Section 69 of The Indian Contract Act, 1872
A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other. Illustration B holds land in Bengal, on a lease granted by A, the zamindar. The revenue payable by A to the Government being in arrear, his land is advertised for sale by the Government. Under the revenue law, the consequence of such sale will be the annulment of B's lease. B, to prevent the sale and the consequent annulment of his own lease, pays to the Government the sum due from A. A is bound to make good to B the amount so paid.
Summary
- This provision allows a person who pays money on behalf of another to get reimbursed if they had a personal interest in making that payment.
- The other party must be legally bound to pay that money.
- The person paying must not be a mere volunteer, they must have a genuine interest that is protected by making the payment.
- It covers situations where a person makes a payment to protect their own interest, such as a leaseholder paying the landowner's government revenue to prevent the lease from being annulled.
Practical examples
FAQ
1. What is the main purpose of Section 69 of the Indian Contract Act, 1872?
The main purpose of Section 69 of the Indian Contract Act, 1872, is to ensure that a person who pays money to protect their own interest, which another person was legally bound to pay, gets reimbursed by that other person.
2. Does a volunteer have a right to recover money under Section 69 of the Indian Contract Act, 1872?
No, under Section 69 of the Indian Contract Act, 1872, a person who has no interest in the payment and pays it voluntarily cannot claim reimbursement, since they must have an interest in the payment.
3. Does Section 69 of the Indian Contract Act, 1872, apply if the other person was not legally bound to pay?
No, under Section 69 of the Indian Contract Act, 1872, the reimbursement is only valid if the other person was bound by law to pay the money that was paid on their behalf.
Test yourself
Q1.Under Section 69 of the Indian Contract Act, 1872, what is a necessary condition for a person to claim reimbursement after paying someone else's debt?
Q2.Under Section 69 of the Indian Contract Act, 1872, who is liable to reimburse the person who made the payment?
Q3.Under Section 69 of the Indian Contract Act, 1872, what happens if a person pays another person's debt purely out of charity, without any personal interest?
Q4.Under Section 69 and Section 70 of the Indian Contract Act, 1872, what is a key difference in why a person must compensate or reimburse another?