Relief on the basis of quantum meruit may be given even when a contract is found to be void, as per Section 65 of the Contract Act.

Madhavan Nair, J.

1. The plaintiff, the Municicipal Council of Dharapuram, is the petitioner. The plaintiffs suit was for the recovery of a sum of Rs. 202-2-0 on the ground that the right to remove the rubbish accumulating within the Municipal limits for the year 1927-28 was put up for auction and that it was purchased by the defendant he being the highest bidder for a sum of Rs. 225. It was stated that a portion of the amount was paid and the balance is due. Various issues were raised in the case. Issue 1 was:

Is the contract on which the suit is based enforceable in view of Section 69, District Municipalities Act?

2. The other issues related to the merits of the case. On this preliminary issue the lower Court found that the contract was void and dismissed the suit. In the course of the judgment the learned District Munsif expressed the opinion that the contract being void the plaintiff is not entitled to relief on the basis of quantum meruit. It was urged before him, having regard to the decision in Municipal Council, Tiruvarur v. Kannustvami Pillai A.I.R. 1930 Mad. 600, that the plaintiff should be giyen a decree on the basis of quantum meruit. But that decision was held inapplicable on the ground that in that case both the parties to the suit agreed that a decree on the quantum meruit basis might be given and that in the present case there was no agreement between the parties on that matter. In revision, Mr. Ramanadha Aiyar on be-half of the Municipal Council argues that the right to claim relief on the quantum meruit basis is not necessarily based on agreement between the parties and that if a party is otherwise entitled to claim it relief should be given. In Mohammad Ebrahim Molla v. Commissioners for the Port of Chittagong AIR1927Cal465 , it was held that though a contract is void relief to the party aggrieved may be given on the basis of quantum meruit. The relief given in that case was not based upon any agreement between the parties. That decision has been followed in this Court in Thangammal Ayyar v. Krishnan A.I.R. 1930 and Palaniswami Goundar v. English and Scottish Co-operative Whole sale Societies, Ltd. AIR1933Mad145 . In neither of these cases was the relief granted on the quantum meruit basis based upon the agreement between the parties.

3. If a party is otherwise entitled to relief on the basis of quantum meruit it cannot be denied to him on the plea that the parties did not agree at the very commencement that such relief should be given. When a contract is found to be void, even though the relief that may be given is said to be based on the principle of quantum meruit, still, speaking with reference to the Indian law, the relief is based under Section 65, Contract Act. which says that when an agreement is discovered to be void or when a contract becomes void any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it.

4. It is on this principle that the plaintiff will be entitled to get relief in this case. But before deciding that question it will have to be considered whether any advantage has been reaped by the defendant under this contract. If he has obtained any advantage, then though the contract is void he will have to restore that advantage to the Municipality. As that question depends on a consideration of the evidence the case will have to be remitted to the lower Court for a decision on the point after examining the evidence given by the parties. Issue 2 will have to be considered by the lower Court in connexion with this question of restoration of advantage. After considering this issue the lower Court may proceed to examine the evidence with regard to the benefit said to have been obtained by the defendant under the contract. Issue 3 in the case says : "Is the plaintiff entitled to the penalty claimed?" This penalty is one which the plaintiff is entitled to claim under the contract. As