Authority: High Court at Calcutta, Commercial Division (Original Side)

Order Date: 16 July 2026

Case Overview

  • Parties: Appellant – Pulinat Ettan Thomas (individual); Respondent – Finorchem Limited (company).
  • Original suit CS‑COM No. 175 of 2024 filed by Finorchem seeking a declaration that the appellant’s appointment as a business consultant had not commenced and a refund of the advance payment of ₹50,47,422 with interest.
  • Agreement dated 2 August 2019 (Exhibit D) stipulated that the appellant’s appointment would commence only upon the simultaneous joining of seven other experts in the rubber‑chemical field, whose names were to be recommended by the appellant and approved by the plaintiff.
  • Only four of the seven experts actually joined; the remaining three did not, leading the plaintiff to claim that the contingency failed and the contract was unenforceable under Sections 31 and 32 of the Indian Contract Act, 1872.
  • The appellant filed a written statement and a counter‑claim for consultancy fees (₹15 lakh per month for Aug‑Nov 2019), severance fee, balance of the agreed upfront amount (₹1 crore), travel‑food‑lodging expenses, and interest at 18% p.a., totalling ₹2,81,16,238.
  • The trial court framed twelve issues, of which issues 3, 4, 10 (contingent nature of contract) and issues 5‑11 (refund and counter‑claim) were decided.
  • The trial court held the contract contingent, unenforceable, and ordered the appellant to refund the advance of ₹55,47,422 with interest at 8% per annum; it dismissed the counter‑claim.

Final Outcome

  • The High Court affirmed the trial court’s view that the agreement was a contingent contract; because the condition of simultaneous joining of all seven experts was not satisfied, the contract did not commence.
  • Consequently, Finorchem Ltd must refund the advance amount of ₹55,47,422 to the appellant, with interest at 8% per annum calculated from the date of institution of the suit.
  • However, applying the doctrine of quantum meruit (Section 70, Indian Contract Act) and Supreme Court precedents, the Court held that the appellant had rendered non‑gratuitous services that were accepted by the plaintiff. The appellant is therefore entitled to remuneration of ₹15,00,000 per month for August‑November 2019, totalling ₹60,00,000.
  • The plaintiff had already paid ₹55,00,000 (including ₹5,00,000 TDS). After adjusting this amount, the appellant is awarded a net sum of ₹5,00,000, with interest at 8% per annum from 1 December 2019 until realization.
  • The appellant’s claim for travel, food and lodging expenses of ₹58,770 was rejected as it was not substantiated by documentary evidence.
  • The counter‑claim for the balance of the upfront amount (₹1 crore) and other fees was dismissed.
  • The decree therefore comprises: (i) repayment by Finorchem of ₹55,47,422 plus interest; (ii) payment by Finorchem to the appellant of ₹5,00,000 plus interest from 1 December 2019; (iii) denial of the travel‑expense claim.

Topics: Contract Enforcement, Quantum Meruit