State of West Bengal v. B.K. Mondal & Sons

AIR 1962 Supreme Court 779Supreme Court of India1962Law of Contract I

Rule established

Section 70 of the Indian Contract Act applies even against the government; where a person lawfully performs work for another (including the State) who enjoys the benefit, the beneficiary must compensate regardless of the absence of a valid contract.

Facts

B.K. Mondal & Sons carried out construction work for the State of West Bengal
The total claim was Rs. 19,325 for work done
No formal contract complying with Article 299 of the Constitution was executed (government contracts must be expressed to be by the Governor, executed by authorized person)
The State argued that since no valid contract existed under Article 299, it had no liability to pay
The trial court and High Court ruled in favour of B.K. Mondal
The State appealed to the Supreme Court

Issue

Whether the government is liable under Section 70 of the Indian Contract Act to compensate for work done and enjoyed, when no valid contract under Article 299 exists?

Held

The Supreme Court held for B.K. Mondal: the State was liable under Section 70
Section 70 creates a quasi-contractual obligation independent of any contract
It applies where: (a) a person lawfully does anything for another; (b) not intending to do so gratuitously; and (c) the other person enjoys the benefit
The absence of a valid contract under Article 299 does not defeat the Section 70 claim because Section 70 operates outside the contractual framework
The government enjoyed the benefit of the construction; justice required compensation

Ratio Decidendi

Section 70 of the Indian Contract Act creates a quasi-contractual obligation independent of the existence of any valid contract. It operates on the principle that a person who enjoys the benefit of another's non-gratuitous act must compensate the performer. This obligation applies even against the State: the constitutional requirement of Article 299 for valid government contracts does not immunize the government from quasi-contractual liability where it has received and enjoyed the benefit of work done.

How to use it in an exam

The Indian authority for quasi-contractual liability against the government
Key principle: Article 299 compliance determines contractual liability; Section 70 operates outside contract law on principles of unjust enrichment
Three requirements of Section 70: (1) lawful act; (2) not gratuitous; (3) benefit enjoyed by other
Problem questions: "A builds a road for the government without formal contract; government uses road; A claims payment" → Section 70 applies (B.K. Mondal)
Contrast: if the government explicitly refuses the work and doesn't use it → no "benefit enjoyed" → Section 70 fails

Source

Source: AIR 1962 SC 779

This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.