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Firm Sarada Prosad De Vs. Bhut Nath Mallik - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Reported inAIR1942Cal291
AppellantFirm Sarada Prosad De
RespondentBhut Nath Mallik
Excerpt:
- .....offer by the defendants to return the goods. but in the written statement there was no such offer. the defendants cannot obviously retain the goods and at the same time refuse to pay for them. the learned judge was probably right when he thought that this plea was a mere device to evade payment. then, in the second place, the government notification only affects retail prices in bengal. the defendants could export at any price they pleased. it is therefore impossible to say that the loss, if any, caused to the defendants was in any way due to the government notification. the rule is accordingly discharged with costs; hearing fee two gold mohurs.
Judgment:
ORDER

Henderson, J.

1. This is a rule calling upon the plaintiff to show cause why a decree of the Small Cause Court Judge at Sealdah should not be set aside. The relevant facts are as follows : The petitioners contracted through a broker Kali Nath Chakravarti, on 4th December 1939, to purchase 14 bags of coriander seeds at the rate of Rs. 13-8-0, per maund. In . pursuance of this contract, the bags were delivered by the plaintiff to the defendants on 6th December. On 5th December, there was a notification by the Government of Bengal, fixing the maximum retail price for the sale of coriander seeds at 4 annas a seer. The suit has been decreed in the Court below. The two grounds, upon which the rule was issued, raise the question of the effect of this notification on the contract. Three arguments have been put forward by Mr. Ghose in support of his contention that the suit has been wrongly decreed. In the first place, it was argued that the plaintiff is debarred from recovering a higher price than that fixed in the notification. On this point, the learned Judge was clearly right. The notification deals with retail prices only and there is nothing in it to prevent the plaintiff from recovering at the contract rate. In the second place, it was suggested that the consideration for the contract was unlawful. But at the time when the contract was made there was no regulation of prices in force and the question of the consideration being unlawful does not arise. Thirdly, it was contended that the contract became void under Section 56, Contract Act. Clearly the case is not within the actual terms of the section. The notification did not make it impossible or unlawful for the defendants to pay for the goods. Mr. Ghose relied rather on the doctrine known as 'frustration of venture.' Although it is not necessary to decide this point, on the facts in the present case, the question was fully argued and I propose to express my opinion on it.

2. This doctrine is based not upon the existence of any actual impossibility in fact, but upon the existence, in the circumstances of the case, of an implied condition. In order to justify such an inference, the implied condition must be absolutely necessary to give effect to the transaction which the parties must have intended. I am certainly not prepared to infer the existence of any such condition in the present case. When the contract was made, the Defence of India Act was in force and the Government had power to regulate prices. There was no reasonable ground for supposing that that power would remain a dead letter.' In these circumstances, the parties might have inserted an express condition that the contract would become void in the event of the Government regulating prices. When this was not done, it would be most dangerous to imply any such condition. The defendants took the risk that Government action might lead to a fall in prices just as they took the risk that any other event might lead to such, a fall. The doctrine however would not be of any assistance to the defendants in the present case. In the first place, they did not refuse to take delivery and then plead that the contract was void. In the present petition, there is a story of an offer by the defendants to return the goods. But in the written statement there was no such offer. The defendants cannot obviously retain the goods and at the same time refuse to pay for them. The learned Judge was probably right when he thought that this plea was a mere device to evade payment. Then, in the second place, the Government notification only affects retail prices in Bengal. The defendants could export at any price they pleased. It is therefore impossible to say that the loss, if any, caused to the defendants was in any way due to the Government notification. The rule is accordingly discharged with costs; hearing fee two gold mohurs.


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