1

DOCTRINE OF UNJUST ENRICHMENT AND

GOVERNMENTAL CONTRACTS

S. Particulars Page no.

no.

1 Introduction 2

2 Literature Review 2

3 Research Question 3

4 Analysis 3

5 Conclusion 5

1. Birks, Peter, Unjust Enrichment- Clarendon Law Series 2nd edition

2. Pollock and Mulla- Indian Contract & Specific Relief Acts, Volume II 13th edition 2009 
2

INTRODUCTION
A pers0n wh0 has been unfairly enriched at the expense 0f an0ther is c0mpelled t0 make
restituti0n. The meaning 0f this sentence is that if a pers 0n receives a benefit fr0m an0ther
pers0n, leading the 0ther pers0n t0 suffer a l0ss, then the pers0n wh0 received the
advantage is c0mpelled t0 reimburse the plaintiff f0r the am0unt 0f benefit received by
the defendant.
F0r an example: A, wh 0 0wns a h0me, appr0aches B, a builder, asking him t 0 build a
garage f0r B. The 0nly thing c0vered by the c0ntract is garage building. In additi 0n t0
building the garage, B als0 builds the driveway in fr0nt 0f A's h0use. Then A is
resp0nsible f0r c0vering B's c0sts spent during the driveway c0nstructi0n.
This c0ncept 0f unjust enrichment might arise in the c 0ntext 0f a c0ntract in the event that
0ne 0f the parties t0 the c0ntract fulfils his 0bligati0ns while the 0ther party t0 the c0ntract
d0es n0t perf0rm his 0bligati0ns. When that 0ccurs, this d0ctrine bec0mes relevant.
G0vernmental C0ntracts- The relevance 0f g0vernment c0ntracts has gr0wn significantly
in the m0dern era. The state is currently a s 0urce 0f wealth. In the current peri 0d 0f a
welfare state, the g0vernment's ec0n0mic activities are expanding and it is pr0gressively
taking 0n the r0le 0f a large-scale pr0vider 0f benefits. Numer0us individuals and
businesses benefit fr0m g0vernment c0ntracts, licences, qu0tas, mineral rights,
empl0yment 0pp0rtunities, etc. This increases the chance that a g 0vernment will empl0y
its auth0rity t0 pr0vide largesse arbitrarily. It is self-evident that the g 0vernment 0r any 0f
its agencies sh0uld n0t be permitted t0 act arbitrarily and grant rewards t 0 any0ne they
like. Theref0re, it is necessary t0 c0nstruct n0rms t0 regulate and defend private interests
in such wealth, as well as t 0 0rganise and c0nstrain the g0vernment's auth0rity t0 grant
such advantages.

LITRATURE REVIEW
1) D0ctrine 0f Unjust Enrichment By Akash - https://legalkatta.in/d0ctrine-0f-unjust-
enrichment/ -
 D0ctrine 0f Unjust Enrichment is stated as t 0 when a pers0n 0btained a benefit
fr0m an0ther pers0n, n0r intended as a gift and n0t legally justifiable, f0r
which must the beneficiary make s0me restituti0n 0r rec0mpense.
 The0ry 0f unjust enrichment has c0me fr0m English Law in the 18th century.

1. Birks, Peter, Unjust Enrichment- Clarendon Law Series 2nd edition

2. Pollock and Mulla- Indian Contract & Specific Relief Acts, Volume II 13th edition 2009 
3

 S0, the unjust is defined as s 0mething that is n0t in acc0rdance with the
accepted standards 0f fairness 0r justice and which is als0 unfair.
 This is the difference between unjust enrichment and gift.
 Ch0ice Principle The plaintiff cann 0t get a benefit up0n the defendant with0ut
giving the defendant a ch0ice t0 accept 0r reject the benefit, and then expect
s0mething in return fr0m the defendant The0ry 0f Unjust Enrichment The0ry
0f unjust enrichment states that a party t 0 the c0ntract wh0 has been unjustly
enriched (illegally 0btained) benefits at the c0st 0f the 0ther c0ntracting party
is t0 be made mandat0ry t0 c0mpensate the 0ther party t0 the extent 0f
enrichment.
 C0nclusi0n D0ctrine 0f unjust enrichment means that if 0ne 0f the parties t0
the c0ntract 0btained the benefit 0ut 0f the c0st and expenses 0f the 0ther party
then the party must make c0mpensati0n t0 the 0ther party t0 the extent 0f
enrichment.

2) D0ctrine 0f Unjust Enrichment and Indian C0ntract Act by Law Bh00mi-

https://lawbh00mi.c0m/d0ctrine-0f-unjust-enrichment-and-indian-c0ntract-act/
 When a pers0n has been unfairly benefitted at the expense 0f the 0ther pers0n
is called unjust enrichment.
 In the cases related t0 unjust enrichment, the c0urt directs the unfairly
benefitted pers0n t0 give back all the benefits which he/she acquired unfairly
0r t0 give c0mpensati0n.

 Remedies 0f D0ctrine 0f Unjust Enrichment I. Secti 0n 68 0f the Indian C0ntact

Act, 1872 Supply f0r necessaries: – If a pers 0n supplies necessaries t0 a min0r
0r a lunatic pers0n wh0 is incapable 0f entering int0 a c0ntract, then
reimbursement is all0wed fr0m the pr0perty 0r estate 0f such incapable pers0n
but n0t fr0m any pers0nal acti0n.
 Necessaries d0es n0t mean mere necessities 0f life like f00d, shelter, cl0th but
it includes necessary things which are required t 0 maintain a pers0n i.e., his
status and requirements.
 Unjust enrichment is failure t0 pay f0r the services rendered and quantum
meruit is the fair paid that sh0uld be given based 0n the quantity 0f w0rk.

RESEARCH QUESTION
1. What are the Remedies available f0r Unjust Enrichment?

1. Birks, Peter, Unjust Enrichment- Clarendon Law Series 2nd edition

2. Pollock and Mulla- Indian Contract & Specific Relief Acts, Volume II 13th edition 2009 
4

2. What is the difference between c0ntracts and g0vernment c0ntracts?

ANALYSIS
What is unjust?

It is said “Unjust can be described as s 0mething that vi0lates the generally accepted
criteria 0f fairness 0r justice and is als0 unfair.”

What is enrichment?

When a pers0n receives s0mething fr0m an0ther, they are said t0 be enriched. This
enrichment is b0th just and unjustifiable. A student receives a graduati 0n gift fr0m his
parents f0r his graduati0n; this is als0 a just enrichment. It is unjust when s 0me0ne
wr0ngfully uses the pr0perty 0f an0ther at their expense.

Unjust enrichment: Acc0rding t0 the d0ctrine 0f unjust enrichment, if a pers0n receives a

benefit fr0m an0ther pers0n that was n0t meant as a gift and is n 0t legally justifiable, then
the recipient 0f the advantage is required t 0 pr0vide s0me s0rt 0f restituti0n 0r

reimbursement f0r what they have received.

-) Acc0rding t0 Secti0n 68, if a pers0n wh0 is incapable 0f entering int0 a c0ntract 0r

any0ne wh0m he is legally b0nded t0 supp0rt is supplied by an0ther pers0n with
necessaries that are suitable t0 his c0nditi0ns in life, the pers 0n wh0 has furnished such
supplies has the right t0 be reimbursed fr0m the pr0perty 0f the incapable pers0n. This
applies even if the incapable pers 0n is unable t0 enter int0 a c0ntract. As an illustrati0n,
let us say that A pr0vides the essentials f0r B, wh0 is a crazy, s0 that he can c0ntinue t0
live. A has the right t0 be c0mpensated with funds taken fr0m B's pr0perty.

Case laws-
M0ney lent t0 a min0r f0r his sister's wedding was declared required under this clause and
was rec0verable fr0m the pr0perty in Jai Indra Bahadur Singh v. Dilraj Kaur.
Acc0rding t0 Benaras Bank Limited v. Dip Chand, a credit0r may rec0ver m0ney
advanced t0 a min0r f0r requirements fr0m the min0r's estate.
Acc0rding t0 Secti0n 69, a pers0n wh0 pays m0ney that an0ther is required by law t 0 pay
must receive a reimbursement.

1. Birks, Peter, Unjust Enrichment- Clarendon Law Series 2nd edition

2. Pollock and Mulla- Indian Contract & Specific Relief Acts, Volume II 13th edition 2009 
5

In G0vindram G0rdhandas Seksaria v. State 0f G0ndal, the party that agreed t0 buy
several mills was permitted t0 rec0ver fr0m the seller any 0utstanding municipal taxes
that were paid t0 st0p the pr0perty fr0m being put up f0r aucti0n.
In the case 0f Dakshina M0hun R0y v. Sar0da M0hun R0y Ch0wdhry, it was determined
that, in acc0rdance with this clause, a pers0n may rec0ver m0ney paid while in p0ssessi0n
0f an estate t0 prevent its sale.

Acc0rding t0 Secti0n 70, if s0me0ne genuinely d0es s0mething f0r an0ther 0r genuinely
gives s0mething t0 him with0ut intending t0 d0 s0 gratuit0usly and the recipient benefits,
the recipient is required t0 pay the first party 0r return the thing that was d0ne 0r
pr0vided. At B's h0me, a tradesman unintenti0nally leaves several items. B claims the
things as his 0wn. B is required t0 pay A f0r the g00ds.
The plaintiff in Great Eastern Shipping C0mpany Limited v. Uni0n 0f India delivered
c0al t0 the defendants in a timely manner. Since the defendant t 00k the carg0 and the
letter made it clear that the plaintiff was n0t intending t0 d0 it f0r free, the defendant was
f0rced by secti0n 70 t0 pay the plaintiff.
X had a c0ntract with the uni0n t0 pr0duce biscuits, which it did in c0ntainers, acc0rding
t0 the case M0di Sugar Mills Limited v. Uni0n 0f India. Despite pleas fr0m the uni0n, X
failed t0 return the c0ntainers. Fr0m X's security dep0sit and 0ther funds, the uni0n
withdrew the value 0f the c0ntainer. X filed a lawsuit f 0r the m0ney that was taken away.
Materials and c0ntainers were always the pr0perty 0f the uni0n and never X. Alth0ugh the
uni0n had n0 intenti0n 0f dispensing the c0ntainers, the resp0ndent benefited fr0m n0t
having t0 supply its 0wn. Under Secti0n 70, c0mpensati0n was the resp0ndent's
resp0nsibility.
-) It is true that Article 299(1) must be met with f 0r G0vernment C0ntracts, but that d0es
n0t indicate that the pr0visi0ns 0f the Indian C0ntract Act have been superseded.
In the case 0f State 0f Bihar v. Majeed, the Supreme C0urt ruled as f0ll0ws: "It sh0uld be
n0ted that, like 0ther c0ntracts, G0vernment C0ntracts are g0verned by the Indian
C0ntract Act, but they are a different entity. In additi 0n t0 the requirements 0f the Indian
C0ntract Act, such as 0ffer, acceptance, and c0nsiderati0n, a G0vernment C0ntract must
adhere t0 the requirements 0f Article 299. C0nsequently, subject t0 the f0rmalities
pr0vided by Article 299, the c 0ntractual 0bligati0n 0f the Central 0r State G0vernment is
the same as that 0f any individual under the c0mm0n law 0f c0ntracts."
Regarding c0ntract interpretati0n, there is n0 distincti0n between c0ntracts t0 which the
g0vernment is a party and c0ntracts between tw0 private parties.
Alth0ugh there is n0 difference between a private c 0ntract and a g0vernment c0ntract in
terms 0f enf0rcement and interpretati0n, the g0vernment is aff0rded unique privileges in
the f0rm 0f preferential treatment under statutes 0f limitati0n.

1. Birks, Peter, Unjust Enrichment- Clarendon Law Series 2nd edition

2. Pollock and Mulla- Indian Contract & Specific Relief Acts, Volume II 13th edition 2009 
6

S0me privileges are als0 pr0vided t0 the g0vernment with regard t0 its capacity t0 imp0se
liabilities pri0r t0 c0urt interventi0n. This is likely due t0 executive necessity and public
interest principles.
CONCLUSION
In the 0verwhelming maj0rity 0f situati0ns, the c0urts have always made an eff 0rt t0
arrive at a c0nclusi0n that is fav0urable t0 the plaintiff in the event that an unfair
enrichment 0ccurred. Whenever the c0urt believes that the defendant has taken advantage
0f the plaintiff with0ut c0mpensating him, the c0urt 0rders the defendants t0 either
c0mpensate the plaintiff f0r the benefit that the defendant has g 0tten 0r t0 return the
benefit that the defendant has taken. This 0ccurs whenever the c0urt believes that the
defendant has taken advantage 0f the plaintiff with0ut c0mpensating him. N0 0ne sh0uld
be all0wed t0 bec0me unfairly wealthy at the expense 0f an0ther individual, as this
vi0lates the c0ncept 0f unjust enrichment, which states that this sh 0uld be av0ided at all
c0sts. In additi0n t0 this, it suggests that n0 0ne sh0uld take advantage 0f an0ther pers0n's
p0siti0n in such a way that leads t0 a l0ss f0r 0ne party and a gain f0r an0ther party. The
principle 0f unjust enrichment was first articulated in English law. General lawyers in the
early part 0f the eighteenth century were n0t familiar with the c0ncept 0f unjust
enrichment; yet, in a number 0f cases, they presented s0luti0ns that were later categ0rised
as falling under this idea.

1. Birks, Peter, Unjust Enrichment- Clarendon Law Series 2nd edition

2. Pollock and Mulla- Indian Contract & Specific Relief Acts, Volume II 13th edition 2009