Obligation of a Person Enjoying the Benefit of a Non-Gratuitous Act under Section 70 of the Indian Contract Act, 1872: The Three Conditions, the Requirement of Enjoyment, and Government Liability for Work Done Without a Valid Contract

Section 70 is the widest of the quasi-contractual provisions and the most frequently litigated. It covers the person who does something for another, without being asked and without meaning to do it for nothing, where the other takes the benefit. The commonest and most important application is against the Government: a contractor does work for a public authority under an arrangement that turns out to be invalid because it does not comply with Article 299 of the Constitution, and the State takes the benefit of the work and then pleads that there was no contract. Section 70 answers that plea, and its three conditions are strictly applied in both directions.

1. The Provision

Section 70, Indian Contract Act, 1872

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 thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.

Illustrations. (a) A, a tradesman, leaves goods at B's house by mistake. B treats the goods as his own. He is bound to pay A for them. (b) 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.

The two Illustrations set the boundaries of the section. Illustration (a) shows that an act of the recipient, treating the goods as his own, is what makes him liable; he could have returned them. Illustration (b) shows that the section does not reward the good Samaritan: a rescuer who intended to act gratuitously has no claim, and in any event a person whose property is saved from fire has no real opportunity to accept or reject the service.

2. The Three Conditions

📖 State of West Bengal v. B. K. Mondal & Sons, AIR 1962 SC 779

Facts: A contractor constructed a kutcha road, a guard room, an office and storage sheds at the oral request of an officer of the State. The work was completed, accepted and used by the State. The State then resisted payment on the ground that there was no contract complying with the constitutional requirements as to the form of government contracts, so that nothing was due.

Held: The Supreme Court held the State liable under Section 70. It laid down the three conditions that must be satisfied: first, a person must lawfully do something for another or deliver something to him; second, he must not have intended to do so gratuitously; and third, the other person must have enjoyed the benefit of the act or delivery. All three being present, the State was bound to compensate. The liability under Section 70 is not founded on contract at all but is imposed by law to prevent unjust enrichment, and the absence of a contract in the required constitutional form is therefore no answer to a claim properly founded on the section.

Ratio: Section 70 creates a statutory liability independent of contract. Where the three conditions are satisfied, the person who has taken the benefit must compensate, and a plea that no valid contract existed does not defeat the claim.

2.1 The act must be lawful

The act must be one the person was lawfully entitled to do. Three exclusions follow. It must not be unlawful in itself; a person who does something forbidden by law cannot claim compensation for it. It must not be done in performance of a pre-existing legal duty, since the claimant then confers nothing the other was not already entitled to. And it must not be done as a trespasser or officious intermeddler, which is the point developed below.

2.2 There must be no intention to act gratuitously

The section requires a positive state of mind at the time of the act: the claimant must not have intended to act for nothing. The burden lies on him. Where the relationship between the parties, such as close family, or the circumstances, such as a rescue or a neighbourly kindness, indicate that no payment was contemplated, the claim fails. Illustration (b) states that case.

📖 Falcke v. Scottish Imperial Insurance Co., (1886) 34 Ch D 234 (CA)

Facts: A person who had an interest in a life insurance policy paid a premium to prevent the policy from lapsing, thereby preserving its value for everyone interested in it. He claimed a lien on the policy for the premium he had paid, contending that he had preserved the property for the benefit of all.

Held: The claim failed. Bowen LJ stated the general principle: the mere fact that a person has benefited another by doing work or conferring a benefit on his property does not give a right of action, and liabilities are not to be forced on people behind their backs any more than you can confer a benefit on a man against his will. Salvage in maritime law and a few other recognised categories are exceptions, and the general rule is otherwise.

Ratio: A person who confers a benefit on another without request and without the other's opportunity to decline acquires no right to payment. Liability cannot be imposed on a person who was never given the choice of accepting or rejecting the benefit.

2.3 The other person must enjoy the benefit

⚠ Enjoyment of the benefit means an opportunity to accept or reject, and an election to accept

This is the condition that decides most cases and the one that separates Section 70 from Section 69. Section 69 requires no acceptance at all, because the discharge of the defendant's legal liability is itself the benefit. Section 70 requires that the defendant had a real option to accept or to decline what was done or delivered, and that he in fact took the benefit. That is why the tradesman recovers in Illustration (a), the householder having treated the goods as his own and being able to have returned them; and why the rescuer in Falcke did not, the owner having had no chance to refuse. Work done on another's land without his knowledge, or an improvement he could not have prevented, will usually fail on this limb.

The three conditions, and why enjoyment of the benefit decides most cases

3. Government Liability under Section 70

Article 299(1) of the Constitution requires contracts made in the exercise of the executive power of the Union or of a State to be expressed to be made by the President or the Governor, and to be executed on his behalf by a person authorised. Non-compliance makes the contract void and unenforceable, and the provision is mandatory. The consequence would be harsh if there were no remedy at all, because work is routinely done on departmental instructions and the formalities are routinely overlooked.

Section 70 supplies the remedy. B. K. Mondal establishes that a claim lies against the State for compensation where work has been done and the benefit taken, notwithstanding that no valid contract exists.
The claim is not on the contract. It is a statutory claim, so the contractor cannot recover the contract rate as such; he recovers compensation, which is what the work was reasonably worth.
The claim must be properly pleaded as one under Section 70. A plaint framed solely on a contract that turns out to be void does not automatically convert itself into a Section 70 claim, and the three conditions must be pleaded and proved.
The three conditions are applied as strictly against the State as against anyone else. The work must have been done lawfully, not gratuitously, and the authority must have enjoyed the benefit, which usually means that it accepted and used the work.
Where the work was done under a contract that is void for illegality, rather than merely for want of form, the position differs, and the reasoning in Kuju Collieries Ltd. v. Jharkhand Mines Ltd., (1974) 2 SCC 533 applies: Sections 65, 70 and 72 did not assist a party who paid under a transaction he knew to be unlawful.

4. Section 70 and Its Neighbours

	Section 69	Section 70
What the claimant did	Paid money another was bound by law to pay	Lawfully did something for another, or delivered something to him
Is the claimant's interest required?	Yes. He must be interested in the payment	No. What is required is that he did not intend to act gratuitously
Is acceptance by the defendant required?	No. The discharge of his liability is the benefit	Yes. He must have had the option to accept or reject and must have enjoyed the benefit
Measure of recovery	The sum actually paid	Compensation for the thing done or delivered, or its restoration
Typical claimant	A tenant, purchaser, mortgagee, bailee or warehouseman	A contractor, supplier, or a person who has delivered goods
Typical defence	The claimant had no interest, or the defendant was not bound by law to pay	The claimant acted gratuitously, or the defendant never enjoyed the benefit

5. What Section 70 Does Not Cover

An officious intermeddler. A person who thrusts a benefit on another without any opportunity for him to decline has no claim, per Falcke.
A person acting gratuitously, including a volunteer, a family member conferring a kindness, and a rescuer who did not contemplate payment.
Performance of an existing obligation, whether owed to the defendant or to a third party, since nothing new is conferred.
Work done under a subsisting valid contract, where the parties' rights are governed by the contract and quasi-contract has no application.
Work done under a transaction the claimant knew to be unlawful, on the reasoning in Kuju Collieries.
A benefit the defendant could not have refused, such as an unrequested improvement to land of which he had no notice until it was complete.

6. The Position Stated Shortly

Section 70 requires a lawful act done for another, an absence of intention to act gratuitously, and enjoyment of the benefit by the other.
B. K. Mondal states the three conditions and holds that the liability is statutory and independent of contract.
The act must be lawful, must not be the performance of an existing duty, and must not be that of an officious intermeddler.
The burden of showing that he did not intend to act gratuitously lies on the claimant.
Enjoyment of the benefit requires a real option to accept or reject, and an election to accept, which is what Illustration (a) turns on.
Falcke v. Scottish Imperial Insurance: a benefit cannot be forced on a person who was given no chance to decline it.
Section 70 is the route by which a contractor recovers for work done for the State under an arrangement void for non-compliance with Article 299.
The recovery is compensation for what the work was reasonably worth, not the contract rate, and the claim must be pleaded under the section.
Section 70 differs from Section 69 in requiring acceptance and enjoyment by the defendant, where Section 69 requires none.

7. Related Topics and Provisions

Topic or provision	Connection
Quasi-Contracts under Sections 68 to 72	The chapter as a whole and its basis
Doctrine of Unjust Enrichment	The principle Section 70 gives effect to
Reimbursement of a Person Paying Money Due by Another under Section 69	The neighbouring provision, compared above
Finder of Goods under Section 71	The next of the quasi-contractual obligations
Section 70, Indian Contract Act	The provision and its Illustrations
Section 69, Indian Contract Act	Payment of money another is bound by law to pay
Section 65, Indian Contract Act	Restoration where an agreement is void
Section 25(2), Indian Contract Act	Promise to compensate for a past voluntary act, the contractual counterpart
Article 299, Constitution of India	Form of contracts made by the Union and the States