Doctrine of Unjust Enrichment - Indian Laws - General

Doctrine of Unjust Enrichment - Unjust enrichment has been defined as: - A benefit obtained from another, not intended as a gift and not legally justifiable, for which the beneficiary must make restitution or recompense. See Black s Law Dictionary, Eighth Edition (Bryan A. Garner) at page 1573. A claim for unjust enrichment arises where there has been an 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. `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 of a person occurs when he has and retains money or benefits which in justice and equity belong to another. Unjust enrichment is 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 defendant may be liable even when the defendant retaining the benefit is not a wrongdoer and even though he may have received [it] honestly in the first instance. (Schock v. Nash, 732 A.2d 217, 232-33 (Delaware. 1999). USA) Unjust enrichment occurs when the defendant wrongfully secures a benefit or passively receives a benefit which would be unconscionable to retain. The terms `unjust enrichment and `restitution are like the two shades of green - one leaning towards yellow and the other towards blue. With restitution, so long as the deprivation of the other has not been fully compensated for, injustice to that extent remains. Which label is appropriate under which circumstances would depend on the facts of the particular case before the court. The courts have wide powers to grant restitution, and more so where it relates to misuse or non-compliance with court orders. INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION VERSUS UNION OF INDIA OTHERS- 2011 (7) TMI 1109 - SUPREME COURT In Sahakari Khand Udyog Mandal Ltd. v. Commissioner of Central Excise Customs [ 2005 (3) TMI 116 - SUPREME COURT], 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. xxx xxx xxx ........................ it is clear that the doctrine of unjust enrichment is based on equity and has been accepted and applied in several cases. ... The doctrine of unjust enrichment is a just and salutory doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. State represents the people of the country. No one can speak of the people being unjustly enriched. MAFATLAL INDUSTRIES LTD. Versus UNION OF INDIA - 1996 (12) TMI 50 - Supreme Court 118. The Law of Restitution is founded upon the principle of unjust enrichment . As stated by the learned authors, Lord Goff of Chieveley and Gareth Jones in the book The Law of Restitution (3rd Edn.) 1986, It presupposes three things : first, that the defendant has been enriched by the receipt of a benefit; secondly, that he has been so enriched at the plaintiff s expense; and thirdly, that it would be unjust to allow him to retain the benefit. These three subordinate principles are closely interrelated. (page 16). [See also Cheshire Fifoot Furmston s Law of Contract (12th Edn.) 1991, page 649.]