Skip to content


Mugneeram Bangur and Co. Vs. Gurbachan Singh - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberA.F.O.D. No. 226 of 1952
Judge
Reported inAIR1959Cal576,63CWN549
ActsContract Act, 1872 - Sections 32 and 56
AppellantMugneeram Bangur and Co.
RespondentGurbachan Singh
Appellant AdvocateAtul Chandra Gupta, ;Bijan Behari Das Gupta and ;Aloke Gupta, Advs.
Respondent AdvocatePrafulla Kumar Roy, ;Mrinal Kumar Ghose, ;Sailendra Nath Ghose, ;Satindra Kumar chakravartti and ;Niranjan Banerjee, Advs.
DispositionAppeal dismissed
Cases Referred and Mersey Docks and Harbour Board v. Coggins and Griffiths
Excerpt:
- p.n. mookerjee, j.1. the only point which arises in this appeal is whether a contract for sale of land stood discharged and came to an end by reason of certain intervening or supervening circumstances, to which due reference will be made in the course of this judgment. the point was, even lately, not free from doubt and it was beset with considerable difficulties, but a recent pronouncement of the supreme court has clarified the position and considerably lightened our task.2. the law to be considered is the law of frustration of contract as applicable to this country. the matter appears to be concluded by the decision of the supreme court in the case of satyabrate ghose v. mugneeram bangur and co. : air1954sc44 . where under apparently similar circumstances, their lordships of the supreme.....
Judgment:

P.N. Mookerjee, J.

1. The only point which arises in this appeal is whether a contract for sale of land stood discharged and came to an end by reason of certain intervening or supervening circumstances, to which due reference will be made in the course of this judgment. The point was, even lately, not free from doubt and it was beset with considerable difficulties, but a recent pronouncement of the Supreme Court has clarified the position and considerably lightened our task.

2. The law to be considered is the law of frustration of contract as applicable to this country. The matter appears to be concluded by the decision of the Supreme Court in the case of Satyabrate Ghose v. Mugneeram Bangur and Co. : AIR1954SC44 . where under apparently similar circumstances, their Lordships of the Supreme Court rejected the plea of frustration of the contract, but, as the said case has been sought to be distinguished on facts and a seemingly new question has also been raised for our consideration and as it his been further argued that this Court, though bound by the Supreme Court's statement or enunciation of the principle, is not bound by any particular application of that principle, made by it in any particular case, and may make a different application of that principle even to the similar facts before it and reach a different conclusion, it is necessary to examine the whole position and record our views on the same in some detail.

3. The controversy, as we have said above, centres round the question whether the contract in suit came to an end by frustration due to the intervening circumstances, to which we shall presently refer. The material facts lie within a short compass and they stand as follows:

The appellant Company, which was the defendant in the Court below, was the owner of a large tract of land, situate in the vicinity of the Dhakuria Lakes, which they intended to develop and sell by plots under their Lake Colony Scheme No. 1. In respect of two of these plots, plots Nos. 245 and 246, comprising an area of 10 cottahs, the Company entered into an agreement for sale with the plaintiff respondent Gurbachan Singh and received an earnest money of Rs. 202/- in pursuance & in terms thereof. By that agreement, the Company undertook to construct the roads etc. for appropriate enjoyment of the above plots as a building site. The terms of the agreement appear sufficiently from the two documents, the letter of agreement, more correctly, the letter of offer, Ext. A, and the earnest money receipt (which is really the acceptance) Ext. 1, which may be set out as follows: Ext. A: Letter of agreement by Gurbachan Singh to Mugneeram Bangur and Co.

'To

Mugneeram Bangur and Co.,

 Land; Department, Russa Road South.

 Tollygunge;, Calcutta

 No.; 488.

 Phone;: South 135.

Through Babu--

Re: Plot Nos. New No. 245/246 on 30' Road in Premises No. Lake Colony Scheme No. 1, Northern Block.

Area measuring 10 ks. X. ch. ......sqr. ft. more or less.

Dear Sir,

I am willing to purchase the above plot of land from you at the average rate of Rs. 1,075/- (Rupees one thousand and seventy-five only) per Katta irrespective of the condition of the soil and I am ready to deposit Rs. 202/- of the actual value as an earnest money at once. I undertake to complete the transaction within one month from the date on (?) (of) completion of road on payment of the balance of the consideration money and time must be deemed as essence of the contract. If I fail to do so within the said period the earnest money deposited by me will be forfeited and you will be free to re-sell the land and I shall be liable for all damages that may result thereby. I also agree to sign a formal agreement in the form required by you if you so desire.

Yours faithfully.

Name: Gurbachan Singh,

 Address;: 48/1, Chakraberia Road North.

Dated the 19

Witness (Illegible)

Address :--------------

N. B.--I agree to pay half of the value at the time of Registration of the Deeds and the balance within 6 years bearing interest at the rate of 6 per cent. per annum with half yearly rests and the said Plots Nos. 245 and 246, purchased by me shall remain charged for the payment of the balance of the purchase money in the manner as aforesaid and the necessary security deed and charge should be executed and registered by me at my own cost.

Name: Gurbachan Singh.

Address:--

Witness (Illegible)

4, Bakliar Sha Road, Tollygunge.'

Ext. 1;--Receipt for earnest money granted to Gurbachan Singh on behalf of Mugneerarn Bangur and Co., dated the 14th May, 1941.

'Mugneerarn Bangur and Co.,

 Land; Department.

 No.; 488.

 Phone;: South 135.

 Russa; Road South, Tollygunge,

 Calcutta;, 14th May, 1941.

 Receipt.;

Received with thanks from Babu Gurbachan Singh of 48/1, Chakraberia Road North, the sum of Rs. 202/- (Rupees two hundred and two only) as earnest money having agreed to sell to him/her or his/her nominee 10 kottahs Ch. sq. ft. more or less in Plot No. New 245/246 on 30' Road in Premises No. Lake Colony Scheme No. 1 Northern Block at the average rate of Rs. 1,075/- (Rupees one thousand seventy-five only) per katta.

The conveyance must be completed within one month from compilit (sic) roads date (?) on payment of the balance of the consideration money, time being deemed as the Essence of the Contract. In case of default, this agreement will be considered as cancelled with forfeiture of earnest money.

Mukarari Mourasi one-third value of the land will be paid of (sic) the time of Registration the balance within 6 years bearing 6 per cent. interest.

Rs. 202/-

By Cheque No. BB/39 1678184 the Bhowanipur Banking Corporation Ltd.

Dated 14-5-41.

Revenue Stamp.

Kanialal Muchal

for Mugneeram Bangur and Co.'

4. The agreement was entered into on 14-5-1941, on payment of the sum of Rs. 202/- (out of the. consideration money (Rs. 10,750/-) at the rate of Rs. 1,075/- per cottah) by way of earnest money and it stipulated completion of the sale by execution of the conveyance and payment of the balance of the consideration money in manner, stipulated above, within one month of the completion of the roads, time being deemed to be the essence of the contract.

5. Thereafter, certain events happened, to which reference is necessary for appreciation of the dispute between the parties and, eventually, the defendant Company refused to execute the conveyance upon the plea that the contract in question had been cancelled and the earnest money forfeited due to the said events and, accordingly, the plaintiff had to institute the present suit for specific performance of the contract on 8-8-1946.

6. The material intervening events may now be conveniently set forth here.

7. On 12-11-1941, a part of the land, comprised within the Scheme but not including the disputed plots Nos. 243 and 246, was requisitioned by the Government under Rule 79 of the Defence of India Rules. This was followed by another requisition of a similar portion on 16-6-1943, under Rule 75A of the said Defence of India Rules and. on 18-2-1944 and 25-7-1944, respectively, there were the third and the fourth requisitions, the lands whereof covered inter alia the present plots in suit, under the said Rule 75A of the Defence of India Rules. In the meantime, on 24-12-1943, the Company claims to have issued a circular letter, Ext. B, as follows:

'Mugneerarn Bangur and Co.,

Land Department.

372/4 Russa Road, South, Tollygunge.

The 24th December, 1943.

Dear Sir,

You agreed to purchase the area measuring 10 cottahs from Lake Colony Scheme No. 1 (N. B.) being Plots Nos. 245, 246 new at the rate of Rs. 1,075/-per katlah and deposited the sum of Rs. 202/- on condition of completing the transaction within one month from the date of completion of road and drains.

A considerable portion of the lands in the whole scheme has been requisitioned under the Defence of India Rules and possession taken by the Government over a year ago. There is absolutely no knowing how long the Government will retain the possession of these lands. The proposed roads, drains cannot possibly be taken up in hands during the continuance of the War and possibly for many years even after the termination of the War.

In these circumstances, we have decided to treat the agreement as canceled and give you the option of taking of the refund of the earnest money deposited by you within one month from the receipt of this letter.

In the event of your refusal to treat the contract as cancelled, we are offering you, in the alternative, to complete the registration of the conveyance of the sale deed within one month from the receipt of this letter. In such a case you have to take the lands as it is now, the road and drains will be made by us as soon as circumstances will permit after the termination of the War.

If you do not exercise your option in any of the two ways mentioned above the agreement will be deemed to have been cancelled and your earnest money forfeited.

Yours faithfully.'

8. But it is admitted now that no such letter actually reached the present plaintiff.

9. In the written defence, filed by the Company to the plaintiff's suit, the two main defences were:

(i) Paragraph 6.

'.............. This defendant submits that soon after the contract this defendant began construction of roads in some parts of the scheme and also entered into a contract for preparing drains with Mr. P. B. Ghose of 15. Prince Anwar Shah Road, for the construction of drains. But soon after that, a part of the land of Lake Colony being requisitioned by the Government, the said work could not proceed. Ultimately, the whole area of the scheme was requisitioned by the Government under the Defence of India Rules. It is submitted that on the requisition and possession of the land by the Government under the Defence of India Rules the performance of the contract as alleged in the plaint became indefinitely impossible and the contract terminated by frustration'.(ii) Paragraph 8.'................The offer made by the defendant in its circular letter, dated 24-12-1943, was the offer of a new proposal and the statement about the forfeiture of the earnest money and the cancellation of the contract was according to the law as then understood. It is denied that the plaintiff did not receive the defendant's letter, dated 24-12-1943, which was sent through registered post at his address. The plaintiff having failed to comply with the requisition in the letter cannot pray for specific performance of the contract which has become impossible of performance by circumstances beyond this defendant's control. The present suit is misconceived'.

10. The suit, however, was decided by the learned Subordinate Judge and hence this appeal by the defendant.

11. Before us, the finding of the learned Subordinate Judge that the circular letter, Ext. B, referred to above, was not received by the plaintiff, has not been challenged and the defence under paragraph 8 of the written statement, as quoted above, has not been pressed, apart from what, out of the same, appears to be linked with the defence, taken in paragraph 6, namely, the defence of frustration of the contract clue to impossibility of performance on account of requisition and taking over of possession by the Government under the Defence of India Rules, that is, on account of circumstances beyond the defendant's control, and it is that defence,--and that alone, which requires consideration by us, supplemented by the so-called new or additional argument of illegality in the performance of the contract due to the supervening circumstances.

12. In England, the law of frustration of the contract has not been codified and it is not part of the codified law of the land. It developed by stages by enunciation or statement of the underlying principle or principles by the English Courts. That enunciation of statement of the underlying principle or principles, however, or the formulation of the underlying legal theories, has not been uniform and the matter has been looked at from different angles or points of view by the English Courts and different theories have been propounded at different times to explain the doctrine and justify particular statements of the underlying principle or principles or the juridical basis of the same. Beneath the ripples, however, there is a steady under-current which represents the central or the essential idea, on which the doctrine is based, namely, that of impossibility of performance of the contract, and that gives the real clue to the English doctrine or the English law on the subject.

13. In India, the law on the point has been codified and, as stated by the Supreme Court in the case of : AIR1954SC44 (supra) at p. 195 (of SCA): (at p. 47 of AIR) on the subject of 'frustration' 'the courts in this country' should 'look primarily to the law, as embodied in Sections 32 and 56 of the Indian Contract Act. Indeed, the said two sections of the Contract Act embrace the whole of the Indian law on the subject, Section 32 applying in cases of contingent contracts and Section 56, covering the rest, Under either, however, impossibility is the central or the dominating idea and the determining factor, impossibility in cases of contingent contracts in the happening of the event or events, on which same depend, and, in other cases, impossibility of the act to be performed under the contract, illegality or unlawfulness of the act, given in Section 56 as a separate ground for frustration of contract, being comprehended within the above conception of impossibility for that purpose. The case before us, as was the case before the Supreme Court : AIR1954SC44 (supra), is not one of contingent contract. We may, therefore, safely leave out Section 32, as was done by the Supreme Court on that occasion, and concentrate our attention on Section 56.

14. That section (Section 56), in its relevant part (second paragraph), runs as follows:

'A contract to do an act which, after the contract is made, becomes impossible, or, by reason of same event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.'

15. That paragraph, to quote the Supreme Court again Vide p. 194 (of SCA):(at p. 46 of AIR),

'enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done. The wording of this paragraph is quite general, and though the illustrations attached to it are not at all happy, they cannot derogate from the general words used in the enactment. This much is clear that the word 'impossible' has not been used here in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to do.

Continuing, the Supreme Court made the following further observation at p. 195 (of SCA): (at p. 47 of AIR) of the report:

'....... .the doctrine of frustration is really an aspect or part of the law of discharge or contract by reason of supervening impossibility or illegality of the act agreed to be done and hence conies within the purview of Section 56 of the Indian Contract Act. It would be incorrect to say that Section 56 of the Contract Act applies only to cases of physical impossibility and that where this section is not applicable recourse can be had to the principles of English law on the subject of frustration. It must be held also, that to the extent that the Indian Contract Act deals with a particular subject, it is exhaustive upon the same and it is not permissible to import the principles of English law dehors these statutory provisions. The decisions of the English courts possess only a persuasive value and may be helpful in showing how the courts in England have decided cases under circumstances similar to those which have come before our courts'.

and, further down, after referring to the different English theories on the point, their Lordships categorically stated at p. 198 (of SCA): (at p. 48 of AIR) that

'these differences in the way of formulating legal theories really do not concern us so long as we have a statutory provision in the Indian Contract Act. In deciding cases in India the only doctrine that we have to go by is that of supervening impossibility or illegality as laid down in Section 56 of the Contract Act, taking the word 'impossible' in its practical and not liberal sense. It must be borne in mind, however, that Section 56 lays down a rule of positive law and does not leave the matter to be determined according to the intention of the parties'.

Their Lordships agreed with Lord Maugham that

'the doctrine of frustration is only a special case of the discharge of contract by an impossibility of performance arising after the contract was made'

and ruled that

'the doctrine is a special case of impossibility and as such comes under Section 56 of the Indian Contract Act' Vide p. 195 (of SCA): (at p. 47 of AIR).

16. In explaining the central or the essential idea of the doctrine, namely, that of impossibility of performance of the contract, their Lordships at p. 195 of the report (SCA); (at p. 47 of AIR) quoted with approval Lord Loreburn's observation in the case of Tamplin Steamship Co. Ltd. v. Anglo Mexican Petroleum Products Co. Ltd. (1916) 2 AC 397 at p. 406, that

'the parties shall be excused it substantially the whole contract becomes impossible of performance, or, in other words, impracticable, by some cause for which neither was responsible

that, indeed, being the principle, accepted by all the Law Lords in Tamplin's case (1916) 2 AC 397 though they differed in their application of it. But their (the Supreme Court's) emphasis throughout was on the two sections, Sections 32 and 56, of the Indian Contract Act, and the terms of those two sections. The problem, therefore, was one of construction of the said two sections, or, of Section 56 alone, so far as the present case is concerned, and, to that task, we shall presently address ourselves in the light of the approach, indicated by their Lordships.

17. Before we actually take up the question of construction, it may be useful to refer here to the two lines of approach, indicated in the English cases on the point. One was the theory of implied term or the theory of implied intention of the parties. That theory Vide : AIR1954SC44 (supra) at pp. 198-9 (of SCA): (at p. 48 of AIR) appears to have been rejected by their Lordships or the Supreme Court as not being, strictly speaking, relevant on the law of frustration of contract, so far, at least, as Section 56 of the Indian Contract Act (with which alone we are here concerned), and the other theory which appears to have been preferred and approved by them (Vide pp. 197 & 199 (of SCA): (p. 48 of AIR) was the theory of the reasonable man, as advocated by Lord Wright in the case of Joseph Constantine Steamship Line Ltd. v. Imperial Smelting Corporation Ltd., (1942) AC 154 at p., 185, in the following passage:

'In ascertaining the meaning of the contract and its application to the actual occurrences, the court has to decide, not what the parties actually intended, but what as reasonable men they should have intended. The court personifies for this purpose the reasonable man.'

18. Incidentally, we may observe that this theory of reasonable man was expressly rejected by this Court (Vide Mugneeram Bangur and Co. v. Satyabrata Ghose, 55 Cal WN 222: (AIR 1951 Cal 832)) in the very case which went up to the Supreme Court in : AIR1954SC44 and where finally, it was accepted by their Lordships and their Lordships applied it in construing Section 56, taking, of course, the word 'impossible' in its practical and not literal sense as enjoined by them earlier. To put it in the words of their Lordships themselves,

'the doctrine of frustration is applied not on the ground that the parties themselves agreed to an implied term which operated to release them from the performance of the contract. The relief is given by the court on the ground of subsequent impossibility when it finds that the whole purpose or basis of a contract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was beyond what was contemplated by the parties at the time when they entered into the agreement..........When such an event or change of circumstance occurs which is so fundamental as to he regarded by law as striking let the root of the contract as a whole, it is the court which can pronounce the contract to be frustrated and at an end. The court undoubtedly has to examine the contract and the circumstances under which it was made.'

but 'it is the court' which 'has to form its conclusion whether the changed circumstances destroyed altogether the basis of the adventure and its underlying object', 'the belief, knowledge and intention of the parties' being 'evidence, but evidence only on which the court' will proceed to form its said conclusion. 'This is really a rule of positive law and as such comes within the purview of Section 56 of the Indian Contract Act.' (vide p. 199 (of SCA): (p. 48 of AIR)).

19. So much for the principle, which has to be remembered in understanding the law of frustration of contract, as applicable in this country, and, in applying it

'the court has to examine the nature and terms of the contract before it and the circumstances under which it was made'

or entered into and

'to determine whether or not the disturbing element which is alleged to have happened in the particular case has substantially prevented the performance of the contract as a whole.'

That will be the relevant enquiry in applying the law of frustration, or, to put it for our present, purpose, that is, so far as the instant case is concerned, in applying Section 56, and both impossibility and illegality or unlawfulness, as mentioned in the section, must be understood in that light and in that context. It the answer be in the affirmative, the contract will stand dissolved or discharged as

'it is well-settled that, if and when there is frustration, the dissolution of the contract occurs automatically', and

'it docs not depend, as does rescission of a contract, on the ground of repudiation or breach, or on the choice or election of either party. It depends on the effect of what has actually happened on the possibility of performing the contract. What happens generally in such cases and has happened here is that one party claims that the contract has been frustrated, while the other party denies it. The issue has got to be decided by the court ex post facto on the actual circumstances of the case.'

20. Having thus indicated the law and the mode of its application, let us see how the parties before us stand in respect of their rights in dispute. To do so, it is necessary first to indicate the background against which that consideration should be made. As put by the Supreme Court in Satyabrata's case, : AIR1954SC44 (supra) (vide p. 201 (of SCA): (p. 49 of AIR), 'the most material thing' in that connection 'is that there is absolutely no time-limit within which the roads are to be made' and, indeed, as it is clear from the evidence on record as it was in Satyabrata's case too, 'there was not even an understanding between the parties on this point.' The other

'important thing that requires notice in the above connection is that the war was already on when the parties entered into the contract. Requisition orders for taking temporary possession of lands for war purposes were normal events during this period, Apart from requisition orders, there were other difficulties in doing construction work at that time, because of the scarcity of materials and the various restrictions which the Government had imposed in respect of them. That there were certain risks and difficulties involved in carrying on operations like these could not but be in the contemplation of the parties at the time when they entered into the contract and that is probably the reason why no definite time-limit was mentioned in the contract within which the roads etc. are to be completed. This was left entirely to the convenience of the Company and, as the matter of fact, the purchaser did not feel concerned about it.'

It is inter alia, against this background,--and that was, substantially speaking, the background in Sat-yabrata's case too, that we are to consider to what extent the passing of the requisition orders affected the performance of the contract in the present case.

21. It is argued on behalf of the appellant Company that, by reason of the requisitions, referred to above, starting with the requisition of November 12, 1941, it became impossible or illegal (unlawful) on their part to construct the roads, which construction so runs the appellant's argument, was an essential or integral part of the bargain between the parties and as such the performance of the contract became impossible or unlawful as a whole and the panties were relieved of such performance as a matter of law, the root or foundation of the contract being destroyed as a result of the above requisitions. In the facts before us, we are not impressed by the above argument As we have said above, in the contract between the parties, there was no time limit for construction of the roads and the principal reason for that we have also explained. It is true that there is some evidence in this case that the work of construction of roads etc. was entrusted to a contractor Pulin Behari Ghose, D. W. 5 before the first of the above requisitions and some progress was made which was interrupted by the military occupation under the above requisitions. But it is also clear, as found by the learned Subordinate Judge and for the reasons, given by him, that neither party was very much anxious to have the constructions made earlier or before the requisitions ended and neither of them really ever complained of the requisitions, as affecting the construction of the roads etc. in terms of their contract so as to destroy Us very foundation or fundamental basis and frustrate it and bring about its discharge. As a matter of fact, even the defendant Company did not regard the term of construction of roads etc. in that light or as so essential as to demand immediate performance, or even performance before the withdrawal or termination of the requisition, for subsistence of the contract (Vide their own letter Ext. B.) In the above contract and in the background, set out by us hereinbefore, namely, the absence of a definite time limit for the construction of the roads etc. and the probable reason therefor, to wit, the possibility in the minds of the parties at the time of the said contract and their probable knowledge that there might be requisitions under the Defence of India Rules and scarcity or non-availability of materials on the ground of war and the likelihood--quite natural in the circumstances,--of the parties having in their minds a well justified apprehension, and of their actually contemplating, that there might be certain risks and difficulties involved in the matter of the said construction on account of the very uncertain and abnormal situation of the time, it is reasonable to hold that the interruption of the construction of the roads etc. by reason of the requisitions did not affect the fundamental basis of the contract or bargain between the parties and did not frustrate the said contract.

22. Under almost similar circumstances, the Supreme Court came to the same conclusion in Sat-yabrata's case, : AIR1954SC44 , (supra), and we do not think that that case is materially distinguishable. We may also say with respect that the conclusion in that case was rightly reached on a proper application of the law on the point. It is true that, in that case, there was no evidence that the work of construction of the roads etc. had actually started before the requisitions, but we do not think that that fact makes any material difference. The contract in either case was similar and, if there was no time limit and time was not the essence of contract under either, so far as the construction of roads etc. was concerned, the fact that, in the one case, the work of construction was interrupted at the starting, that is, at the commencement of the work and its starting was delayed and, in the other, interruption came in the midst of he said work, that is, after it had started, and interfered with its progress and completion, would not make any material difference. The difference of the period also that intervened between the contract and the first requisition, namely, of about six months in the one case and of a much longer period, namely, of about eighteen mouths, in the other would not also be of any material distinction on the above point. The distinction, there fore, that Mr. Gupta wanted to draw between the two cases, the instant case and the case before the Supreme Court, is unavailing and the conclusion in either should be the same. We have already expressed our respectful agreement with the conclusion of the Supreme Court in Satyabrata's case, : AIR1954SC44 and the statement of the law and the application thereof, as made therein, and, accordingly, in the present case also, the same result would follow and the Company's defence of frustration would share the same fate. The two English cases, cited by Mr. Gupta, namely, Kerr v. Ayr Steam Shipping Co. Ltd., 1915 AC 217 at p. 223 and Mersey Docks and Harbour Board v. Coggins and Griffiths, 1947 AC 1 at p. 11, do not in our opinion, support the extreme propositions, contended for by Mr. Gupta, but even if they did they would not. in the above context, afford any material assistance to this client and, in spite of the said cases and the propositions, laid down therein, on which reliance was placed by Mr. Gupta, this appeal should fail on the merits and the decision and the authority of the Supreme Court quoted above, would stand in his way as, if we may say so again, with respect, the law and its application were correctly stated and made therein.

23. Section 56, as construed by the Supreme Court and that construction is certainly binding on us,--requires that, to have the effect of frustration, the impossibility or unlawfulness must be such as to destroy the very foundation or the fundamental basis of the contract in question. That, indeed, is the test for the application of the determining principle, as laid down by the Supreme Court, and judged by that test, the defence of frustration must fail in the present case.

24. As held above by us, in the particular context afforded by the relative background to which due attention has been drawn hereinbefore, the requisition orders and/or the interruption of work, that followed in consequence, did not affect or destroy the foundation or fundamental basis of the contract in suit, which, therefore, cannot be said to have become frustrated or discharged by reason thereof. In the premises, the defence of frustration was rightly rejected by the learned Subordinate Judge and this appeal must fail.

25. We may add further, that there may be another approach to the problem before us. There being no time limit for construction of the roads etc. that construction may be made within a reasonable period and, in the background, indicated above, and the circumstances of this case, that reasonable period may well include the requisition period or periods which, though uncertain, would be temporary. This argument was advanced before this Court in Satyabrata's case, : AIR1951Cal332 , but it was rejected and, in the decision of their Lordships of the Supreme Court there is no reference to it, but, if we may respectfully say so, this point and this aspect of the matter may justly claim further consideration and may not be wholly without substance.

26. Lastly, we would refer to an additional argument which was advanced by Mr. Gupta in this Court in support of the appeal, namely, that the performance of the contract in suit, particularly the construction of the roads, became illegal or unlawful on account of the requisitions. Even on this consideration, however, the position in the present case would not be different as the illegality or the unlawfulness which may attach to the particular work or works during the period of requisition would be of a temporary character and would not, in the light of the considerations which are germane to our decision on the question of impossibility of performance of the contract and which form the very basis of our conclusion on the point, render the contract infructuous or frustrate it and bring about its discharge. The law of frustration on the ground of illegality or unlawfulness of performance of an act, on which the contract depends, also rests on the same principles as in the case of impossibility. This additional argument also, would not, therefore, be of any material assistance to the appellant in the present case.

27. We may just add, in passing, that this additional argument also, namely, the question of illegality or unlawfulness of the particular act, to wit, the construction of roads etc., was raised before the Supreme Court in Satyabrata's case, vide : AIR1954SC44 in connection with the similar contract which was before the Court on that occasion and was, in substance, rejected by their Lordships although it may be said that there are observations in their Lordships' judgment which may suggest that the point was held to have been belatedly raised and was not entertained or at least fully considered on that ground and left open for consideration or further consideration on appropriate future occasions. Undeniably, however, there are passages in their Lordships' said judgment (vide p. 203 of the report SCA) : (p. 50 of AIR) ) which contain some indication of their Lordships' view on the point and which sufficiently support our above approach and conclusion.

28. In the above view, this appeal would fail and, accordingly, we dismiss it with costs.

Sarkar, J.

29. I agree.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //