The Doctrine of Unjust Enrichment prevents one party from unfairly benefiting at another’s expense, ensuring restitution in contractual relationships. In Indian law, this principle is primarily codified in Sections 68 to 72 of the Indian Contract Act, 1872.

MEANING AND DEFINITION

Unjust enrichment occurs when one party gains a benefit unjustly at another’s expense, without legal justification. Restitution aims to restore the aggrieved party to their original position before the unjust enrichment occurred. This principle ensures that no one should profit unfairly at another’s detriment.

HISTORICAL BACKGROUND

The concept of unjust enrichment has roots in English common law, particularly in the 18th-century case of Moses v. Macferlan (1760) 2 Burr 1005, where Lord Mansfield emphasized that no one should unjustly enrich themselves at another’s expense. In India, the principle was recognized in the 1860s and later codified in the Indian Contract Act, 1872. 

LEGAL PROVISIONS IN THE INDIAN CONTRACT ACT, 1872

Sections 68 to 72 of the Act address situations resembling unjust enrichment:

1. Section 68: Deals with the claim for necessaries supplied to persons incapable of contracting, such as minors or individuals of unsound mind.

2. Section 69: Pertains to reimbursement of money paid by an interested person on behalf of another who is legally bound to pay.

3. Section 70: Covers obligations of a person enjoying the benefit of a non-gratuitous act.

4. Section 71: Addresses the responsibility of a finder of goods.

5. Section 72: Relates to liability of a person receiving benefits by mistake or under coercion.

ESSENTIALS OF UNJUST ENRICHMENT

For a claim of unjust enrichment, the following elements must be established:

• Enrichment: The defendant has been enriched by receiving a benefit.
• At the Plaintiff’s Expense: The enrichment occurred at the expense of the plaintiff.
• Unjust: The enrichment is unjust, lacking a legal basis.

DEFENSES TO UNJUST ENRICHMENT

Certain defenses can be invoked against claims of unjust enrichment:

• Contractual Agreement: If a valid contract exists governing the transaction, claims of unjust enrichment may not stand.
• Voluntary Conferral: If the benefit was conferred voluntarily without expectation of payment, restitution may not be warranted.
• Change of Position: If the defendant has changed their position in reliance on the benefit received, making restitution inequitable.

KEY CASE LAWS

1. Mohori Bibee v. Dharmodas Ghose (1903) 30 Cal 539 (PC)

   • Facts: A minor mortgaged his property to secure a loan.
   • Issue: Whether the contract was void due to minority and if restitution applies.
   • Held: The Privy Council held that agreements with minors are void, and Section 65 of the Indian Contract Act does not apply to void agreements with minors.

2. Satyabrata Ghose v. Mugneeram Bangur & Co. (1954) SCR 310

   • Facts: A contract for land development became impossible due to government orders.
   • Issue: Whether the doctrine of frustration applies, leading to restitution.
   • Held: The Supreme Court held that the contract was frustrated, and any advance paid should be refunded to prevent unjust enrichment.

3. Indian Council for Enviro-Legal Action v. Union of India (2011) 8 SCC 161

   • Facts: Industries caused environmental damage without proper remediation.
   • Issue: Whether the polluters were liable for unjust enrichment.
   • Held: The Supreme Court held that the polluters were liable to compensate for the environmental damage caused, preventing unjust enrichment.

MAXIMS AND PRINCIPLES

• “Nemo debet locupletari ex aliena jactura”: No one should be enriched by another’s loss.
• “Restitutio in integrum”: Restoration to the original position.

INTERNATIONAL PERSPECTIVE

The principle of unjust enrichment is recognized globally, with variations in its application. In English law, it has evolved through common law, while in civil law jurisdictions, it is often codified. The underlying concept remains the prevention of unfair gain at another’s expense.

CONCLUSION

The Doctrine of Unjust Enrichment serves as a cornerstone in contract law, ensuring fairness and equity. By mandating restitution, it prevents parties from retaining benefits unjustly, thereby upholding the integrity of contractual relationships.

REFERENCES

1. Indian Contract Act, 1872.
2. Mohori Bibee v. Dharmodas Ghose (1903) 30 Cal 539 (PC).
3. Satyabrata Ghose v. Mugneeram Bangur & Co. (1954) SCR 310.
4. Indian Council for Enviro-Legal Action v. Union of India (2011) 8 SCC 161.