Section 72 The Indian Contract Act, 1872
Section 72 of the Indian Contract Act, 1872 deals with the "Liability of person to whom money is paid, or thing delivered, by mistake or under coercion."
📜 Bare Text of Section 72:
“A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.”
🔍 Explanation:
Section 72 imposes an obligation on a person who has received money or goods either:
By mistake (e.g., accidental bank transfer),
Or under coercion (e.g., payment under threat or duress),
to return or repay that money or goods to the rightful owner.
🧠 Key Concepts:
Mistake can be:
Of fact (e.g., paying to the wrong person), or
Of law (e.g., paying tax not actually due).
Coercion means force or threats that make someone act involuntarily.
This Section reflects the principle of unjust enrichment — a person should not unfairly benefit at another's expense.
📌 Illustrations:
Mistake:
A pays B ₹10,000 believing B is a creditor, but B was paid in full earlier. B must return the money.
Coercion:
A is forced to pay a toll under threat of damage to goods even though the toll is illegal. A can recover that money.
⚖️ Important Case Law:
Sales Tax Officer vs. Kanhaiya Lal (1959 SC): Held that even a payment under mistake of law (not just fact) is recoverable under Section 72.
Shiba Prasad Singh v. Srish Chandra Nandi (1949 PC): Reaffirmed the duty to repay money paid under mistake of law.
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