Mr. L let out his residential house to Mr. M for 50,000 p.m. for a period of one year. According to the Rent agreement, electricity bill will be…

CA Foundation · Business Laws · MTP · May 2026
Mr. L let out his residential house to Mr. M for 50,000 p.m. for a period of one year. According to the Rent agreement, electricity bill will be paid by Mr. L. But Mr. L could not pay for electricity dues up to 5 months, due to his financial hardships. The Electricity Board sent the notice of disconnection, if it is not paid within a week's time. To avoid all this, Mr. M paid the electricity bill of 50,000 with penalty. Later on, L refused to reimburse - 50,000 and argued that he has paid bill voluntarily because of his own interest. Decide with reference to provisions of the Indian Contract Act, 1872 whether Mr. M is entitled to be reimbursed by Mr. L?

Suggested Answer and Working Notes:

(i) True: As per Section 10 of the Sale of Goods Act, 1930, where there is an agreement to sell goods on the terms that the price is to be fixed by the valuation of a third party and such third party does not or cannot make such valuation, the agreement is thereby avoided. However, if the goods or any part thereof have been delivered to, and appropriated by, the buyer, he shall pay a reasonable price therefor. The given statement is in consonance with the provisions of Section 10 of the Sale of Goods Act, 1930. Therefore, the statement is True.

Topics: The Indian Contract Act, 1872

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