Payment by an interested person

In one minute

Sometimes a person must pay another's debt to save his own interest. Section 69 gives him a right to be paid back by the person who should have paid.

Two things must be present. The payer has a real interest in the payment, and the other person is bound by law to pay. In exams, the two conditions and the Act's illustration of the Bengal lease earn the marks. In real life, it protects a tenant, buyer or co-owner who pays a landlord's or seller's dues to stop a forced sale.

Legal provision

• Section 69: a person who is interested in the payment of money that 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 that A must pay to the Government is in arrears, and the Government advertises A's land for sale. Under the revenue law, the sale will end B's lease. To prevent the sale and the loss of his lease, B pays the Government the sum due from A. A is bound to make good to B the amount paid.

Meaning and definition

Section 69 is one of the five situations of quasi contract. The Act does not define "interested". It does not need to, because the section describes the whole claim: an interested person pays what another must pay by law, and the other reimburses him.

The reason is fairness. The payer saved the debtor from the result of his own default. If the law allowed the debtor to keep that saving for free, the debtor would be enriched at the payer's cost. This is unjust enrichment, and the law prevents it. The claim does not come from any promise by the debtor. It comes from the law.

The English forerunner of the rule is Exall v. Partridge (1799). The diagram shows the parties in the Act's own illustration.

A, the zamindarOwes revenue to the Government and has not paid.

B, the lesseeHolds a lease from A that a revenue sale would cancel.

The GovernmentAdvertises A's land for sale for the arrears.

• B pays the Government the revenue that A owed, to save his lease.
• The Government's claim against A for that revenue ends.
• A must reimburse B the amount paid (section 69).
• If B had no interest in the land and paid only out of kindness, the law would give him no right to be reimbursed.

Detailed explanation

Step 1: the payer must be interested

The payer must have a real stake in the payment. A tenant whose lease would end, a buyer whose property would be sold, or a co-owner whose share would be lost all qualify. A stranger who pays only to help does not.

The word "interested" is wide. In Govindram Gordhandas Seksaria v. State of Gondal (Privy Council, 1949) the interest was a contractual one. A buyer's interest in mills that would be sold for unpaid taxes was enough. The Calcutta High Court reached the same result for a purchaser of a tenure who paid the landlord's rent.

Step 2: another person must be bound by law to pay

The debt must be one that the other person is legally bound to pay. The duty may arise from a statute, a contract, or a decree. Revenue and rent are common examples.

The Privy Council in Seksaria treated a duty that came from a contract as a duty "bound by law". Payment of a debt that the other person did not owe in law does not count.

Step 3: the payer pays because of his interest

The section says the interested person "therefore pays it". His payment must be made to protect his interest. A payment made for some other reason, or made without any need, does not qualify. This word keeps out officious payments.

Step 4: the claim is for money

The section speaks of "payment of money". The payer recovers the sum he paid. He does not recover profit or damages, and he does not recover more than he paid.

Step 5: the claim does not need a promise

The debtor never promised to repay the payer. He may even have wished to refuse. The law gives the right anyway, because the payer discharged a duty of the debtor. This is why section 69 is a quasi contract and not a contract.

The conditions at a glance

Condition	What it means	Example
Interest in the payment	The payer will suffer a loss if the money is not paid	A lessee whose lease would end on a revenue sale
Another is bound by law	The debtor owes the money under a statute, contract or decree	The zamindar's duty to pay land revenue
Payment is made "therefore"	The payer pays to protect his interest	B pays to prevent the sale and the loss of his lease
Claim	Reimbursement of the sum paid, from the debtor	A must make good to B the amount paid

Don't confuse: interested payer, volunteer and benefit under section 70

Sections 69 and 70 both lead to payment. They start from different facts.

Point	Section 69	Section 70	A volunteer
Basis of the claim	The payer is interested and the other is bound by law to pay	The act was not meant to be gratuitous and the other enjoyed the benefit	None
What is done	Payment of money that another owed	Any lawful act or delivery	Payment out of kindness
Need for interest	Yes	No	No
Result	Reimbursement	Compensation or restoration	No claim

Common mistakes

• Forgetting the interest. A payer with no stake in the money cannot claim.
• Forgetting that the other person must be bound by law to pay. A debt that is not owed in law is outside the section.
• Treating section 69 as a contract. The debtor made no promise to repay.
• Claiming more than was paid. The right is to the sum paid, as reimbursement.

Apply it

Leading case laws

• Govindram Gordhandas Seksaria v. State of Gondal (1949)

  Facts. Municipal taxes of Rs 1,24,092 were due on two mills. The mills had been sold to Seksaria and sub-sold by him to a company. The company paid the taxes to prevent a forced sale and claimed reimbursement. The Privy Council decided the appeal on 19 December 1949. AIR 1950 PC 99.

  Principle. "Interested" in section 69 covers a contractual interest and not only ownership. A duty that rests on a contract is a duty that the person is bound by law to perform.

  Why it matters. It gives the widest reading of the two conditions of section 69.

• Radha Madhub Samonta v. Sasti Ram Sen (1899)

  Facts. A purchaser bought a putni interest at an auction in 1892. The sale was set aside and an appeal was pending. The zamindar demanded Rs 2,000 as accumulated rent, and the purchaser paid it. He sued the defaulting putnidars (the holders of the tenure) for reimbursement. (1899) ILR 26 Cal 826.

  Principle. The purchaser was a person interested in the payment because he would lose his interest if the appeal succeeded and the rent remained unpaid. The defaulting holders were bound by law to pay the rent.

  Why it matters. It shows that a doubtful title does not defeat the payer's interest.

• Exall v. Partridge (1799)

  Facts. Exall left his carriage at the premises of Partridge, a coachbuilder, for repair. The landlord seized the carriage as distress for rent that Partridge and his co-tenants owed. Exall paid the rent to recover the carriage and sued Partridge and the others. (1799) 8 TR 308.

  Principle. The Court of King's Bench held that the payment was compulsory and not voluntary, so Exall could recover the money.

  Why it matters. It is the English forerunner of section 69.

How to write this answer in the exam

Key points to remember

• Section 69 reimburses a person who pays money that another was bound by law to pay.
• The payer must be interested in the payment.
• The payment must be made "therefore", to protect that interest.
• The other person's duty may come from a statute, a contract or a decree.
• The right is to the sum paid and nothing more.
• A volunteer with no interest has no claim.

Quick self-test

Related topics

• Quasi Contract
• Liability to pay for non-gratuitous acts
• Things delivered by mistake or coercion
• Performance by joint promisors