Section 95 The Indian Contract Act, 1872
Section 95 – Indian Contract Act, 1872
Title: Liability of person to whom money is paid, or thing delivered, by mistake or under coercion
Bare Act Language:
A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it.
🔍 Explanation:
Section 95 imposes an obligation on a person to return money or goods received:
By mistake (either of fact or of law), or
Under coercion (force or compulsion).
Even if there was no formal contract, this provision creates a quasi-contractual obligation to restore the benefit wrongly received.
📘 Illustration:
If A pays ₹10,000 to B by mistake, thinking he owes B that amount, but in reality, he doesn’t — then B is legally bound to return the amount to A.
⚖️ Relevant Case Law:
Sales Tax Officer v. Kanhaiya Lal (1959 AIR 135):
Held that money paid under a mistake of law or fact must be refunded under Section 95.
Shivprasad v. Durga Prasad (1908):
A payment made under a mistaken belief that a debt exists is recoverable.
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