JUDGEMENT Appeal (No. 56 of 1940) from a decree of the High Court in its appellate jurisdiction (July 14, 1939) which had reversed a decree of the same court in its original jurisdiction (January 10, 1939). The following facts are taken from the judgment of the Judicial Committee This appeal raised an important question of commercial law under the Indian Contract Act. It was brought by the appellant, who carried on business from Calcutta as a distributor of cinema films. The respondents were a limited company who imported such films into India. The contract between the parties was expressed Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 93 in a letter dated May 8, 1936, sent by the respondents to the appellant, under which the appellant was to maintain at his own cost the respondents office in Calcutta, and handle their films in Bengal, Bihar, Orissa, Assam and Burma in conjunction with the respondents head office at Cawnpore. The main stipulation was in the following terms "That we shall deliver you "a brand new positive print of each picture approximately "at the average of one picture a month and we shall pay for "all the royalties to the producers for the exploitation of the "pictures and in consideration of this, you will pay us a sum "of Rs.1750 towards the cost of each print supplied to you. "Such payments to be made to us on demand and the prints "to be delivered to you within four to five weeks from the date "of the payment. The exact price of the print to be adjusted "on the delivery of the print and to be reckoned by adding "the actual duty as would be payable on the footage together "with the costs of the positive print and other incidental "charges (shippers, freights, etc.)." That was followed by a provision whereby the appellant was to retain twenty-five per cent, of the revenue received on the exhibition of the film until he had recovered half of his " investment on the prints" or "print cost," the balance being divided between the parties equally thereafter the whole revenue was to be divided equally. The prints were to be returned to the respondents after the "exploitation " was over. The prints were to be returned to the respondents after the "exploitation " was over. The correspondence between the parties which followed upon the contract and continued until January, 1937, showed that two films only—Shipmates 0 Mine and Annie Laurie— were offered to and accepted by the/appellant. On July 2, 1936, the appellant paid the respondents Rs.2000 on account of the sum due, or to become due, under the contract. From a bill dated September 30, 1936, it appeared that the full sum due for Shipmates o* Mine, the first picture delivered, was Rs.2043-4-0—which included the cost of making the positive print, customs duty, shipping charges, clearing charges, censors fee, etc. The film was delivered by the respondents to the appellant on October 5 ; but it would seem that the appellant had difficulty in getting it booked by cinema exhibitors, and on or about December 4, 1936, at the respondents suggestion, he returned it to the respondents for a time so that they might try to get it exhibited. Meanwhile, on November 7, 1936, the appellant had likewise paid Rs.2000 on account of the sum due, or to become due, for Annie Laurie under the contract; but that film had not been delivered by the respondents when, on December 1, 1936, the appellant wrote to the respondents making various complaints of delay and breach of contract; and saying that "in the circumstances which have happened we find you have "no bona fide intention of carrying out the contract and we "decline to have any business dealings with you." This letter intimated a claim by the appellant for refund of the sum of Rs.4000 already paid, for Rs.908-13-0 expenses incurred, and for Rs.5000 damages. The respondents by letter of December 3 denied that they had committed any breach. The appellant on December 12, by letter and telegram, adhered to his letter of December 1 and refused to act as respondents agent any further. The respondents on December 14 denied the appellants allegations of breach of contract and refused his claims for refund and damages; finally, by letter of January 21, 1937, they accepted the appellants repudiation of the contract, and said that they were taking the organization of the contract territories under their own control and would claim against the appellant for all losses. The present suit was brought in the High Court at Calcutta on January 25, 1937. The present suit was brought in the High Court at Calcutta on January 25, 1937. The plaint alleged that the respondents had failed and neglected to perform their part of the contract and to make over positive prints of a number of films therein specified by name. On that basis it claimed Hs.3000 as general damages for loss of profit, refund of the Rs.4000 paid on account, and Rs.913-13-0 expenses incurred. The respondents by their written statement of April 22, 1937, denied that they had committed any breach of contract, and averred that they had all along been ready and willing to perform their Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 94 part. They alleged that the appellant had broken the contract, and that they had suffered damages, for which they were advised to bring a separate suit. At the trial before Panckridge J. in January, 1939, it was found by the learned judge (and now admitted before the Board) that the appellant had failed to prove any breaches by the respondents entitling him to repudiate the contract as he had done by his letter of December 1, 1936. But at the end of the trial Mr. P. C. Ghose, counsel for the appellant, contended that even if the appellant had broken the contract and the respondents were justified in rescinding it, the appellant had, under s. 64 of the Indian Contract Act, a good claim for refund of the sum of Rs.4000 paid on account. The learned judge accepted that contention, and gave the appellant a decree for Rs.4000 and costs, without requiring him to make any amendment of his pleading, or putting him on any terms ; without considering, so far as appeared, whether the respondents should have an opportunity to amend their written statement by pleading their damages by way of equitable set-off; or should have a stay of execution pending the determination of a separate suit for damages to be brought by them. On the respondents appeal to a Division Bench, Lort-Williams J., who dissented from his colleagues, held that the respondents had committed breaches which entitled the appellant to rescind the contract—a view which the appellant abandoned before the Board. On the respondents appeal to a Division Bench, Lort-Williams J., who dissented from his colleagues, held that the respondents had committed breaches which entitled the appellant to rescind the contract—a view which the appellant abandoned before the Board. He (Lort-Williams J.) appeared to have considered that the course taken by the learned judge in decreeing the suit on a ground not pleaded was justified by consent of the respondents counsel at the trial; and he agreed that if the respondents rightly rescinded the contract under s. 39 by reason of the appellants default, the appellant was entitled under s. 64 to refund of the Rs.4000. Derby shire C.J. and Nasim Ali J. thought that the trial judge was wrong in giving a decree upon a case which the appellant had not made on the pleadings; but they, too, entertained the new ground of claim without taking steps to have it pleaded. They decided that it was unsustainable since s. 64 of the Act did not apply to a case of rescission under s. 39, and in the result the appeal was allowed. The relevant sections of the Indian Contract Act, 1872, are — "2. In this Act the following words and expressions are "used in the following senses, unless a contrary intention "appears from the context— " (g) An agreement not enforceable by law is said to be void "(A) An agreement enforceable by law is a contract " (i) An agreement which is enforceable by law at the option "of one or more of the parties thereto, but not at the option "of the other or others, is a voidable contract " (j) A contract which ceases to be enforceable by law becomes "void when it ceases to be enforceable." "39. When a party to a contract has refused %o perform, or. "disabled himself from performing, his promise in its entirety, "the promisee may put an end to the contract, unless he has "signified, by words or conduct, his acquiescence in its "continuance. 60"Illustration. " (a) A, a singer, enters into a contract with B, the manager "of a theatre, to sing at his theatre 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. 60"Illustration. " (a) A, a singer, enters into a contract with B, the manager "of a theatre, to sing at his theatre 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. B is at "liberty to put an end to the contract." "53. When a contract contains reciprocal promises, and one "party to the contract prevents the other from performing his "promise, the contract becomes voidable at the option of the "party so prevented; and he is entitled to compensation "from the other party for any loss which he may sustain in "consequence of the non-performance of the contract. Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 95 "Illustration, "A and B contract that B shall execute certain work for A "for a thousand rupees. B is ready and willing to execute "the work accordingly, but A prevents him from doing so. "The contract is voidable at the option of B ; and, if be elects "to rescind it, he is entitled to recover from A compensation "for any loss which he has incurred by its non-performance." "55. When a party to a contract promises to do a certain "thing at or before a specified time, or certain things at or "before specified times, and fails to do any such thing at or "before the specified time, the contract, or so much of it as "has not been performed, becomes voidable at the option of "the promisee, if the intention of the parties was that time "should be of the essence of the contract. ..." "64. When a person at whose option a contract is voidable "rescinds it, the other party thereto need not perform any "promise therein contained in which he is promisor. The "party rescinding a voidable contract shall, if he has received "any benefit thereunder from another party to such contract, "restore such benefit, so far as may be, to the person from "whom it was received." "65. The "party rescinding a voidable contract shall, if he has received "any benefit thereunder from another party to such contract, "restore such benefit, so far as may be, to the person from "whom it was received." "65. 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. "Illustration. " (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 con sequence, rescinds the contract. B must pay A for the "five nights on which she had sung." "66. The rescission of a voidable contract may be communicated or revoked in the same manner, and subject “to the same rules, as apply to the communication or revocation "of a proposal." "75. A person who rightly rescinds a contract is entitled to “compensation for any damage which he has sustained through "the non-fulfilment of the contract. " Illustration. "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 is entitled to claim compensation "for the damage which he has sustained through the non-fulfilment of the contract." 1942. Nov. 16, 17, 18. Bagram for the appellant. The question is, where a party to a contract makes a part payment on account of the price and then repudiates the contract while it is in its executory condition, and the other party accepts the repudiation and puts an end to the contract, who is entitled to the money paid as part payment of the price ? I stress the words " refused to perform " in s. 39 of the Contract Act—that, it is conceded, is what the appellant has done, and the respondents have put an end to the contract. I stress the words " refused to perform " in s. 39 of the Contract Act—that, it is conceded, is what the appellant has done, and the respondents have put an end to the contract. A partly-performed contract can constitute a voidable contract s. 55. Sect. 64 gives a right to the party repudiating the contract, and s. 75 gives the converse remedy to the party Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 96 who accepts the repudiation, but he must have suffered damage. [Re illustrations in Acts, see Mahomed Syedol Ariffin v. Yeoh Ooi Gark (( 1916) L. R. 43 I. A, 56.).] This comes in as a voidable contract under s. 2 (i.), even if s. 39 is struck out, though reliance is placed on s. 39. It is a voidable contract which has been rescinded and s. 64 applies. Even if "put an end to " is not the same as "rescinded" and s. 39 has no application, it is submitted that it is rescinded within the meaning of s. 64, and that was the view taken by the trial judge and by Lort-Williams J. Under the Contract Act, and in particular, but not exclusively, under s. 64 read with ss. 2 (i.) and 39, the appellant is entitled to recover his deposit of Rs.4000. He is also entitled to recover it, apart from the Contract Act, on general principles of law. Damages may be obtained by the party accepting repudiation by appropriate action, but money cannot be kept which was consideration for something which was not performed. Where the contract is put an end to by the fault of one of the parties the position under the sections of the Contract Act is no different from that under English law. It is not the policy of the law to enrich a party to a contract, but merely to compensate him if he has suffered any damages Dies v. British and International Mining and Finance Corporation ([ 1939] 1 K. B. 724.) which, if anything, is stronger than the present case. [Reference was also made to Fibrosa Spolka Akcyjna v. Fairbairn, Lawson, Combe, Barbour, Ld. ([ 1943] A. C, 32.).] Here the respondents have filed no suit for damages, and two years had passed. Rewcastle K.C. and Khambatta for the respondents. [Reference was also made to Fibrosa Spolka Akcyjna v. Fairbairn, Lawson, Combe, Barbour, Ld. ([ 1943] A. C, 32.).] Here the respondents have filed no suit for damages, and two years had passed. Rewcastle K.C. and Khambatta for the respondents. It is submitted, in the first place, that the respondents are not liable in the circumstances of this case to make any restitution under the Contract Act. Secondly, if in the circumstances of this case any question of restitution could have arisen, it did not arise in these proceedings as constituted. Thirdly, even if the respondents are wrong on both those points, restitution could not possibly consist of the return of the Rs.4000 even if the matter falls within ss. 64 and 65 of the Act. With regard to the first proposition—that the appellant is not entitled to restitution under s. 64 of the Act—it was found by the trial judge that he was so entitled because this was a contract voidable at somebodys option, and a voidable contract which had been rescinded. Now, s.. 64 is linked up with s. 2 (i.) which defines a voidable contract. If there is in a code of this kind a definition the words in the section ought not to be given any other meaning unless it is impossible that the defined meaning was intended in that section. The defined meaning of a voidable contract in s. 2 (i.) is" an agreement which is enforceable by law at the option of one .... "but not at the option of the other . . . ." This contract began simply as a contract enforceable by either party, it did not cease to be so because the appellant wrongly, as it now turns out, said that he was not prepared to perform it. That had no effect at all, it simply left the contract a contract, and it remained so until the respondents chose to accept the repudiation. It was never a voidable contract within the meaning of s. 2 (i.). That had no effect at all, it simply left the contract a contract, and it remained so until the respondents chose to accept the repudiation. It was never a voidable contract within the meaning of s. 2 (i.). When the respondents accepted the repudiation it was a contract not enforceable in the future by anybody, but a contract which had only the effect that it gave the respondents a right of action for the appellants breach of it in its entirety the language in Johnstone v. Milling (( 1886) 16 Q. B. D. 460, 467.) is adopted—the situation here is precisely the same as it was there. The respondents right to damages does not arise under the terms of the contract, although it arises out of the contract. On that basis it is submitted that s. 64 has no application to this contract and there is no question of restitution. [Reference was made, on the application of the Contract Act, to Natesa Aiyar v. Appavu Padayachi (( 1913) I. L. R. 38 M. 178.) and Brohmo Dutt v. Dharmo Das Ghose (( 1898) I. L. R. 26 C. 381.).] As to the second proposition, this is an entirely different case from that which was made against the respondents in the pleadings. The action started on the footing that the respondents had broken the contract. That the case came within s. 64 was never raised except in counsels reply. If the appellant is entitled to get back the Rs.4000 the respondents are entitled to damages and should be given a set-off. The respondents had to face an entirely different case, suggesting a wholly different cause of action. This is a case where it would be a grave injustice to the respondents if this claim is allowed in Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 97 this action. With regard to the third proposition, the respondents had expended the Rs.4000 and produced the positives and had rendered the appellant an account of the expenses. He accepted it, and according to it he reimbursed the respondents the Rs.4000. When he repaid that sum it was the respondents money coming back to them. The appellant was to have the use of the film, and his consideration for that was his providing the costs. He accepted it, and according to it he reimbursed the respondents the Rs.4000. When he repaid that sum it was the respondents money coming back to them. The appellant was to have the use of the film, and his consideration for that was his providing the costs. Even assuming against the respondents that there is some advantage or benefit to them, it must be looked at under s. 64 at the date when the contract was brought to an end. The Rs.4000 were not Rs.4000 remaining in their pocket, but were then represented by two positive films, and the only thing the appellant could possibly recover under s. 64 would be some right in connexion with the films. In no circumstances was it open, even on the changed case, to give the appellant judgment for Rs.4000. The Dies case ([ 1939] 1 K. B. 724.) is different from this case. On the known facts— that the films were produced and one sent and the other tendered to the appellant—a decision giving Mm restitution must be wrong. Khambatta followed. The Contract Act is not exhaustive Jwaladutt R. Pillani v. Bansilal Motilal (( 1929) L. R. 56 I. A. 174.) ; Mohori Bibee v. Dharmodas Ghose (( 1903) I. L. R. 30 C. 539.548.). Within the four corners of the Act are to be found contracts which are void, discovered to be void, and voidable, and on examining the Act it becomes clear that s. 39 refers neither to void nor voidable conracts, nor contracts discovered to be void; it simply refers to valid contracts which by wrongful repudiation are brought to an end by the acceptance of the repudiation and no more than that. Between the repudiation and the acceptance of it this contract was never voidable at the option of one party Halsburys Laws of England, 2nd ed., vol. vii., p. 228, para. 313. There appears to be no case where ss. 64 and 65 have given relief to a party wilfully and wrongfully repudiating the contract. Between the repudiation and the acceptance of it this contract was never voidable at the option of one party Halsburys Laws of England, 2nd ed., vol. vii., p. 228, para. 313. There appears to be no case where ss. 64 and 65 have given relief to a party wilfully and wrongfully repudiating the contract. There are three decisions of the Board which show that those sections come into play where the rescission puts an end to the contract in its inception Harnath Kuar v. Indar Bahadur Singh (( 1922) L. R. 50 I. A. 69.), Annada Mohan Roy v. Gour Mohan Mullick (( 1923) L. R. 50 I. A. 239,243.), and Hansraj Gupta v. Official Liquidators of the Dehra Dun-Mussoorie Electric Tramway Co. (( 1932) L. R. 60 I. A. 13.). This contract comes within the case of money deposited in earnest which is to be treated not only as part payment of the price, but as security for the performance of the contract. Bagram replied. Dec. 15. The judgment of their Lordships was delivered by Sir George Rankin, who stated the facts above set out, and continued As the appellants whole case was that the respondents had broken the contract in essential particulars, the respondents could hardly be expected to plead by way of equitable set-off that they were entitled to recover damages by reason that they had rightly rescinded the contract on account of the appellants breaches. Upon this appeal the only matter raised by the appellant is his right to recover the sum of Rs.4000 paid on account under the contract. This right is claimed upon the basis that he wrongfully refused to perform his part of the contract by his letter of December 1, 1936, and that the respondents rightfully rescinded the contract on January 21, 1937—matters of which there is no mention whatever either in the plaint or written statement or in any formal minute or petition. In mercy to the parties and in the public interest their Lordships think that they can hardly refuse now to entertain the important question of commercial law upon which there was a difference of opinion in the High Court. But they cannot omit to take strong objection to the informality with which it has in this case been raised. In mercy to the parties and in the public interest their Lordships think that they can hardly refuse now to entertain the important question of commercial law upon which there was a difference of opinion in the High Court. But they cannot omit to take strong objection to the informality with which it has in this case been raised. While a rigid practice of refusing leave to amend pleadings is far from commendable, to entertain a case of which the pleadings contain no suggestion is another matter altogether. It is unfortunate that a proper application for leave to amend was not insisted on by the High Court and a formal order made thereon duly safeguarding the rights of the respondents, and ensuring that the basis in fact of the new case made should be set forth Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 98 with particularity and exactness by the appellant. The desirability of a direction as to pleading will be referred to later in this judgment. The first question is whether under the Indian Contract Act a party who has "put an end to " a contract under s. 39 is liable to restore any benefit received by him under the contract from another party ? [His Lordship referred to the relevant sections of the Indian Contract Act and continued] The language employed by the Act presents certain problems of construction. When one party to a contract has refused to perform his obligation thereunder so as to give rise to a right in the other party to put an end to the contract, is the latter a person at whose option the contract is voidable, and if he does put an end to the contract, does he rescind a voidable contract ? When he has so rescinded, has the contract become void ? Or is the language of s. 64 as to a person at whose option a contract is voidable restricted to cases where fraud, undue influence, mistake or other element vitiates the original consensus so that the party who has an option to refuse to be bound by the contract must either accept it as a whole or take no advantage from it whatsoever, treating it as void ab initio? Or are ss. Or are ss. 64 and 65 restricted to cases to which the terms "void" or "voidable" have been expressly applied by the Act? In a case within s. 39 the party who rightly " puts an end to " or “rescinds " (s. 75) the contract is entitled to damages for the defaulting partys breach. In this sense the contract has not ceased to be M enforceable by law." On the other hand, neither party is any longer bound to perform his promise—indeed an offer to do so, if made by either party, could properly be rejected by the other. The election of the party rescinding, as Cotton L.J. once put it, " relieves c "the other party from any further obligation under the "contract and enables both parties to make arrangements "for the future on the footing that the contract has been "once for all broken and is at an end " Johnstone v. Milling (i). That the word " voidable " does not appear in s. 39 may well be significant—indeed, to say that " the promisee may put "an end to the contract" is to use language often employed by English judges, but very often qualified by words to show that the contract is only brought to an end sub modo. The judgments in Johnstone v. Milling (16 Q. B. D. 460. 470,) contain careful qualifica tion to this effect. " The other party may adopt such "renunciation of the contract by so acting upon it as in effect "to declare that he too treats the contract as at an end, "except for the purpose of bringing an action upon it for the "damages sustained by him in consequence of such renunciation " (per Lord Esher M.R. (Ibid. 467.)). " The rights of the "parties under the contract must be regarded as culminating "at the time of the wrongful renunciation of the contract, "which must then be regarded as ceasing to exist except for "the purpose of the promisees maintaining his action upon "it" (per Bowen L.J. (Ibid. 473.)). Though the Indian Act is to be interpreted according to the meaning of the words used in it, such passages help to show that s. 39 and s. 64 cannot be read together as a matter of course if they do not appear by the mere force of their own language to link up. 473.)). Though the Indian Act is to be interpreted according to the meaning of the words used in it, such passages help to show that s. 39 and s. 64 cannot be read together as a matter of course if they do not appear by the mere force of their own language to link up. The question must therefore be whether there is elsewhere in the Act sufficient to show that the contract which may be " put an end to " is " voidable " ? To this question their Lordships think the answer must be Yes. The presence of illustration (c) to s. 65 cannot be made consistent with any other view. The effect of s. 39 is explained by the example there given of a singer who wilfully absents herself from the theatre. The same example serves also under s. 65 as illustration (c) and under s. 75. It is a prominent feature of this portion of the Act. The right of one party upon refusal by the other to perform the contract is described indifferently by the Act as a right to "put an end to " or " rescind " it; and illustration (c) plainly imports that this right is either that of " a person at whose "option the contract is voidable " (s. Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 64) or is such that by the exercise of it the contract " becomes void " (s. 65). Of these two propositions it is to be observed that they are not mutually exclusive, whether or not each involves the other. It has been suggested that the illustrations given under s. 65 are intended to refer to ss. 64 and 65 taken together, or at least that illustration (c) is to be read as referable to s. 64. Another view is that the sections overlap. It is difficult to suppose that the singers contract has become " void" under s. 65 without being " voidable " under s. 64. But no view which can be taken on these matters can provide an escape from the conclusion that a liability to make restitution attaches to the party putting an end to a contract under s. 39. It is difficult to suppose that the singers contract has become " void" under s. 65 without being " voidable " under s. 64. But no view which can be taken on these matters can provide an escape from the conclusion that a liability to make restitution attaches to the party putting an end to a contract under s. 39. Nor can the illustration be ignored or brushed aside because it is not part of the body of the section Mahomed Syedol Ariffin v. Yeoh Ooi Gark (L. R. 43 I. A. 256.). Further, under s. 53, if one party prevents the other from performing his promise, " the contract becomes voidable at "the option of the party so prevented," and the latter may "elect to rescind it " this section, like s. 75, expressly confers a right to recover damages. Again, under s. 55, where time is of the essence and one party has made default, " the contract, "or so much of it as has not been performed, becomes "voidable at the option of the promisee " the last paragraph of the section deals with the right to damages. And s. 66 describes how " the rescission of a voidable contract " may be communicated. From these sections it must be conceded that, as language is used in this Act, the right to treat a contract as voidable and to rescind it may be accompanied by a right to recover damages for the wrongful act which grounds the right of rescission. The ordinary notion of an English lawyer that the right to recover damages must be based upon a valid and subsisting contract, and that a plaintiff could not declare upon a contract as being void, cannot be taken as a guide to the use of the words " void " and " voidable " in the Indian statute. Nor can the clauses of s. 2, which would seem intended to explain those words by use of the phrase "enforceable by law," be taken as showing that a contract which one party is entitled by reason of the others default to rescind is not " voidable." It may be suggested that a case under s. 39, or under the first paragraph of s. 55 comes readily under the phrase “voidable contract " as explained by cl. (i.) of s. 2, but that even after rescission it never becomes void in the sense of cl. (].). It is, it may be said, enforceable at the option of the party not in default, but it never "ceases to be enforceable” even if " put an end to," because the right to damages remains. But this account of the matter has its own difficulties. The option which characterizes a voidable contract is an option either to say " it shall not be enforceable at all" or to leave it as a good contract enforceable by any party on the usual conditions. This is certainly so in any case under s. 19 it is enforceable at the option of one party only in the sense that that party may elect to treat it as not binding upon any party. The voidable contract in a case of undue influence is either going to be good or wholly void. After rescission it will not be enforceable at all. It is by no means plain, therefore, that cl. (i.) of s. 2 affords room for the opinion that in a case under s. 39, the agreement, notwithstanding rescission, is enforceable at the option of one party. The terms of els. (g.) and (i.) do not of themselves necessitate any departure from the ordinary implications of the words " voidable” and "void," nor have they been so construed hitherto. As the learned editors of a well-known work on the Act have put it, "Whenever one party to a contract has the option of annulling "it, the contract is voidable; and when he makes use of that "option the agreement becomes void." (Pollock and Mulla Indian Contract Act, 6th ed., p. 365.) Again, there are difficulties in the way of holding that illustration (c) to s. 65 does not apply to that section at all, though doubtless it illustrates s. 64. Their Lordships prefer to confine themselves to a reason which is apparent on the face of the Act—that the right to recover damages has been dealt with by the draftsman as a right expressly conferred by the statute in cases where the contract has been rendered " voidable " by the wrongful Law. Rep. 70 Ind. App. Their Lordships prefer to confine themselves to a reason which is apparent on the face of the Act—that the right to recover damages has been dealt with by the draftsman as a right expressly conferred by the statute in cases where the contract has been rendered " voidable " by the wrongful Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 100 act of a party thereto and has been " rescinded " by the other party accordingly. The right to damages presents no insuperable objection to the application of s. 64 to cases of rescission under s. 39, and s. 64 applies, in their Lordships1 judgment, to the present case. Their Lordships are not concerned to make the Act agree in its results with the English law. It may be that in such a case as the present the respondents could not in England be made liable to refund any portion of the Rs.4000 paid on account, even upon proof that they had sustained no damage by the appellants breaches. That the matter is not quite clear may be inferred from dicta in Mayson v. Clouet ([ 1924] A. C. 980, 987.) and Dies v. British and International Mining and Finance Corporation ([ 1939] 1 K. B. 724.). It is at least certain that if the party who rightfully rescinds a contract can recover damages from the party in default and is afforded proper facilities of set-off, the Indian legislature may well have thought that his just claims have been met. The fact that a party to a contract is in default affords good reason why he should pay damages, but further exaction is not justified by his default. Where a payment has been made under a contract which has—for whatever reason—become void the duty of restitution would seem to emerge. A cross claim for damages stands upon an independent footing, though it arises out of the same contract and can be set off. It was contended for the respondents that even if s. 64 of the Act applied to the case, restitution could not properly consist in the return of the Rs.4000. A cross claim for damages stands upon an independent footing, though it arises out of the same contract and can be set off. It was contended for the respondents that even if s. 64 of the Act applied to the case, restitution could not properly consist in the return of the Rs.4000. The contract was referred to as showing that what the appellant had to pay to the respondents was intended to reimburse the respondents for the expense of producing the print which they had to deliver, the import duties, port charges, censors fee, etc. Hence it was contended that the respondents had received no benefit or advantage, or at least that the Rs.4000 represents no benefit or advantage in the respondents hands. The learned Chief Justice gave some countenance to this argument, saying that if the rescission had been an issue at the trial the respondents would have called witnesses to show that they had paid Rs.4000 or thereabouts in order to import the films. This defence, however, either misinterprets the contract or the law. The sum to be paid by the appellant as consideration for the respondents delivering the print was to be reckoned with reference to sundry items of cost, e.g., cost of the positive print, shipping charges and other items mentioned in the bill of September 30, 1936. But when the appellant on each of two occasions paid Rs.2000 on account he was not handing money to the respondents wherewith they were as his agents to discharge a debt of his. He was paying the money to the respondents in part discharge of the consideration due, or to become due, to them from him under the contract now rescinded. It was a benefit or advantage, it was received, and it was received under the contract. Sects. 64 and 65 do not refer by the words " benefit" and •" advantage" to any question of "profit M or " clear profit,! nor does it matter what the party receiving the money may have done with it. To say that it has been spent for the purposes of the contract is wholly immaterial in such a case as the present. It means only that it has been spent to enable the party receiving it to perform his part of the contract—in other words, for his own purposes. To say that it has been spent for the purposes of the contract is wholly immaterial in such a case as the present. It means only that it has been spent to enable the party receiving it to perform his part of the contract—in other words, for his own purposes. If on the footing that all sums received have to be returned, the respondents can show that after paying for the positive print, the shipping charges and so forth they have made a loss owing to the refusal of the appellant to carry out the contract, then these charges will be reflected in their claim for damages. If, on the other hand, the respondents have been so fortunate as to get another person to take the appellants place on terms equally remunerative to them, these payments will not even mean that the respondents have suffered more than nominal damages. On general principles they may set off such damage as they have sustained, but the Act requires that they give back whatever they received under the contract. To give effect to the respondents right to claim damages and to have an equitable set-off they must be given leave to file a further written statement in the High Court. This pleading should contain particulars of the respondents claim for damages for the appellants wrongful refusal to carry out the Law. Rep. 70 Ind. App. 35 ( 1942- 1943) Muralidhar C hatterjee V. International Film C ompany Limited 101 contract, and should set forth that these are claimed by way of set-off against the appellants claim to recover Rs.4000 which has been allowed upon the footing that he wrongfully repudiated the contract and that the respondents lawfully put an end to the contract by their letter of January 21, 1937. Their Lordships think that this appeal should be allowed; that the decrees of the High Court dated January 10 and July 14, 1939, should be set aside ; that it should be declared that the appellant is entitled to recover from the respondents Rs.4000 paid under the contract of May 8, 1936, subject to the right of the respondents to set off the amount due to them as damages for the appellants repudiation and breaches of the said contract; that the respondents should have leave within two months of the receipt by the High Court of the Order in Council to be made on this appeal, or within such further time as may be allowed by the High Court, to file in the High Court particulars of their claim for damages as aforesaid; and that this case should be remitted to the High Court in its Original Jurisdiction to assess such damages and thereafter to pass a decree for such sum as may be due on balance to either party, and to make such order as to the costs of the proceedings for the assessment of damages as it shall think fit. Their Lordships will humbly advise His Majesty accordingly. The appellant will pay the respondents costs in the High Court both at the trial and on appeal. The respondents will pay the appellant his costs of this appeal.