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1960 Supreme(J&K) 7
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
S. Murtaza Fazl Ali, J.
Hari Singh & Ors. - Appellant
Versus
Dewani Vidyawati - Respondent
COS No. 5/2007 (Svt.)
Decided On : 23 February, 1960
Advocate For Appellant: Jaswant Singh
Advocate For Respondent: S.K. Chaku
Advocate For Respondent: Ram Lal Anand
The doctrine of frustration of contract applies when an event occurs after the formation of a contract that makes the performance of the contract impossible, illegal, or impracticable, and the event was not caused by the fault of either party.
Headnote:
CONTRACT - Frustration - Impossibility of Performance - Supervening Event - Change of Circumstances - Doctrine of Frustration Applied - Restitution of Benefit Received.
Fact of the Case:
The plaintiffs, Sardar Hari Singh, Sardar Fouja Singh, and Sardar Kartar Singh, filed a suit against the defendant for the recovery of Rs. 36,000, out of which Rs. 34,000 was advance money given for a Theka (lease) and Rs. 2,000 was claimed as damages. The plaintiffs alleged that the defendant, the owner of certain lands in Kohli Dilbagh, Tehsil Gujranwala (Punjab), had sanctioned the Theka of the lands in question to them from Kharif 1947 to Rabi 1950. The plaintiffs deposited a sum of Rs. 34,000 as advance consideration for the Theka for one year. However, the defendant was unable to deliver possession of the lands to the plaintiffs due to the partition of India and Pakistan, which resulted in the lands becoming part of Pakistan territory. The plaintiffs shifted to India and could not cultivate the lands or derive any usufruct from them. They claimed a refund of the advance money and damages for breach of contract.
Finding of the Court:
The court held that the defendant was not liable for damages as the contract had become void due to frustration. The court found that the main purpose and essential object of the contract was for the plaintiffs to reap the benefit out of the lands by getting produce from the tenants or by ejecting or dealing with them under the provisions of law. This purpose could not be achieved after the partition of India, which resulted in serious communal disturbances and made it extremely hazardous for any Hindu or Sikh to enter the place where the lands were situate. The court also found that the plaintiffs were unable to derive any benefit from the land in question.
Issues: 1. Is the suit barred by time? 2. Did the plaintiffs take over administration of the land about which lease deed was to be executed and registered and did they derive any benefit from it? 3. Is the suit amount advanced liable to fore-feature because of any breach in the preliminary conditions of agreement to lease dated 25th January, 1947? 4. To what relief are the plaintiffs entitled?
Ratio Decidendi: The court applied the principle of frustration of contract, as laid down in Section 56 of the Contract Act, to the facts and circumstances of the case. The court held that the contract had become void due to an event (partition of India) which was beyond the control of the parties and which made the performance of the contract impossible. The court also held that the plaintiffs were entitled to be restituted for the benefit received by the defendant under the contract, as per Section 65 of the Contract Act.
Final Decision: The court decreed the plaintiffs' suit and passed a decree for a sum of Rs. 34,000 against the defendant, with interest at the rate of six percent per annum from the date of the decree to the date of realization. The court made no order as to costs, considering the peculiar circumstances of the case and the fact that the contract had failed due to circumstances beyond the control of either party.
The defendant was the owner of certain lands situate in Kohli Dilbagh, Tehsil Gujranwala (Punjab) and she used to settle these lands with Thekadars by auction from time to time. The defendants sanctioned the Theka of the lands in suit in this village from Kharif 1947 to Rabi 1950 in favour of the plaintiffs, on their depositing a sum of Rs. 54.000/- being the advance consideration of the Theka for one year. The plaintiffs deposited a sum of Rs. 34,000/- between 25th January 1947 to 25th February, 1947.
The plaintiffs deposited a sum of Rs. 2000/-on 25-1-1947 by virtue of Ex. P. 2, Rs. 21.600/,-on 12-2-1947 by virtue of Ex. P. 3, a sum of Rs. 7,800/- on 20-2-1947 by virtue of Ex. P.4 and Rs. 2,600/- on 25-2-1947 by virtue of Ex. P. 5. One of the conditions of the Theka was that a regular lease and Kabuliat would be executed after the Thekadar was put in possession. The plaintiffs alleged that the defendant was unable to deliver possession of the lands to. them in spite of the best efforts of her agents, as a result of which the plaintiffs filed an application before the General Manager of the defendant for extension of the lease.
This application was referred to Dewani Sahiba, the defendant, for final approval but no final orders could be passed on this application and (in the meantime the Dominions of India and Pakistan came into existence and the lands in suit became a part of the territory of Pakistan. The plaintiffs shifted to India and could, therefore, neither cultivate the lands nor derive any usufruct there from. The plaintiffs further contended that they were entitled to the refund of advance money tendered by them to the defendant, because they could not be delivered possession due to the negligence of the defendant.
The plaintiffs also pleaded that at any rate by virtue of the fact that the lands formed part of the Pakistan territory after the independence of India, the very foundation of the contract disappeared and the contract became void by frustration and, therefore, the plaintiffs were entitled to be restituted for the benefit received by the defendant under the contract.
(2) The suit was contested by the defendant and a number of pleas were taken by her. The defendant pleaded, inter alia, that the plaintiffs were Pakistan nationals and the suit was not maintainable without the sanction of the State. They also pleaded that the plaintiffs were not State subjects and further that the suit was not triable by the Civil Court as there was a relationship of landlord and tenant between the parties. Certain other pleas were also taken regarding the maintainability of the suit and all these pleas have been decided by orders of this Court which will be referred to later.
On merits the defendant pleaded that there was no question of giving actual physical possession to the plaintiffs by the defendant. The system prevailing in the estate of the defendant was1 that Thekadars were to get the entire produce or rent from the tenants who were already on the lands settled by the defendant and the Thekadar was further given rights to bring upon such tenants as they pleased, after ejecting the previous tenants in accordance with law.
The defendant alleged that the plaintiffs were fully aware of this position and had taken the lease knowing the conditions prevailing in the estate of the defendant. The defendant further pleaded that it was announced to all the tenants on the spirt that the plaintiffs were their new Thekadars from Kharif 1947 and henceforward the tenants should pay the produce of their lands to them. This was all that she was required to do.
The defendant resisted the plea of frustration of contract on the ground that the plaintiff
