THE NEW MARINE COAL CO. (BENGAL) PRIVATE LTD. vs UNION OF INDIA

The Supreme Court held that under Section 70 of the Indian Contract Act, 1872, a party receiving benefits from an illegal contract is liable to pay compensation, even if the contract is invalid under Section 175(3) of the Government of India Act, 1935. The Court found that the respondent failed to plead negligence in its written statement, which was necessary to establish estoppel by negligence. Consequently, the Court upheld the trial court's decision to decree the appellant's claim for compensation, rejecting the respondent's defense based on alleged negligence.