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PETITIONER: ARIES ADVERTISING BUREAU

       Vs.

RESPONDENT: C.T. DEVARAJ

DATE OF JUDGMENT22/02/1995

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J)

CITATION:  1995 AIR 2251            1995 SCC  (3) 250  JT 1995 (2)   576        1995 SCALE  (2)103

ACT:

HEADNOTE:

JUDGMENT: ORDER 1.        This  appeal  by special  leave  arises  from  the judgment  of the Division Bench of the Madras High Court  in A.S. No.226/ 71 dated February 14, 1995.  The facts lie in a short  compass.  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/and  odd 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.  We arc concerned only with the   liability  of  the  first  defendant-respondent   C.T. Devaraj.   The trial court decreed the suit against  him  on finding  that  there  was privity of  contract  between  die appellant  and the respondent.  The High Court,  on  appeal, found  that  there is no privity of  contract.   Though  the appellant, relying on s.70 of the Indian Contract Act, 1872, (for  short ’the Act’) attempted to fasten the liability  on the respondent, it was found 577 that  the  respondent did not derive any benefit  under  the contract  between him and Balakrishnan.  On the other  hand, he  was  a financer to run the circus which had  incurred  a huge  loss.  Consequently, it was held that the  benefit  of s.70   of  the  Act  was  inapplicable.   The   appeal   was accordingly allowed. and the suit against the respondent was dismissed.  Thus this appeal. 2.   Shri  Sampath,  learned counsel for the  appellant  has strenuously contended that in view of the agreement (Ex.  A- 3)  executed  by  the respondent  and  Balakrishnan  wherein Clause  (4) states about the respondent undertaking  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  by  the   respondent. Thereby  there  emerged a concluded  oral  contract  between

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appellant  and  the respondent.  It is also  contended  that since the respondent agreed to receive the benefit of 30% of the profit from the income derived by running of the circus, he had derived benefit pursuant to the advertisement made by the  appellant and, therefore, the respondent is bound  s.70 of the Act. 3.   We find no force in the contentions.The agreement Ex.A- 3 is bilateral between the respondent and Balakrishnan.  The appellant is not a party to the agreement.  So, there is  no privity  of contract between the appellant and Devaraj.   It is  also an admitted fact that though proposal sent for  the advertisement  by the appellant was approved by Devaraj,  he did  it on behalf of Balakrishnan.  The approval  sought  by the appellant was not given in writing so as to bind Devaraj with  the expenditure incurred for advertisement.  The  High Court  had concluded that in the absence of any approval  in writing  by  the  respondent,  reliance  upon   self-serving statement  made  by the appellant in this  regard,  was  not sufficient to fasten the liability on the respondent for the expenditure  incurred by Balakrishnan for  advertisement  to run the circus. 4.   Section 70 of the Act provides thus:               "Where  a  person lawfully does  anything  for               another  person, or delivers anything to  him,               not intending to do so gratuitously, and  such               other  person enjoys the benefit thereof,  the               latter  is bound to make compensation  to  the               former in respect of, or to restore, the thing               so done or delivered.  " Admittedly, the appellant had not done anything directly  to the  respondent.   On  the  other  hand,  it  had  done  the advertisement  to benefit the second defendant  Balakrishnan only,  who  had run the circus.  The High Court found  as  a fact  that the respondent did not derive any benefit out  of the  contract  entered  into  between  the  respondent   and Balakrishnan.  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. 5.    Therefore, the High Court was right in 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 appeal  is  accordingly  dismissed,  but without costs. 579