Doctrine of Restitution
1. Meaning of Doctrine of Restitution
The Doctrine of Restitution is a legal principle which ensures that no one should be unjustly enriched at the expense of another.
It is based on equity and fairness.
If a person receives or retains a benefit unfairly, they are required to return it or compensate the provider.
In simple words:
“No one should profit at another’s expense without giving compensation.”
2. Legal Basis in India
The principle is embedded in the Indian Contract Act, 1872, especially under:
Section 70 – Obligation of person who has received benefit unlawfully or by mistake to make restitution.
Section 72 – Obligation to restore or make compensation when a person is forced to act without consent.
Section 70 states:
“Where a person lawfully does something for another person, or delivers something to him, not intending to do so gratuitously, the other person is bound to compensate him.”
3. Essential Features
Benefit received: The defendant must have received some benefit.
Lawful act: The act must be lawful (not illegal or immoral).
Expectation of compensation: The person performing the act did not intend to do it gratuitously.
Unjust enrichment: Retaining the benefit without paying would be unjust.
4. Examples
A delivers goods to B by mistake; B must pay for them.
A builds a wall on B’s land mistakenly, thinking it’s his own; B must compensate A if he accepts the benefit.
Work done for another without a contract, but with expectation of payment.
5. Case Laws
Chinnaya vs Ramayya (1882) 7 Mad 98
Contractor partially performed construction. Payment was allowed on the principle of restitution/quantum meruit.
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 (Australia)
Even without a formal contract, a person who performed work at another’s request could claim compensation under restitution.
Hind Construction vs State of Kerala (AIR 1980 Ker 45)
Court awarded payment for work done even when contract was terminated unjustly, following the principle of restitution.
6. Difference Between Restitution and Quantum Meruit
| Feature | Doctrine of Restitution | Quantum Meruit |
|---|---|---|
| Basis | Prevention of unjust enrichment | Payment for work done |
| Contract | Not necessary | Usually arises when contract exists but is partial/unenforceable |
| Purpose | Restore benefit to rightful owner | Fair compensation for services |
| Scope | Broader – includes mistake, coercion, or lawful act | Narrower – primarily related to work or services |
7. Summary
The Doctrine of Restitution is about fairness and equity, ensuring that:
“A person who receives a benefit at the expense of another must compensate them if it would be unjust not to do so.”
It is closely related to Quantum Meruit but wider in scope, as it can apply even when no contract exists and covers any unjust enrichment.
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