The court upheld that a party may be compensated for work done despite absence of a written contract when the other party benefits, reinforcing principles of unjust enrichment under Section 70 of the Indian Contract Act.

1. This is an appeal against the judgment and decrees dated 26th October, 1978 in Special Civil Suit No.215 of 1972 on the file of Joint Civil Judge, Senior Division, Pune. I have heard the learned Counsel appearing for both the parties.

2. The appellants - plaintiffs filed a suit in the trial Court for recovery of money in respect of a building contract. The plaintiffs' case is that defendant company entrusted construction of a bungalow and a factory to the plaintiffs. It appears the construction had been done by a previous contractor and then work was entrusted to the plaintiffs. The plaintiffs submitted their estimates and also rates which were accepted by defendant with some modification. The work was entrusted to the plaintiffs sometime in February 1970. It is also plaintiffs' case that part of the work done by previous contractor was not of good quality and the matter was examined by the Architect Mr. Nene. When the work was in progress, the defendant also entrusted some additional work to the plaintiffs. The understanding was that plaintiffs should go on giving running bills and defendant should go on making payments. Accordingly, plaintiffs started the work and was giving running bills and the defendant was making payments. In all plaintiffs have done work of the value of Rs. 1,53,446.20ps., for which bills have been issued. The defendant has made part payment to the extent of Rs. 1,25,000/-. The defendant has not paid the balance of Rs. 28,446.20ps. in spite of repeated demands and exchange of letters. The work was almost complete by the end of February 1971. For the first time during March 1971, the defendant raised an objection regarding quality of the work and also about the measurements. The defendant had never raised any such objection till then. Defendant's letter of objection was suitably replied by the plaintiffs. Apprehending that defendant may entrust the work to some other contractor, plaintiffs rushed to Court and filed a suit for injunction in Regular Civil Suit No.292 of 1971. The said suit later came to be withdrawn. The defendant appears to have completed the remaining work departmentally and as a result the plaintiffs have lost profit to that extent. Hence on these allegations the plaintiffs have filed a suit, for recovery of Rs. 32, 000/- as detailed in para 16 of the plaint.

3. The defence is as follows : -

The suit building contract is admitted. It is stated that plaintiffs abandoned the contract, and therefore, committed a breach of the contract. It is admitted that plaintiffs has submitted estimates and rates and they were accepted by the defendant subject to some modification. It is not admitted that defendant entrusted additional work to the plaintiffs. According to the defendant, the agreement was that for the running bills the defendant should pay 90 per cent, five per cent to be paid after the work is found satisfactory and then remaining five per cent to be paid only after the expiry of first rainy season or after six months whichever is longer. It is alleged that the work of the plaintiffs was not good. The quantities like measurements etc. are inflated. The material used was substandard. The work done was not ac