Team Code: R-3

BEFORE THE HONOURABLE SUPREME COURT OF INDIA

Under Article 133 of the Constitution of India

USNL

(Appellant)

ASHISH COMPUTERZZ

(Respondent)

Written Submission on Behalf of the Respondent

(Counsels Appearing on Behalf of the Respondent)

 TABLE OF CONTENTS

Table of Contents ....................................................................................................................... 2

List of Abbreviations ................................................................................................................. 3

Index of Authorities ................................................................................................................... 4

Statement of Jurisdiction............................................................................................................ 6

Statement of Facts ...................................................................................................................... 7

Arguments Presented ................................................................................................................. 9

Summary of Arguments ........................................................................................................... 10

Arguments Advanced............................................................................................................... 12

I. THAT NO BREACH OF THE CONTRACT BETWEEN ASHISH COMPUTERZZ

LTD. AND USNL HAS TAKEN PLACE. ......................................................................... 12

II. THAT THE AGREEMENT BETWEEN USNL AND SURESH COMPUTERS IS

VOID AB INITIO. ............................................................................................................... 17

III. THAT THERE IS UNJUST ENRICHMENT ON THE PART OF APPELLANT. . 20

PRAYER .................................................................................................................................. 23

2
 LIST OF ABBREVIATIONS

AC Appeals Cases

AIR All India Reporter

Del Delhi

ER English Reports

ILR Indian Law Reports

Ltd Limited

Mad Madras

Para Paragraph

Punj Punjab

QBD Queen’s Bench Division

SCC Supreme Court Cases

sec Section

3
 INDEX OF AUTHORITIES

Cases

Indian Cases

Akhil Bhartiya Upbhokta Congress v. State of Madhya Pradesh ............................................ 19

Dhruv Dev Chand v Harmohinder Singh AIR 1968 SC 1024 ................................................. 13
Food Corporation of India v Kamdhenu Cattle Feed Industries AIR1993 SC 1601 ............. 19
Indian Council for Enviro-Legal Action v Union of India, (2011) 12 SCC 766 ..................... 21
Nagar Nigam, Meerut v Al Fatheem Meat Exports Pvt. Ltd. ................................................. 18
Nex Tenders (India) Private Limited v. Ministry of Commerce and industry and Ors. .......... 19
Pameshswari Das Mehta v Ram Chand Om Prakash ............................................................. 15
Ramana Dayaram Shetty v International Airport Authority of India ...................................... 18
Sahakari Khand Udyog Mandal Ltd v CCE & Customs AIR 2005 SC 1897 .................... 20, 21
Satyabrata Ghosh v Mugneeram Bangur & Co. ...................................................................... 13
State of West Bengal v. B.K Mondal ........................................................................................ 21
V.L. Narasu v P.S.V. Iyer ......................................................................................................... 15

English Cases

Cricklewood Property & Investment Trust Ltd. v Leighton’s Investment Trust Ltd................ 13
Davis Contractors Ltd v Fareham U.D.C................................................................................. 14
Denny, Mott & Dickson Ltd v James B. Fraser & Co Ltd 1944 AC 265 ................................ 16
Fibrosa v. Fairbairn ................................................................................................................ 20
Howell v Coupland .................................................................................................................. 14
Taylor v Caldwell..................................................................................................................... 14

Statutes

Article 14 of the Constitution of India, 1950 ........................................................................... 18

Carriage by Road Act, 2007..................................................................................................... 16
Indian Contract Act, 1872 .................................................................................................. 13, 16

Articles

A.L. Corbin, ‘Recent Developments in Contracts’ [1937] 50 Harv L Rev 549 ...................... 14

4
Books

Chitty on Contracts (29th ed, Sweet & Maxwell 2014)............................................................ 12

5
 STATEMENT OF JURISDICTION

The Hon’ble Supreme Court of India may exercise its Appellate Jurisdiction under Article
133 of The Constitution of India.

The present memorandum sets forth the facts, contentions and arguments in the present case.

6
 STATEMENT OF FACTS

1. USNL is a PSU providing telephone, mobile and internet services in state of Uttar
Pradesh. USNL invited e-tender for supply of 500 computers the configuration of
which were i5 processors, 20”Monitors, 500 SATA and 4 GB Ram, Windows 8.1
Pro OS.
2. On this e-tender the Ashish Computerzz Pvt. Ltd. filled the tender proposal from
Hyderabad and deposited Earnest Money of 10 Lacs in the account of USNL via
RTGS mode. On the relevant day the tender was evaluated by the price committee
and technical committee and both found it suitable.
3. The supplier has to supply computers in five consignments each of 100 from the
Hyderabad City. He successfully sent 4 consignments claimed money for the same
which was lingered on the condition of final supply of consignment.
4. The consignment was being shipped by a reputed shipper DLF and when the last
and final consignment was being shipped it got damaged due to heavy rains and
the trailer carrying it met with an accident and the computers got damaged.
5. The computers when reached the destinations given by the USNL at Faizabad it
was seen that they were badly damaged. Hence the Faizabad branch office of
USNL denied receiving the consignment.
6. The DLF left the computers in the yards of Faizabad USNL office for which
Faizabad office had to arrange the ground staff to take care of it. The USNL
stopped the payment of Ashish Computerzz.
7. Ashish computerzz filed a case for recovery of money but the USNL contended
that there has been breach of contract hence the Ashish computerzz must pay Rs.
4,61,131/- toward the price of not supplied computers and damage of Rs. 14,000/-
as well as cost of Rs. 5,000/- and interest @ 18% per annum on the amount
claimed by them.
8. It was also contended by the appellant that 100 computers had no value and same
have been kept in the yard of USNL under the watch and ward of extra staff
engaged by the USNL and that due to delay the computers have become useless
and have no value at all as Windows 10 has been launched with an i7 processors.

7
9. In the court USNL contended that DLF must have shipped the consignment under
CFI (Cost, Fright Insurance) agreement hence all damages to computers must be
borne by DLF. In the meanwhile USNL entered into agreement with Suresh
Computers a Lucknow based concern to supply 100 computers on the term and
condition as quoted in tender but it was not done through e-tender rather it was a
customised private contact between USNL and Suresh computers.
10. The Ashish computerzz contended that USNL being a PSU cannot resort to
ordinary sale process in comparison to e-tendering and e-auction in violation of
CVC guidelines. The PSU is also dispending a public service and service is a
natural resource and common property of people of India hence the computers
which will make these services available are sine quo non for the general public.
Hence the whole process of purchase is void ab inito.
11. Ashish computerzz also contended on the basis of quantum meriut and unjust
enrichment by beholding damaged computers in their yard in the name of caring
charges.
12. The USNL contented that due to breach of a fundamental nature they have made a
breach hence the whole contract can be repudiated and whatever claim they have
made is totally logical and sound and there was no commercial hardship in market
and there has been sea change in technologies since then.

8
 ARGUMENTS PRESENTED

1. THAT NO BREACH OF THE CONTRACT BETWEEN ASHISH

COMPUTERZZ LTD. AND USNL HAS TAKEN PLACE.

2. THAT THE AGREEMENT BETWEEN USNL AND SURESH COMPUTERS

IS VOID AB INITIO.

3. THAT THERE IS UNJUST ENRICHMENT ON THE PART OF APPELLANT.

9
 SUMMARY OF ARGUMENTS

1. THAT NO BREACH OF THE CONTRACT BETWEEN ASHISH

COMPUTERZZ LTD. AND USNL HAS TAKEN PLACE.

The counsel of the respondents argues that there has been no breach of the contract by
respondents owing to the contract between Ashish Computerzz and DLF. It was the
responsibility of the shipper to properly provide for the goods to be shipped. Owing to the
relevant provisions of Carriage by Road Act, 2007, it was the duty of DLF and thus would be
liable for any damage of goods done by them. Moreover, the counsel argues that the case
would come under doctrine of frustration owing to the circumstances which rendered the
contract impossible. The heavy rains and accident was not comprehended by any of the party
and thus the respondents cannot be held liable for the compensation for the damaged goods.

Moreover, the appellants should fulfil their contractual obligations by payment of the
previous four shipments because all the 5 shipments of the computers are not interdependent
and thus the appellants cannot avoid the previous delivery of the goods.

2. THAT THERE IS UNJUST ENRICHMENT ON THE PART OF APPELLANT.

The counsel for respondent humbly submits that there has been unjust enrichment on the part
of the appellant. The doctrine of unjust enrichment has primarily three factors that should be
present these include: : (i) enrichment of the defendant; (ii) at the expense of a
claimant; (iii) an unjust factor and (iv) defences, such as change of position. The counsel
submits that the entire factors essential to constitute unjust enrichment are there in the present
situation. USNL kept the goods in their office yard and employed staff to keep guard. They
did not pay the amount for the 4 shipments which were done successfully.

3. THAT THE AGREEMENT BETWEEN USNL AND SURESH COMPUTERS

IS VOID AB INITIO.

The counsel humbly submits that the agreement entered into with Suresh Computers to
supply 100 computers is void ab initio since the purchase was not done through e-tender
rather it was a customised private contract between USNL and Suresh Computers. A Public

10
Sector Undertaking cannot resort to ordinary sale process in comparison to e-tendering and e-
auction in violation of Article 14 and CVC guidelines issued to that effect. The Public Sector
Undertaking is dispensing a public service and service is a natural resource and common
property of people of India hence the computers which will make these services available are
sine quo non for general public. Hence, the whole process is void from its very outset.

11
 ARGUMENTS ADVANCED

I. THAT NO BREACH OF THE CONTRACT BETWEEN ASHISH

COMPUTERZZ LTD. AND USNL HAS TAKEN PLACE.

The counsel for respondents argues that in the present case, there was no breach of contract
by Ashish Computerzz Ltd. The contract between the two parties was for the sale-purchase of
computers of certain specifications. Ashish Computerzz contracted with DLF, a reputed
shipper to supply the goods to USNL. While on the way, due to heavy rains, there was an
accident due to which the trailer met with an accident and the computers got damaged.

The respondents argue that there has been no breach of contract by them on two grounds- (i)
on the principle of frustration of contract (ii) on the grounds that DLF being bailee should be
responsible for the same and not the bailor, respondents.

USNL had not paid the respondents for the earlier shipments of 400 computers. The
appellants were under contractual obligation to pay for the same. Moreover, the appellants
cannot ask for the total price of the not supplied computers on the ground that the contract
has been frustrated as under Section 56 of the Indian Contract Act, 1872.

1. Doctrine of frustration:

In English law, “a contract may be discharged on the ground of frustration when something
occurs after the formation of the contract which renders it physically or commercially
impossible to fulfil the contract or transforms the obligation to perform into a radically
different obligation from thsat undertaken at the moment of the entry into the contract.”1

Frustration signifies a certain set of circumstances arising after the formation of the contract,
the occurrence of which is due to no fault of either party and which render performance of the
contract by one or both the parties physically and commercially impossible. These set of
circumstances are regarded as the release of the parties from any further obligations. Where
the entire contract performance of a contract becomes substantially impossible without any
fault on either side, the contract is prima facie dissolved by the doctrine of frustration.

1
Chitty on Contracts (29th ed, Sweet & Maxwell 2014) 23-001.

12
Section 56 of the Indian Contract Act, 1872 incorporates the doctrine of frustration which
relates the performance of the contracts and it purports to deal with one class of
circumstances under which performance of a contract is excused on the ground of the
contract becoming void.

Section 56 of the Indian Contract Act states that:

Agreement to do impossible act.- An agreement to do an act impossible in itself is

void.

Contract to do act afterwards becoming impossible or unlawful.- A contract to do an

act which, after the contract is made, becomes impossible, or, by reason of some event
which the promisor could not prevent, unlawful, becomes void when the act becomes
impossible or unlawful.

The law excuses further performance under the doctrine of frustration, where the contract is
silent as to the position of the parties in the event of performance becoming literally
impossible or only possible in a very different way from that originally contemplated.

The doctrine of frustration comes into play in two types of situation, first where the
performance is physically cut-off and second, where the object has failed. The Supreme
Court of India has held that Section 56 will apply to both kinds of frustration. Referring to the
section, B.K. Mukherjee J of the Supreme Court observed in Satyabrata Ghosh v
Mugneeram Bangur & Co.2 as follows:

“This much is clear that the word ‘impossible’ has not been used here in the sense of
physical or literal impossibility. The performance of an act may not be literally
impossible but it may be impractical and useless from the point of view of the object
and purpose which the parties had in view; and if an untoward event or change of
circumstances totally upsets the very foundation upon which the parties rested their
bargain, it can be very well said that the promisor finds it impossible to do the act
which he promised to do.”3

Explaining the concept “frustration of the contract” in Cricklewood Property & Investment
Trust Ltd. v Leighton’s Investment Trust Ltd.4, it was said that it means “occurrence of an

2
AIR 1954 SC 44.
3
Affirmed in Dhruv Dev Chand v Harmohinder Singh AIR 1968 SC 1024.
4
[1945] AC 221.

13
intervening event or change of circumstances so fundamental as to be regarded by the law
both as striking at the root of the agreement, and as entirely beyond what was contemplated
by the parties when they enter into the contract.”

Test of frustration:

That test was first formulated by the House of Lords in Davis Contractors Ltd v Fareham
U.D.C.5 As Lord Radcliffe put it:

“Frustration occurs whenever the law recognises that without default of either party a
contractual obligation has become incapable of being performed because the circumstances
in which performance is called for would render it a thing radically different from that which
was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to
do…. that special importance is necessarily attached to the occurrence of any unexpected
event that, as it were, changes the face of things. But, even so, it is not hardship or
inconvenience or material loss itself which calls the principle of frustration into play. There
must be as well such a change in the significance of the obligation that the thing undertaken
would, if performed, be a different thing from that contracted for.”6

The principle of frustration of contract or of impossibility of performance is applicable to a

great variety of contracts. Among the various grounds of application of the doctrine, the
specific grounds applicable in this case would be put forth by the counsel.

1.1. There has been destruction of the subject-matter:

The doctrine of impossibility applies with full force "where the actual and specific subject-
matter of the contract has ceased to exist".7 “Taylor v Caldwell8 is the best example of this
class.” There, a promise to let out a music hall was held to have frustrated on the destruction
of the hall. Another illustration is Howell v Coupland,9 where the defendant contracted to sell
a specified quantity of potatoes to be grown on his farm, but failed to supply them as the crop
was destroyed by a disease.

5
[1956] AC 696.
6
ibid.
7
A.L. Corbin, ‘Recent Developments in Contracts’ [1937] 50 Harv L Rev 549.
8
122 ER 309.
9
[1876] 1 QBD 258.

14
In a leading case under Section 56 of the Contract Act of Madras High Court, V.L. Narasu v
P.S.V. Iyer,10 where a contract to exhibit a film in a cinema hall was held to have become
impossible of performance when on account of heavy rains the rear wall of the hall collapsed
killing three persons and its license was cancelled until the building was reconstructed to the
satisfaction of the chief engineer. The owner was under no liability to reconstruct the hall and
even if he did reconstruct and it took him some time, by that time the film would have lost its
appeal.

In the present case, due to heavy rains, the trucker carrying the shipment met with an accident
and the computers were destroyed. This accident was not within the contemplation of any of
the parties and none of the parties could be held liable for the same. The respondents cannot
be held to be liable for the damage of the goods for the event which was not within their
reach. Thus doctrine of frustration would apply in this case. Moreover, for the sake of the
argument if the appellants argue that it was the respondent’s duty to provide the computers
and thus should provide for new shipment, the same cannot be possible because of the new
technology computers in the market. Moreover, reasonable care was taken by the respondents
in the case and hence should not be held liable for the damage to the shipment.

1.2. There has been change of the circumstances.

A contract will frustrate “where circumstances arise which make the performance of the
contract impossible in the manner and the time contemplated.”

Kapur J of Punjab High Court in Pameshswari Das Mehta v Ram Chand Om Prakash11
explained the principle thus: “It is clear that if there is entirely unanticipated change of
circumstances the question will have to be considered whether this change of circumstances
has affected the performance of the contract to such an extent as to make it virtually
impossible or even extremely difficult. If that be the case, the change of circumstances not
having been brought about the fault of either party, the courts will not enforce the contract.”

Effects of frustration:

“It is well settled that if and when there is frustration the dissolution of the contract occurs
automatically. It does not depend, as does rescission of a contract, on the ground of

10
AIR 1953 Mad 300.
11
AIR 1952 Punj 34, 38.

15
repudiation or breach, or on the choice or election of either party. It depends on the effect of
what has actually happened on the possibility of performing the contract.12

The frustration is not self-induced and it operates automatically in this case.

In case of frustration:

1. The contract comes into automatically. It is not required that the either party takes
steps to rescind the same.
2. The effect of frustration at common law is to release the parties from any further
performance of the contract.
3. Accrued obligations remain: legal rights or obligations already accrues and due,
before the frustrating event occurred, are left undisturbed.

On the accounts of such effects, the contract of the 5th shipment of the computers stands
frustrated but the earlier shipments contract remains and thus the appellants were bound to
fulfil their contractual obligations of the earlier shipments.

2. Ashish Computerzz Ltd is not liable for the damages asked by USNL.

Even for the sake of the argument, if the counsel argues that the doctrine of frustration is not
applicable in the present case, respondents should not be liable for the damages incurred
during the shipment of the goods by DLF.

Section 10 of Carriage by Road Act, 2007 clearly states that:

“The liability of the common carrier for loss of, or damage to any consignment, shall
be limited to such amount as may be prescribed having regard to the value, freight
and nature of goods, documents or articles of the consignment,' unless the consignor
or any person duly authorised in that behalf have expressly undertaken to pay higher
risk rate fixed by the common carrier under section 11.

Provided further that the common carrier shall not be liable if such carrier proves
that such loss of, or damage to, the consignment or delay in delivery thereof, had not
taken place due to his fault or neglect or that of his servants or agents thereof.”

Section 73 of Indian Contract Act states that:

12
Denny, Mott & Dickson Ltd v James B. Fraser & Co Ltd 1944 AC 265.

16
 “When a contract has been broken, the party who suffers by such breach is entitled to
receive, from the party who has broken the contract, compensation for any loss or
damage caused to him thereby, which naturally arose in the usual course of things
from such breach, or which the parties knew, when they made the contract, to be
likely to result from the breach of it.”

By the interpretation of the above sections, it was not reasonable of USNL to demand the
sum of Rs.461131 towards price of non-supplied computers, damages of Rs.70000, loss of
profit Rs.14000 as well as interest of 18% p.a. on the amount claimed by them. USNL can
only claim for damages which it actually incurred but has actually not been there.

The next interpretation from the sections was that the common carrier is to be held liable for
the damages incurred to the goods while their shipment. It is the duty of DLF to prove that
they had taken reasonable care while the shipment was being transferred. Thus, it is the
responsibility of DLF to properly dispose of the goods.

The counsel submits before the court on the grounds of arguments put forward that the
respondents cannot be held liable for the sum of money demanded by the USNL and cannot
be held liable for the damage of the goods.

II. THAT THE AGREEMENT BETWEEN USNL AND SURESH COMPUTERS

IS VOID AB INITIO.

The counsel humbly submits that the agreement entered into with Suresh Computers to
supply 100 computers is void ab initio since the purchase was not done through e-tender
rather it was a customised private contract between USNL and Suresh Computers. A Public
Sector Undertaking cannot resort to ordinary sale process in comparison to e-tendering and e-
auction in violation of Article 14 and CVC guidelines issued to that effect. The Public Sector
Undertaking is dispensing a public service and service is a natural resource and common
property of people of India hence the computers which will make these services available are
sine quo non for general public. Hence, the whole process is void from its very outset.

17
3.1. Private negotiation amounts to breach of Article 14

In the case of Nagar Nigam, Meerut v Al Fatheem Meat Exports Pvt. Ltd.13 the Apex Court
has been pleased to observe that:

“The law is well-settled that contracts by the State, its corporations, instrumentalities and
agencies must be normally granted through public auction/public tender by inviting tenders
from eligible persons and the notification of the public-auction or inviting tenders should be
advertised in well-known dailies having wide circulation in the locality with all relevant
details such as date, time and place of auction, subject-matter of auction, technical
specifications, estimated cost, earnest money Deposit, etc. The award of Government
contracts through public-auction/public tender is to ensure transparency in the public
procurement, to maximise economy and efficiency in Government procurement, to promote
healthy competition among the tenderers, to provide for fair and equitable treatment of all
tenderers, and to eliminate irregularities, interference and corrupt practices by the authorities
concerned. This is required by Article 14 of the Constitution of India, 1950. However, in rare
and exceptional cases, for instance during natural calamities and emergencies declared by the
Government; where the procurement is possible from a single source only; where the supplier
or contractor has exclusive rights in respect of the goods or services and no reasonable
alternative or substitute exists; where the auction was held on several dates but there were no
bidders or the bids offered were too low, etc., this normal rule may be departed from and such
contracts may be awarded through 'private negotiations’.”

Hon’ble Supreme Court expressed a similar opinion in the case of Ramana Dayaram
Shetty v International Airport Authority of India14 by pointing out that where the
Government is dealing with the public, whether by way of giving jobs or entering into
contracts or issuing quotas or licences or granting other forms of largess, the Government
cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it
pleases, but its action must be in conformity with standard or norm which is not arbitrary or
irrelevant.

The State cannot act in a whimsical manner while awarding contracts. USNL cannot enter
into a private negotiation with Suresh Computers. The decision to award a contract must be
founded on sound, transparent, discernible and a well-defined policy, and should be taken in

13
(2006) 13 SCC 382.
14
AIR 1979 SC 1628.

18
a fair and equitable manner and the same was emphasized by the Supreme Court in Akhil
Bhartiya Upbhokta Congress v. State of Madhya Pradesh.15

In contractual sphere as in all other State actions, the State and all its instrumentalities have to
conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet.
There is no unfettered discretion in public law. A public authority possesses powers only to
use them for public good. This imposes the duty to act fairly and to adopt a procedure which
is 'fairplay in action'.16 The awarding of contract to Suresh Computers does not reflect a
fairplay of action on the part of the State and speaks of procedural lapses.

A similar stand was taken by the Court in Nex Tenders (India) Private Limited v. Ministry
of Commerce and industry and Ors.17 whereby the Court allowed a petition seeking
quashing of a contract entered into irregularly and reiterated that all contracts by Government
or by an instrumentality of State should be granted only by public auction or by inviting
tenders, after advertising same in well-known newspapers having wide circulation, so that all
eligible persons will have an opportunity to bid in bid and there is total transparency.

Hence, the private negotiation is constitutionally invalid.

3.2 Award of contract in violation of CVC guidelines issued to the effect of guaranteeing
right to equality

As per CVC award of private contracts on nomination basis, would amount to a breach of
Article 14 of the Constitution guaranteeing right to equality, which implies right to equality
to all interested parties and hence it has made Tendering mandatory for all Government
Organizations. In this regard reference must be made order no. dated 5th July, 2007.

Hence, the counsel argues that the contract of USNL with Suresh Computers Ltd regarding
the sale of computers was void ab initio.

15
(2011) 5 SCC 29.
16
Food Corporation of India v Kamdhenu Cattle Feed Industries AIR1993 SC 1601.
17
ILR 1978 Del 120.

19
III. THAT THERE IS UNJUST ENRICHMENT ON THE PART OF APPELLANT.

The counsel for the respondent contends that there was unjust enrichment done by USNL
against the respondent Ashish Computerzz.

In the leading case of Fibrosa v. Fairbairn18, Lord Wright stated the principle thus: “Any
civilised system of law is bound to provide remedies for cases of what has been called unjust
enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some
benefit derived from, another which it is against conscience that he should keep. Such
remedies in English law are generically different from remedies in contract or in tort, and are
now recognised to fall within a third category of the common law which has been called
quasi contract or restitution.”

The doctrine of unjust enrichment has primarily three factors that should be present these
include: : (i) enrichment of the defendant; (ii) at the expense of a claimant; (iii) an unjust
factor and (iv) defences, such as change of position. 19

There are to be certain unjust factors present so as to invoke this doctrine of unjust
enrichment. These unjust factors may include: (i) mistake (this is the archetypal unjust
factor); (ii) undue influence and duress and (iii) failure of consideration. In the present case at
hand it is seen that there is no consideration given to the respondent for the

“Unjust enrichment” has been defined by the court as the unjust retention of a benefit to the
loss of another, or the retention of money or property of another against the fundamental
principles of justice or equity and good conscience. A person is enriched if he has received a
benefit, and he is unjustly enriched if retention of the benefit would be unjust. Unjust
enrichment occurs when the defendant wrongfully secures a benefit or passively receives a
benefit which would be unconscionable to retain.20 Also the court has given its opinion in
various cases regarding unjust enrichment. To summarise the opinions of the court-

Unjust enrichment has been defined by the court as unjust retention of a benefit to the loss of
another, or the retention of money or property of another against the fundamental principles
18
[1943] AC 32.
19
Birks, ‘Independent causative event’ 2005.
20
Sahakari Khand Udyog Mandal Ltd v CCE & Customs AIR 2005 SC 1897.

20
of justice or equity and good conscience. A person is enriched if he has received a benefit,
and he is unjustly enriched if retention of the benefit would be unjust.
A person is enriched if he has received a benefit, and he is unjustly enriched if retention of
the benefit would be unjust21.

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.22 This doctrine is basically based on the principle of equity. Any doctrine based on
equity is mainly aimed to provide complete justice to the parties involved.
In the Indian Contract Act this doctrine has been enunciated under Section 70 which reads
that
"Where a person lawfully does anything for another person, or delivers anything to him, not
intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is
bound to make compensation to the former in respect of, or to restore, the thing so done or
delivered."

It has been very clearly held in the case State of West Bengal v. B.K Mondal23 the court held
that

It is plain that three conditions must be satisfied before this section can be invoked. The first
condition is that a person should lawfully do something for another person or deliver
something to him. The second condition is that in doing the said thing or delivering the said
thing he must not intend to act gratuitously; and the third is that the other person for whom
something is done or to whom something is delivered must enjoy the benefit thereof. When
these conditions are satisfied sec. 70 of the Indian Contract Act imposes upon the latter
person, the liability to make compensation to the former in respect of or to restore, the thing
so done or delivered.

In the present case all the three requirements are fulfilled firstly there is lawful delivery of
goods under the contract. Secondly, there is no intention to act gratuitously and thirdly the
appellant has in possession the goods. Also there is no act done by the appellant to signify

21
Indian Council for Enviro-Legal Action v Union of India, (2011) 12 SCC 766.
22
Sahakari Khand Udyog Mandal Ltd. v. CCE & Customs (2005) 3 SCC 738.
23
AIR 1962 SC 779.

21
something contrary. The fact that he employed ground staff shows that there was an intention
to possess the goods.

All that sec. 70 provides is that if the goods delivered are accepted or the work done is
voluntarily enjoyed then the liability to pay compensation for the enjoyment of the said goods
or the acceptance of the said work arises.24

The respondent contents here that the appellant is holding 100 computers in the yard even
providing a ground staff for the maintenance.25 Hence, the goods are in a way in possession
of the appellant. The respondent contends that in this case there is unjust enrichment because
the computers are still with the appellant and there is no intention as such on the part of the
appellant to repudiate the contract.

The respondent contends in the present case that Ashish computers should get money for the
supply of first four instalments. This would have happened if the appellants had not taken the
goods and hence repudiate the contract.

24
ibid (n 4).
25
Moot proposition para 8.

22
 PRAYER

In the light of arguments advanced and authorities cited, the Respondent humbly submits that
the Hon’ble Court may be pleased to adjudge and declare that:

 The suit should not be maintainable, under Article 133 of the Constitution of India,
before this Hon’ble Court.
 The agreement between USNL and Suresh Computers is void ab initio.
 Unjust enrichment on the part of Appellant.

It is, therefore, most respectfully prayed that this Hon’ble Court be please to pass such
order or orders as it may deem fit and proper under the given facts and circumstances of
the case in the interest of equity, justice and good conscience.

23