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1962 Supreme(Mad) 140

MADRAS HIGH COURT
S. RAMACHANDRA IYER,RAMAKRISHNAN
Alanduraiappar Koil Chithakkadu by its Trustee M.Ramanada Nainar
Versus
T.S.A. Hamid
App. No. 162 of 1959
Decided On : 25 April, 1962

Advocates Appeared:
T.K. Subramania Pillai, for Appellant; T.R. Ramachandran, for Respondent.

The doctrine of frustration under Section 56 of the Indian Contract Act is not applicable where the contract is not rendered impossible or substantially prevented by an intervening event or change of circumstances.

Headnote:

LEASE - REMISSION OF RENT - FRUSTRATION OF CONTRACT - LEASE AGREEMENT DID NOT PROVIDE FOR REMISSION OF RENT DUE TO UNEXPECTED CAUSES - CYCLONES CAUSED LOSS TO LESSEE BUT DID NOT MAKE PERFORMANCE OF CONTRACT IMPOSSIBLE - DOCTRINE OF FRUSTRATION NOT APPLICABLE - LESSEE NOT ENTITLED TO REMISSION OF RENT.

Fact of the Case:

The plaintiff, a temple, leased out a property called Shandy Tope to the first defendant for a period of five years at an annual rental of Rs. 12,000. The lease agreement did not provide for any remission of rent due to unexpected causes. During the lease period, two cyclones caused damage to the property and resulted in a loss of business for the lessee. The lessee claimed remission of rent on the ground of frustration of contract under Section 56 of the Indian Contract Act.

Finding of the Court:

The court held that the lessee was not entitled to remission of rent. The court found that the cyclones did not make the performance of the contract impossible or substantially prevent the performance of the contract. The court also found that the lessee was largely responsible for his predicament through having bid at a highly excessive figure at the auction. The court further held that the doctrine of frustration was not applicable in the present case.

Issues: 1. Whether the lessee was entitled to remission of rent on account of the loss sustained by him due to the cyclones? 2. Whether the lessee could not fulfil his promise under the lease, on account of reasons beyond his control, namely, the two cyclones, and consequently is he entitled to any relief under Sec. 56 of the Indian Contract Act?

Ratio Decidendi: 1. The terms of the lease agreement did not provide for remission of rent due to unexpected causes. 2. The cyclones did not make the performance of the contract impossible or substantially prevent the performance of the contract. 3. The lessee was largely responsible for his predicament through having bid at a highly excessive figure at the auction. 4. The doctrine of frustration was not applicable in the present case.

Final Decision: The appeal was allowed, and the decree of the lower court was set aside. The parties were granted a decree for the amount as prayed for, in the suit with costs.

Judgement

RAMAKRISHNAN, J. :- This appeal is directed against the judgment and decree of the learned Subordinate Judge, Mayuram, in O. S. No. 18 of 1956. The suit was filed for the recovery of Rs. 10,243-8-0 due as arrears of lease. The plaintiff is a temple, Sri Alanduraiappar Koil, Chithakkadu, represented by its present trustees, plaintiffs 1 to 5. The 2nd defendant is the minor son of the first defendant. The temple owned a property called Shandy tope inside Mayuram municipality where fairs are held every Monday and where there are also some shops for carrying on daily sales. The right of collecting dues from the stall-keepers in the market as well as in the shops used, to be leased out. In an auction held on 24-2-1952, the first defendant took this on lease for a term of five years from 1-4-1952 at an annual rental of Rs. 12,000. However, the registration of the lease deed took place only on 12-9-1953. The first defendant became a defaulter, and on 1-1-1956, the arrears of rent stood at Rs. 10,203-8-0. The plaintiff sent a notice demanding these arrears on 4-1-1956. The first defendant sent a reply on 9-1-1956 requesting for remission, and then he prayed for time till 31-3-1956 for payment of arrears. Since the first defendant became a defaulter, the plaintiff decided to determine the lease. That was done by notice dated 17-2-1956. The arrears upto the date of the determination of the lease came to the suit amount.

The plea of the first defendant which was adopted by the 2nd defendant was this. The shandy tope originally fetched only a lease of Rs. 300 a year, and in 1946, the first defendants brother took the lease at Rs. 4500 for five years from 1948 to 1952. The bid was pushed upto Rs. 12000 for the suit period on account of unhealthy competition. After the lease period commenced, there was an unexpected and unprecedented cyclone in November 1952 and it caused damage to the buildings in the tope. The trees fell down on the roofs, and the market became slushy and water logged. The defendant requested the plaintiff to attend to the repairs but he would not do so. The defendant had to spend a good amount of money for effecting the necessary repairs. As a result of the cyclone, the business in the shandy became poor, and the defendant sustained heavy loss. He wrote letters on 12-11-1953 and 24-11-1953 to the plaintiff referring to the loss, and requesting him to grant a proportionate reduction in the lease amount. But the executive officer of the plaintiff temple issued a notice on 30-11-1953 to the defendant demanding the arrears. According to the first defendant, on account of the cyclone, the fundamental basis for the contract became altered, and the contract became impossible of performance due to circumstances which the defendant could not prevent. The defendant also applied to the Deputy Commissioner of the Hindu Religious and Charitable endowments board for remission, but no relief was given. There was a second cyclone on 30-11-1955, which caused damage to the goods, and the sandy did not resume its normal business thereafter. In view of the above circumstances, the claim for the arrears was denied. There was also another plea by the defendant that on account of an earlier notice by the plaintiff on 2-12-1953 stating that the lease was cancelled, the lease became determined on 2-12-1953 itself.

2. The trial court came to the conclusion that the plea last mentioned about the determination of the lease in 1953, was not sustainable, because even after that notice, the defendant continued to occupy the shandy on the same terms as under the original lease. This point is not now before us in this appeal. The lower court went at length into the claim of the defendant for remission on account of the cyclone. It came to the conclusion that the defendant did suffer loss on account of the two cyclones. It accepted the entries in the defendants account books, which showed that the defendant had spent more than two thousand rupees
















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