PUNJAB & HARYANA HIGH COURT
K.L.Gosain and Harbans Singh JJ.
Court Of Wards Dada Siba Estate
Versus
Raja Dharan Dev Chand
First Appeal No. 143 of 1952,
Decided On : SEPTEMBER 23, 1959
LEASE - Frustration of contract - Applicability of doctrine - Lease of land for agricultural purposes - Land taken over by mob - Lessee unable to cultivate land - Whether lease frustrated - Held, no.
Fact of the Case:
Plaintiff leased land from defendant for agricultural purposes. Before the lease term expired, a mob took over the land and the plaintiff was unable to cultivate it. Plaintiff sued for a refund of the lease money, claiming that the lease was frustrated.
Finding of the Court:
The court held that the doctrine of frustration did not apply to the lease because an estate in land had already been created in favor of the plaintiff. The court also held that the provisions of Section 108(e) of the Transfer of Property Act were inapplicable because the land was neither destroyed nor became permanently unfit for the purposes of agriculture.
Issues: 1. Whether the doctrine of frustration applied to the lease. 2. Whether the provisions of Section 108(e) of the Transfer of Property Act were applicable.
Ratio Decidendi: 1. The doctrine of frustration is a positive rule of law embodied in Section 56 of the Contract Act and is applicable only to purely contractual obligations, not to contracts creating an estate in land. 2. A contract of lease may be avoided on the happening of an event as contemplated by the terms of the contract, which may be either express or implied. This does not amount to discharge of a contract by the application of the doctrine of frustration but really amounts to construction of the document and discharge of the same under the provisions of Section 32 of the Contract Act. 3. A contract of lease may further be avoided at the option of the lessee on the happening of an event as contemplated under Clause (e) of Section 108 of the Transfer of Property Act. The avoidance in this case, however, must be differentiated from discharge of a contract by frustration because in the latter case, volition of the parties is not at all material, while under Clause (e) the Option is that of the lessee.
Final Decision: The court dismissed the plaintiff's suit.
Harbans Singh, J.
1. This order will dispose of two Regular First Appeals Nos. 143 and 144 of 1952, in both of which, the facts are similar and the points of law that arise are indentical.
2. The facts giving rise to the suit, out of which appeal No. 143 has arisen, may briefly be stated as follows : Kanwar Rajinder Singh defendant No. 2, (at that time a minor) son of Raja Sham Singh of Dada Siba in Kangra District, was under the Court of Wards and inter alia owned five squares of land situated at Chak No. 2/1 AL, Tehsil Okara, District Montgomery (now. in West Pakistan). The Deputy Commissioner, Kangra, who managed this estate, issued a notice in the month of November, 1948, inviting tenders for the giving of this land on lease for a period of one year, namely, for Kharif 1947, and Rabi 1948. Thakar Dalip Singh plaintiff (now represented fay Raja Dharam Dev Chand respondent), submitted a tender offering Rs. 11.125/- which was accepted by the Deputy Commissioner, Kangra. The whole of this amount, in accordance with the terms of the tender, was paid in advance on various dates before February, 1947. It has been established on the record and is not now in dispute that the plaintiff was already in possession of the land, being a lessee of the same for the preceding year, i.e., for kharif 1946 and rabi 1947 and consequently continued to be in possession of the land, after the expiry of the term of the previous lease, under the present lease for the year 1947-48.
Due to riots that immediately preceded and followed the nartition of the country the lessee and some of his tenants who were Hindus left Okara and came over to East Punjab and thus, the lessee was not able even to harvest the kharif crop of 1947. which was to mature in the month of September or October. On 16th of October, 1947, vide Exhibit D. 7, the plaintiff sent a letter to the Deputy Commissioner, Kangra, informing him that the land in dispute having been taken possession of by the Pakistani Muslims and the Pakistan Government, the amount of Rs. 11.125/- paid by ham in advance as lease money for kharif 1947 and rabi 1948 should be refunded to him. Having failed to receive any satisfaction he brought the suit, out of which the present appeal has arisen, on 6th of February, 1950. Paragraph 5 of the plaint gives the grounds on which refund was claimed along with interest.
(1) That the plaintiff was not given possession of the land as lessee for kharif 1947 and rabi 1948;
(2) that so far as the plaintiff was concerned, the land which he had taken on lease "was lost to him on account of the acts of beating, looting and violence committed by large mobs of ferocious Muslims";
(3) for the reasons given above, it became impossible for the plaintiff from the middle of June to cultivate and nurture the crop of kharif 1947;
(4) that the consideration for which the lease money was paid had failed and the plaintiff was entitled to receive the amount paid by him by way of refund or compensation.
The suit was resisted on various grounds and inter alia it was stated that the possession was already with the plaintiff and he continued to remain in possession of the land even after rabi 1947, and that, in fact, the work of kharif 1947 began in the month of April and May, 1947, that the work of cultivation after August, 1947, could have been continued by the tenants of the. plaintiff who belonged to Montgomery District and that the plaintiff was not entitled to any refund. In the replication on behalf of the plaintiff it was further stated that the principle of frustration also applied. In view of these pleadings, a number of issues were settled. However, it would be sufficient to reproduce issues Nos. 1, 4 and 5 on which we were addressed by-die counsel for the parties. These are as follows:
1. Whether the suit is not cognizable by this Court as the lands leased are situated in Montgomery District?
4. Whether the contract of lease became Impossible of performance and the consider
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