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Mahadeo Prosad Shaw Vs. Calcutta Dyeing and Cleaning Co. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberS.M.A. No. 117 of 1959
Judge
Reported inAIR1961Cal70
ActsContract Act, 1872 - Section 56; ;Transfer of Property Act - Section 108; ;Code of Civil Procedure (CPC) , 1908 - Section 144 - Order 9, Rule 13; ;West Bengal Premises Rent Control Act
AppellantMahadeo Prosad Shaw
RespondentCalcutta Dyeing and Cleaning Co.
Appellant AdvocateAshoke Chandra Sen and ;Hemesh Chandra Sen, Advs.
Respondent AdvocateC.C. Ganguly and ;Archana Sen Gupta, Advs.
DispositionAppeal dismissed
Cases ReferredBhagwant Singh v. Sri Kishen Das
Excerpt:
- .....of the property is to be decided under the transfer of property act but other cases of the lease (contract) becoming impossible are to be adjudged under the contract act, seems rather difficult to me. the reason is while dealing with the provisions of the transfer of property act and the contract act in relation to contribution the supremo court held in kedar lal v. harilal reported in : [1952]1scr179 . 'it is an established principle that where there is a general law and a special law dealing with a particular matter, the special excludes the general'. if it excludes the general it excludes the general in its entirety and not in parts only.19. heading therefore section 108(e) together with the proviso i cannot but hold that the entire law of frustration of leases is codified.....
Judgment:

P. Chatterjee, J.

1. This Second Miscellaneous Appeal is on behalf of the landlord, who instituted the suit for possession after a notice to quit and who subsequently got a decree for possession but which has thereafter been set aside under Order 9, Rule 13 of the Code. The defendant thereafter applied under Section 144 of the Code for restitution. The application of the defendant has been allowed by both the Courts below and hence the present appeal by the landlord plaintiff -- the objector to the petition under Section 144 of the Code.

2. The plaintiff instituted his ejectment suit on 5-1-1956. On 19th April 1956, an ex parte decree was passed. On 11th March, 1957, possession was delivered to the decree-holder, but defendant immediately started proceedings under Order 9, Rule 13 of the Code for setting aside the ex parte decree and the ex parte decree was set aside; against that order, certain proceedings were pending in this High Court and in the meantime, on the 8th June, 1958, under the order of the Calcutta Corporation one of the structures which was in a dilapidated condition, was demolished.

3. The defendant applied for restitution under Section 144 of the Code after the ex parte decree was set aside. The objection of the plaintiff landlord was that as the Corporation demolished one of the structures there has been a frustration of the contract within the meaning of Section 56 of the Indian Contract Act and, therefore, no restitution is possible. This objection was over-ruled by both the Courts below and hence the present appeal.

4. Mr. Sen on behalf of the landlord has referred to Section 59 of the Indian Contract Act and he says that the statute and the principle underlying the samehas been applied to leases and he has referred to a decision reported in : AIR1950Cal441 in the case between Kshitish Chandra v. Shiba Rani. According to Mr. Sen, there may be some conflict of opinion on this matter in England, but whatever that may be, so far as our country (sic), the doctrine of frustration has been applied to leases from a very long time. According to Mr. Sen, the decision of R. P. Mukherjee, J. in the aforesaid case is based on an earlier decision of this High Court by R. C. Mitter, J. (Sir Ramesh Chandra) between Inder Pershad Singh v. Campbell reported in ILR 7 Cal 474. The doctrine of frustration was also considered by Sir Ashutosh Mukherjee in a case between Ezekil Abraham v. Ramjus Roy reported in 33 Cal LJ 151 -- the same case as AIR 1921 Cal 305 Mr. Sen says that the doctrine of frustration has recently been considered by the Supreme Court in a case between Satyabrata v. Mughee Ram reported in : AIR1954SC44 . According to Mr. Sen, this rule of frustration as applied to India is a rule of positive law as held by Mukherjee, J. of the Supreme Court and there is no question of introducing the principle of implied grants in the same manner as has been done in English cases. According to Mr. Sen, if the section applies, it will apply because of its own force, independent of any implied contract between the parties. Mr. Sen, therefore, submits that the doctrine of frustration being firmly established in our country as under Section 56 of the Indian Contract Act, it must be held that after the Calcutta Corporation demolished one of the structures the contract became frustrated and, therefore, restitution is not possible.

5. Mr. Ganguly on behalf of the tenant has challenged the correctness of the decision of R. P. Mukherjee, J. in the aforesaid case. According to Mr. Ganguly, it is now well established that English cases are no guide as has been held by the Supreme Court in the aforesaid case of : AIR1954SC44 . Mr. Ganguly referred to the case between Inder Pershad. v. Campbell ILR 7 Cal 474. But according to him, that was a case not of a lease but of a contract pure and simple and, therefore, there is no support for the judgment of Mr. Justice R. P. Mukherjee from the Division Bench judgment in the case of Inder Pershad Singh ILR 7 Cal 474. Mr. Ganguly further says that the case of 33 Cal LJ 151: (AIR 1921 Cal 305) a decision of Sir Ashutosh Mukherjee has also nothing to do as to the applicability of the doctrine of frustration to leases; he, therefore, challenges the basis for the decision of R. P. Mukherjee, J. At the same time, he refers to another decision in : AIR1952Cal380 a decision of R. C. Mitter and Roxbourgh JJ. between Abdul Hashem v. Kalahari Mondal. Mr. justice R. C. Mitter (Sir Roopendra Commar) held 'We would however, be inclined to take the view that the doctrine does not apply where as a result of contract an estate is created', but observed that it was not necessary for them to decide the point. Mr. Ganguly has further referred to another decision of this High Court of Guba Roy. J., reported in : AIR1952Cal567 between Sakhisona Dasi v. Gour Hari Jana where he doubted the decision of R. P. Mukherjee, J. in the case bet-ween Kshitish Chandra v. Shiba Rani, : AIR1950Cal441 and followed a decision of Coyajee. J. in the Bombay High Court reported in : AIR1950Bom89 ,Tarabai Jivanlal v. Padamchand. He, therefore, submits that the doctrine of frustration has no application to leases and the restitution was correctly allowed by both the Courts below.

6. The first question that has been raised before me is whether the doctrine of frustration applies to leases. Except the decision in ILR 7 Cal 474 a decision of Sir Ramesh Chunder Mitter, all the other decisions referred to the English cases for a proper understanding of the doctrine of frustration. It is Sir R. C. Mitter alone, who restricts himself to Section 56 of the Contract Act only. Sir R. C. Mitter decided the case in ILR 7 Cal 474 at a time when the Indian Contract Act has come into force, but the Transfer of Property Act was yet to be enacted. That decision, therefore, cannot have any reference to the Transfer of Property Act. As all the other decisions have referred to English law and depend on the English law, so I just make a brief reference to that law. As regards the applicability of the doctrine of frustration to lease-hold property Halsbury's Laws of England, 3rd Edition, Vol. VIII, page 189, Section 3; Article 322 states 'The doctrine probably does not apply at all to contracts which create an estate in land by demise, although the point is still open whether in certain rare circumstances it might not do so'. The reason of putting the law in such language is the decision in Cricklewood Property and Investment Trust Ltd. v. Leightens Investment Trust Ltd. reported in (1945) 1 All ER 252 where 'Lord Russel of Killowen and Lord Goddard were of opinion that the doctrine had no application to a lease while Viscount Simon, L. C. and Lord Wright thought that it might apply in rare and exceptional instances'.

7. Suffice it to say that the law in England cannot now be stated to be quite settled and as the law in our country has been enacted under Section 56 of the Indian Contract Act and as also there is a reference of that part of law in the Transfer of Property Act, the law that we should understand in India should be on a reference to those statutes viz. our Contract Act and our Transfer of Property Act. It is needless to state that these statutes have stood the test of time quite firmly.

8. Mr. Justice B. K. Mukherjee of Supreme Court while deciding the case reported in : AIR1954SC44 that the view that where this Section 56 is not applicable recourse can be had to the principle of English law on the subject of frustration, is not correct. An English case can have only a pursuasive value and be only helpful in showing how English Courts decided cases under similar circumstances. He has also held at p. 322 (of SCR): at p. 48 of AIR) that 'Section 56 of the Indian Contract Act lays down a rule of positive law and does not leave the matter to be determined according to the intention of the parties'.

9. It is indeed true that he was not considering the question of applicability of the doctrine of frustration to lease-holds; but I am referring the aforesaid for the purpose that as we have our own statute on this matter it is 'not permissible to import the principles of English law' (as stated by him at p. 319 (of SCR): (at p. 47 of AIR)).

10. Coming to our own law, if we refer to the earliest decision in ILR 7 Cal 474 of Sir R. C. Mitter,we do not find anything from the reports as to whether there was a relationship of landlord and tenant between the plaintiff and the defendant. It may be there was a contract between them as is usual in our country between the owner of a particular plot of land and a cultivator for having the land cultivated by a contract system known as Bargha or Bhag. The only difference might have been that in case of Bargha or Bhag, produce is to be delivered but here the contract was by payment of money. Whatever it may be, that case is no authority for the purpose of determining the question whether the doctrine of frustration applies to leases or not. The only question was whether the doctrine of frustration would apply to contracts and whether the circumstances were such as to make the rule applicable. In that view of the matter, I cannot hold that the aforesaid decision is any guide as to the applicability of Section 56 of the Contract Act to leases. The decision next referred to, the decision of Sir Ashutosh Mukherjee, has no application at all to lenses. Coming to the decision of R. P. Mukherjee. J., I find he mainly relied upon English cases which, I am afraid, cannot be done after the decision of the Supreme Court in : AIR1954SC44 . R. P. Mukherjee, J. did not consider the matter either with reference to the Transfer of Property Act or with reference to the Contract Act. The Indian authorities, which he referred to, were not the authorities expressly on that question.

11. The decision of Mr. Justice Guha Roy was also a decision based on English law without reference to our own statute and, therefore, in view of the subsequent decision of the Supreme Court in the aforesaid case of : AIR1954SC44 , this is no sure guide. So far as the decision of Mr. Justice R. C. Mitter (Sir Roopendra Coomar), it suffices to say that he has specifically stated that it was not necessary for him to consider the question of frustration; but he was merely inclined to accept the English view that it has no application to leases.

12. I, therefore, proceed to consider whether the doctrine of frustration has application to leases.

13. Section 56 of the Contract Act, 2nd part, is the part which we have to consider. That section is as follows:

'Contract to do an act which after the contract is made becomes impossible ..... becomes void when the act becomes impossible'.

14. Hence, there must be--

(a) A valid and subsisting contract between the parties,

(b) There must be some part of the contract yet 'to do'.

(c) The contract after it is made, becomes 'impossible'.

15. If these three conditions are satisfied, then the contract becomes void when the act becomes impossible. This is the law of frustration; but the question still is whether that would operate to a lease. The question arises in the following manner:

16. When a lease is executed, there is transfer of property. The lessee is put in possession and it may be said after the lessee is put in possession that there is nothing yet to be done. Therefore, Section 56 would not apply because condition (b) would not be fulfilled, there being nothing yet to be done by either party.

17. The answer to it is that after the lease is executed and the lessee is put in possession, it is the duty of the landlord to allow the tenant to continue in possession without interruption under Section 108(c) of the Transfer of Property Act and further the lessee is bound at the proper time and place to pay the rent to the lessor as provided under Section 108(1) of the Transfer of Property Act. What, therefore, is stated is that the possession may be delivered, but that does not mean that the entire contract has been performed and nothing remains yet to be done. It is stated further that this aspect of the matter was not considered by Mr. Justice Guha Roy. However, I cannot say that the entire contract is completely performed as soon as the lessee is put in possession and nothing else is yet to be done. During the period of the lease, the landlord's duty is to allow the tenant peaceful enjoyment of the property. The tenant's duty is to pay the rent. If that is so, the contract of lease does not come to an end as soon as the lease is executed. The other clauses of Section 108 would show that there are other rights and liabilities of the landlord and tenant under its various sub-clauses. In that view of the matter, I cannot accept the view that there is nothing to be done after possession is delivered, but I cannot say that Section 56 of the Act, because of this reason, has application; as this is not all. Section 108(e) of the Transfer of Property Act is a specific section which deals with the substance of Section 56 of the Indian Contract Act and that section says :

'If by fire, tempest, or flood or violence of any army or of a mob or other irresistible force any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purpose for which it was let, the lease shall, at the option of the lessee, be void, etc'.

A comparison of this section of the Transfer of Property Act with Section 56 of the Indian Contract Act would show that the doctrine of frustration as enacted in Section 56 is substantially incorporated in Section 108(e) of the Transfer of Property Act. Section 56 refers to the stage when the contract becomes impossible or unlawful and there would be frustration within the meaning of that Act and the contract discharged thereby. Section 108(e) of the Transfer of Property Act does not use the words 'when the contract becomes impossible', but really gives certain instances of it. The word 'impossible' in Section 56 of the Contract Act has been understood to mean 'impracticable' or 'impossible' of performance in the case between Satyabrata v. Mugnee Ram, : AIR1954SC44 aforesaid. Section 108(e) of the Transfer of Property Act on the other hand begins with certain instances where the lease becomes impossible of further performance and those Instances are destruction by 'fire, tempest, flood, violence of an army or of a mob'; after citing specific instances it continues to use a rather general clause 'other irresistible force'.

18. Section 108(e) of the Transfer of Property Act refers to 'destroyed wholly or rendered substantially and permanently unfit', but Section 56 of the Contract Act refers to 'an act becoming unlawful or impossible'. Hence, there is no doubt that the Contract Act covers substantially a wider field than the Transfer of Property Act does. The performance of the duties of a lessor or a lessee may become 'impossible' otherwise than by the destruction of the property; but Section 108(e) of the Transfer of Property Act does not cover those cases. An argument, that the question of frustration of a lease by destruction of the property is to be decided under the Transfer of Property Act but other cases of the lease (contract) becoming impossible are to be adjudged under the Contract Act, seems rather difficult to me. The reason is while dealing with the provisions of the Transfer of Property Act and the Contract Act in relation to contribution the Supremo Court held in Kedar Lal v. Harilal reported in : [1952]1SCR179 .

'It is an established principle that where there is a general law and a special law dealing with a particular matter, the special excludes the general'. If it excludes the general it excludes the general in its entirety and not in parts only.

19. Heading therefore Section 108(e) together with the proviso I cannot but hold that the entire law of frustration of leases is codified under Section 108(e) of the Transfer of Property Act, The result is that under the Contract Act the contract stands discharged as this is a part of positive law; whereas under the Transfer of Property Act it depends on the option of the lessee. Therefore, the result of frustration, if a lease is to be treated as a contract would contradict the result as stated in Section 108(e) because in one case the contract stands automatically discharged and in the other only discharged at the option of the lessee. As the Transfer of Property Act is a special provision regarding leases, the general provision as enacted in Section 56 of the Contract Act, would not apply in view of the specific provision relating to leases under Section 108(e) of the Transfer of Property Act. In that view, I hold Section 56 of the Contract Act has no application to leases and instead of that section, Section 108(e) will apply so far as frustration relating to leases is concerned.

20. In that view of the matter, it would be for the Court below to consider whether any material part of the property has been destroyed or rendered substantially and permanently unfit for the purpose for which it was let out and secondly to consider the option of the lessee. As here the lessee in both the Courts below as well as in this Court opted to have the lease, the first question whether it has been rendered substantially or permanently unfit is not a question which is necessary to be gone into in the present case. The result is that I overrule the contention of Mr. Sen that the doctrine of frustration as enacted under Section 56 of the Indian Contract Act would apply and I hold that instead of that, Section 108(e) of the Transfer of Property Act would govern the field.

21. But this question does not solve the entire question. First supposing that frustration has not occurred then, if the lease itself has been determined by the notice to quit as alleged by the landlord, there is nothing to frustrate nor there is anything to be restituted. The question whether the lease has been determined or not is a question which is being decided in this suit itself. In that view of the matter, it is not necessary for me nor proper to express any opinion on that matter at this stage. But, as it is a lease to which the West Bengal Premises Rent Control Act applies even if there is a notice to quit valid and legal, the tenant would still, nonetheless, be entitled to contitue in possession by virtue of the protection given to the tenant under the Rent Control Act.

22. The next question is whether the tenant is entitled to restitution under Section 144 of the Code of Civil Procedure. Section 144 of the Code of Civil Procedure does not say that a person would be entitled to restitution simply because the decree is set aside or varied or reversed. The condition under which the person would be entitled to restitution is that he must be on the date of application a person 'entitled to benefit by way of restitution or otherwise.' The Section clearly says that restitution would not come as a matter of course either on variation or on reversal of the decree; but the person must also be entitled to any benefit by way of restitution. What I mean to say is, if a suit is instituted against a trespasser and the plaintiff gets a decree against the trespasser and finally that decree is reversed will the trespasser be entitled to restitution? He will not be entitled to restitution for the simple reason that he is not entitled to benefit by way of restitution. He has no right to be restituted to the property. If he has none, he cannot be said to be entitled to the benefit of restitution. This is what the Privy Council has decided in a case reported in , between S. N. Banerji v. Kuchwar Lime and Stone Co. Ltd. Lord Atkin considered the matter and observed:

'that justice does not require such a preposterous conclusion as they (trespassers), should be put back in a position which they have no right to occupy...'

It is indeed true that Lord Atkin did not expressly refer to the particular phrase in Section 144 of the Code for this particular purpose though he referred to and considered Section 144 of the Code for another purpose but still I have no doubt that his observation is with reference to the words used in Section 144 of the Code of Civil Procedure as well. The view that I am taking is also supported by a decision of the Supreme Court where the decree was reversed, but yet the sale that was held in execution of the decree, which was subsequently reversed, was not set aside on the ground mainly that the applicant was not entitled to benefit of restitution, I am referring to a decision of Mahajan, J. of the Supreme Court reported in Bhagwant Singh v. Sri Kishen Das, : [1953]4SCR559 and His Lordship there referred to with approval a decision of our Chief Justice Rankin in Dayal Sar-kar, v. Tarideshi, ILR 59 Cal 647: (AIR 1932 Cal 803).

23. In order therefore that the petitioner be entitled to be restituted in possession, the applicant should be so entitled. It is not enough that Section 108(e) of the Transfer of Property Act operates, but also he has to prove that the applicant is still entitled to benefit of restitution.

24. I have very grave doubt, if the Rent Control Act had not been in operation, whether he would have any such right, because after the lease had been properly determined he would not still be entitled to any benefit under the lease and so not entitled to restitution. But as the Rent Control Act is there and as the applicant is entitled to continue in possession as long as a decree for ejectment be not passed, he must be entitled to the benefit of that Act. It may be true there is nothing in the Rent Control Act by which the tenant has been given directly any benefit, but what has been done is the power of the Court in passing an ejectment decree has been fettered. The power of the Court being restricted the Court cannot pass a decree for ejectment except on the satisfaction of the conditions laid down in the Rent Control Act. Therefore, the Act does not provide for a direct relief to the tenant, but by restricting the power of the Court the tenant is benefited. The object of the Act is to benefit the tenant. The method adopted is to restrict the power of the Court. This is clear from the definition of the word 'tenant' that, 'he continues to be so till a decree for ejectment is passed'.

25. In that view of the matter, I hold that the tenant is still entitled to some benefit by way of restitution and he would be so entitled till a decree for ejectment is not passed by a competent Court. As no decree for ejectment has yet been passed, I hold he is entitled to the benefit of restitution and so I substantially agree with the findings of the Courts below.

26. Having held that the lease has not been frustrated because or demolition of one of the structures and having further held the petitioner tenant is entitled to restitution, the question is to which property the tenant may be restituted. I would make it clear that there is no question of restitution with regard to the demolished structure. The structure has been demolished and is not in existence, so no question of tenant's option arises with regard to the non-existing properties. The structure was leased out, not the land underlying and after the structure was demolished, the tenant cannot be put in possession of that structure as a matter of fact even if he would like to be so put in possession; he has no right to build on the land another structure nor has he any right to compel the landlord to raise a similar structure for him; he may have some right for abatement of rent but that is not for me to decide. He would he, therefore, restituted to possession of other property leased out than the structure demolished.

27. The result is that the appeal is dismissed but there would be no order for costs.

28. Leave to appeal under Clause 15 of theLetters Patent is granted.


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