Hello all,

 

This is slightly belated, perhaps; but I only recently came across a rather interesting Indian judgment M/s Nagpur Golden Transport Co. v. M/s Nath Traders, Civil Appeal 3546/2006 - judgment dated 7December 2011.

 

This facts were that a consignor entered into a contract with a carrier (Nagpur Golden Transport).Under the arrangement between the parties, the consignee paid to the consignor the price of the goods (Rs. 3,61,000). As a result of an accident involving the vehicle in which the carrier was carrying these goods, the goods were damaged. Consignees refused to take delivery. The carrier hence returned the goods to the consignor. 

 

The local Consumer Court (which I understand is a special forum created by statute in India) directed the carrier (the claim in the consumer court was against the carrier for negligence and not the consignor) to pay a sum of Rs. 3,61,000 to the consignee. The carrier appealed to the Supreme Court. The carrier claimed that the consignor was unjustly enriched as it had received both, the returned goods, as well as the consideration of Rs. 3,61,000/- from the consignee. The Supreme Court held that the consignee was liable to hand over the goods to the (negligent) carrier, or to pay the realisable value of those goods to the carrier.

 

The Supreme Court quoted Fibrosa, and then held, "If the damaged monoblock pumps are not returned by respondent No.3 to the appellant or if the value of the damaged monoblock pumps realized by respondent No.3 are not paid to the appellant, respondent No.3 would stand unjustly enriched."

 

What is the unjust factor here? Surely the goods were not returned by the carrier to the consignee on the understanding that if it were subsequently found liable in negligence, it would not have had to pay damages/it would be entitled to return of the goods? (At least, there is no finding to that effect whatsoever). The Court does not even purport to go into failure of consideration, mistake etc. 

 

It is singularly striking how little discussion the Supreme Court judgment contains: the text of the judgment is available here: http://www.indiankanoon.org/doc/1836550279/

Interestingly, my attention was drawn by a colleague to the decision of the Indian Supreme Court in Mahabir Kishore v. State of Madhya Pradesh (1989), where the Sup Ct.  took the view:

"The doctrine of 'unjust enrichment' is that in certain situation it would be 'unjust' to allow the defendant to retain a benefit at the plaintiff's expense. The relatively modern principle of Restitution is of the nature of quasi contract. But the English law has not yet recognised any generalised right to restitution in every case of unjust enrichment. As Lord Diplock has said, 'there is no general doctrine of "unjust enrichment" recognised in English law. What it does is to provide specific remedies in particular cases of what might be classed as unjust enrichment in a legal system i.e. based upon the civil law'..." 

Subsequently, in Sahakari Khand Udyog v. Commissioner of Central Excise, (2005) 181 ELT 328 (SC), the Supreme Court again took the view:

"Stated simply, `Unjust enrichment' means retention of a benefit by a person that is unjust or inequitable. `Unjust enrichment' occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. The doctrine of `unjust enrichment', therefore, is that no person can be allowed to enrich inequitably at the expense of another. A right of recovery under the doctrine of `unjust enrichment' arises where retention of a benefit is considered contrary to justice or against equity. The juristic basis of the obligation is not founded upon any contract or tort but upon a third category of law, namely, quasi-contract or the doctrine of restitution..."

I was hence curious as to whether Indian law still is premised on a "quasi-contract" theory, what Courts mean when they say "contrary to justice", whether there is any principled basis at all for this area of law in India yet?

Thanks,

Kalan J. R. 

 

Thank you,

Kalan Jon R.

 

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