UNDER SECTION 70, INDIAN CONTRACT ACT, 1872
ARIES ADVERTISING BUREAU VS. C.T DEVARAJ (1995)
BENCH: Ramaswamy(J), K. Hansaria B.L. (J)
FACTS:
- The appellant-plaintiff had advertised for the circus run by the second defendant Balakrishnan
- It laid a suit for recovery of a sum of Rs.27,000/ towards the advertisement
charges impleading the respondent, as first defendant, alongwith Balakrishnan as second defendant. - Balakrishnan remained ex-parte and an ex-parte decree against him became final.
ISSUE:
Whether the respondent is bound to make compensation for the advertising costs under section 70 of Indian Contract Act, 1872
APPELLANT’s SUBMISSIONS:
- That based on the agreement the respondent undertook to pay the advertisement charges, he is bound to pay the same to the appellant
- Proposal sent for advertisement by the appellant was admittedly approved concluding an oral contract
- That the respondent had derived benefit pursuant to the advertisement made by the appellant hence bound by section 70 of Contract Act
JUDGMENT:
The court upheld the order of the High Court negativing the relief to the appellant, either because of lack of the privity of the contract or due to non-applicability of s.70 of the Act. The appellant had not done anything directly to the respondent. The respondent was only a financer to run the circus and pursuant to the contract the respondent had suffered huge loss. In the absence of any benefit derived by the respondent pursuant to the advertisement made by the appellant, s.70 is not attracted to the facts of this case. The appeal was dismissed, but without costs.
