The doctrine of frustration can be invoked when the common basis of the contract has failed due to circumstances beyond the control of the parties, leading to the impossibility of performance.

JUDGMENT

Chatterjee, J. - This is a suit for the recovery of Rs. 32,500/- being damages for breach of contract.

2. A gentleman by the name of Hazarimull Agarwalla carried on business in' the name & style of Sree Jagadish Rice & Oil Mills at Forbesgunge in the district of Purnea in Bihar. He was the karta & manager of a joint Hindu family which carried on business in that name.

3. The case made in the plaint is that it was agreed that Hazarimull Agarwalla would sell & the deft, would purchase 2,500 maunds of rice on inter-alia the following terms & conditions: (a) The deft, would pay the price of rice at 28/-per maund. (b) The deft, would pay also two annas per maund, as expenses for cartages & loading, (c) The deft, would pay Rs. 62/- per hundred new bags, (d) Delivery would be given at the plff's. mill.

(2) It is alleged in the plaint that the deft, postponed taking delivery of the goods to which the plff. assented. On 20-9-1943 the plff. called upon the deft, to take delivery of the goods within fifteen days but the deft, failed & neglected to take delivery of the goods & this suit has been instituted, for damages being the difference between the value of the goods at the contract rate & the price prevailing on or about 5-10-1943.

(3) In its written statement the deft. Co. pleaded that it was implied from the nature of the contract that the 2,500 maunds of rice would have to be despatched by rail from Purnea for export out of the province of Bihar to Bengal. The deft. states that it made diligent efforts to obtains wagons or wagon priorities but the same were not available. The plff. failed & neglected to apply for the necessary permit to enable him to give delivery of the contracted goods. In any event, the deft. Co. was prevented from obtaining delivery of the goods for exporting the same from Bihar by reason of Govt. Orders & Notfns. issued under the Defence of India Rules. By reason of such Orders-& Notifications, the contract was rendered void & the deft. Company was not liable to take delivery of the goods. The Govt. of Bihar requisitioned. 12,500 maunds of rice lying with the Jagadish Rice & Oil Mills which included the rice in question. Therefore the contract became impossible of performance or was rendered void.

4. The following issues were raised:

1. What were the terms of the contract between the parties?

2. Was the plff. under any obligation to arrange for wagons or permits?

3. Was the deft. Company bound to make diligent efforts to secure wagons? If so, did it do so?

4. Was it intended by the parties that the goods would have to be despatched by rail or export from Purnea to Bengal? Was that the basis of the contract?

5. Is the deft. Co. excused from the performance of the contract or was the contract rendered void or illegal or did it become impossible of performance owing to:-

(a) Notification issued under the D. I. Rules.

(b) Orders of Govt. or District Magistrate, Purnea.

(c) Fixation of ceiling price.

(d) Requisition of the stock of the rice.

(e) Non-availability of wagons.

6. What sum, if any, is due to the plff.?

5. Issue No. 1: There can hardly be any dispute as to the terms of the contract between the parties. They are contained in the bundle of correspondence which is admitted. On 12-7-1943, the deft. Co. wrote to the plff. firm as follows:-

"P. C. Ray & Co. (India) Ltd.

Timber & Rice Merchants.

4, Lyons Range,

Calcutta, 12-7-1943.

Reference No. 27/7/43.

To,

Messrs. Sree Jagadish Rice & Oil Mills,

Forbeshgunge,

Purnea.

Dear Sirs,

We learn from our representative Mr. S. M. Bose that you are willing to do rice business with us. We beg to state that we are prepared to purchase rice from you provided you guarantee to supply usual quality & weights.

For the first few transactions we will deposit & instruct the Imperial Bank, Purnea to pay you in full against Railway Receipts. Later you will have to send us R/R as usual for collection through a Bank.

We agree to pay -121- to -/3/- per maund as F.O.R. Charges & cost of New gunny approximat