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1924 Supreme(Mad) 536

IN THE HIGH COURT OF MARAS
Devadoss
President Of The District Board
Versus
G. Santhappa Naik
Decided On : 20 September, 1924

Under Section 56 of the Indian Contract Act, a contract becomes void only if it becomes impossible or unlawful due to an event that the promisor could not prevent.

Headnote:

impossibility of performance - contract - Section 56 of the Indian Contract Act - Herne Bay Steamboat Co. Ltd. v. Hutton [1903] 2 K.B. 683

Fact of the Case:

The plaintiffs purchased the right to collect toll at two toll gates, Hoshangadi and Kollur during the official year 1918-10. The traffic in food grains was stopped due to government ordinances, causing the plaintiffs to suffer a loss. They sued for the recovery of the amount collected from them.

Finding of the Court:

The court found that the contract did not become wholly incapable of performance as traffic continued to pass through the toll gates after the ordinances were passed. The District Board was advised to consider remitting a portion of the amount payable by the plaintiffs due to the government ordinances.

Issues: The main issue was whether the contract became impossible of performance due to the government ordinances and whether the District Board should get costs in these cases.

Ratio Decidendi: The court held that under Section 56 of the Indian Contract Act, a contract becomes void only if it becomes impossible or unlawful due to an event that the promisor could not prevent. The court also emphasized the duty of the District Board to consider remitting a portion of the amount payable by the plaintiffs in the public interest.

Final Decision: The appeals were allowed, and the plaintiffs' suits were dismissed. The court advised the District Board to consider remitting a portion of the amount payable by the plaintiffs.

JUDGMENT

Devadoss, J.

1. In these appeals the District Board of South Kanara is the appellant. The main contention for the appellant is that the contract entered into with the appellant by the plaintiffs did not become impossible of performance. The plaintiffs purchased the right to collect toll at two toll gates, Hoshangadi and Kollur during the official year 1918-10. In September of that year the Government pass-ed au ordinance that food grains etc., should cot be transported from the British territory to Mysore; and the Mysore Government also passed a similar ordinance as regards the transport of food grains, etc., from Mysore to South Kanara. In consequence to these two ordinances, the traffic in food grains, etc., was entirely stopped between South Kanara and Mysore. The plaintiffs naturally suffered a loss on account of the stoppage of the traffic in food grains, etc. They have brought two separate suits for the recovery of the amount collected from them. Both the Courts have given decree in their favour and the District Board has preferred these two second appeals.

2. The contention on behalf of the appellant that the contracts did not become wholly incapable of performance, I think, is a sound one. When the plaintiffs purchased the right to collect tolls at these two places they did not rely merely upon the carts containing food grains passing along the roads. They must have expected carts of all kinds to pass through these two toll gates; and from the collections at the two toll gates it appears that a number of carts did pass through these toll gates after 22nd September 1918. For the whole of the year the collections at Hoshangadi toll gate amounted to Rs. 850; the collections upto 22nd September 1918 amounted to Rs. 400. At the Kollur toll gate the total collections for the year amounted to Rs. 419; and the collections up to 22nd September 1918 amounted to Rs. 260. It is quite clear, therefore, that considerable traffic did pass the toll gates between 22nd September 1918 and 31st March 1919. That being so it cannot be said that the contract became wholly incapable of performance by reason of the ordinance passed by the Madras Government. In order to make out a case of impossibility of performance, it has to be shown that the contract could not be performed by reason of anything that the Government did in the matter. Under Section 56 of the Indian Contract Act if a contract becomes impossible or by reason of some event which the promisor could not prevent, becomes unlawful then the contract becomes void. Here it cannot be said that the contract to collect tolls at these two toll gates became impossible by reason of the Government passing an ordinance. In order to relieve the plaintiffs of their liability under the contract the performance of it must become impossible as in a case where the right is to collect the tolls for the passage of traffic on a bridge, if the bridge is washed away by a flood, it may be said that the performance of the contract (the collection of the toll) becomes impossible by reason of the bridge being washed away. Here no such thing is alleged or proved. Mr. Sundara Kao for the respondent wanted to contend that the only carts that could have passed these two toll gates were carts containing food grains. There is no evidence for such a contention. Such a case was not put forward by the plaintiffs either in pleadings or in the evidence. It is unnecessary to refer to any decision on the point; for I think the matter is so plain that it hardly requires any authority to make it dear. However I may refer to a case in Herne Bay Steamboat Co. Ltd. v. Hutton [1903] 2 K.B. 683 in which it was held that, when a portion of the contract was capable of performance, the contract did not become void or unenforceable. The plaintiffs suits, therefore, must fail.

3. The next point for consideration is whether the District Board of South Kanara should get costs in these cases. In a matter like this, owing to the Go


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