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2025 Supreme(Gau) 2359

THE GAUHATI HIGH COURT AT GUWAHATI, (THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) 
(PRINCIPAL SEAT AT GUWAHATI)
ROBIN PHUKAN, J.
Sri Prasanta Saha, S/o Prabir Kr. Saha – Appellant
Versus
Sri Biplab Kumar Chetia, S/o. Late Dr. Bipin Chetia – Respondent
RFA No. 100 of 2017
Decided On : 28-07-2025

Advocates Appeared:
For the Appellant :Mr. B.K. Bhagawati, Advocate
For the Respondent: Mr. S.P. Choudhury.

Section 70 of the Contract Act provides a remedy against unjust enrichment in the absence of a formal contract, provided that the service rendered and the benefit enjoyed are proven. It cannot be used to bypass the burden of proving actual work performed or damages sustained when evidence is deficient.

Headnote:(A) Indian Contract Act, 1872 - Sections 70 and 73 - Claim for compensation for work rendered - Oral agreement - Suit for recovery - Plaintiff claimed outstanding payments for work executed, seeking compensation under the principle of restitution or damages for breach of agreement. Reliance placed on Section 70 to claim for work done despite the absence of a formal written contract. (Para 6.1, 10, 10.1, 15)

(B) Quasi-contract - Principle of unjust enrichment - Section 70 - Essential conditions - Three conditions must be satisfied: lawfully doing something for another, not intending to act gratuitously, and the other person enjoying the benefit thereof. This provision is not applicable where there is a subsisting contract or where the claim is specifically for breach of contract. (Para 10.2, 10.4, 11, 13)

(C) Burden of proof - Evidence of loss - Breach of contract - In a claim for damages under Section 73, the actual loss suffered must be proven. Failure to provide admissible financial records or evidence of the work performed prevents the assessment and recovery of the claimed amount. (Para 14, 15, 15.1)

Facts of the case:
The plaintiff sought recovery of unpaid dues for work executed under an alleged oral agreement with the defendant. The defendant denied the existence of any binding contract and contested the claim. The trial court dismissed the suit, finding that the plaintiff failed to establish the existence of a valid agreement or the specific quantum of the alleged work performed.

Findings of Court:
The court determined that the plaintiff failed to substantiate the claim, as the evidence provided lacked verification and the plaintiff could not prove the existence of an enforceable agreement or the actual extent of work and resulting loss suffered.

Issues: Whether the work performed creates a liability under the principles of quasi-contract for restitution or damages for breach of contract, and whether the lack of evidence precludes the recovery of the alleged outstanding amount.

Ratio Decidendi: Section 70 of the Contract Act serves to prevent unjust enrichment when work is voluntarily accepted, but it is not applicable where the party fails to prove the performance of work and the corresponding benefit enjoyed by the other party. Where a claim for damages is based on an alleged breach, the burden remains on the claimant to produce admissible evidence to prove both the agreement and the actual loss suffered.

Result: Appeal dismissed.

Table of Content
1. procedural history and factual foundation of the suit. (Para 1 , 2 , 3 , 4 , 5)
2. arguments concerning contract breach and the applicability of section 70 versus section 73 of the indian contract act. (Para 6 , 7)
3. evaluation of evidence regarding the alleged oral agreement and admissibility of banking records. (Para 8 , 9)
4. analysis of quasi-contractual obligations under section 70 of the indian contract act in the presence of an existing agreement. (Para 10 , 11 , 12 , 13)
5. final determination on failure to prove damages and dismissal of the appeal. (Para 14 , 15 , 16 , 17)

JUDGMENT :

ROBIN PHUKAN, J.

Heard Mr. B.K. Bhagawati, learned counsel for the appellant and Mr. S.P. Choudhury, learned counsel for the respondent.

2. In this appeal, under Order 41 Rules 1 & 2 of the CPC, the appellant has put to challenge the correctness or otherwise of the Judgment and Decree dated 30.03.2017, passed by the learned Civil Judge No. 2, Kamrup (M) at Guwahati (trial court hereinafter), in Title Suit No. 229/2010.

3. For the sake of convenience and to avoid confusion, the name of the parties appeared in the said title suit is adopted herein also.

4. It is to be noted here that vide impugned Judgment and Decree dated 30.03.2017, the learned trial court had dismissed the suit of the plaintiff, wherein the plaintiff had prayed for the outstanding amount of Rs.57,56,699/- along with interest @ 15% per annum.

Background Facts:-

5. The background facts, leading to filing of the present appeal, are adumbrated herein below:-

“The plaintiff is a Class I(A) contractor and the defendant is a government contractor running a proprietorship concern. On 16.05.2005, the defendant obtained a work order from the PWD (Border Roads), Government of Assam in respect of construction of IBB bund-cum-road including security fencing along the Surma river bank from Kinnerkhel to Harinagar, in Cachar and the bid price was Rs. 2,48,33,396/- and the Executive Engineer, Badarpur, BRC Division, vide letter dated 02.03.2006, directed the defendant to commence the work so as to complete the same by December, 2006. Since the defendant could not execute the work properly due to resistance from local people, against acquisition proceedings, the work could not be executed. Thereafter, on 25.03.2008, the Government of Assam notified the acquisition of land for construction of the said road.

Since the year 2005-2006, the defendant requested the plaintiff to provide his services in executing the aforesaid work against the work order. Then, the plaintiff and the defendant mutually agreed that the plaintiff would take entire responsibilities for execution of the aforesaid work as per the terms of the agreement. However, no written contract was executed between them but, it was agreed that the plaintiff would raise bills and he would be compensated for the work. Thereafter, the plaintiff had completed the work and he received various payments for the period 2006 - 2008. But, after 2008, the defendant did not clear any of the bills for work done and the plaintiff has alleged that the work done worth of Rs. 1,07,76,699/-, he has received only Rs.50,20,000/- and despite repeated request, the defendant failed to pay the outstanding amount of Rs. 57,56,699/- along with an interest @ 15% per annum.

Being aggrieved, the plaintiff had instituted the suit before the learned trial court. But, the same came to be dismissed vide impugned judgment and decree dated 30.03.2017.

The defendant had contested the suit by filing his written statement, wherein a stand had been taken that there is no cause of action, there is no privity of contract between him and the plaintiff and the suit is not maintainable and barred by limitation and is bad for non- joinder of parties. It is also stated that though there was initial problem in commencing the work due to non- acquisition of land but, the land was acquisitioned and thereafter, he started the work as awarded to him. It is also stated that the

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