INTRODUCTION:Chapter V 

of the Indian contract Act, 1872 deals with the

“certain relations resembling to those created by contract”. It incorporates those
obligations which are known as “Quasi Contracts” under English law. A person is
obliged to compensate another although the basis of this obligation is neither a
contract between the parties, nor any tort on the part of the person who is bound to
compensate. The basis of the obligation is that no one should have the unjust
benefit at the cost of the other. If A gets unjust enrichment at the cost of B, A has an
obligation to compensate B for the same. For instance, A and B jointly owe 100
rupees to C. A alone pays the amount to C and B, not knowing this fact, pays 100
rupees over again to C. C is bound to repay the amount to B.

In an action for unjust enrichment, the following essentials have to be proved:

 The defendant has been “enriched” by the receipt of a “benefit”.

 The enrichment is “at the expense of the plaintiff”.
 The retention of the enrichment is “unjust”.

The Indian contract act, 1872 deals with the folllowing quasi-contractual
obligations:
1. Claim for necessaries supplied to a person incompetent to contract (Section
68).
2. Reimbursement of money paid, due by another (Section 69).
3. Obligation of person enjoying benefit of non-gratituous act (Section 70).
4. Responsibilty of the finder of goods (Section 71).
5. Liability of a person getting benefit under mistake or coercion (Section 72).

1. Claim for necessaries supplied to a person incompetent to

contract.
Where one person supplies necessaries suited to the condition in life of a
person, who is incompetent to contract (for example, a minor or lunatic), or
to anyone whom such person incompetent person is legally bound to support
(for example, to a lunatic’s wife or children), the person furnishing such
supplies is entitled to a reimbursement from the property of such
incompetent person.
Section 68 contains the following provisions in this regard:
“68. Claim for necessaries supplied to person incapable of contracting,
or on his account-  If a person, incapable of entering into a contract, or
anyone whom he is legally bound to support, is supplied by another person
 with necessaries suited to his condition in life, the person who has furnished
such supplies is entitled to be reimbursed from the property of such
incapable person.”
Illustrations - 
     (a) A supplies B, a lunatic, with necessaries suitable to his condition in
life. A is entitled to be reimbursed from B’s property.
     (b) A supplies the wife and children of B, a lunatic, with necessaries
suitable to their condition in life. A is entitled to be reimbursed from B’s
property.

2. Reimbursement of money paid, due by another.

 Reimbursement of person paying money due by another, in payment of
which he is interested  (Section 69) - 

          A person who is interested in the payment of money which another is

bound by law to pay, and who therefore pays it, is entitled to be reimbursed by
the other.
Illustration  - 
     B holds land in Bengal, on a lease granted by A, the zamindar. The revenue
payable by A to the Government being in arrear, his land is advertised for sale
by the Government. Under the revenue law, the consequence of such sale will
be the annulment of B’s lease. B to prevent the sale and the consequent
annulment of his own lease pays the Government the sum due from A. A is
bound to make good to B the amount so paid.

For the application of this Section, the following two essential conditions are to
be there:
1. One person is interested in the payment of money, and therefore, he
pays it, while,
2. another person is bound by law to pay the same, but he fails to pay.
The person so making the payment is entitled to be reimbursed by the person
who was bound to pay.
(1). One should have interest in making payment.
The person who makes the payment and then claims its
reimbursement must have an interest in making the payment. The purpose of
making the payment should be bona fide protection of his interest by the
plaintiff.
 In Exall v. Partridge (1799), the palintiff placed his carriage in the
defendant’s premises. Since it was lying in the defendant’s premises, his
landlord seized it as distress because the defendant was in arrears of rent.
The plaintiff had to clear the arrears of the rent, which were otherwise to be
paid by the defendant, and got his carriage back. It was held that the plaintiff
was entitled to recover from the defendant the rent so paid by him.
(2.) Another person should be bound by law to pay.
For this section to be applicable, the plaintiff, should have an interest in the
payment, and the defendant should be bound by law to pay the same. The
provision is based on the principle that the plaintiff, having discharged the
defendant’s debt, is entitled to be reimbursed by him.
3. Obligation of person enjoying the benefit of non-gratuitous act.
According to Section 70:
“ Where a person lawfully does anything for another person, or delivers
anything to him, not intending to do so gratuitously, and such another person
enjoys the benefit thereof, the letter is bound to make compensation to the former
in respect of, or to restore, the thing so done or delivered.”
For this section to be applicable, the following conditions are to be satisfied:
i. A person should be lawfully do something for another person, or should
deliver something to him;
ii. The person making the payment or delivering the thing must not do so
gratuitously, i.e., he should expect payment for the same; and
iii. The other person should enjoy the benefit of this payment or the delivery of
the thing.

When all the above conditions are satisfied, the person receiving the benefit
becomes bound to pay compensation t the person conferring the benefit.
Illustrations:
Ex. 1. A, a tradesman, leaves goods at B's house by mistake. B treats the
goods as his own. He is bound to pay for them to A.
Ex 2. A saves B's property from fire. A is not entitled to compensation from
B, if the circumstances show that he intended to act gratuitously.
Name of the case:Damodar mudaliar vs. secretary of state for India, 1894.
 A village was irrigated by a tank. The government effected certain repairs to
the tank for its preservation and had no intention to do so gratuitously for the
zamindars. The zamindars enjoyed the benefits thereof. Held, they were
liable to contribute.

4. RESPONSIBILITIES OF FINDER OF GOODS (Sec. 71)

A person, who finds goods to another and takes them into his custody, is subject to
the same responsibilities as a bailee.
He is bound to take as much care of the goods as a man of ordinary prudence
would, under similar circumstances, take of his own goods of the same bulk,
quality and value. If he does not, he will be guilty of wrongful conversion of the
property. Till the owner is found out, the property in goods will vest in the finder
and he can retain the goods as his own against the whole world.

Example: F picks up a diamond on the floor on k's shop. He hands it over to K to

keep it till true owner is found out. No one appears to claim it for quite some
weeks in spite of the wide advertisement in the newspapers. F claims the diamond
from K Who refuses to return. K is bound to return the diamond to F who is
entitled to retain the diamond against the whole world except the true owner.

Under Section 169, the finder of goods has, however, been authorised to sell the
goods found by him, when,
the owner of the goods cannot with reasonable diligence be found, or if he refuses,
upon demand, to pay the lawful charges of the finder; and
either the thing found is in danger of perishing or of losing the greater part of its
value, or, in case the goods are not of perishable nature, but the lawful charges of
the finder, in respect of the thing found, amount to two-thirds of its value.
If the situation is not covered by Section 169 and the finder sells the goods, he can
be made liable for conversion.

5. MISTAKE OR COERCION
Section 72:Liability of person to whom money is paid, or thing delivered,by
mistake or under coerscion.
A person to whom money has been paid, or anything delivered, by mistake
or under coercion, must repay or return it.
Illustrations:
(1) A and B jointly owe 100 rupees to C. A alone pays the amount to C, and B
not knowing this fact, pays 100 rupees over again to C. C is bound to rapay
the amount to B.
Cases:

(1) Case: D. cawasji & co. vs. state, 1969 .

A railway company refuses to deliver up certain goods to the consignee, except
upon the payment of an illegal charge for carriage. The consignee pays the sum
charged in order to obtain the goods. He is entitled to recovers so much of the
charge as is illegally excessive.
Sec. 72 does not draw any distinction between a mistake of fact and mistake of
law.
(2). Case: sales tax officer, benares vs. kanhaiya lal mukand lal safaf, 1959.
K paid sales tax on his forward transactions of bullion. Subsequently this tax was
declared ultra vires. Held, K could recover the amount of sales tax and that sec. 72
is wide enough to cover not only mistake of fact but also mistake of law.
(3) Case: Norwich etc. society ltd. vs. price W.H. LTD 1934 .
 An insurance company paid the amount on a policy under the mistake that the
goods had been destroyed by a peril insured against. The goods infact had been
sold. Held, the money could be recovered by the insurance company.
(4) Case: Kelly vs. solari 1841.
An insurance co. paid the amount on a policy which had lapsed by a reason of non-
payment of premiums by the assured. The company knew this fact but it was
overlooked at the time of payment. Held, the company could recover the amount
"however careless the party (company paying money) may have been omitting to
use the diligence to inquire into the fact"