# Karirnbil a n v. State of Kerafa

- **Citation:** [1962] Supp. 1 S.C.R. 876
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Case number:** Civil Appeal No. 286 of 1958
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/karirnbil-a-n-v-state-of-kerafa-2574
- **Pages:** 38

## Headnote

1961
Karirnbil
a n
v.
State of Kerafa
Ayyan:ar J.
1961
December 5.
876 SUPREME COURT REPORTS [1962) SUPP.
determination of the ceiling in respect of different
individuals who are brought within the scope of
the enactment, and (3) ss. 52 and 64for determining
the compensation payable to the several classes of
persons whose lands are acquired under Act, all these
are violative the guarantee of the equal protection
of laws under Art. 14 of thr C,,nstitution.
I therefore agree in tho order proposed that
the petitions be allowed, and with costs.
Petitions allowed.
STATE OF WEST BENGAL
v.
M/S. B. K. MONDAL AND SONS
(P. B.
GAJENDRAGADKAR, A. K.
SARKAR,
K. N. WANCHOo, K. C. DAs GUPTA and
N. RAJAGOPALA .AYYANGAR, JJ.)
State Government-Enjoying beiufit of non-gratuitous workIj bound to pay compen•ation-Absence of valid contract, if exonerate• !iability-lndia'lt Oo'lttract Act, 1872 (9 of 1872)-•.70
Government of India Act, 1935 (25 & 26 Geo.5. Oh.42), •.175(3).
By s. 70 of the Contract Act, "where a per•on 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,
~he
thing so done or delivered".
Under s.175(3) of the Government of India Act all contracts made in the exercise of the
executive authority of a province shall be expre8'ed to be made
by the Governor of the province and shall be executed on
behalf of the Governor by mch persons and in such manner
as he may director authorise.
The respondent, a firm of building contractors doing construction works for the Provincial Government did certain
additional construction on the reque1t of its officers. Its bills
for these latter works were not paid and it sued the Government basing its claim on contract and in the alternative on
s. 70 of the Contract Act. The defence of the Provincial
Government, inter alia, was that there was no valid and binding contract and s. 70 had no application. The trial Judge
(1) S.C.R. SUPREME COURT REPORTS
877
found that although there was no valid contract under s.175(3)
of the Government of India Act, 1935, the claim was jutified
under s. 70 of the Contract and decreed the suit. The Court
of appeal affirmed that decree. The State appealed by special
leave.
lleld (Per curiam), that the courts below were right in
holding that s. 70 of the Contract Act applied to the case and
the appeal must fail.
Per Gajendragadkar, Wanchoo and Ayyangar, JJ.-
Whether a mandatory provision in a statute is merely directory
or obligatory should be decided on a careful examination of
· the scope of the statute and the object of the particular provi·
sion. In enacting s.175(3) of the Government of India Act,
1935, the intention of the parliament was that the state
should not be burdened with liability based on unauthorised
contracts. The provision made was inJ'ublic interest and so
the word •shall' used therein must be he! to make it obligatory and not directory .
.<Jelh Bhikraj Jaipuria v. Union of India, (1962] 2 S. C. R.
880, approved.
Ohatlurbhllj Vithaldfl8 Jasani v. Moruhwar Prashram
[1964] S. C.R. 817, explained.
In order that a person can invoke s. 70 of the Contract
Act he must be able to show (1) that he acted lawfully,(2)
that he did not intend to act gratuitously and (3) that the
other person enjoyed the benefit.
A claim for compensation under s. 70 therefore is not
one based on any subsisting contract but proceeds on the basis
that something was done or delivered to another who voluntari·
ly accepted it even though he had always the option to refuse
the same.
Recognition of the claim in the present case, could not
therefore, amount to a contravention of s.175(3) of the
Government of India Act, either directly or indirectly.
The word •!awfully' in s. 70 of the Contract Act means
,,
that after something is done or delivered by one person
to another and is voluntarily accepted and enjoyed

## Text

_Characters 0–39,961 of 78,043. This is a partial read: ask again with offset=39961 for what follows._

1961
Karirnbil
a n
v.
State of Kerafa
Ayyan:ar J.
1961
December 5.
876 SUPREME COURT REPORTS [1962) SUPP.
determination of the ceiling in respect of different
individuals who are brought within the scope of
the enactment, and (3) ss. 52 and 64for determining
the compensation payable to the several classes of
persons whose lands are acquired under Act, all these
are violative the guarantee of the equal protection
of laws under Art. 14 of thr C,,nstitution.
I therefore agree in tho order proposed that
the petitions be allowed, and with costs.
Petitions allowed.
STATE OF WEST BENGAL
v.
M/S. B. K. MONDAL AND SONS
(P. B.
GAJENDRAGADKAR, A. K.
SARKAR,
K. N. WANCHOo, K. C. DAs GUPTA and
N. RAJAGOPALA .AYYANGAR, JJ.)
State Government-Enjoying beiufit of non-gratuitous workIj bound to pay compen•ation-Absence of valid contract, if exonerate• !iability-lndia'lt Oo'lttract Act, 1872 (9 of 1872)-•.70
Government of India Act, 1935 (25 & 26 Geo.5. Oh.42), •.175(3).
By s. 70 of the Contract Act, "where a per•on 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,
~he
thing so done or delivered".
Under s.175(3) of the Government of India Act all contracts made in the exercise of the
executive authority of a province shall be expre8'ed to be made
by the Governor of the province and shall be executed on
behalf of the Governor by mch persons and in such manner
as he may director authorise.
The respondent, a firm of building contractors doing construction works for the Provincial Government did certain
additional construction on the reque1t of its officers. Its bills
for these latter works were not paid and it sued the Government basing its claim on contract and in the alternative on
s. 70 of the Contract Act. The defence of the Provincial
Government, inter alia, was that there was no valid and binding contract and s. 70 had no application. The trial Judge
(1) S.C.R. SUPREME COURT REPORTS
877
found that although there was no valid contract under s.175(3)
of the Government of India Act, 1935, the claim was jutified
under s. 70 of the Contract and decreed the suit. The Court
of appeal affirmed that decree. The State appealed by special
leave.
lleld (Per curiam), that the courts below were right in
holding that s. 70 of the Contract Act applied to the case and
the appeal must fail.
Per Gajendragadkar, Wanchoo and Ayyangar, JJ.-
Whether a mandatory provision in a statute is merely directory
or obligatory should be decided on a careful examination of
· the scope of the statute and the object of the particular provi·
sion. In enacting s.175(3) of the Government of India Act,
1935, the intention of the parliament was that the state
should not be burdened with liability based on unauthorised
contracts. The provision made was inJ'ublic interest and so
the word •shall' used therein must be he! to make it obligatory and not directory .
.<Jelh Bhikraj Jaipuria v. Union of India, (1962] 2 S. C. R.
880, approved.
Ohatlurbhllj Vithaldfl8 Jasani v. Moruhwar Prashram
[1964] S. C.R. 817, explained.
In order that a person can invoke s. 70 of the Contract
Act he must be able to show (1) that he acted lawfully,(2)
that he did not intend to act gratuitously and (3) that the
other person enjoyed the benefit.
A claim for compensation under s. 70 therefore is not
one based on any subsisting contract but proceeds on the basis
that something was done or delivered to another who voluntari·
ly accepted it even though he had always the option to refuse
the same.
Recognition of the claim in the present case, could not
therefore, amount to a contravention of s.175(3) of the
Government of India Act, either directly or indirectly.
The word •!awfully' in s. 70 of the Contract Act means
,,
that after something is done or delivered by one person
to another and is voluntarily accepted and enjoyed by the
latter, a lawful relationship arises between the two which
attaracts s. 70 of the Contract Act. In cases falling under the
section, there cannot, therefore be any scope for claims for
specific performance or for damages for breach of contract,
the claim for compensation under the section being on the
footing that there has been no con tract and the conduct of
parties has created a rela tionahip resembling that arising out
of a contract.
l'6l
State of W11t B111gal
v.
M/s. B. K, M""'41
IHI
Stalt of Wtsl B1n1al
v,
11//1. B.Jr. Mun'41
878 SUPREME COURT REPORTS (1962] SUPP.
There is nothing in s. 175(3) of the Government of India
Act, tested in the light of s. 23 of the Contract Act, that forbids a claim under s. 70 of the Contract Act, There is no
conllict between the two sections, each covering a distinct and
separate field and s. 70 Cor;tract Act should be regarded
rather as supplementing s. 175(3} of the Government of India
Act.
Chuli Lal v. Bhagu:an Dru, (1889) I.L.R. 11 Al 1. 234
disapproved.
'
Held, further, that in construing a specific statutory provision such as s. 70 of the Contract Act it would be unreasonable to seek assistance from English decisions on statutory
provisions contained in English law.
Ramanandi Kw.r v. KalawatiKUtr, (1927) L.R. 55 I.A
18, referred to.
The State Government, as much as an ordinary citizen,
must be subject to s. 70 of the Contract Act and it was wrong
to suggest that its position was like that of a minor and,
therefore, it was outside the scope of s. 70 of the Act.
Sudland Ghoaal v. Balaram Mardana, (1911) I.L.R. 38
Cal. I, referred to.
Case law referred to.
Per Sarkar and Das Gupta, lJ. -
The question in the
instant ca.e was whether the three requisites of s. 70 of the
Contr
. Act had hem satisfied.
There was no dispute that
the
_, overnment had taken benefit of the work it urgently
ne~<1cd the w~rk and put it to its use immediately. It was also
clear that the respondent did not intend to do the work
gratuitously.
What the r.quest made by the officers did
was to inform the rtsponden t that the Government needed
the work immediately and would pay for it when done, and
works similar the respondent, who had previou•ly done and
been paid for, readily acted on it.
There can also be no doubt that the work was done
lawfully.
Even ·assuming that work done under a contract
Invalid under s. 175(3} of the Government of India Act, would
be unlawful because of evasion of it, that section does not
say that work done without any contract at all, as in the instant case, would be work unlawfully done nor docs it make it
unlawful for the Government to take benefit of work done for
it without any contract at all.
Section 175(3} of the Government of India Act applies
to a consensual contract which the Government makes and
not to something which is also called a contract but which the
-
(i) S.C.R. SUPREME OOURT REPORTS
879
law brings into existence by a fiction irrespective of the consent of the parties. Section 70 of the Con tract Act applies
where its requisites exist, if it is necessary to imply a contract
or contemplate a quasi-contract for applying the section !hat
must be done and neither s. 175(3) of the Governmenl of
India Act nor any other impediment can stand in the way.
'
Held, further, that a resort to English Law is not justified
for deciding a question arising on an Indian statute unless it
is such that it cannot be ttasonably understood without such
assistance.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 286 of 1958.
Appeal by special leave from the judgment
and decree dated the January 4, 1957, of the Calcutta High Court in Civil Appeal From Original
Decree No. 155 of 1953.
B. Sen, P. K. Ohatt,erjee and P. K. Bose, for the
1961
State •f Wesl &ngal
v.
M/s. B. K. Mondal
"
appellant.
N. O. Ohatrerjee, A.N. Sinha and P. K. MukherJee,
for the respondent.a.
.
1961. December 5. The Judgment of Gajendragadkar, Wanchoo and Ayyangar, JJ., was delivered
by Gajendragadkar, J. The Judgment of Sarkar
and Das Gupta, JJ. was delivered by Sarkar, J.
GAJENDRAGADKAR, J.-This appeal by special
Gaj1nilr.,adkar J,
leave arises out of a suit filed by the respondent
B. K. Mondal & Sons against the appellant the
State of West Bengal on the Original Side of the
Calcutta IDgh Court claiming a sum of Rs. 19,325/-
for works done by it for the appellant. This claim
was made out in two ways. It was alleged .that the
works in question had been done by the respondent in terms of a contract entered into between
the parties and as such the appellant was liable to
pay the amount due for the said works. In the
alternative it was alleged that if the 'fontract in
question was invalid then the respondent's claim
fell under s. 70 of the Indian Contract Act.
The
respondent had lawfully done such works not
1961
v .
SBO
SUPREME COURT REPORTS [1962] SUPP.
intending to act gratuitously in that behalf and the
appellant had enjoy(;cl tlw benefit thereof.
.Vfs. B. A v .. d,1
The respondent's cu.sc was that on February 8,
l.ojtn«saiadkar ·'·
1944, it offered to put up certain temporary
storage godowns at Arambagh in t.he District of
Hooghly for the use of the Civil Supplies Department of the State of 13engal and that the said offer
was accepted by the said department by a letter
dated February 12, 1944. Accordingly the respondent completed the said construction and its bill
for Rs. 39,476/. was duly paid in July 1944. Meanwhile, on April 7, 1944, the respondent was requested by the Sub-Divisional Officer, Arambagh, to
submit its estimate for the construction of a kutcha
road, guard rooin, office, kitchen and room for
clerks at Arambagh for the Department of Civil
Supplies.
The respondent alleged that the Additional Deputy Director of Civil Supplies visited
Arambagh on April 20, 1944, and instructed the
respondent to proceed with the conAtruction in
accordance with the estimates submitted by it.
Accordingly the respondent completed the said constructions and a bill for Rs. 2,322/8 was submitted
in that behalf to the Assistant Director of Civil
Supplies on April 27, 1944. Thereafter the Sub.
Divisional Officer, Aram bagh required the construe·
tion of certain storage sheds at K.hanakul and the
ASBistant Director of Civil Supplies wrote to the
respondent on April 18, 1944, asking it to proceed
with the construction of the said storage sheds.
Thie work also was completed by the respondent in
due course and for the said work a bill for
Ra. 17,003/- was submitted. In the present suit the
respondent claimed that the two bills submitted by
it in which the respondent had claimed Rs. 2,322/8/·
and Ra. 17,003/· respectively had remained unpaid
and that was the basis of the present claim.
The appellant denied all the material allega·
tions made by the respondent in its plaint. It
-
(1) S.C.R.
SUPREME COURT REPORTS
881
&lleged that the requests in pursuance of which the
respondent claims to have made the several constructions were invalid and unauthorised and did
not constitute a valid contract binding the appellant under s. 175(3) of the Government of India
Act, 1935 (hereafter called the Act). It pleaded
that there was no privity of contract between the
respondent and itself and it denied its liability for
the entire claim. The written statement filed by
the appellant was very vague and general in terms
and no specific or detailed pleas had been set out
by the &ppellant in its pleading.
However, G.K. Mitter, J., who tried the suit,
" framed five material issues on the pleadings and
recorded his findings on them. He held that having
regard to the provisions of s. 175(3) of the Act
there was no valid and binding contract between
the respondent and the appellant for . the construction of huts and sheds at Khanakul and Arambagh.
This finding was in favour of the appellant. He
held that the respondent's claim against the appellant was, however, justified under s. 70 of the
Indian Contract Act, and he came to the conclusion
that the said claiip was not barred by limitation.
He also rejected the plea of the appellant that the
liability of the Province of Bengal h'ad not devolved upon tutl appellant under the provisions of the
Indian Independence (Rights, Property and Liabilities) Order 1947. Thus, on these three points the
findings of the trial judge were against the appellant.
It appears that at the trial the respondent had also
relied upon s. 65 of the Indian Contract Act in
support of its claim. The learned judge held that
s. 65 did not apply to the facts of the case and so
the finding on this point was in favour of the appellant. The result was that the respondent's claim
was upheld under s. 70 of the Contract Act and a
decree for the amount claimed by it was accordingly paSBed in its favour.
1961
Stall oJW"t BllOfOI
v.
M/1, B. K. Mo Jal
Gajendrazadkar J.
Jgf J
Stat. ofWut B'"tal
v.
M/1. B. Jr. Monda/
Gajtniragadk,. J.
882 SUPREME COURT REPORTS (1962) SUPP
The appellant disputed the correctness and
validity of the said decree by prcferrinrr an '1ppcal
to the Calcutta High Court in its civil appellate
jurisdiction. The said appeal was he'lfd by S.R.
Das Gupta and Bachawat, JJ. The two learned
Judges who heard the said appeal delivered separate though concurring judgments ancl substantially
confirmed the material finding rerorded by the
trial court. In the result the appeal preferred by
the appellant was dismissed. The appPllant then
applied for a certificate to come to this Court but
the High Court rejected itfl application. Thereupon
the appellant moved this Court for a Rpecial certificat-0 and on obtaining it haa come to this (',ourt ; 1
and the principal point which has been urged before us by Mr. Sen on behalf of the appellant is
thats. 70 of the Contract Act does not apply to
the present caae.
Before dealing wit this point it is necessary
to refer briefly to the finding recorded by the
Courts below that the contract on which the respondent relied is invalid under s. li5(3) of the
Act. Mr. Sen argues that this finding is correct
whereas Mr. Chatterjee faintly suggested that the
contract cannot be said to be invalid. Section
175(3) provides, inter alia, that all contracts made
in the exercise of the executive authorit.y of a
province shall be expressed to be made by the
Governor of a Province and all ~uoh contracts made
in exercise of that authoritv shall be executed on
behalf of the Governor by such persons and in such
manner as he may direct or authorise. It is common-ground that the contracts in questicn were not
executed by any persons duly authorised by the
Governor in that behalf, and the question is whether
the said contracts can be said to ho valid inspite c,f
the fact that they do not nomply with the mandatory
requirements of s. 175(3) of the Act. In our opinion, there can be no doubt that failure to comply
with tho mandatory provisions of the said section
,
•
•
-.
{I) S.C.R. SUPREME COURT REPORTS
883
makes the contracts invalid. The question as to
whether mandatory provisions contained in statutes
sh 'JU!d be considered merely as directory or obligatory has often been considered in judicial decisions. In dealing with the question no general or
inflexible rule can be laid down.1 It is always a
matter of trying to determine tne real intention
of the Legislature in using the imperative or
mandatory words, and such intention can be gathered by a careful examination of the whole scope
of the statute and the object intended to be achieved by the particular provision containing the
mandatory clause. If it is held that the mandatory
!Jlause is obligatory it inevitably follows that contravention of the said clause implies the nullification
of the contract. There can be no doubt that in
enacting the provisions of s. 175(3) the Parliament
intended that the state should not be burdened with
li<tbility based on unauthorised contracts and the
plain object of the provision, therefore, is to save
the State from spurious claims ma.de on the strength of such unauthorised contracts. Thus the provision is made in the public interest and so there
can be no difficulty in holding that the word "shall"
used in making the provision is dntended to .make
the provision itself obligatory and not directory.
This is th~ view taken by this Court in Seth Bhihraj Jaipuria v. The Union of India (1), and, with
respect, we are in entire agreement with that
view.
As in the case of Rhikraj Jaipuria( 1 ) so in the
present case too Mr. Chl\tterjee has attempted to
argue that the conclusion about the obligatory
character of the provisions of s. 175(3) is inconsistent with the decision of this Court in Ohatturbhuj
Vithaldas Jasani v. M<Jreshwar Parashram (')In that
case a. contract for the supply of goods had bef!n
entered into with the Central Government by the
(1) [1962] 2 S.C.R. 880.
(2) [19541 S.C.R. 817 •
•
1161
Slal1 of W 111 Btntol
, ..
M/s. B. K. Mondcl
Gajtndrag.dl&ar J.
1161
Stat. of West Bmlf'l
v,
M/s. B. K. MondaJ
Gaj1n.dratadkar J,
884 SUPREME OOURT REPORTS [1982) SUPP.
firm Moolji Scika and Comp•my of which the candidate Chatturbhuj was a partner. The contract in
question had not complied with the mandatory pro·
visions of Art. 299(1) of the Constitution (which
corresponds snbstantially to s. 17 5(3) of the Act)
and the question which this Court had to co~ider
was whether in view of the fact that the contract
in question had contravened the provisions of Art.
299( l) the candidate Chatturbhuj could be said to
be disqualified for being cho8t'n as a member of
Parliament by virtue of the disqualifioation set out
in s. 7( d) of the Representation of the Peoplp, Act
43 of 1951. In dealing with this que&tion Bose, J.,
who spoke for the Court, observed that "s. 7(d) of
the Representation of the People Act docs not
require that the contracts at which it strikes should
be enforceable against tbe Government; all it requires is that the contracts should be for the supply
of goods to the Government. The contracts in question are just that and so are hit by the section". It
would thus be seen that in the case of Chatturbhuj(')
this Court was dealing with the narrow question
as to whether the impugned contract for the supply
of goods would cease to attract the provisions of
s.7(d) of the Representation ofthePeopleActon the
ground that it did not comply with the provisions
of Art. 299(1 ), and this Court held that notwithstanding the fact that the contract could not be enforced
against the Government it was a contract which
fell within the mischief of s. 7(d).
1\fr. Chatterjee,
however, contends that in considering the effect of
non-compliance of Art. 299(1) Bose, J., has also
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 points
out that this observation shows that the contract
(1) 1[954] S. C.R. 817 .
•
' -
..
(1) S.C.R. SUPREME COURT REPORTS
885
with whic!i the Court was dealing was not treated
"as void and of no effect." It would be noticed
that the observation on which Mr. Chatterjee relies
has to be read in the context of the question posed
for the decision of this Court and its effect must be
judged in that way. All that this Court meant by
the said observation was that the contract made in
contravention of Art. 299(1) could be ratified by the
Government if it was for its benefit and as such it
could not take the case of the contractor outside the
purview of s. 7(d).
The contract which is void may
not be capable of ratification, but, since according
to the Court the contract in question could have
been ratified it was not void in that technical sense.
That is all that was intended by the observation
in question. We are not prepared to read the said
observation or the final decision in the case of
Chatturbhuj (1) as supporting the proposition that
notwithstanding the failure of the parties to comply
with Art. 299(1) the contract would not be invalid.
Indeed, Bose, J., has expressly stated that such a
contract cannot be enforced against the Govern·
ment and is not binding on it. Therefore, we do
not think that Mr. Chatterjee oa.n successfully challenge the finding of the Courts below that the contracts in question were invalid. It is on this basis
that v.e have to consider the main question about
the applicability of s. 70 to the facts of the present
case.
Mr. Sen argues that in dealing with the 11uestion about the scope and effect of s. 70 it would be
material to remember the background of this
section. He suggests that the rule laid down in
the section is based on the notes in Smith's Leading
Cases to Lampleigh v. Brathwaite ('), and so he
argues that in construing the said section it would
be relevant to refer to the English decisions bearing on the point.
The first decision on which
(1) [1954] S.C.R. 817.
(2) Smith'1 Lcadin1 Casea, Vol, I. 13th ed., p. 1.f8,
1961
Stall of W 1st Ben1al
v.
M /s B, K, Monial
(} ajmdragadkar .1.
1961
Si." of l1'tll Bengal
v.
M /1. B. Ir.Moodal
Qojmdro,uk<Zf J.
886 SUPREME COURT REPORTS [1962) SUPP .
Mr. Sen very strongly relies is tho case of H. You1u1
&: Co. v. The Mayor and Corporation of RoyalLeaminyton Spa('). In that case, the House of J,ords had
to consider the effect of tho provisions of s. li4( 1)
of the Public Health Act, 18i5 (38 & 30 Viet c. 55).
The said section enacts that "every contract ma.do
by an urban authority whereby tho value or
amount exceeds £50 shall be in writing and sealed
with the common seal of euch authority". It was
held that "the provision of the said section is obli·
gatory and not merely directory and it applies to
an executed contract of which the urban authority
have had the full benefit and enjoyment, and which
has .been effected by their agent duly appointed
under their common seal." It appears that the
Corporation of Leamington had ent-0red into a contract with one Powis for the execution of certain
works to supply the district with water. Before
Powis l:ould complete this contract it was terminated. Then the Council, in its capacity as urban
authority, passed a resolution not under seal whereby its engineer was authorised to enter into a contract for completing the works left unfinished by
Powis. The said engineer employed the plaintiff
who completed the unfinished work and sued the
Corporation for the sum due to him as balance in
respect of the work executed by him. This claim
was resisted by the Corporation on the ground that
the provisions of s. 174(1) were mandatory and
since the contract on which the plaintiff's claim was
based had not complied with the said mandatory
provision no claim could be made against the Corporation. The Queen's Bench Division upheld the
defence and the decision of the Queen's Bench
was confirmed by the Court of Appeal as well as by
the House of Lords.
In dealing with the argument that the contract in question was not void Lord Blackburn cited
(I) (1885) 8 App. Cas. 517.
.........
I
' •
'
(1) s.c.R. SUPREME COURT REPORTS
887
with approval the observations made by Lindley,
L.J., in the Court of Appeal. "In a case like the
present before us", observed Lindley, L.J., "if we
were to hold the defendants liable to pay for what
has been done under the contract, we should in
effect be repealing the Act of Parliament and depriving the ratepayers of that protection which
Parliament intended to secure for them". He also
added "it may be said that this is a hard and narrow view of the law, but my answer is that Parliament has thought expedient to require this view
to be taken, and it is not for th is or any other
Court to decline to give effect to a clearly expressed
statute because it may le11d to apparent hardship".
Lord Bramwell went further and in his speech
added that he did not agree in the regret expressed
at having to come to the said conclusion. "The
Legislature has made provision", said Lord Bramwell, "for the protection of ratepayers, shareholders
and others, who must act through the agency of a.
representative body, by requiring the observance
of certain solemnities and formalities which involve
deliberation and reflection. That is the importance
of the seal. It is idle to say that there is no magio
in a water". Mr. Sen argues that the decision in
the case of H. Young & Go('). offers us material
assistance in dealing with the question a.bout the
effect of non-compliance of s. 175(3) of the Act and
the applicability of s. 70 of the Indian Contract
Act.
Incidentally it may be pointed out that in
England the decision in Young's case (') has now
become obsolete because' the relevant provisions
of the Public Health Act, 1875, were repealed in
1933 by the Local Government Act, 1933.
Section
266 of the said Act authorises the local authority
to enter into contra.ct neoessary for the discharge
of their functions and provides that all contracts
made by a. local authority or by a committee
thereof shall be made in acoordanoe with the
{I) (1883) 8 App. Cas. 517,
1961
Stat1 of West B11'gal
v.
M /s. B. K, Mondal
Gajendrazadkar J.
1961
Sl4ll of W 1sf Btntal
v.
M/s. B K. Mondol
Gojt"drotadlc41 J.
888 SUPREME COURT REPORTS [l!l62] SUPP.
standing orders of the local authority, an<! in the
case of contracts for the supply of goods or materials, or for the execution of works, the ~!anding
orders shall (a) require that., except as otherwise
provided by or under the standing orders, notice of
the intention of the authority or the committee,
as the case may be, to enter into the contra.ct
sh1<1l be published and tenders invited, and (b)
regulate the manner in which notice sha.11 be published and tenders invited. Tho proviso to this
section lays down that a pl'rson entering into a
contract with the local authority shall not be
bound to enquire whether the standing ordns of
the authority which applied to the contract have
been complied with, and all contracts entered into
with the local authority, if othorwirn valid, shall
have full force and effect not withstanrling that
the standing orders applicable thereto havo not •
been complied with. Subsequently in 1960 the
Corporate Bodies Contract Act 18& 9 Eliz., 2 c. 46)
has been passed ; and s. 1 of the Act now governs
the contracts entered into by the corporate bodies
wherever incorporated. The said section provides
that ( l)(a) a contract which if ma.de between private persons would be by law required to be in
writing, signed by the parties to be charged therewith, may be made on behalf of the body corporate in writing signed by any person acting under
its authority, express or implied, and ( b) a. contract
which if made between private persons would by
law be valid although made by parol only, and
not reduced into writing; may be made by parol
on behalf of the body corporate by any person
acting under ite authority, express or implied ;
(2) a contra.ct made according to this section aha.II be
effectual in law and shall bind the body corporate
and its successors and all other parties thereto.
Sub-section (4) of s. 1 provides that nothing in
this section shall be taken as preventing a contract under seal from being made by or on behalf of
-
..
'
(1) S.C.R. SUPREME COURT REPORTS
889
a body corporate. It will thus be seen that the
fochnical
and rigorous requirement that the
oontmct shall be made under seal by a corporation
has . now become obsolete ; and so the decision in
Young's case (1) has ceased to be a matter of any
importance.
Before these legislative changes were however made a distinction used to be drawn between
cases where the requirement of a seal was the
result of the common law rule as to contracts by
corporations and those where the said requirement
was based on a statutory provision like the one
under s.174(1) of the Public Health Act, 1875.
The non-observance of the statutory provision
requiring that a contract of the specified type
should be in writing and sealed with the common
seal of the authority
in
question
renders
the contract
void
and
as
such
exempts
the corporation from any liability to pay compensation for the performance of the contract even
where the corporation may have had the full
benefit and enjoyment of the said contract. On
the other hand, where the requirement as to writing and seal is based not on statutory provision
but on principles of common law, failure to comply
with the said requirement would not afford a valid
defence to the corporation to resist a claim made
by a contractor for compensation for a work done
by him if it is shown that the corporation had
the benefit and enjoyment of the said work. This
latter principle has been laid down by the Court
of Appeal in Lawford v. The Billericay Rural District Council ('). In that case it was held 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
(I) (188.'l) 8 App. Cas. 517.
(2) (1903) 1 K.B. 772,
1961
State of JVesl Bengal
v.
M/s. B. K. Monda/
Gajendra:adkar J,
/flljj
Sta:t of If ut BtngaJ
••
M /;. B. K. MondaJ
Gajtndragadkar J,
890 SUP.REllIE COURT REPORTS [1962) SUPP.
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-·
a.h~ence of a. contra.ct under the sea.I of the corporation is no answer to a.n a 0 tion brought in respect
of the work done or th<l goods supplied." In
coming to this conclusion Vaughan Williams, L. J.,
followed the rule re~ognised by Lord Denman in
Doc v. Taniere (') where he said that "where the
corporation have acted as upon an executed contra.ct,
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 a.II the advantage they would
have had if the contract had been regularly made.
That is by no means inconsistent with the rule
that, in genera.I, a. corporation can only contra.ct
by deed, it is merely raising a p:-esumption against
them, from their acts, that they have contracted
in such a manner a.a to be binding upon them".
In other words, the decision was based on the
ground that reliance may be placed on a.n implied
contract arising from a.n executed oonsidera.tion
on an ~ccepta.nce of the benefit of the contra.ct.
Mr. Sen's argument is that in dealing with
the question a.bout the effect of the contravention
of s. 175(3) of the Act and the applicability of
s. 70 of the Contract Aot the decision in the ease
of Lawford (') is irrelovent while that in the case of
H. Y aung and Co. (') is relevent and material because we a.re concerned with the contravention of a
statutory provision and not with the contravention
of the provision of the rule of common law. We
are not impreSBed by this argument. The question which the appellant has raised for our decision
falls to be considered in the light of the provisions
of s. 70 and has to be answered on a fair and
reasonable construction of the relevant terms of
(ll (1843) 12 Q.B. 998, 1013.
(2)
(1903) I K.B. 772.
(3) ( 1883) 8 ,\pp. a... 517.
(1) S.C.R. SUPREME COURT REPORTS
891
the said section. In such a case, where we are
dealing with the problem of construing a specific
statutory provision it would be unreasonable to
invoke the assistance of English decisions <lea.ling
with the statutory provisions contained in English
Law. As Lord Sinha has observed in delivering
the judgment of the Privy Council in Ra,manandi
K uer v. Kam'l£ati K uer (1) "it has often been pointed out by this Board that where there is a positive
enactment of the Indian Legislature the proper
course is to examine the language of that statute
and to ascertain its proper meaning uninfluenced
by any consideration derived from the previous
state of the law or of the English law upon which
it may be founded". If the words used in the
Indian statute are obscure or ambiguous perhaps
it may be permissible in interpreting them to examine the background of the law nr to derive
assistance from English decisions bearing on the
point ; but where the words are clear and unambi·
guoua it would be unreasonable to interpret them
in the light of the alleged background of the
statute and to attempt to see that their inter·
pretation conforms to the said background. That
is why, in dealing with the point raised bcforl) us
we must primarily look to the law as embodied
in s. 70 and seek to put upon it a fair and reasonable construction.
Section 70 reads thus :
"Where a person lawfully does any·
thing
for
another
person, or delivers
anything to him, not intending to do so
gratuitously, and such other person enjoy1
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."
It is plain that three conditions must be
aatisfied before this section can be invoked. The
(I) (1927) L. R. 55 I. A. 18; (1928) I. L. R. 7 Pat. 221.
1961
State of Weat Bengal
..
M /s. B. K. Mond•l
Goj~ndragadkar J.
892 SUPREME COUI\T REPORTS [1962rsUPP.
first condition is that a peison should lawfully do
t ate of West B.ngol something for another person or deliver something
M/s. B.vK. Mond, 1 to him. The second condition is that in doing
the said thing or delivering the said thing he must
1961
Ga;endragadkar J. 'not intend to act gratuitously ; and the third is
·that the other person for whom something is
done or to whom something is delivered must
--
enjoy the- benefit thereof. When these conditions
are satisfied s. 70 imposes upon the latter person,
the liability to make compensation to the former
in respect of or to restore, the thing so done or
delivered. In appreciating the scope and effect
of the provisions Qf this section it would be useful
to illustrate how this section would operate. If a
person delivers something to another it would ho
open to the latter person . to refuse to accept the
thing or to return it ; in that case s. 70 would not
.· come into operation. Similarly, if a person does
something for another it would be open to the
latter person not to accept what has been done by
the former; in that case again s. 70 would not apply.
In other words, the person said to be made
liable under s. 70 always has the· option not to
-accept the thing or to return it. It is only where
ho voluntarily accepts the thing or enjoys the work
done that tho liability under s. 70 arises. Taking
the facts in the case before us, after the respondent
constructed the warehouse, for instance, it was
open to the appellant to refuse to accept the said
warehouse and to have the benefit of it. It could
, . have called upon the respondent to demolish the
- -said warehouse and take away the materials nsed
by it in constructing it; but, if the appellant accepted the said warehouse and used it and enjoyed
its benefit then different considerations come intoplay and s .. 70 can be invoked. Section 70 occurs
in chapter V which deals with certain relations res··
embling those created by contract. In other words,
this chapter does not deal with the rights or liabili-
. ties accruing from the contract. It deals with the
I
(1) S.C.R. SUPREME COURT REPORTS
893
rights and liabilities accruing from relations which
resemble those created by contract. That being so,
reverting to the facts of the present case once again
after the respondent constructed the warehouse it
would not be open to th~ respondent to compel the
appellant to accept it because what the respondent
has done is not in pursuance of the terms of :iny
vali!l contract and the respondent in making the
conitruction took the risk of the rPjection of the
work by the appellant. Therefore, in cases falling
under s. 70 the person doing something for another
or delivering something to another cannot sue for
the specific performance of the contract nor ask for
damages for the breach of the contract for the
simple reason that there is no contract between him
and the other person for whom he does something
or to whom he delivers something. All that s. 70
provides is that if the goods delivered are accepted
or the work done is voluntarily enjoyed then the
liability to pay compensation for the enjoyment of
the said goods or the acceptance of the said work
arises. Thus, where a claim for compensation is
made by one person against another under s. 70, it
is not on the basis of any subsisting contract between the parties, it is on the basis of the fact that
something was done by the party for another and
the said work so done has been voluntarily accepted
by the other party. That broadly stated is the
effect of the conditions prescribed by s. 70.
It is, however, urged by Mr. Sen that the re·
cognition of the respondent's claim for compensation virtually permits the circ11mvention of the
mandatory provisions of s. 175(3), because, he
argues, the work done by the respondent is no
more than the performance of a so-called contract
which is contrary to the said provisions and that
cannot be the true intent of s. 70. It is thus clear
that this argument proceeds on the assumption that
if a decree is passed in favour of the respondent for
1961
State oflVtJt Bengttl
v
M/s. B. K. Monda/
Gajendragadkar J,
11161
Stalt of H'~'' Bmgal
'/!
Mfr. B. K.Jtondal
894 SL"'PRE.\IE COL"RT REPORTS [1962] SL"'PP.
~
compensation as
alternatively claimed by it,
it would in substance amount to treating the invalid
contract as being \'alid.
In our opinion, this argument is not well-fo11nded. It i~ true that the provisions of s. li5(3) are mandatory and if any contract
is mn.d0 in ,contr1wention of the said provisions the
said contract would
be
invalid; but it must be
rerm•mhL<red
that. the eause of action for the alt.ernative e !aim of the respondent is not the breach of
any contract by the appellant~ in fact, the alternative claim is
based on the a!lllumption that the
contract in pursuance of which the respondent made
the ctmstructionij in question was ineffective and as
~ch amounted to no contract at all. The respon-
,Jent says that it has done some work which haa
hee11 ac".·,,pted and enjoyed by the appellant and it
is the voluntary acceptance and enjoyment of the
ea.id work which is the caus0 of action for the altcrnati\·e claim.
Can it be said that when the respondent built the warehouse, for
instance, without a
\•1did
contract betw,,en it and the appellant it waa
doing something contrr.ry to s. Ii5(3}?
As we have
alrfa'.ly made it clear even if the rcRpond.,nt built
the warehouse he could not have forced the appellant to accnpt it ancl the appellant may well havo
askc d it to ,i.molisb the warchome and take away
the materials.
Therdore, the mere act of constructing the warehouse on
the part of the
respondent
cannot be said to contravene the provi•ions of
s. J 75r:l). In this connection it may be relevant to
consider illtrntratinn (a) to "· 70. The said i!luRtration "hows that if A a trad<'sm1m leaves goods at
Jfs hous<• b.v mistake, and B treats the goods as his
own h<' i"
bound to pay A for them. .Now, if wc
assume that B ~tands for the State Government, can
it he sni<I that A was contravening the provisions of
s. 175(3) whl'n by mistake he left the goods at the
home of B? The answer to this question is obviously
in the nega.ti ve.
Therefore, if gooda are delivered
by A to the State Government by mistake and the
•
'
(I) S.C.R. SUPREME COURT REPORTS
895
State Government acoepts the goods and enjoys
them a claim for compensation can be made by A
against the State Government, and in entertaining
the said claim 'the Court could not be upholding the
contravention of s. 175(3) at a.11 either directly or
indirectly. Once it is realised that the cause of
action for a claim for compenRation under s.