25. There is no dispute between the parties that the plaintiff lawfully carried the said cargo of coal by "Jag Sevak" and delivered them to the defendant. Moreover the correspondence exhibited in the suit conclusively show that the plaintiff had rendered the said service to the defendant not intending to do so gratuitously. There is no dispute that the defendant had accepted the said works and had enjoyed the benefit of such works. In these circumstances the defendant had incurred a statutory liability to make compensation to the plaintiff under Section 70 of the Contract Act.
26. Section 70 is in Chapter V of the Act which deals with "Relations Resembling Those Created by Contract". Chapter VI of the Act deals with the consequences of a breach of contract and Section 73 is in Chapter VI of the Act. First paragraph of Section 73 of the Act inter alia provides that whenever a party has suffered loss or damage in consequence of a breach of contract he is entitled to receive compensation from the party who has broken the contract Principle upon which such compensation is to be assessed is that a party injured by a breach of contract should be placed in the same position in terms of money as far as possible had the contract been performed by the party in default. This paragraph cannot have any application in those cases where agreements are void for any reasons whatever.
27. The third paragraph of Section 73 of the Act, however, provides that when an obligation resembling those created by contract has been incurred by a party and has not been discharged by him the injured party is entitled to receive compensation from the party in default, as if the party in default had agreed to pay him such compensation and had broken that agreement. This paragraph confers a statutory right on a person to receive compensation from the person who has incurred a statutory obligation to pay it under Section 70 of the Act and though there may not be any contract to pay compensation but "the party in default" having incurred a statutory liability is enjoined to discharge it as if he had entered into a contract to pay compensation to the injured party and has broken such a contract.
Section 70 and third paragraph of Section 73 of the Act are based on the doctrine of Restitution which says that you cannot unjustly enrich yourself by retaining anything delivered to you which does not belong to you and you must return it to the person from whom you have received it. It says that if you cannot return them In specie you must pay him their equivalent in money. Similarly if anything is done by one person for the other this doctrine says to the person who has accepted such works that you having enjoyed the benefits of such works must compensate the person who had done that work for you and if you do not want to pay him you will be guilty of enriching yourself unjustly by the labour of the other person and so you must pay to the person from whom you have received such work. Principle of restitution is not primarily based on loss suffered by the plaintiff but on the benefit which is enioyed by the defendant at the cost of the plaintiff which is wholly unjustified for the defendant to retain.
Calcutta High Court
Great Eastern Shipping Co. Ltd. vs Union Of India (Uoi) on 14 August, 1970
Equivalent citations: AIR 1971 Cal 150
Bench: S Deb
