Radhakrishna Menon, J.:— This appeal by the plaintiff in O.S 280 of 1974 in the Court of the 1st Additional Sub Judge, Ernakulam for recovery of arrears of rent with interest, is against that part of the judgment decreeing the cross-claim of the defendant-respondent.
2. Facts relevant for consideration of the issue involved in the appeal are few and they are as shown hereunder. The plaint schedule building belongs to the plaintiff-Dharmasthapanam. The defendant, the tenant of the building since 5th July 1954, is conducting his hotel business by name “Cochin Refreshment House” in the said building. While so, the defendant-respondent started paying rent at an enhanced rate of Rs. 300/- from 1957 onwards. In December 1972, the defendant-respondent without obtaining the consent of the plaintiff, commenced certain unauthorised works on the building and it resulted in the plaintiff-appellant filing the suit, O.S 982 of 1972 on the file of the Munsiff's Court, Ernakulam for an injunction restraining the respondent-defendant from carrying on the said works. The temporary injunction obtained by the plaintiff-appellant on 8-12-1972 was served on the defendant on the same day. It was at this stage Mr. P.K Kunjalu, Advocate, Ernakulam and Mr. P.A Sulaiman, Proprietor. Swiss Time House, Ernakulam at the instance of the respondent-defendant, settled the dispute and as per the settlement the defendant-respondent agreed to enhance the rent by Rs. 100/-. The rent thus fixed, at Rs. 400/- per month was agreed to be paid with effect from 1-1-1973. The defendant-respondent had also agreed to execute a rent deed. Pursuant to this agreement, the plaintiff did not press the injunction suit and accordingly the suit was dismissed.
3. The defendant-respondent has been paying rent at Rs. 400/- till and inclusive of 4-8-1973. Thereafter the rent was in arrears. The suit is for recovery of arrears of rent at the rate of Rs. 400/- for 16 months from 4-8-1973 till 4-12-1974 with interest at 6% per annum. The total amount thus claimed in the suit comes to Rs. 6,400/- with interest accrued, Rs. 240/-.
4. Shorn of the unnecessary details, the case put forward by the defendant is this: It was with the consent of the Managing Trustee of the plaintiff trust, the defendant made the improvements and modifications on the building at a cost of Rs. 26,250/-. The understanding then was that the plaintiff would reimburse the above cost to the defendant. Instead of doing that, the plaintiff filed O.S 982 of 1972 in the Munsiff's Court for an injunction restraining the defendant from carrying on the improvement/modification work on the building. It was at this juncture the mediators intervened and the defendant agreed to pay rent at Rs. 400/- per mensem. It had further been agreed between the parties that the improvements made to the building will form part of the trust property. Accordingly the injunction suit was not pressed. It is further submitted that the accounts were given to the Managing Trustee. The Managing Trustee expressed his inability to pay the entire amount. He suggested that the defendant could adjust one-half of the rent every month towards the amount of Rs. 26,250/- until it is fully paid up. The defendant agreed for it. Although the accounts were settled in June 1973, rent up to August 1973 was paid at Rs. 400/- per mensem, a waiting the execution of the agreement as per the settlement. In the circumstances, the defendant need pay rent only at Rs. 200/- per mensem from July 1973 until the sum of Rs. 26,250/- is wiped off.
5. The defendant subsequently amended the written statement and laid foundation for the cross-claim. The amended pleadings read thus:
“In addition to the defence of the agreement to reimburse Rs. 26,250/- set out above, this defendant alternatively claims the said amount from the plaintiff and borne out by accounts with 6% interest per annum from the date of decree till realisation. The plaintiff is liable to pay the same and defendant is entitled to recover the same from the plaintiff. The reply notice dated 12-1-1974 issued by Advocate Sri C.S Narayanan may be read as part of this written statement.”
6. The plaintiff filed a replication disputing the correctness of the statement in the additional written statement. The plaintiff contended that the trust had not agreed to pay Rs. 26,250/-. The said statement is false. The plaintiff also denied the statement that the defendant had made improvements on the building, spending Rs. 26,250/-. The plaintiff also disputed the correctness of the account. The plaintiff submited that all the accounts are concocted, just got up for the purpose of the claim. They are not genuine accounts. It was further contended that even assuming they are genuine, the plaintiff is not bound to reimburse the said amount, under law. The plaintiff accordingly contended that the cross-claim of the defendant is liable to be dismissed.
7. The Court below settled as many as 5 issues and after considering the respective claims of the parties to the suit passed the following decree:
“In the result the suit is decreed for Rs. 6640/-. Since the defendant had deposited Rs. 6640/- into Court, the plaintiff shall be entitled to realise only future interest on Rs. 2400/- at 6% per annum from 22-11-1974, the date of plaint to 4-2-1975, the date of deposit. The defendant is given a decree for realisation of Rs. 26,250/- with future interest a 16% per annum from the date of payment of court-fee on the counter-claim, namely, 11-11-1976. The defendants shall be at liberty to set off future interest on Rs. 2400/- from 22-11-1974 to 4-2-1975 against the amount decreed in his favour. In the circumstances of the case both parties are directed to bear their respective costs.”
8. The only dispute that survives for consideration is the one relating to the decree for Rs. 26,250/- with future interest, awarded in favour of the defendant.
9. The learned counsel for the appellant submitted that the counter-claim laid by the respondent-defendant is unsustainable in law. He submitted that the court below went wrong in applying S. 70, Contract Act, to the facts of the case. According to him, on a close scrutiny of the facts it could be seen that the respondent-defendant has miserably failed to prove that he made the improvements on the building for the benefit of the plaintiff-appellant, that it was not done gratuitously and that the plaintiff-appellant in fact, has enjoyed the benefit thereof. He further submitted that there is no specific pleading in the written statement in this regard. This being the position, the respondent-defendant is not entitled to the reimbursement, assuming that he had spent the aforesaid amount of Rs. 26,250/- for effecting the improvements on the building. The learned counsel in this connection laid emphasis on the following facts. The defendant made this modifications and improvements on the building for his own benefit. He had to make these modifications so that he could attract more customers. This was all the more necessary because the hotel business, he was carrying on, had remained closed for more than 6 or 7 months due to labour problems. The improvements, however, were effected without the consent of the plaintiff. The learned counsel further submitted that even assuming that the said acts of the defendant have incidentally benefited the plaintiff, the provisions of S. 70 could not be said to be attracted. In support of these contentions he cited a decision of the Madras High Court in Bangaroo Thirumalai Souri Naicker v. R.G Orr, AIR 1919 Mad 1145. In the said decision the finding was that the repair work done to the tank which irrigated the lands of the plaintiffs as also the defendants and also the lands of other persons, was mainly for the benefit of the plaintiffs, although the defendants also incidentally benefited by the work. The Madras High Court nevertheless held that the defendants were not liable for a proportionate share of the expenses. This is what the Madras High Court had held:
“Section 70, does not apply to cases where a person does an act for his own benefit and that act incidentally benefits his neighbour or any other person. In such cases the latter need not pay for the extent of the benefit derived by him from the act…………………….
A person claiming contribution from another under S. 70, Contract Act, must prove that he did some act for the latter. An act cannot be described as done by one person for another, unless it can be shown that, but for the existence of that other's interest, it would not have been done.” (head-note)
This decision, however, has no application to the facts of the case. Here the plaintiff, in having withdrawn the injunction suit, must be held to have voluntarily accepted the benefit of the work, the defendant had done on the building.
10. The scope of the provisions of S. 70 has succinctly been stated by Jenkins C.J in Suchand Ghosal v. Balaram Mardana, (1911) ILR 38 Cal 1, thus:
“The terms of S. 70 are unquestionably wide, but applied with discretion they enable the Courts to do substantial justice in cases where it would be difficult to impute to the persons concerned relations actually created by contract. It is, however, especially incumbent on final Courts of fact to be guarded and circumspect in their conclusions and not to countenance acts or payments that are really officious.”
The above observation of Jenkins C.J has been noted with approval by the Supreme Court in the decision, State of West Bengal v. B.K Mondal and Sons, AIR 1962 SC 779. In the said decision the Supreme Court held:
“Section 70 deals with cases where there is no valid contract and provides for compensation to be paid in a case where the three requisite conditions prescribed by it are satisfied………………………………………………
What S. 70 prevents is unjust enrichment and it applies as much to individuals as to corporation sand Government…………… It is only where he voluntarily accepts the thing or enjoys the work done that the liability under S. 70 arises.”
(emphasis supplied)
It can thus be seen that the voluntary acceptance of the benefit of the work done or the thing delivered is the foundation of the claim under S. 70. If once the benefit of the work done or thing delivered is accepted, it can be presumed that the said work was done or thing was delivered, not intending to do so gratuitously. Similarly it can as well be presumed that the person who has accepted the work done or thing delivered, has enjoyed the benefit also. S. 70 deals with cases where there is no valid contract. However, it is possible to infer from the circumstances of a given case that a lawful relationship is born between the two and such a relationship is recognised under the provisions of S. 70.
11. As held by the Supreme Court, the claim for compensation made under S. 70 is not based on any subsisting contract between the parties but is based on a different kind of obligation or a third category of law, namely, quasi-contract or restitution. [vide Mulamchand v. State of M.P, AIR 1968 SC 1218].
12. Taking the facts of the case before us, what the plaintiff did was, he accepted the mediation and withdrew the injunction suit. That means, instead of refusing to accept the terms of mediation particularly the one whereby the plaintiff agreed to accept the benefit of the work done by the defendant, the plaintiff with open eyes accepted the offer of the defendant to raise the rent of the building from Rs. 300/- to Rs. 400/- per month, on the understanding that he will reimburse the cost of construction treating the modifications made, as forming part of the assets of the trust. The findings of the Court below, extracted hereunder, in this regard clinch the issue especially when the said findings are beyond challenge:
“It has to be next considered how far the plaintiff Trust is benefited by the act done. There is no dispute regarding Ext. B1 which was got Written up by P.W 1 through his clerk. It is also not disputed that in the said agreement all the works effected by the defendant have been shown as belonging to the plaintiff Trust. The evidence of P.Ws 2 and 3 is also to the effect that they persuaded P.W 1 to withdraw the suit as the works effected by the defendant enured to the benefit of the plaintiff Trust. These circumstances apart, the enhancement of rent from Rs. 300/- to Rs. 400/- can also be said to be highly beneficial to the plaintiff and P.W 1 has no case that the rent was agreed to be enhanced consequent upon the withdrawal of the suit.” Ext. B1 and the recitals therein are binding on the plaintiff. Admittedly Ext. B1 was got written by the plaintiff through his clerk. He has stated so, in his evidence. The injunction suit accordingly was withdrawn. The withdrawal of the injunction suit in these circumstances, proves to the hilt that the appellant-plaintiff has voluntarily accepted the benefit of the work done by the defendant on the building and therefore it can be taken that the requisite conditions prescribed by S. 70 are satisfied in the case.
13. The learned counsel for the respondent further submitted that in the circumstances of the case, particularly in view of the fact that the appellant-plaintiff has voluntarily accepted the benefit of the work done by the defendant on the building, the defendant is entitled to lay his claim on the doctrine of “unjust enrichment” also. This principle presupposes three things: first, that the defendant has been enriched by the receipt of a benefit; secondly, that such enrichment has occurred at the expense of the plaintiff; thirdly, that it would be unjust for the defendant to retain that benefit. (Anson's Law of Contract, 25th edition, page 649). We are of the opinion that the above principles squarely apply to the facts of the case.
14. Coming to the case that there are no specific pleadings to sustain the cause of action based on S. 70, it is enough, if a reference is made to the facts stated in para 3 of the written statement. It has been stated there that the improvements and modifications to the building were carried out with the consent of the Managing Trustee and also on the understanding that the trust will reimburse the cost, the defendant would meet in that regard. The parties had agreed, it is further alleged that the improvements/modifications thus made will form part of the assets of the trust and consequently the rent also will be increased from Rs. 300/- to Rs. 400/-. In fact the rent was increased and the defendant paid the increased rent till and inclusive of 4-8-1973. Thus the work was not done gratuitously. May be that the defendant has not pleaded the ingredients of S. 70 specifically. But we are of the view that the above pleadings do disclose the substance of the Section. Yet, if we allow the appellant-plaintiff to press into service the technical plea of want of specific pleadings, ‘justice’ will undoubtedly be a casualty. We are not for it. We hold that the written statement contains necessary and proper pleadings enabling the defendant to sustain the plea based on S. 70 Contract Act.
15. Viewed from another angle also, the above technical plea of the appellant is liable to be rejected. The issues settled in the case and the discussions thereon in the judgment of the trial court clearly show that the parties have deliberately and knowingly gone with the trial of the case based on S. 70 notwithstanding the alleged defects in the pleadings. The appellant knew what case he was to meet. The object of pleading is to put the opposite party on the vigil regarding the case based on the said pleadings and therefore if the pleadings, though not specific, do disclose the case, the opposite party is to meet, then it would not be improper for the courts to give relief notwithstanding the position in law that the court cannot grant relief to parties on a case for which there was no foundation in the pleadings.
16. For the reasons given above we hold that the respondent-defendant is well founded in his claim for compensation for the work, he has done on the building.
17. Now the question arises whether the defendant-respondent has been successful in proving that he has spent an amount of Rs. 26,250/- for the work done by him on the building belonging to the plaintiff. The respondent-defendant in his connection has relied on Exts. B3, B4, B8, B9, B13, and B14 said to be the accounts maintained by him in this regard. However, these accounts have not been proved because the scribe who was maintaining the accounts, was not examined as a witness, although the plaintiff had disputed the correctness of the claim. The court below has not given much importance to these documents and that it is so can be seen from its finding that “In my view the accounts do not assume much importance as the suit is not based on accounts.” Merely because the accounts were produced before the Sales Tax Department, it cannot be said that they are genuine. Under law, it is for the defendant to prove his claim and only when he proves it, the burden shifts on to the plaintiff to establish that he is not liable to pay the compensation. Whatever that be, the fact remains that the defendant has made improvements to the building. Exts. B1 and A19, the report of the Commissioner, give the details of the work, done by the defendant. Most of the work, however, was done for the benefit of the defendant himself and therefore he is not entitled to get the cost incurred in that regard reimbursed. The evidence available on record is not sufficient to determine the cost of construction, the appellant is bound to reimburse. We, therefore, have to work out the said liability on a rough and ready basis; or else the matter may have to be remitted to the court below for fresh disposal. The counsel on both sides do not want a remit. In these circumstances, we hold that ends of justice will squarely be met if we limit the cross-claim to Rs. 3000/- and give a decree to the defendant for the said amount. The cross-claim therefore is allowed to the extent of Rs. 3,000/-.
18. In the result the defendant is given a decree for Rs. 3000/- with future interest at 6% per annum from the date of the payment of court-fee on the counter-claim, namely 11-11-1976. The defendant shall be at liberty to set off future interest on Rs. 2,400/- from 22-11-1974 to 4-2-1975 against the amount decreed in his favour.
The appeal is allowed in part. We make no order as to costs.
Appeal partly allowed.
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