SUPREME COURT OF INDIA
J.C. SHAH, V. RAMASWAMI AND G.K. MITTER, JJ.
Raja Dhruv Dev Chand, Appellant
Versus
Raja Harmohinder Singh and another, Respondents
Civil Appeal No. 407 of 1965,
D/- 1-3-1968.
Advocates appeared
M/s. Vikram Chand Mahajan and Hardev Singh Advocates, for Appellant, M/s. B. P. Maheshwari, Sobhag Mal Jain and R. K. Maheswari, Advocates, for Respondent No. 2.
Indian Contract Act - Section 56 - Transfer of Property Act - Section 4 - Lease - Refund of rent amount - Doctrine of frustration - Applicability of - Appellant claimed a decree for refund of rent on ground that consideration for lease failed, because covenants of lease had become impossible of performance as a result of communal riots in District of Montgomery and inability of non-muslims to continue to reside in that area - High Court rejected contention - Held, Doctrine of frustration does apply to leases, but even if it does not apply in terms to contract of lease of agricultural land broad principle of frustration of contract applies to leases". Court are unable to agree with that observation, and observation at p. 11 that "According to Indian law, sales of land as also leases are contracts" - Under a lease of land there is a transfer of right to enjoy that land. Rule is incorporated in S. 108 (e) of Transfer of Property Act and applies to leases of land, to which Transfer of Property Act applies, and principle thereof to agricultural leases and to leases in areas where Transfer of Property Act is not extended - Appeal dismissed.
Judgement
SHAH, J. :- The appellant obtained from the Court of Wards, Dada Siba Estate, a lease of five squares of land in Tahsil Okara District Montgomery in the undivided Punjab for the Kharif season 1947 and Rabi season 1948. Following upon the partition of India in July 1947 and allotment of the territory in which the lands were situate to Pakistan, the appellant migrated to India
2. An action commenced by the appellant against the Court of Wards in the Court of the Subordinate Judge, Kangra, at Dharamsala for a decree for refund of the rent paid by him was decreed. But the High Court of Punjab reversed the decree, holding that the doctrine of frustration of contract did not apply to leases of immovable property and that in any event on the facts proved there was no case of frustration established by the appellant. With certificate granted by the High Court. this appeal is preferred by the appellant. Raja Harmohinder Singh and Kanwar Rajinder Singh have now been substituted in place of the Court of Wards as the respondents.
3. The appellant claimed a decree for refund of the rent on the ground that the consideration for the lease failed, because the covenants of the lease had become impossible of performance as a result of communal riots in the District of Montgomery and the inability of non-muslims to continue to reside in that area. The High Court rejected the contention.
4. The following findings of the High Court are not challenged before us:
5. After obtaining possession of lands from the Court of Wards the appellant carried on agricultural operations for Kharif cultivation and "partly enjoyed benefit therefrom by taking fodder etc.", that the right to the demised land continued to remain vested in the appellant even after he migrated to India, that the lands demised were neither destroyed nor had they become permanently unfit for the purpose of agriculture, and that there was no agreement- express or implied -that the rent was payable only if the appellant was able personally to attend to or supervise the agricultural operations.
6. Under the English common law the earlier case laid down the rule of "absolute contract" that when a duty was cast upon a person who bound himself by contract absolutely to do a thing, he could not escape liability for damages for breach by proof that as events turned out performance was futile or even impossible: see Paradine v. Jane, 1947 Aleyan 26. This rule was later mitigated by an exception that if further fulfilment of the contract is brought to an abrupt stop by some irresistible and extraneous cause for which neither party is responsible, the contract shall terminate forthwith and the parties be discharged: see Denny, Mott and Dickson Ltd. v. James B. Fraser and Co. Ltd., 1944 AC 265. The rationale of the doctrine of frustration under the English common law need not be considered, for in India by the provisions of the Indian Contract Act have turned a limited exception under the English common law into a positive general rule in S. .56 of the Indian Contract Act. Section 56. insofar as it is material provides "An agreement to do an act impossible in itself is void.
7. A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
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Under S. 56, where an event which could not reasonably have been in the contemplation of the parties when the contract was made, renders performance impossible or unlawful, the contract is rendered void, and the parties are excused from performance of their respective obligations. Therefore where performance is rendered by intervention of law invalid, or the subject matter assumed by the parties to continue to exist is destroyed, or a state of thing assumed to be the foundation of the contract fails, or does not happen, or where the performance is to be rendered personally and the person dies or is disa
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