Restitution for non-gratuitous payment defeats absence of privity when a recipient retains the benefit.

Money received in connection with a proposed property transaction was held recoverable on restitutionary principles even without direct privity of contract. The recipient could not retain the benefit merely by denying a contractual link once the payment was shown to be non-gratuitous and connected to an authorised negotiation for sale. The analysis relied on unjust enrichment and the statutory obligations reflected in Sections 70 and 72 of the Indian Contract Act, 1872, which require compensation for non-gratuitous benefit and repayment of money received by mistake or under coercion. The defence of absence of privity therefore failed, and repayment was required.

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Issues: Whether the plaintiff was entitled to restitution of the amount paid to the first defendant despite the absence of privity of contract, where the first defendant had received the money in connection with a proposed sale and retained the benefit.

Analysis: The amount paid by the plaintiff was not a gratuitous payment. The first defendant had received the money in connection with the proposed purchase of the ground floor of his property, and the payment was made on the basis of the authorisation given to the second defendant to negotiate the sale. Once the first defendant accepted the benefit, he could not resist repayment merely by pleading absence of direct contractual privity. The claim attracted the doctrine of restitution and unjust enrichment. Sections 70 and 72 of the Indian Contract Act, 1872 embody the obligation to compensate for non-gratuitous benefit enjoyed and to repay money received by mistake or under coercion. The Court also noted that the trial court could have compared signatures under Section 73 of the Indian Evidence Act, 1872 and taken appropriate steps at an early stage under Order X of the Code of Civil Procedure, 1908.

Conclusion: The plaintiff was entitled to recover the amount from the first defendant on the basis of restitution, and the defence of want of privity of contract failed.

Ratio Decidendi: Where money is received in connection with a transaction that is not gratuitous and the recipient enjoys the benefit, repayment can be ordered on principles of restitution and unjust enrichment even in the absence of privity of contract.

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