Obligation of person who has received advantage under void agreement, or contract that becomes void
Section 65 of the Indian Contract Act, 1872 deals with obligation of person who has received advantage under void agreement, or contract that becomes void. When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it. The Act came into force on 01 Sep 1872.
When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it to the person from whom he received it.
Illustrations
(a) A pays B 1,000 rupees, in consideration of B's promising to marry C, A's daughter. C is dead at the time of the promise. The agreement is void, but B must repay A the 1,000 rupees.
(b) A contracts with B to deliver to him 250 maunds of rice before the first of May. A delivers 130 maunds only before that day, and none after. B retains the 130 maunds after the first of May. He is bound to pay A for them.
(c) A, a singer, contracts with B, the manager of a theatre, to sing at his theatre for two nights in every week during the next two months, and B engages to pay her a hundred rupees for each nights performance. On the sixth night, A wilfully absents herself from the theatre, and B, in consequence, rescinds the contract. B must pay A for the five nights on which she had sung.
(d) A contracts to sing for B at a concert for 1,000 rupees, which are paid in advance. A is too ill to sing. A is not bound to make compensation to B for the loss of the profits which B would have made if A had been able to sing, but must refund to B the 1,000 rupees paid in advance.
Section 65, The Indian Contract Act, 1872 (Act 9 of 1872).
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
-
Tarsem Singh v. Sukhminder Singh
Court's Decision & Legal Precedent
Judgment of Main Case order-1.pdf 1998-02-02 DATE VERIFIED. Saghir Ahmad/Jagannadha Rao. Already in combined on contract-act 20 and 65. Isolates s.13: consent is when the parties agree upon the same thing in the same sense; mutual consent as defined in ss.13 and 14 is sine qua non; parties not ad-idem on bigha vs kanal, so there is no consent and the agreement is void under s.20. Map contract-act 13 only. Do not pad 14 (Manubhai) or remap 20/65.
On this section: Advantage received under an agreement discovered to be void for mutual mistake must be restored under s.65; a forfeiture clause in a void agreement cannot be enforced (Tarsem Singh).
-
National Insurance Co. LTD vs Seema Malhotra
Court's Decision & Legal Precedent
When an insured gives a cheque towards payment of insurance premium and the cheque is subsequently dishonoured by the bank due to insufficiency of funds, the insurer is not liable to the insured or their legal heirs to honour the insurance contract or pay claims arising from accidents that occurred before the cheque was dishonoured. This is because: (1) a cheque is a conditional promise to pay, not actual payment; (2) Section 64-VB of the Insurance Act requires that premium must be received before the insurer assumes any risk; (3) an insurance contract consists of reciprocal promises, and when the insured fails to pay the premium, the insurer is absolved from providing coverage; (4) the insurer's statutory liability to third parties under the Motor Vehicles Act is distinct from and does not extend to claims by the insured or their legal heirs.
On this section: When a contract becomes void, any person who received advantage must restore it; used to establish that insurer can recover any amounts disbursed if premium is not validly paid
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 65
What have the courts held on Section 65 of the Indian Contract Act?
Tarsem Singh v. Sukhminder Singh (02 Feb 1998) is the leading judgment on this section among those set out below: Advantage received under an agreement discovered to be void for mutual mistake must be restored under s.65; a forfeiture clause in a void agreement cannot be enforced (Tarsem Singh). Another 1 judgment on this section is set out below, all of them from the Supreme Court. They run from 1998 to 2001.
How do I find court cases under Section 65 of the Indian Contract Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Contract Act 65, section 65 Contract Act, section 65 of the Indian Contract Act. People searching for it also type contract act 1872 section 65. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 2 reported judgments on this section are set out on this page, beginning with Tarsem Singh v. Sukhminder Singh (02 Feb 1998).
When did Section 65 of the Indian Contract Act come into force?
Section 65 of the Indian Contract Act, cited as Contract Act 65, came into force on 01 Sep 1872, having been enacted on 25 Apr 1872. It is in force as at the date shown on this page.
Other sections of this Act
- 73. Compensation for loss or damage caused by breach of contract1822 words
- 23. What considerations and objects are lawful, and what not596 words
- 74. Compensation for breach of contract where penalty stipulated for577 words
- 28. Agreements in restraint of legal proceeding void512 words
- 25. Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law423 words
- 16. "Undue influence" defined397 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.