STATE OF WEST BENGAL versus M/S. B. K. MONDAL AND SONS

Citation: [1962] SUPP. 1 S.C.R. 876 · Decided: 05-12-1961 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

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Judgment (excerpt)

1961 
Karirnbil 
a n 
v. 
State of Kerafa 
Ayyan:ar J. 
1961 
December 5. 
876 SUPREME COURT REPORTS [1962) SUPP. 
determination of the ceiling in respect of different 
individuals who are brought within the scope of 
the enactment, and (3) ss. 52 and 64for determining 
the compensation payable to the several classes of 
persons whose lands are acquired under Act, all these 
are violative the guarantee of the equal protection 
of laws under Art. 14 of thr C,,nstitution. 
I therefore agree in tho order proposed that 
the petitions be allowed, and with costs. 
Petitions allowed. 
STATE OF WEST BENGAL 
v. 
M/S. B. K. MONDAL AND SONS 
(P. B. 
GAJENDRAGADKAR, A. K. 
SARKAR, 
K. N. WANCHOo, K. C. DAs GUPTA and 
N. RAJAGOPALA .AYYANGAR, JJ.) 
State Government-Enjoying beiufit of non-gratuitous work-
Ij bound to pay compen•ation-Absence of valid contract, if exo-
nerate• !iability-lndia'lt Oo'lttract Act, 1872 (9 of 1872)-•.70 
Government of India Act, 1935 (25 & 26 Geo.5. Oh.42), •.175(3). 
By s. 70 of the Contract Act, "where a per•on 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, 
~he 
thing so done or delivered". 
Under s.175(3) of the Govern-
ment of India Act all contracts made in the exercise of the 
executive authority of a province shall be expre8'ed to be made 
by the Governor of the province and shall be executed on 
behalf of the Governor by mch persons and in such manner 
as he may director authorise. 
The respondent, a firm of building contractors doing cons-
truction works for the Provincial Government did certain 
additional construction on the reque1t of its officers. Its bills 
for these latter works were not paid and it sued the Govern-
ment basing its claim on contract and in the alternative on 
s. 70 of the Contract Act. The defence of the Provincial 
Government, inter alia, was that there was no valid and bind-
ing contract and s. 70 had no application. The trial Judge 
(1) S.C.R. SUPREME COURT REPORTS 
877 
found that although there was no valid contract under s.175(3) 
of the Government of India Act, 1935, the claim was jutified 
under s. 70 of the Contract and decreed the suit. The Court 
of appeal affirmed that decree. The State appealed by special 
leave. 
lleld (Per curiam), that the courts below were right in 
holding that s. 70 of the Contract Act applied to the case and 
the appeal must fail. 
Per Gajendragadkar, Wanchoo and Ayyangar, JJ.-
Whether a mandatory provision in a statute is merely directory 
or obligatory should be decided on a careful examination of 
· the scope of the statute and the object of the particular provi· 
sion. In enacting s.175(3) of the Government of India Act, 
1935, the intention of the parliament was that the state 
should not be burdened with liability based on unauthorised 
contracts. The provision made was inJ'ublic interest and so 
the word •shall' used therein must be he! to make it obliga-
tory and not directory . 
.<Jelh Bhikraj Jaipuria v. Union of India, (1962] 2 S. C. R. 
880, approved. 
Ohatlurbhllj Vithaldfl8 Jasani v. Moruhwar Prashram 
[1964] S. C.R. 817, explained. 
In order that a person can invoke s. 70 of the Contract 
Act he must be able to show (1) that he acted lawfully,(2) 
that he did not intend to act gratuitously and (3) that the 
other person enjoyed the benefit. 
A claim for compensation under s. 70 therefore is not 
one based on any subsisting contract but proceeds on the basis 
that something was done or delivered to another who voluntari· 
ly accepted it even though he had always the option to refuse 
the same. 
Recognition of the claim in the present case, could not 
therefore, amount to a contravention of s.175(3) of the 
Government of India Act, either directly or indirectly. 
The word •!awfully' in s. 70 of the Contract Act means 
,, 
that after something is done or delivered by one person 
to another and is voluntarily accepted and enjoyed by the 
latter, a lawful relationship arises between the two which 
attaracts s. 70 of the Contract Act. In cases falling under the 
section, there cannot, therefore be any scope for claims for 
specific performance or for damages for breach of contract, 
the claim for compensation under the section being on the 
footing that there has been no con tract and the conduct of 
parties has created a rel

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