Satyabrata Ghose v. Mugneeram Bangur &co.
DATE OF JUDGMENT: 16/11/1953
BENCH: MUKHERJEA, B.K. BENCH: MUKHERJEA, B.K. BOSE, VIVIAN BHAGWATI, NATWARLAL H.
Facts
Satyabrata (plaintiff), assignee of Bejoy Krishna Roy, sued defendant alongwith Bejoy as party defendant, for wrongfully repudiating the contract of developing the lands which were sold to the plaintiff, and asked for specific performance of the same. Defendant took the defence of frustration as the lands which needed to be developed were temporarily requisitioned by the Govt. under the defence rules such that for unspecified period of time, any development work if executed on the land would be illegal. The contract was made at a time when war conditions were prevailing and any such requisition was imputed to be in contemplation of the parties while forming contract. Further, no time was specified in the contract.
Issue– Whether the doctrine of frustration will be applicable in this case?
Whether the plaintiff can seek relief under sec.56 of the Indian contracts act, 1847 ?
Held
Impossibility’ u/s 56 doesn’t mean literal impossibility to perform (like strikes, commercial hardships, etc.) but refers to those cases where a supervening event beyond the contemplation and control of the parties (like the change of circumstances) destroys the very foundation upon which the contract rests, thereby rendering the contract ‘impracticable’ to perform, and substantially ‘useless’ in view of object and purpose which the parties intended to achieve through the contract. Therefore, this is not a case applicable under the sec.56 of the Indian contracts act,1872 and a defence of frustration of contracts cannot be claimed under this case.
In the present case, Firstly, war condition were known to the parties while entering into the contract such they were aware of the possible difficulty in performance of the contract, in such circumstances, the requisition of property did not affect the root of the contract; Secondly, no stipulation as to time was provided in the agreement such that the work was to be completed within a reasonable time, but having regard to the nature of the development contract and the knowledge of the war conditions prevailing during the contract, such a reasonable time was to be relaxed. Therefore, the contract had not become impossible of performance u/s 56.
Caldwell v. Taylor
Facts.
Plaintiff and Defendant entered into a contract, in which, Defendant agreed to let the Plaintiff use The Surrey Gardens and Music Hall on four certain days. After the signing of the contract, but before the first contract, the concert hall was destroyed by fire. The destruction was without fault of either party and was so extensive that the concerts could not be given.
Issue.
Whether the loss suffered by Plaintiffs, is recoverable from the Defendant?
Held-
The Defendant was discharged from performing, and his failure to perform was not a breach of the contract. When the contract is absolute, the contractor must perform it or pay damages for nonperformance although in consequence of unforeseen events the performance of the contract has become impossible. However, that occurs only where the contract is absolute. The contract here is subject to an implied condition that the parties shall be excused if performance becomes impossible from the perishing of the thing without fault of the contractor. The parties regarded the continuing existence of the hall as the foundation of the contract, and the contract contained an implied condition that both parties would be excused if the hall did not exist. Therefore, the destruction of the hall without fault of either party excuses both parties, the Plaintiff from taking the gardens and paying the money and the Defendant from performing their promise to give the use of the hall.
Conclusion– This is the case where the doctrine of impossibility through destruction of the subject matter was established by the queen’s bench.
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