the State Government, and the Court, in allowing that claim, would not be endorsing any breach of section 175(3), either directly or indirectly. The Court observed that the cause of action for compensation under section 70 does not depend on the mere delivery of the goods or the performance of work, but rather on the acceptance and enjoyment of the goods or work by the recipient. From this standpoint, it was not difficult to hold that section 70 does not validate a breach of section 175(3) of the Act. Accordingly, the principal argument advanced by counsel Mr. Sen, that the respondent’s construction under section 70 nullified the effect of section 175(3), could not be accepted. While acknowledging that section 70 requires a person to lawfully do something or lawfully deliver something to another, the Court emphasized that the term “lawfully” is not superfluous and forms an essential element of the provision. Responding to Mr. Sen’s contention that “lawfully” should be interpreted in light of section 23, whereby an act is unlawful if prohibited by law, the Court found that even applying that test, the delivery or performance giving rise to a compensation claim under section 70 cannot be deemed forbidden by section 175(3); therefore, the interpretation proposed by Mr. Sen does not preclude the application of section 70 to the present facts. The Court also considered an argument based on the observations of Justice Straight in Chedi Lal v. Bhagwan Dass, wherein Justice Straight suggested that the legislature, by using the word “lawfully,” contemplated situations where a person, by acting for another, could seek compensation from the latter. The Court held that this test does not align with the terms of section 70, because the lawful relationship required by “lawfully” arises not from the claimant having performed an act for the defendant, but from the defendant’s acceptance and enjoyment of the act performed by the claimant, which then creates the basis for a compensation claim.

It was submitted that the appellant could claim compensation from the appellant. With respect, the Court was not persuaded that the test formulated by Straight, J. could be justified by the language of section 70. The Court acknowledged that, by its terms, a lawful relationship must exist between the person seeking compensation and the person against whom compensation is claimed; this follows from the use of the word “lawfully” in section 70. However, the Court held that such a lawful relationship does not arise simply because the claimant performed something for the other party. Rather, the relationship is created only when the act performed by the claimant is accepted and enjoyed by the other party. Consequently, the existence of that accepted and enjoyed act gives rise to the lawful relationship, and it is this relationship that supports a claim for compensation. The Court observed that this important aspect was not fully considered when Straight, J. articulated the test relied upon by counsel for the petitioner. If the test were applied literally, one could argue that the claimant would be entitled to compensation solely by virtue of the contemplated relationship, rendering section 70 almost unnecessary. In the Court’s view, the word “lawfully” indicates that after one person delivers or does something for another, and the latter accepts and enjoys that thing, a lawful relationship is formed, and that relationship, under section 70, creates a right to compensation. The Court stressed that the thing delivered or done must not be fraudulent, dishonest, or gratuitous. Section 70 is not intended to entertain claims by persons who interfere officiously in another’s affairs or who impose unwanted services. The provision deals with situations where a person does something for another without intending to act gratuitously and the other person enjoys the benefit. It follows that when a thing is delivered or done, the recipient must have the option to reject it. Therefore, the acceptance and enjoyment of the delivered or performed thing, which form the basis of a compensation claim under section 70, must be voluntary. The Court noted that this requirement provides an effective safeguard against spurious claims based on unauthorized acts. If the act performed by the respondent had been unauthorized and spurious, the appellant could have refused to accept it, and the respondent would not have been able to claim compensation. Finally, the Court reiterated that claims under section 70 do not encompass specific performance or damages for breach of contract.

The Court explained that a claim for compensation under section 70 is founded on the premise that no contract exists and that the parties’ conduct with respect to the delivered goods or performed work creates a relationship resembling a contractual one. It noted that when a claim is made against a State Government under section 70, the work performed or goods supplied may often stem from a request issued by an officer or other representative of that Government. The Court held that such a request may be ineffective or invalid if the officer making it lacked authority under section 175(3), or, even if the officer was authorized, the request may become inoperative because it was not followed by a contract executed in the manner prescribed by section 175(3). In either circumstance, the delivery of the thing or the performance of the work occurs without a contract, thereby bringing the matter within the ambit of section 70. The Court clarified that a request is not an element of section 70, although the existence of an invalid request does not render section 70 inapplicable. An invalid request is, in law, no request at all, and consequently the parties’ conduct must be assessed on the basis that no subsisting contract existed at the material time. Accordingly, the Court said that the inquiry must focus on whether the conditions stipulated by section 70 have been satisfied; if they are, a claim for compensation must be entertained. The Court emphasized that section 70 provides for compensation to be paid for the goods delivered or the work done, and that the alternative to compensation is the restoration of the thing delivered or performed. In the present case there was no dispute about the amount of compensation. However, the Court observed that a claim for compensation under section 70 is not identical to a claim for damages for breach of contract where a contract subsisted between the parties. The Court therefore rejected the suggestion that recognising a compensation claim under section 70 either directly or indirectly nullifies the effect of section 175(3) or validates an otherwise invalid contract. It observed that the two provisions cover separate and distinct fields: section 175(3) regulates how contracts are to be made, while section 70 deals with situations where no valid contract exists and provides compensation when its three requisite conditions are met. The Court concluded that there is no conflict between the two provisions and noted, as a matter of common knowledge, the extensive operations of a modern governmental organisation.

State Government officers regularly have to enter into a wide range of contracts, many of which are of a minor or routine character. On occasion they must act in emergencies, and frequently, in pursuit of the State’s welfare policies, they are required to create contracts orally or by correspondence without adhering strictly to the requirements of section 175(3) of the Act. When the performance of such contracts is carried out for the benefit of the Government, for its use and enjoyment, and is otherwise proper and legitimate, section 70 is intended to intervene and to support a claim for compensation by the contracting parties despite the fact that the contracts were not executed in the manner mandated by section 175(3). If the Court were to hold that section 70 does not apply to these dealings by Government officers, the result would be extremely unreasonable and could seriously impede, if not completely halt, the day‑to‑day efficient functioning of the Government. The present discussion of this point is not intended to diminish the binding nature of the provisions of section 175(3); rather, it is to emphasize that, like ordinary citizens, the State is also subject to section 70. When the State has accepted goods delivered to it or has enjoyed services performed for it, such acceptance and enjoyment create a valid foundation for claims of compensation against the State. Accordingly, claims that arise from a contract validly made under section 175(3) must be distinguished from claims for compensation made under section 70. Once that distinction is appreciated, there is no difficulty in rejecting the contention that section 70 validates a breach of section 175(3). In effect, section 70 may be read as a provision that supplements, rather than contradicts, the requirements of section 175(3) of the Act.

The appellant’s counsel advanced another line of argument, comparing the appellant’s position to that of a minor who lacks capacity to contract, and contended that, just as a minor falls outside the scope of section 70, the appellant should likewise be excluded. It is well established, as held by the Privy Council in Mohori Bibee v. Dhurmodas Ghose, that a minor, like an insane person, is incompetent to contract; consequently, any purported contract entered into by a minor is void, and sections 64 and 65 of the Contract Act are inapplicable. Moreover, section 68 of the Contract Act expressly provides that a minor may be liable for certain claims for necessaries, thereby confirming that a minor cannot be sued for compensation under section 70, as noted in Bankay Behari Prasad v. Mahendra Prasad. The appellant’s counsel pressed this analogy into service in support of the contention that the appellant should be treated as incapable of being sued under section 70.

The Court examined the contention that, by analogy with a minor, the effect of section 175(3) of the Act rendered the appellant incapable of entering into a contract unless the contract complied with the procedure prescribed in that subsection. The Court found this line of reasoning unsound. Section 175(1) expressly confers on the Province the authority to purchase or acquire property for the purposes specified therein and to execute contracts. While section 175(3) indeed mandates that such contracts be formed in the manner it prescribes, a holistic reading of section 175 does not support the proposition that the appellant occupies the same legal position as a minor for the purposes of section 70 of the Contract Act. The Court noted that a minor is excluded from the operation of section 70 because the special provisions of section 68 address the minor’s circumstances. Section 70 is intended to prevent unjust enrichment and is applicable equally to individuals, corporations and the Government. Consequently, the Court rejected the expansive claim that the State Government falls outside the reach of section 70. Moreover, in the case of a minor, the essential element of voluntary acceptance of the benefit—upon which a claim under section 70 relies—is absent; therefore, on principle, section 70 cannot be invoked against a minor. The Court observed that the scope and effect of section 70, particularly its applicability to void contracts entered into by provincial governments or corporations, have been the subject of numerous decisions across the country. The prevailing view, which the Court favoured, is reflected in cases such as Mathura Mohan Saha v. Ram Kumar Saha and Chittagong District Board; Abaji, Sitaram Modak v. The Trimbak Municipality; Pallonjee Eduljee & Sons, Bombay v. Lonavla Gity Municipality; Municipal Committee, Gujranwala v. Fazal Din; Ram Nagin Singh v. Governor‑General in Council; Union of India v. Ramnagina Singh; Union of India v. New Marine Coal Co. (Bengal) Ltd.; Damodara Mudalar v. Secretary of State for India; Corporation of Madras v. M. Kothandapani‑Naidu; Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar; and Ram Das v. Ram Babu. Although a minority of judgments have expressed dissent, as seen in Chedi Lal v. Bhawan Das; Radha Kishana Das v. The Municipal Board of Benare; Anath Bandha Deb v. Dominion of India; Punjabhai v. Bhagawan Das Kisandas; and G. R. Sanchuiti v. Pt. R. K. Choudhari, the dominant trend supports the Court’s approach. Before concluding this discussion, the Court found it helpful to cite the observations of Chief Justice Jenkins in Suchand Ghosal v. Balaram Mardana, wherein he remarked that “the terms of section 70 are unquestionably wide, but applied with discretion they enable the …”.

The Court observed that it is necessary for courts to achieve substantial justice in situations where it would be difficult to assign to the parties a relationship that actually arose from a contract. However, the Court emphasized that final fact‑finding courts must proceed with great caution and must not endorse actions or payments that are essentially gratuitous or officious. Turning to the factual matrix of the present case, the Court noted that both the trial court and the appellate court had concluded that the work performed by the respondent was carried out in actual compliance with requests that had been issued by officers of the appellant but that those requests were invalid because the officers lacked proper authority. Consequently, the work was deemed to have been executed without any contractual basis. The lower courts had not been contested on the point that the appellant had accepted the respondent’s work and had put the constructed buildings to use. Both learned judges of the appellate bench explicitly stated that the appellant did not dispute this aspect of the respondent’s case. Justice S. R. Das Gupta remarked that “the appellant did not contest before us the quantum decreed in favour of the plaintiff.” Justice Bachawat further observed that “the materials from the record also show that the Government urgently needed the work which was done by the respondent and that the Government accepted it as soon as it was done and used it for its benefit.” Moreover, the learned judge recorded that the Advocate‑General admitted that “this is a case where the Province of Bengal was under a moral obligation to pay the respondent,” and added that “an obligation of this kind which is apart from the provisions of section 70 of the Indian Contract Act, a moral and natural obligation, is by the provision of that section converted into a legal obligation.” On the basis of these findings, the Court held that section 70 could rightly be invoked by the respondent against the appellant, that all requisite conditions of the statutory provision were satisfied, and that the lower courts were correct in granting the respondent’s claim. Accordingly, the appeal was dismissed with costs.

Justice Sarkar concurred that the appeal should fail. He recounted that in 1944 the respondent, a firm of contractors, had performed certain construction work for the Government of Bengal at the request of specific government officers. The work was subsequently used and benefited the Government. However, those officers had not been empowered by the Government to make such a request on its behalf, and the respondent was aware throughout that the authority was lacking. These facts were not in dispute. Because the respondent had not been compensated for the work, it instituted proceedings in the Original Side of the Calcutta High Court in 1949, seeking a decree for the monies due from the Province of West Bengal for the said work. The High Court, both at the first hearing and on appeal, examined the matter in detail. (The continuation of the High Court’s reasoning follows in the subsequent portion of the judgment.)

The High Court, on appeal, held that no contract existed between the respondent and the Government concerning the work that formed the subject of the suit. Nevertheless, the Court concluded that the respondent was entitled to compensation under section 70 of the Indian Contract Act. The Court further explained that the original liability to pay that compensation rested with the Government of Bengal, but that liability had, under the Indian Independence (Rights, Properties and Liabilities) Order, 1947, passed to the Province of West Bengal, which after the partition of India became the State of West Bengal. Consequently, the respondent’s suit was successful. The State of West Bengal subsequently filed an appeal against the High Court’s decision. The sole issue raised on appeal was whether the High Court was correct in granting a decree based on section 70 of the Contract Act. The Court found that the High Court was indeed correct. Section 70 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 therefor, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.” Justice G. K. Mitter, who conducted the trial, observed that the requisites for entitlement to compensation under section 70 are: (i) the act must be performed lawfully; (ii) it must not be intended to be gratuitous; and (iii) the person for whom the act is performed must enjoy the benefit. The Court agreed with this interpretation and accepted the High Court’s finding that all three requisites were satisfied in the present case.

In the present appeal, counsel for the appellant argued that the High Court erred in holding that relief under section 70 could be granted when the Government derived a benefit from work done under a contract that had not been executed in accordance with section 175(3) of the Government of India Act, 1935, and therefore was invalid. Various English and Indian authorities were cited in support of that contention. The Court, however, deemed it unnecessary to examine those authorities because the foundation of the appellant’s argument did not exist in the facts of this case, nor did the High Court base its decision on that ground. The findings of the High Court, as will be referred to, clearly demonstrate that there was no agreement—neither valid nor invalid—between the respondent and the Government. Accordingly, the work was not performed under any contract with the Government. As a result, no question arose concerning the validity or invalidity of any agreement with the Government, nor any issue regarding non‑compliance with section 175(3) of the Government of India Act, nor the applicability of section 70 of the Contract Act for granting compensation for the work performed.

In this case, the Court explained that there was no agreement of any kind between the Government and the respondent because any such agreement could have been created only through officials who, according to the respondent’s knowledge, did not possess the authority to bind the Government by contract. The High Court had reached this conclusion, a view that is evident from the observations of the learned judges now set out. Justice G. K. Mitter observed that the plaintiff “never had any doubt about the fact that no agreement of any kind had been entered into between it and the province of Bengal” and that the plaintiff “never right from the beginning, that the officers who were requesting the plaintiff to proceed with the work had, no authority to enter into a binding contract with the plaintiff and that they were awaiting sanction from higher officials which they hoped to get.” The appellate bench shared the same opinion. Justice Bachawat stated that “neither of these officers had any authority from the Province of Bengal to make the request to the plaintiff. There was no agreement either express or implied between the plaintiff and the Province of Bengal. There is, therefore, no agreement which is void or which is discovered to be void.” The learned judges referred to section 175(3) of the Government of India Act because arguments based on that provision had been advanced before them, but they distinguished the case of Union of India v. Ramnagina Singh, where it was held that section 70 of the Contract Act did not apply where work was performed under a request that resulted in a void agreement. The Court emphasized that in the present matter there was no request from the Government, as the persons making the request lacked authority to act for the Government, and consequently no question arose of a void agreement with the Government. The Court rejected the contention, raised by counsel for the appellant, that the High Court had decided the case on the basis that section 70 applies where work is done for the Government under an invalid contract. While the High Court did consider certain authorities dealing with work performed under an invalid contract, those authorities were cited by counsel and did not form the basis of its decision. Accordingly, the Court held that it was not required to decide whether compensation under section 70 of the Contract Act could be awarded where goods are delivered to, or work is performed for, the Government under a contract that is invalid because it was not made in the manner prescribed by section 175(3) of the Government of India Act, and it expressly declined to address that question.

In this case the Court noted that it would not consider the provisions of the Government of India Act. The Court then reasoned that if the work had been performed at the request of Government officers who possessed no authority to act on behalf of the Government, and if the respondent knew of that lack of authority, then the work would have been carried out at the request of those officers in their personal capacities. The Court stated that, should such a request have produced a contract between an individual officer and the respondent, whereby the officer was personally bound to pay reasonable remuneration for the work, the question of whether the respondent could also invoke section 70 against the Government would become highly debatable. The Court expressed serious doubt that the section was intended to furnish a person in the respondent’s position with a separate remedy against the Government in addition to a contract‑based remedy against the officer personally. However, the Court added that it need not pursue this line of inquiry further because it was not convinced that any contract had arisen in the present facts between the officers and the respondent. The Court recognized that, in general, when one person requests another to perform work, a tacit promise to pay reasonable remuneration can be inferred in certain circumstances, and that such an inferred promise may give rise to an enforceable contract once the work is performed. The same principle may apply where the request is made to benefit a third party, because the consideration for the promise consists of the detriment suffered by the promisee in performing the work. To illustrate, the Court quoted from Pollock on Contracts (13th edition, p. 9): “The passenger who steps into a ferry‑boat thereby requests the ferryman to take him over for the usual fare.” The Court explained that a similar inference would be drawn where a person explicitly asks a ferryman to convey him or another without mentioning the fare; in each circumstance the requester is understood to be tacitly promising to pay the usual fare. The Court emphasized that such a tacit promise may be inferred only when the surrounding facts are such that a reasonable businessman would deem it proper to infer a promise. This inference, the Court held, is a matter of fact and not forced by any statutory rule. The Court also cited a passage from Cheshire and Fifoot’s Law of Contract (5th edition, p. 30) to underline that commercial parties do not formulate their communications in rigid, textbook terms, and that judicial rules on offer and acceptance are not inflexible logical deductions.

The Court explained that the rules of contract are not derived from natural justice but are merely presumptions drawn from experience, to be applied only insofar as they further the purpose of identifying a true agreement. Applying this principle to the present facts, the Court found no basis to infer any tacit promise by the officers that they would personally pay for the work performed. The High Court had observed, and the respondent was fully aware, that the officers expressly stated the payment would come from the Government, thereby absolving themselves of any personal liability. The officers communicated that the respondent’s estimates had been forwarded to the Deputy Director for formal sanction and that, once sanctioned, the Government would be informed and payment would be arranged, and that the work should not be delayed in the meantime. Although the Deputy Director was apparently the officer authorized to grant the sanction, he was not among those who initially requested the work. The respondent understood that the work was required for the Government and that the officers held no personal interest in it. Crucially, the respondent never believed that the officers had made any personal promise to pay. Throughout the process, the respondent appealed to the Government for sanction of the orders issued by the officers, submitted the necessary estimates, and requested payment from the Government; at no point did the respondent look to the officers for any liability concerning the work undertaken under their direction. On previous occasions the respondent had performed similar work for the Government under comparable requests and had never construed the officers’ actions as creating personal liability. If the respondent did not obtain that impression, no experienced third party could reasonably infer a tacit promise by the officers to pay personally under the same circumstances. It was also noteworthy that the counsel representing the appellant never advanced the argument that a contract existed between the officers and the respondent. Consequently, the Court found it impossible to conclude that a tacit personal promise or any contractual relationship existed between the officers and the respondent. Moreover, the record did not demonstrate that the officers assured the respondent of securing payment for the work done. The Court agreed with the observation of Justice Bachawat of the High Court’s appellate bench, who held that although the work was carried out at the officers’ request, the circumstances did not permit the inference that the officers personally promised to pay for the work. Therefore, there was no basis for arguing that the work was performed under a contract between the plaintiff and the requesting officers. The evidence on record clearly indicated that the plaintiff performed the work for the Province of Bengal, and any credit for the work was given to the Province, not to the individual officers.

The Court observed that the credit for the work was given to the Province of Bengal and not to the individual officers, and that the material on the record did not permit a conclusion that the work had been performed for the officers. It explained that the other learned Judges of the High Court had not addressed this particular point because the advocates had not raised it, and that no advocate could reasonably have advanced that argument on the facts of the case. The Court clarified, however, that it was not stating a universal rule that government officers could never assume personal liability to contractors in a position similar to that of the respondent. Each situation must be examined on its own facts, and it is possible that circumstances in some cases could justify an inference of a personal undertaking by officers to pay a contractor who performed work for the Government. The Court held that such an inference did not arise in the present case. Accordingly, it concluded that the respondent had performed the work for the Government without any contract with any individual or authority. The next issue was whether the three requisites of section 70, as very correctly formulated by G. K. Mitter, J., were satisfied. The Court found that they were satisfied. There was no dispute that the Government had taken the benefit of the work, and there was no doubt that the respondent had not intended to perform the work gratuitously. The respondent had submitted an estimate for the work and had promptly filed its bill after the work was completed. In earlier, similar circumstances, the respondent had also carried out work at the request of Government officers without a proper contract and had received payment from the Government. The respondent was a contracting firm whose ordinary business was to execute construction projects for remuneration, and the Government was aware of this character of the firm. Consequently, there was no reason to believe that the work was performed gratuitously in the present case. The Government itself had never considered the work to be gratuitous; it objected to the respondent’s bill only on the grounds of alleged poor quality and the absence of a proper sanction. The Government needed the work urgently, and as soon as it was finished it was put to immediate use. The Government was fully aware that the work had been carried out by a commercial contractor whose trade was to receive payment, and that the same contractor had previously performed similar work for the Government and had been paid. The request made by the officers did not alter the legal question before the Court. The request had no compelling effect, it did not constitute a promise, and in fact it had no legal effect at all. Its practical purpose was merely to inform the respondent that the Government required the work immediately and would, in due course, sanction and pay for it; the respondent acted on that information, seeing an opportunity to obtain further business. Thus, the work was performed by

In this matter the respondent performed the work of its own free choice, acting in the ordinary course of its business and with the clear intention of receiving remuneration for the services rendered. The Court had no doubt that the work was carried out lawfully and that it was precisely the type of work which the Government urgently required. For the purpose of the present discussion, and following the submission of the learned counsel for the appellant, the Court assumed that work performed under a contract with the Government that is invalid under section 175(3) of the Government of India Act would be characterised as work done unlawfully. The learned counsel argued that such a situation would arise because invoking section 175(3) would amount to evading the provision, which is equivalent to doing what the section expressly forbids. The Court accepted that hypothetical premise for the sake of argument. However, the provision does not state that work performed for the Government without any contract or formal agreement, and undertaken voluntarily as in the present case, would be unlawful. The Government is free to decline to accept the benefit of such work, but there is no statute, nor any authority pointed out to the Court, that renders the performance of the work itself unlawful. No other reason was offered, nor does any reasoning appear to the Court, that would support a conclusion that the work was not lawfully performed. As noted by Bachawat, J., there is no law prohibiting the Government from taking any work except where a contract is made in accordance with section 175(3) of the Government of India Act. That section may prevent the Government from accepting work under a contract that is invalid because it does not comply with the statutory form, but it does not make it unlawful for the Government to benefit from work carried out without any contract at all. The Court would presume that if the performance of the work were unlawful, the Government would not have accepted its benefit. In the present facts the Government needed the work desperately, and there is no basis on which the Government can maintain that the work was not done lawfully. Consequently, the Court concluded that the work was indeed done lawfully. The respondent also contended that the liability under section 70 of the Contract Act arises only in situations where English law would recognise an implied contract or a quasi‑contract, and that no such implied or quasi‑contract can exist with the Government because a contract with the Government can be made only in accordance with section 175(3) of the Government of India Act. The Court observed that it has been repeatedly held that resort to English law is not appropriate for interpreting a question that arises under a domestic statute unless the statute cannot be reasonably understood without reference to English law. Moreover, established authority indicates that section 70 was drafted in its present form to avoid the complexities of English law, which were rooted in historical considerations, and to keep the legal position straightforward.

In this case, the Court observed that the provision should be free from legal fictions and the complications that arise from them, referring to Pollock on Contracts (13th ed.) page 10. The Court further stated that it did not find any reason why section 175(3) of the Government of India Act would stop a contract with the Government from being implied, nor would it stop the Government from incurring an obligation under a quasi‑contract. The Court explained that an implied contract in law or a quasi‑contract is not a true or consensual contract, and that section 175(3) dealt only with consensual contracts. The provision required that all contracts made in the exercise of the executive authority of the Federation or of a Province be expressed in a specified form and be executed on behalf of the Governor‑General or Governor by a person and in a manner authorised by them. Consequently, the provision applied to consensual contracts entered into by the Government, but not to arrangements that the law creates as a fiction without the parties’ agreement. The Court then turned to section 70 of the Contract Act, holding that the section must be applied whenever its conditions are satisfied, including where it is necessary to imply a contract or to recognise a quasi‑contract. The Court found no reason to think that section 175(3) of the Government of India Act barred such implication, and it was unaware of any other obstacle. Accordingly, the Court concluded that section 70 of the Contract Act was applicable to the facts of this case, that the decree of the High Court should be affirmed, and that the appeal was dismissed.