Restitution barred for void mining lease where illegality was apparent and no mistake or coercion was shown.

Section 65 of the Indian Contract Act, 1872 does not provide restitution where a mining lease is void ab initio for contravening the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949. Because the lessee lacked the required certificate of approval and the lease included a prohibited premium, the arrangement was unlawful from inception. Sections 70 and 72 also offered no relief, as the payment was neither lawful nor shown to have been made under mistake or coercion. The party seeking refund was engaged in mining business and had legal advice, so it could not claim ignorance of the illegality.

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Issues: Whether the appellant was entitled to recover the amount paid under the mining lease under Section 65 of the Indian Contract Act, 1872, or alternatively under Sections 70 or 72 of that Act, when the lease was contrary to the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949.

Analysis: Section 65 applies where an agreement is discovered to be void or where a contract becomes void. It does not apply where the agreement was void from the outset and both parties knew, or must be taken to have known, that the arrangement was unlawful at the time it was entered into. Here, the mining lease was entered into in breach of the statutory regime: the lessee had no certificate of approval, and the lease contained a premium prohibited by the Rules. The agreement was therefore void ab initio. The appellant was engaged in mining business and had legal advice, so it could not claim ignorance of the illegality. Sections 70 and 72 also did not assist because the payment was neither lawful nor made under mistake or coercion.

Conclusion: The appellant was not entitled to restitution under Section 65, nor relief under Sections 70 or 72.

Final Conclusion: The statutory illegality of the lease defeated the claim for refund, and the appeal failed.

Ratio Decidendi: Section 65 of the Indian Contract Act, 1872 does not permit restitution where the agreement was illegal and void from inception and the party seeking relief was aware, or must be taken to have been aware, of the illegality when entering into it.

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