judgement:
Appeal No. 1040/63.
C.K. Daphtary, Attorney General, M.S.K. Sastri and R.H. Dhebar, for the appellant.
C.B. Agarwala and A.G. Ratnaparkhi, for the respondent.
The Judgment of the Court was delivered by Gajendragadkar, C.J.
The short question of law which arises in this appeal is whether the appellant, the State of Bombay (now Maharashtra), shows that its predecessor State of Madhya Pradesh (hereinafter called the Government) had given a reasonable opportunity to.
the respondent, Narul Latif Khan, to defend himself before it passed the final order on June 6, 1952 compulsorily retiring him under Article 353 of the Civil Service Regulations.
By this order, the respondent was compulsorily retired and in relaxation of article 353, the Government was pleased to allow the respondent to draw a compassionate allowance equal to the pension which would have been admissible to him had he been invalidated.
This order was challenged by the respondent by filing a suit in the Court of the first Additional District Judge at Nagpur.
In his plaint, the respondent alleged that the impugned order whereby he was compulsorily retired, was invalid and he claimed a declaration that it was ultra vires and inoperative.
He also asked for a declaration that he was entitled to be restored to the post which he held on July 6, 1950, and that he should be given all pay, allowances.
increments and promotions to which he would have been entitled if he had been permitted to continue in service.
In the result, the respondent asked for a decree for Rs. 62,237 with interest at 6 per cent per annum from the date of the suit till realisation.
This claim was resisted by the appellant on several grounds.
The principal ground on which the appellant challenged the respondent 's claim, however, was that he had been given a reasonable opportunity to defend himself, and so, the impugned order was perfectly valid, and legal.
Several other pleas were also raised by the appellant.
On these pleas, the learned trial Judge framed appropriate issues.
The issue with which we are concerned in the present appeal, however, centered round the question as to whether the Constitutional provision prescribed by article 311 affording protection to the respondent had been contravened.
The trial Judge made a finding against the respondent on this issue.
He also recorded his findings on the other issues with which we are not directly concerned in the present appeal.
In regard to the money claim made by the respondent, the learned trial Judge made a finding that in case he was held entitled to such relief, a decree for Rs. 37,237 may have to be passed in his favour.
In view of his conclusion that the impugned order was valid, no question arose 137 for making such a decree in favour of the respondent.
The respondent 's suit, therefore, failed and was dismissed.
The respondent then took the matter in appeal before the High Court of Judicature at Bombay, Nagpur Bench.
The High Court has, in substance, held that the constitutional provisions prescribed by article 311 have not been complied with by the appellant before it passed the impugned order against the respondent.
It has found that the departmental enquiry which was held suffered from the serious infirmity that the enquiry officer did not hold an oral enquiry and did not allow an opportunity to the respondent to lead his oral evidence.
It has also held that the second notice served by the appellant on the respondent calling upon him to show cause why the report made by the enquiry officer should not be accepted and appropriate punishment should not be inflicted on him, was defective, and that also made the impugned order invalid.
The High Court appears to have taken the view that the impugned order does not show that the appellant had taken into account the explanation offered by the respondent in response to the second notice issued by the appellant.
As a result of these findings, the High Court has reversed the conclusion of the trial Court on the main question and has found that the impugned order is invalid and inoperative.
On that view, the High Court considered the money claim made by the respondent, and it confirmed the finding of the trial Court that the respondent would be entitled to a decree for Rs. 37,237.
In fact, the alternative finding recorded by the trial Court in respect of the amount to which the respondent would be entitled in case he succeeded in challenging the validity of the impugned order, was not questioned before the High Court.
In the result, the High Court allowed the appeal and passed a money decree for Rs. 37,237 in favour of the respondent in terms of prayer (A) of paragraph 31 of the plaint.
The appellant then applied for and obtained a certificate from the High Court and it is with the said certificate that it has brought the present appeal before this Court.
That is how the main question which falls for our decision is whether the constitutional provision prescribed by article 311 has been complied with by the appellant before it passed the impugned order.
At this stage, it may be relevant to refer to some material facts.
The respondent was appointed as Extra Assistant Commissioner in 1926 and since then he had been holding various offices in the State service of the then Madhya Pradesh Government.
In 1950, he was holding the post of a Treasury Officer at Nagpur.
It appears that privilege leave for over a year was due to him and he had applied for four months ' privilege leave.
On June 12, 1950, Government informed him that his request for leave was rejected and he was told that no further application for leave would be entertained in future.
On July 7, 1950, the respondent proceeded 138 on casual leave for two days, and on July 8, 1950 he renewed his application for four months ' leave on medical grounds.
This application was accompanied by a certificate given by Dr. Dange.
Government, therefore, decided to constitute a Medical Board for examining the respondent in order to .decide whether leave on medical grounds should be granted to him.
Accordingly, the respondent appeared before a Special Medical Board on July 22, 1950.
The Medical Board, however, could not come to a decision as to whether the respondent should be granted leave on medical grounds for four months.
It recommended that the respondent should get himself admitted in the Mayo Hospital, Nagpur.
for observation and investigation.
In accordance with this report, Government asked the respondent to get himself admitted in the Mayo Hospital in time, so that the Board could examine him on August 8, 1950.
The respondent refused to, go to the Mayo Hospital and pressed that he should be allowed to go to Calcutta to receive medical treatment from experts.
It appears that on July 26, 1950, the respondent received a telegram from Raipur stating that his daughter was dangerously ill there.
He, therefore, made another application on the same day requesting for ten days ' leave to enable him to go to Raipur and see his ailing daughter.
On July 31, 1950, Government granted the respondent 's request.
Accordingly, the respondent went to Raipur.
From Raipur he renewed his application for four months ' leave on Medical grounds and produced certificates from Dr. Bhalerao and Dr. Kashyap.
That led to a lengthy correspondence between the respondent and the Government which shows that Government insisted on his appearing before the Medical Board and the respondent was not prepared to go to.
Nagpur because he alleged that he was seriously ill and could not undertake a journey to Nagpur.
Ultimately, on September 9, 1950, Government called upon the respondent to resume his duties within three days from the receipt of the said letter failing which he was told that he would be suspended and a departmental enquiry would be started against him.
On October 4, 1950, the respondent wrote a lengthily reply setting forth his contentions in detail.
Since he did not resume his duties, Government decided to suspend him and start a departmental enquiry against him.
Mr. S.N. Mehta, I.C.S., was accordingly appointed to hold the.
enquiry.
On November 29, 1950, Mr. Mehta wrote to the respondent that Government had directed him to conduct the departmental enquiry, and called upon the respondent to attend his office on December 7, 1950, at 11.00 a.m.
The respondent, however.
did not appear before him and wrote to Mr. Mehta that owing to his illness, he was unable to appear before him.
He again pleaded that he was seriously ill.
On January 15, 1951, Mr. Mehta served the respondent with a charge sheet.
Three charges were framed against him.
The first charge was that he had deliberately disobeyed the orders of Government when he was asked to get himself admitted in the Mayo 139 Hospital for observation and investigation.
The second charge was that he had failed to report for duty even though no leave was sanctioned to him by Government and he was specifically ordered by Government to report for duty.
The third charge was that he had persistently disobeyed the orders of Government and he had thereby shown himself unfit to continue as a member of the State Civil Service.
Material allegations on which reliance was placed against the respondent in support of these charges were also specified under the respective charges.
The respondent was, however, not prepared to appear before Mr. Mehta and he raised several technical contentions.
Ultimately, he sent his written statement and denied all the charges.
His case appears to have been that he had not deliberately disobeyed any of the orders issued by Government.
In regard to his getting admitted in the Mayo Hospital, he seems to have taken the plea that when he was allowed to go on casual leave to see his ailing daughter at Raipur, it was clear that he could not have got himself admitted in the Mayo Hospital so as to enable the Medical Board to examine him on August 8, 1950.
In respect of the charge that he had persistently refused to obey the orders of Government, his case was that he was dangerously ill and that he genuinely apprehended that if he undertook a journey to resume his duty, he might even collapse.
He requested the enquiry officer to allow him to appear by a lawyer whom he would instruct to cross examine the witnesses whom the Government would examine against him.
He also stated that he wanted to give evidence of his own doctors who would depose to his ailing condition at the relevant time.
It appears that Mr. Mehta wanted to accommodate the respondent as much as he could and when he found that the respondent was not appearing in person before him, he in fact fixed a date for hearing at Raipur on September 21, 1951 where he happened to be camping.
On that date, the respondent appeared before Mr. Mehta and Mr. Mehta made a note as to what transpired on that date.
The note shows that "the whole case was discussed with the respondent.
His plea was that he should be allowed to appear through a counsel, but it was explained to him in detail that as far as the case can be seen from Government side at present, it does not involve the taking up oral evidence.
He agreed that he would not press for this facility.
He would, however, like to give a detailed answer to the charge sheet.
He also undertook to appear in person regularly in future".
Thereafter, Mr. Mehta required the respondent to file his detailed written statement.
and in fact, the respondent did file his detailed written statement containing the pleas to which we have already referred.
On November 8. 1951, Mr. Mehta wrote to the respondent that he would be glad to hear him in person in case he wished to make an oral statement on November 20, 1951, and when the respondent did not 140 appear on the said date, Mr. Mehta proceeded to examine the documentary evidence showing the failure of the respondent to comply with the orders issued by Government and made his report on November 24, 1951.
He found that the three charges framed against the respondent were proved.
In his report, Mr. Mehta observed that "the conduct of the respondent and the language used by him from time to time in his communications .discloses an attitude of disobedience and insubordination which no Government can tolerate from its subordinate officers".
We may incidentally observe that the comment thus made by Mr. Mehta in regard to the communications addressed by the respondent to him appears to us to be fully justified but, in our opinion, this aspect of the matter cannot have any material bearing on the question with which we are concerned.
The validity of the impugned order must be judged objectively without considering the impropriety of the language used by the respondent or the reluctance shown by him to appear before Mr. Mehta.
In his report, Mr. Mehta has also observed that when the respondent met him, he explained to him that the case did not involve recording of any oral evidence as it was based on documents only.
Mr. Mehta adds that according to the impression he got at that time, the respondent was satisfied that in the circumstances, the assistance of a counsel was unnecessary.
It is, however, plain from the several letters written by the respondent to Mr. Mehta that he was insisting upon an oral enquiry and that he wanted to examine his doctors to show that he was so iII at the relevant time that he could not have resumed his duties.
On March 2, 1951, the respondent wrote to Mr. Mehta stating, inter alia, that he wished to put in the witness box a few high ranking Government officers and the doctors whom he had consulted about his illness.
Earlier on January 20, 1951, he had written to Mr. Mehta requesting him to conduct an oral enquiry as laid down in paragraph 8(iv) G.B. Circular 13.
Similarly, on April 23, 1951, he again informed Mr. Mehta that in his opinion the institution of the departmental enquiry after suspending him was illegal and had caused him grave injury, and he added that oral and documentary evidence will be produced in defence.
It does appear that Mr. Mehta explained to the respondent that so far as Government was concerned, it rested its case merely on documents and did not think it necessary to examine any witnesses, and thereupon the respondent agreed that he need not have the facility of the assistance of a lawyer.
But it is clear from the remarks made by Mr. Mehta in the order sheet on September 21, 1951, and the observations made by him in his report that the only point on which the respondent agreed with Mr. Mehta was that he need not be allowed the assistance of the lawyer in the departmental enquiry.
We have carefully examined the record in 141 this case and we see no justification for assuming that the respondent at any time gave up his demand for an oral enquiry in the sense that he should be given permission to cite his doctors in support of his pica that his failure to resume his duties was due to his ill health.
The charge against him was that he had deliberately disobeyed the Government orders, and it is conceivable that this charge could have been met by the respondent by showing that though he disobeyed the orders, the disobedience was in no sense deliberate because his doctors had advised him to lie in bed; and thus considered, his desire to lead medical evidence cannot be treated as a mere subterfuge to prolong the enquiry.
It is true that the respondent did not give a list of his witnesses; but he had named his doctors in his communications to Mr. Mehta, and in fact Mr. Mehta never fixed any date for taking the evidence of the witnesses whom the respondent wanted to examine.
If Mr. Mehta had told the respondent that he would take the evidence of has witnesses on a specified date and the respondent had failed to appear on the said date with his witnesses, it would have been an entirely different matter.
Therefore, the position is that Mr. Mehta did net hold an oral enquiry and did not give an opportunity to the respondent to examine his witnesses and so, the question which arises for our decision is: does the failure of Mr. Mehta to hold an oral enquiry amount to a failure to give a reasonable opportunity to the respondent within the meaning of article 311 ? The requirements of article 311(2) have been considered by this Court on several occasions.
At the relevant time, article 311(2) provided that no person to whom article 311 applies shall be dismissed or removed or reduced in rank until he has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard t9 him.
It is common ground that the impugned order of compulsory retirement attracts the provisions of article 311 (2).
If it appears that the relevant statutory rule regulating the departmental enquiry which was held against the respondent made it obligatory on the enquiry officer to hold an oral enquiry if the respondent so demanded.
then there would be no doubt that the failure of the enquiry officer to hold such an oral enquiry would introduce a serious infirmity in the enquiry and would plainly amount to the failure of the appellant to give a reasonable opportunity to the respondent.
This position is not disputed by the learned Attorney General and is indeed well settled.
So, the narrow question to which we must address ourselves is whether it was obligatory on Mr. Mehta to hold, an oral enquiry and give d reasonable opportunity to the respondent to lead oral evidence and examine his doctors.
We will assume for the purpose of this appeal that in a given case, Government would be justified in placing its case against the charge sheeted officer only on documents and may be under no obligation to examine any witnesses, 142 though we may incidentally Observe that even in such cases, if the officer desires that the persons whose reports or orders are being relied upon against him should be offered for cross examination, it may have to be considered whether such an opportunity ought not to be given to the officer; but that aspect of the matter we will not consider in the present appeal.
Therefore, even if it is assumed that Government could dispense with the examination of witnesses in support of the charges framed against the respondent, does the relevant rule make it obligatory on the Enquiry Officer to hold an oral enquiry and give the respondent a chance to examine his witnesses or not? This question falls to be considered on the construction of rule 55 of the Civil Services (Classification, Control and Appeal) Rules.
This rule reads thus: "Without prejudice to the provisions of the Public Servants Inquiries Act, 1850, no order of dismissal, removal or reduction shall be passed on a member of a service (other than an order based on facts which have led to the conviction in a Criminal Court or by a Court, Martial) unless he has been informed in writing of the grounds on which it is proposed to take action, and. has been afforded an adequate opportunity of defending himself.
The grounds on which it is proposed to take action shall be reduced to the form of a definite charge or charges, which shall be communicated to the person charged together with a statement of the allegations on which each.
charge is based and of any other circumstances which it is proposed to take into consideration in passing orders on the case.
He shall be required within a reasonable time, to put in a written statement of his defence and to state whether he desires to be heard in person.
If he so desires or if the authority concerned so direct, an oral enquiry shall be held.
At that enquiry oral evidence shall be heard as to such of the allegations as are not admitted, and the person charged shall be entitled to cross examine the witnesses, to give evidence in person and to have such witnesses called.
as he may wish, provided that the officer conducting the enquiry may, for special and sufficient reason to be recorded in writing.
refuse to call a witness.
The proceedings shall contain a sufficient record of the evidence and a statement of the findings and the grounds thereof.
" It appears that the Government of Madhya Pradesh had issued a Circular explaining this Rule.
The Circular contained Rule 8 which is relevant.
It provides that "particular attention is invited to the provisions regarding oral enquiry.
In case the person charged desires that an oral enquiry should be held, the authority holding the departmental enquiry has no option to refuse it".
The High 143 Court seems to have based its conclusion substantially, if not entirely, on this rule.
We do not propose to adopt that course.
The rule may be no more than a circular issued by Government and we do not propose to examine the question as to whether it has the force of a statutory rule.
Our decision would, therefore, be based on the construction of Rule 55 of the Civil Services Rules which admittedly applied and which admittedly is a statutory rule.
The relevant clause in this Rule provides that the officer charge sheeted shall be required within a reasonable time to put in a written statement of his defence and to state whether he desires to be heard in person.
This clause has been complied with m the present proceedings.
Mr. Mehta gave notice to the respondent to appear before him in person on the 20th November, 1951 and the respondent did net appear on that date.
It is the next clause on which the decision of the present appeal depends.
This clause lays down that if he, that is to say the charge sheeted officer, so desires or if the authority concerned so directs, an oral enquiry shall be held.
In our opinion, it is plain that the. requirement that an oral enquiry shall be held if the authority concerned so directs.
or if the charge sheeted officer so desires is mandatory.
Indeed.
this requirement is plainly based upon considerations of natural justice and fairplay.
If the charge sheeted officer wants to lead his own evidence in support of his plea, it is obviously essential that he should be given an opportunity to lead such evidence.
Therefore.
we feel no hesitation in holding .that once the respondent expressed his desire to Mr. Mehta that he wanted to lead evidence in support of his plea that his alleged disobedience of the Government orders was not deliberate, it was obligatory on Mr. Mehta to have fixed a date for recording such oral evidence and give due intimation to the respondent in that behalf.
It is true that the oral enquiry which the enquiry officer is bound to hold can well be regulated by him in his discretion.
If the charge sheeted officer starts cross examining the departmental witnesses in an irrelevant manner, such cross examination can be checked and controlled.
If the officer desires to examine witnesses whose evidence may appear to the enquiry officer to be thoroughly irrelevant, the enquiry officer may refuse to examine such witnesses; but in doing so, he will have to record his special and sufficient reasons.
In other words, the right given to the charges heated officer to cross examine the departmental witnesses or examine his own witnesses can be legitimately examined and controlled by the enquiry officer; he would be justified in conducting the enquiry in such a way that its proceedings are not allowed to be unduly or deliberately prolonged.
But, in our opinion it would be impossible to accept the argument that if the charge sheeted officer wants to lead oral evidence, the enquiry officer can say that having regard to the charges framed against the officer.
he would not hold any oral enquiry.
In the present case, the witnesse. 144 whom the respondent wanted to examine; would undoubtedly have given relevant evidence.
If the doctors who treated the respondent had come and told the enquiry officer that the condition of the respondent was so bad that he could not resume work, that undoubtedly would have been a relevant and material fact to consider in deciding whether the charges framed against the respondent were proved.
Even if we disapprove of the attitude adopted by the respondent in the course of this enquiry and condemn him for using extravagant words and making unreasonable contentions in his communications to the enquiry officer, the fact still remains that he wanted to examine his doctors, and though he intimated to Mr. Mehta that he desired to examine his doctors, Mr. Mehta failed to give him an opportunity to do so.
That, in our opinion, introduces a fatal infirmity in the whole enquiry which means that the respondent has not been given a reasonable opportunity to defend himself within the meaning of article 311(2).
On that view of the matter, it is unnecessary to consider whether the High Court was right in its other conclusions that the second notice served by the appellant on the respondent was defective and that the final order was also defective inasmuch as it did not appear that the appellant had taken into account the representation made by respondent.
It is not disputed by the learned Attorney General that if we hold that the enquiry conducted by Mr. Mehta contravened the mandatory provision of r. 55, the decision of the High Court could be sustained on that ground alone.
In the result.
the appeal fails and is dismissed with cost.
Appeal dismissed.

summary/full:
The appellant who was in the service of a State Government asked for long leave which was refused.
Subsequently he asked for ten days ' leave which was granted.
On the expiry of the leave period he did not join duty on the ground that he was seriously ill.
The Government refused to accept the plea and instituted a departmental inquiry against him.
The respondent wanted to produce oral evidence in support of his plea including the evidence of doctors who treated him, but the enquiry officer refused to record oral evidence on the ground that the case against the appellant rested on documents alone and therefore no oral evidence was necessary.
On the report of the enquiry ' officer the State Government ordered the compulsory retirement of the respondent.
The latter filed a suit in which he claimed inter alia that the constitutional provision in article 311 had been contravened.
The trial judge held against him but the High Court decided in his favour.
The State Government appealed to the Supreme Court with certificate.
The narrow question to which the COurt had to address itself was whether it was obligatory on the enquiry officer to give a reasonable opportunity to the respondent to lead oral evidence and examine his doctors.
HELD: (i) The Civil Services (ClassifiCation, Control and Appeal) Rules provide in r. 55 that if the charge sheeted Officer so desires or if the authority concerned so directs an oral enquiry shall be held.
This provision is mandatory and is based on considerations of natural justice and fair play.
Therefore when the respondent expressed his desire to the enquiry officer that he wanted to lead evidence in support of his plea, it was obligatory on the enquiry officer to have fixed a date for recording such oral evidence and give due intimation to the respondent in that behalf.
[143 D F] (ii) Though an enquiry officer would be justified in conducting the enquiry in such a way that its proceedings are not allowed to be unduly or deliberately prolonged, it would be impossible to accept the argument that if the charge sheeted officer wants to lead oral evidence the enquiry officer can say that having regard to the charges against the officer he would not hold any oral enquiry [143 H] (iii) In the present case the witnesses whom the respondent wanted to examine would undoubtedly have given relevant evidence.
He wanted to examine his doctors but the enquiry officer failed to give him an opportunity to do so.
That introduced a fatal infirmity in the whole enquiry as the respondent had not been given a reasonable opportunity to de.fend himself within the meeting of article 311 (2).
The appeal of the State Government had therefore to be dismissed.
[144 A, C] 136


judgement:
Appeal No. 80 of 1952.
Appeal from the Judgment and Decree dated the 6th September, 1950, of the High Court of Judicature at Calcutta (Das Gupta and Lahiri JJ.) in Appellate Decree No. 318 of 1949 from the Judgment and Decree dated the 25th February, 1949.
of the Court of the District Judge of Zillah 24 Parganas in Title Appeal No. 8 of 1948 arising out of the Judgment and Decree dated the 10th October, 1947, of the Court of the Additional Subordinate Judge, 7th Court, Alipore.
M.C. Setalvad, Attorney General for India (Aurobindo Guha and Gobinda Mohan Roy, with him) for the appellant.
Atul Chandra Gupta (Bijan Behari Das Gupta, with him) for respondent No. 1 1953.
November 16.
The Judgment of the Court was delivered by MUKHERJEA J.
The facts giving rise to this appeal are, for the most part, uncontroverted and the dispute between the parties centres round the short point as to whether a contract for sale of land to which this litigation relates, was discharged and came to an end by reason of certain supervening circumstances which affected the performance of a material part of it.
To appreciate the merits of controversy, it will be necessary to give a brief narrative of the material facts.
The defendant company, which is the main respondent in this appeal, is the owner of a large tract of land situated, in the vicinity of the Dhakuria Lakes within Greater Calcutta.
The 313 company started a scheme for development of this land for residential purposes which was described as Lake Colony Scheme No. I and in furtherance of the scheme the entire area was divided into a large number of plots for the sale of which offers were invited from intending purchasers.
The company 's plan of work seemed to be, to enter into agree ments with different purchasers for sale of these plots of land and accept from them only a small portion of the con sideration money by way of earnest at the time of the agree ment.
The company undertook to construct the roads and, drains necessary for making the lands suitable for building and residential purposes and as soon as they were completed.
the purchaser would be called upon to complete the con veyance by payment of the balance of the consideration money.
Bejoy Krishna Roy, who was defendant No. 2 in the suit and figures as a pro forma respondent in this appeal, was one of such purchasers who entered into a contract with the company for purchase of a plot of land covered by the scheme.
His contract is dated the 5th of August, 1940, and he paid Rs. 101 as earnest money.
In the receipt granted by the vendor for this earnest money, the terms of the agree ment are thus set out: "Received with thanks from Babu Bejoy Krishna Roy of 28 Tollygunge Circular Road, Tollygunge, the sum of Rs. 101 (Rupees one hundred and one only) as earnest money having agreed to sell to him or his nominee 5 K. more or less in plot No. 76 on 20 and 30 ft.
Road in Premises No. Lake Colony Scheme No. 1, Southern Block at the average rate of Rs. 1,000 (Rupees one thousand only) per Cotta.
The conveyance must be completed within one month from the date of completion of roads on payment of the balance of the consideration money, time being deemed as the Essence of the Contract.
In case of default this agreement will be considered as cancelled with forfeiture of earnest money.
Mokarari Mourashi 314 Terms of payment:One third to be paid at the time of registration and the balance within six years bearing Rs. 6 per cent.
interest per annum".
On 30th November, 1941, the plaintiff appellant was made a nominee by the purchaser for purposes of the contract and although he brought the present suit in the character of a nominee, it has been held by the trial judge as well as by the lower appellate court, that he was really an assignee of Bejoy Krishna Roy in respect to the latter 's rights under the contract.
Some time before this date, there was an order passed by the Collector, 24 Parganas, on 12th of November, 1941 under section 79 of the Defence of India Rules, on the strength of which a portion of the land covered by the scheme was requisitioned for military purposes.
Another part of the land was requisitioned by the Government on 20th of December, 1941.
while a third order of requisition, which related to the balance of the land comprised in the scheme, was passed sometime later.
In November, 1943, the company addressed a letter to Bejoy Krishna Roy informing him of the requisitioning of the lands by the Government and stating inter alia that a considerable portion of the land appertaining to the scheme was taken possession of by the Government and there was no knowing how long the Government would retain possession of the same.
The constructs of the proposed roads and drains, therefore, could not be taken up during the continuance of the war and possibly for many years after its termination.
In these circumstances,, the company decided to treat the agreement for sale with the addressee as cancelled and give him the option of taking back the earnest money within one month from the receipt of the letter.
There was offer made in the alternative that in case the purchaser refused to treat the contract as cancelled, he could, if he liked, complete the conveyance within one month from the receipt of the letter by paying the balance of the consideration money and take the land in the condition in which it existed at that time, the company undertaking to construct the roads and the drains, as circumstances might permit, after the termination of the war.
315 The letter ended by saying that in the event of the addressee not accepting either of the two alternatives, the agreement would be deemed to be cancelled and the earnest money would stand forfeited.
This letter was handed over by Bejoy Krishna to his nominee, the plaintiff, and there was some correspondence after that, between the plaintiff on the one hand and the company on the other through their respective lawyers into the details of which it is not necessary to enter.
It is enough to state that the plaintiff refused to accept either of the two alternatives offered by the company and stated categorically that the latter was bound by the terms of the agreement from which it could not, in law, resile.
On 18th of January, 1946, the suit, out of which this appeal arises, was commenced by the plaintiff against the defendant company, to which Bejoy Krishna Roy was made a party defendant and the prayers in the plaint were for a two fold declaration, namely, (1) that the contract dated the 5th of August, 1940, between the first and the second defendant, or rather his nominee, the plaintiff, was still subsisting; and (2) that the plaintiff was entitled to get a conveyance executed and registered by the defendant on payment of the consideration money mentioned in the agreement and in the manner and under the conditions specified therein.
The suit was resisted by the defendant company who raised a large number of defences in answer to the plaintiff 's claim, most of which are not relevant for our present purpose.
The principal contentions raised on behalf of the defendant were that a suit of this description was not maintainable under section 42 of the Specific Relief Act and that the plaintiff had no locus standi to institute the suit.
The most material plea was that the contract of sale stood discharged by frustration as it became impossible by reason of the supervening events to perform a material part of it.
Bejoy Krishna Roy did not file any written statement and he was examined by the plaintiff as a witness on his behalf.
316 The trial judge by his judgment dated 10th October, 1.947, overruled all the pleas taken by the defendant and decreed the plaintiff 's suit.
An appeal taken by the defendant to the Court of the District Judge of 24 Parganas was dismissed on the 25th February, 1949, and the judgment of the trial court was affirmed.
The defendant company thereupon preferred a second appeal to the High Court which was heard by a Division Bench consisting 'of Das Gupta and Lahiri JJ.
The only question canvassed before the High Court was, whether the contract of sale was frustrated by reason of the requisition orders issued by the Government? The learned Judges answered this question in the affirmative in favour of the defendant and on that ground alone dismissed the plaintiff 's suit.
The plaintiff has now come before us on the strength of a certificate granted by the High Court under article 133(I)(c) of the Constitution of India.
The learned Attorney General, who appeared in support of the appeal, has put forward a three fold contention on behalf of his client.
He has contended in the first place that the doctrine of English law relating to frustration of contract, upon which the learned Judges of the High Court based their Decision has no application to India in view of the statutory provision contained in section 56 of the Indian Contract Act.
it is argued in the second place, that even if the English law Applies, it can have no application to contracts for sale of land and that is in fact the opinion expressed by the English ,judges themselves.
His third and the last argument is that on the admitted faacts and circumstances of this case there was no frustrating event which could be said to have taken away the basis of the contract or tendered its performance impossible in any sense of the word.
The first argument advanced by the learned AttorneyGeneral raises a somewhat debatable point regarding the true scope and effect of section 56 of the Indian Contract Act and to what extent, if any, it incorporates the English rule of frustration of contracts.
317 Section 56 occurs in Chapter IV of the Indian Contract Act which relates to performance of contracts and it purports to deal with one circumstances under which performance of a, contract is excused or dispensed with on the ground of the contract being void.
The section stands as follows: "An agreement to do an act impossible in itself is void.
A contract to do an act which after the contract is made, becomes impossible, or, by reason of some event which the promiser could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.
Where one person has promised to do something which he knew, or, with reasonable diligence, might have known, and which the promisee did not know to be impossible or unlawful, such promisor must make compensation to such promisee for any loss which such promise sustains through the non performance of the promise".
The first_paragraph of the section lays down the law in the same way as in England.
It speaks of something which is impossible inherently or by its very nature, and no one can obviously be directed to an act.
The second paragraph enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done.
The wording of this paragraph is quite general, and though the illustrations attached to it are not at all happy, they cannotderogate from the general words used in the enactment.
This much is clear that the word "impossible" has not been used here in the sense of physical or literal impossibility.
The performance of an act may not be literally impossible but it may be impracticbale and useless from the point of view of the object and purpose which the parties had in view and if an untoward event or change of circumstances totally upset the very foundation upon which the parties rested their bargain, it can very well be said that the promisor L/B(D)2SCI 6(a) 318 found it impossible to do the act which he promised to do.
Although various theories have been propounded by the Judges and jurists in England regarding the juridical basis of the doctrine of frustration, yet the essential idea upon which the doctrine is based is that of impossibility of performance of the contract: in fact impossibility and frustration are often used as interchangeable expressions.
The changed circumstances, it is said, make the performance of the contract impossible and the parties are absolved from the further performance of it as they did not promise to perform an impossibility The parties shall be excused, as Lord Loreburn says(1), "if substantially the whole contract becomes impossible of performance or in other words impracticable by some cause for which neither was responsible,.
" In Joseph Constantine Steamship Line Limited vs Imperial Smelting Corporation Ltd.(2), Viscount Maugham obseryed that the "doctrine of frustration is only a special case of the discharge of contract by an impossibility of performance arising after the contract was made." Lord Porter agreed with this view and rested the doctrine on the same basis.
The question was considered and discussed by a Division Bench of the Nagpur High Court in Kesari Chand vs Governor General in Council(3) and it was held that the doctrine of frustration comes into play when a contract becomes impossi ble of performance, after it is made, on account of circum stances beyond the control of the parties.
The doctrine is a special case of impossibility and as such comes under section 56 of the Indian Contract Act.
We are in entire agreement with this view which is fortified by a recent pronouncement of this court in Ganga Saran vs Ram Charan(4), where Fazl (1) See Tamplin Steamship Co. Ltd. vs Anglo Mexican Petroleum Products Co. Ltd.[1916] 2 A.C. 397, 403.
(2) at 168.
(3) I.L.R. (4) ; at 52.
319 Ali J., in speaking about frustration, observed in his judgment as follows: "It seems necessary for us to emphasise that so far as the courts in this country are concerned, they must loot primarily to the law as embodied in sections 32 and 56 of the .
" We hold, therefore, that the doctrine of frustration is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of section 56 of the .
It would be incorrect to say that section 56 of the Contract Act applies only to cases of physical impossibility and that where this section is not applicable, recourse can be had to the principles of English law on the subject of frustration.
It must be held also that to the extent that the deals with a particular subject, it is exhaustive upon the same and it is not permissible to import the principles of English law dehors these statutory provisions.
The decisions of the English courts possess only a persuasive value and may be helpful in showing how the courts in England have decided cases under circumstances similar to those which have come before our courts.
It seems necessary however to clear up some misconception which is likely to arise because of the complexities of the English law on the subject.
The law of frustration in England developed, as is well known, under the guise of reading implied terms into contracts.
The court implies a term or exception and treats that as part of the contract.
In the case of Taylor vs Caldwell(1), Blackburn J. first formulated the doctrine in its modern form.
The court there was dealing with a case where a music hall in which one of the contracting parties had agreed to give concerts on certain specified days was accidentally burnt by fire.
It was held that such a contract must be regarded "as subject to an implied condition that the parties shall be excused, in case, before breach, performance becomes impossible from perishing of the thing without (1) ; 320 default of.
the contractor.
" Again in Robinson vs Davison(1) there was a contract between the plaintiff and the defendant 's wife (as the agent of her husband) that she should play the piano at a concert to be given by the plaintifl on a specified day.
On the day in question she was unable to perform through illness.
The contract did not contain any term as to what was to be done in case of her being too ill to perform.
In an action against the defendant for breach of contract, it was held that the wife 's illness and the consequent incapacity excused her and that the contract was in its nature not absolute but conditional upon her being well enough to perform.
Bramwell B. pointed out in course of his judgment that in holding that the illness of the defendant incapaciated her from performing the agreement the court was not really engrafting a new term upon an express contract.
It was not that the obligation was absolute in the original agreement and a new condition was subsequently added to it; the whole question was whether the original contract was absolute or conditional and having regard to the terms of the bargain, it must be held to be conditional.
The English law passed through various stages of development since then and the principles enunciated in the various decided authorities cannot be said to be in any way uniform.
In many of the pronouncements of the highest courts in England the doctrine of frustration was held "to be a device by which the rules as to absolute contracts are reconciled with a special exception which justice demands"(2).
The court, it is said, cannot claim to exercise a dispensing power or to modify or alter contracts.
But when an unexpected event or change of circumstance occurs, the possibility of which the parties did not circumstance occurs, the possibility contract is taken to be not what the parties actual intended, but what they as fair and reasonable men would presumably have intended and agreed upon, if having such possibility in view they had made express provsion as to their rights and liabilities in the event of such occurrence(1).
As Loard Wright (1) ; (2) Vide Hirji Mulji vs Cheong Yue Steamship Co. Ltd. at 510.
(3) Vide Dahl vs Nelson, Donkinand Co. (1881) 6 App.
38 at 59.
321 observed in Joseph Constantine Steamship Co. vs Imperial Smelting Corporation Ltd.(1).
"In ascertaining the meaning of the contract and its application to the actual occurrences, the court has to decide, not what the parties actually intended but what as reasonable men they should have intended.
The court personifies for this purpose the reasonable man.
" Lord Wright clarified the position still further in the later case of Denny, Mott and Dickson Ltd. vs James B. Fraser & Co. Ltd.(1), where he made the following observations: "Though it has been constantly said by high authority, including Lord Sumner, that the explanation of the rule is to be found in the theory that it depends on an implied con dition of the contract, that is really no explanation.
It only pushes back the problem a single stage.
It leaves the question what is the reason for implying a term.
Nor can I reconcile that theory with the view that the result does not depend on what the parties might, or would, as hard bargainers, have agreed.
The doctrine is invented by the court in order to supplement the defects of the actual contract.
To my mind the theory of the implied condition is not really consistent with the true theory of frustration.
It has never been acted on by the court as a ground of decision, but is merely stated as a theoretical explanation.
" In the recent case of British Movietonews Ltd. vs London and District Cinemas Ltd.(1), Denning L. J. in the Court of Appeal took the view expressed by Lord Wright as stated above as meaning that "the court really exercises a qualifying power a power to qualify the absolute., literal or wide terms of the contract in order to do what is just and reasonable in the new situation".
"The day is gone," (1) at 185.
(2) ; at 275.
(3) L/ B(D) 2SCI 7 322 the learned Judge went on to say, "when we can excuse an unforeseen injustice by saying to the sufferer 'it is your own folly, you ought not to have passed that form of words.
You ought to have put in a clause to protect yourself '.
We no longer credit a party with the foresight of a Prophet or his lawyer with the draftsmanship of a Chalmers.
We realise that they have their limitations and make allowances accor dingly.
It is better thus.
The old maxim reminds us that he who clings to the letter clings to the dry and barren shell and misses the truth and substance of the matter.
We have of late paid heed to this warning, and we must pay like heed now.
" This decision of the Court of Appeal was reversed by the House of Lords and Viscount Simon in course of his judgment expressed disapproval of the way in which the law was stated by Denning L.J.
It was held that there was no change in the law as a result of which the courts could exercise a wider power in this regard than they used to do previously.
"The principle remains the same", thus observed his Lordship. "Particular applications of it may greatly vary and theoretical lawyers may debate whether the rule should be regarded as arising from implied term or because the basis of the contract no longer exists.
In any view, it is a question of construction as Lord Wright pointed out in Constantine 's case and as has been repeatedly asserted by other masters of law.
"(1) These differences in the way of formulating legal theories really do not concern us so long as we have a statutory provision in the .
In deciding cases in India the only doctrine that we have to go by is that of supervening impossibility or illegality as laid down in section 56 of the Contract Act taking the word "Impossible" in its practical and not literal sense.
It must be borne in mind, however, that section 56 lays down a rule of positive law and does not leave the matter to be determined according to the intention of the parties.
(1) at 184.
323 In the latest decision of the House of Lords referred to above, the Lord Chancellor puts the whole doctrine upon the principle of construction.
But the question of construction may manifest itself in two totally different ways.
In one class of cases the question may simply be, as to what the parties themselves had actually intended and whether or not there as a condition in the contract itself, express or implied, which operated, according to the agreement of the Parties themselves to release them from their obligations; this would be a question of construction pure and simple and the ordinary rules of construction would have to be applied to find out what the real intention of the parties was.
According to the , a promise may be express or implied(1).
In cases, therefore, where the court gathers as a matter of construction that the contract itself contained impliedly or expressly a term, according to which it would stand discharged on the happening of certain circumstances the dissolution on of the contract would take place under the terms of the contract itself and such cases would be outside the purview of section 56 altogether.
Although in English law these cases are treated as cases of frustration, in India they would be dealt with under section 32 of the which deals with contingent contracts or similar other provisions contained in the Act.
In the large majority of cases however the doctrine of frustration is applied not on the ground that the parties themselves agreed to an implied term which operated to release them from the performance of the contract.
The relief is given by the court on the ground of subsequent impossibility when it finds that the whole purpose or basis of a contract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was beyond what was contemplated by the parties at the time when they entered into the agreement.
Here there is no question of finding out an implied term agreed to by the parties em bodying a provision for discharge, because the parties did not think about the matter at all nor could possibly have any intention regarding it.
When such an event or change of (1) Vide section 9.
L/B(D)2SCI 7(a) 324 circumstance occurs which is so fundamental as to be re garded by law as striking at the root of the contract as a whole, it is the court which can pronounce the contract to be frustrated and at an end.
The court undoubtedly has to examine the contract and the circumstances under which it was made.
The belief, knowledge and intention of the parties are evidence, but evidence only on which the court has to form its own conclusion whether the changed cir cumstances destroyed altogether the basis of the adventure and its underlying object(1).
This may be called a rule of construction by English Judges but it is certainly not a, principle of giving effect to the intention of the parties which underlies all rules of construction.
This is really a rule of positive law and as such comes within the purview of section 56 of the .
It must be pointed out here that if the parties do con template the possibility of an intervening circumstance which might affect the performance of the contract, but expressly stipulate that the contract would stand despite such circumstances, there can be no case of frustration because the basis of the contract being to demand performance despite the happening of a particular event, it cannot disappear when that event happens.
As Lord Atkinson said in Matthey vs Curling(1), "a person who expressly contracts absolutely to do a thing not naturally impossible is not excused for nonperformance because of being prevented by the act of God or the King 's enemies. . or vis major".
This being the legal position, a contention in the extreme form that the doctrine of frustration as recognised in English law does no come at all within the purview of section 56 of the cannot be accepted.
The second contention raised by the Attorney General can be disposed of in few words.
It is true that in England the judicial opinion generally expressed is, that the doctrine of frustration does not operate in the case of contracts for (1) Vide Morgan vs Manser (1947] 2 AU E.R. 666.
(2) at 234.
325 sale of land(1).
But the reason underlying this view is that under the English law as soon as there is a concluded contract by A to sell land to B at certain price, B becomes in equity, the owner of the land, subject to his obligation to pay the purchase money '.
On the other hand, A in spite of his having the legal estate holds the same in trust for the purchaser and whatever rights he still retains in the land are referable to his right to recover and receive the purchase money.
The rule of frustration can only put an end to purely contractual obligations, but it cannot destroy an estate in land which has already accrued in favour of a contracting party.
According to the Indian law, which is embodied in section 54 of the Transfer of Property Act, a contract for sale of land does not of itself create any interest in the property which is the subject matter of the contract.
The obligations of the parties to a contract for sale of land are, therefore, the same as in other ordinary contracts and consequendy there is no conceivable reason why the doctrine of frustration should not be applicable to contracts for sale of land in India.
This contention of the Attorney General must, therefore, fail.
We now come to the last and most important point in this case which raises the question as to whether, as a result of the requisition orders, under which the lands comprised in the development scheme of the defendant company were requisitioned by Government, the contract of sale between the defendant company and the plaintiff 's predecessor stood dissolved by frustration or in other words became impossible of performance.
It is well settled and not disputed before us that if and when there is frustration the dissolution of the contract occurs automatically.
It does not depend, as does rescission of a contract on the ground of repudiation or breach, or on the choice or election of either party.
It depends on the effect (1) Vida Billington Estates Co. vs Stonfield Estate Ltd. [1952] 1 All E.R.853.
326 of what has actually happened on the possibility of performing the contrat (1).
What happens generally in such cases and has happened here is that one party claims that the contract has been frustrated while the other party denies it.
The issue has got to be decided by the court "ex post facto, on the actual circumstances of the case"(2).
We will now proceed to examine the nature and terms of the contract before us and the circumstances under which it was entered into to determine whether or not the disturbing element,which is allowed to have happened here, has substantially prevented the performance of the contract as a whole.
It may be stated at the outset that the.
contract before us cannot be looked upon as an ordinary contract for sale and purchase of a piece of land; it is an integral part of a development scheme started by the defendant company and is one of the many contracts that have been entered into by a large number of persons with the company.
The object of the company was undoubtedly to develop a fairly extensive area which was still undeveloped and make it usable for residential purposes by making roads and constructing drains through it.
The purchaser.
on the other hand, wanted the land in regard to which he entered into the contract to be developed and make ready for building purposes before he could be called upon to complete the purchase.
The most material thing which deserves notice is, that there is abso lutely no time limit within which.
the roads and drains are to be made.
The learned District Judge of Alipore, who heard the appeal, from the trial court 's judgment found it as a fact, on the evidence in the record, that there was not an understanding between the parties on this point.
As a matter of fact, the first requisition order was passed nearly 15 months after the contract was made and apparently no work was done by the defendant company in the meantime.
Another important thing that requires notice in this con (1) Per Lord Wright in Denny, Mott and Dicksom Ltd. vs Jameso B. Fraser and Co., Ltd. ; , 274, (2) Ibid.
327 nection is that the war was already on, when the parties entered into the contract.
Requisition orders for taking temporary possession of lands for war purposes were normal events during this period.
Apart from requisition orders there were other difficulties in doing construction work at that time because of the scarcity of materials and the various restrictions which the Government had imposed in respect of them.
That there were certain risks and difficulties involved in carrying on operations like these, could not but be in the contemplation of the parties at the time when they entered into the contract, and that is probably the reason why no definite time limit was mentioned in the contract within which the roads and drains are to be completed.
This was left entirely to the convenience of the company and as at matter of fact the purchaser did not feel concerned about it.
It is against this background that we are to consider to what extent the passing of the requisition orders affected the performance of the contract in the present case.
The company, it must be admitted, bad not commenced the development work when the requisition order was passed in November, 1941.
There was no question, therefore, of any work or service being interrupted for an indefinite period of time.
Undoubtedly the commencement of the work was delayed but was the delay going to be so great and of such a character that it would totally upset the basis of the bargain and comercial object which the parties had in view? The requisition orders, it must be remembered, were ' by their very nature, of a temporary character and the requisitioning authorities could, in law, occupy the position of a licensee in regard to the requisitioned property.
The order might continue during the whole period of the war and even for some time after that or it could have been withdrawn before the war terminated.
If there was a definite time limit agreed to by the parties within which the construction work was to be finished, it could be said with perfect propriety that delay for an indefinite period would 328 make the performance of the contract impossible within the specified time and this would seriously affect the object and purpose of the venture.
But when there is no time limit whatsoever in the contract, nor even an understanding bet ween the parties on that point and when during the war the parties could naturally anticipate restrictions of various kinds which would make the carrying on of these operations more tardy and difficult than in times of peace, we do not think that the order of requisition affected the fundamental basis upon which the agreement rested or struck at the roots of the adventure.
The learned Judges of the High Court in deciding the case against the plaintiff relied entirely on the time factor.
It is true that the parties could not contemplate an absolutely unlimited period of time to fulfil their contract.
They might certainly have in mind a period of time which was reasonable having regard to the nature and magnitude of the work to be done as well as the conditions of war prevailing at that time.
Das Gupta, J., who delivered the judgment of the High Court, says first of all that the company had in contemplation a period of time not much exceeding 2 or 3 years as the time for performance of the contract; the purchaser also had the same period of time in contemplation.
The learned Judge records his finding on the point in the following words: "My conclusion on a consideration of the surrounding circumstances of the contract is that the parties contemplated that the roads and drains would be constructed and the conveyance would be completed in the not distant future.
" This finding is inconclusive and goes contrary to what has been held by the District Judge who was undoubtedly the last court of facts.
In our opinion, having regard to the nature and terms of the contract, the actual existence of war conditions at the time when it was entered into, the extent of the work involved in the development scheme and last though not the least the total absence of any definite period of time agreed to by the parties within which the work was 329 to be completed, it cannot be said that the requisition order vitally affected the contract or made its performance impossible.
Mr. Gupta, who appeared for the respondent company.
put forward an alternative argument that even if the performance of the contract was not made impossible.
it certainly became illegal as a result of the requisition order and con sequently the contract became void under section 56 of the as soon as the requisition order was made.
In support of his contention the learned counsel placed reliance upon certain provisions of the Defence of India Rules and also upon illustration (d) to section 56 of the Contract Act.
All that the Defence Regulations show is that the violation of a requisition order could be punished as a criminal offence.
But no matter in whichever way the requisition order could be enforced, in substance it did nothing else but impose a prohibition on the use of the land during the period that it remained in force.
The effect of such prohibition on the performance of the contract, we have discussed above, and we do not think that the mere fact that the requisition order was capable of being enforced by a criminal sanction made any difference in this respect.
In any view this question was not raised in any of the courts below and has not been indicated even in the respondent 's statement of the case.
We do not think that it would be proper to allow this question to be raised for the first time before us, as it requires consideration of the different provisions of the Defence of India Act and also of the implication of illustration (d) appended to section 56 of the Contract Act.
In our opinion, the events which have happened here cannot be said to have made the performance of the contract impossible and the contract has not been frustrated at all.
The result is that the appeal is allowed, the judgment and decree of the High Court of Calcutta are set aside and those of the courts below restored.
The plaintiff will have his costs in all the courts.
Appeal allowed.
Agent for the respondent No. I : R. R. Biswas.

dataset_name: IN-Abs

summary/full:
The doctrine of frustration is really an aspect or part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done and hence comes within the purview of section 56 of the Indian Contract Act.
The view that section 56 applies only to cases of physical impossibility and that where this section is not applicable recourse can be had to the principles of English law on the subject of frustration is not correct.
English cases can have only a persuasive value, and are only helpful in showing how English courts decided cases under similar circumstances.
Section 56 of the Indian Contract Act lays down a rule of positive law and does not leave the matter to be determined according to the intention of the parties.
According to the Indian Contract Act.
a promise may be express or implied.
In cases, therefore, where the court gathers as a matter of construction that the contract itself contained impliedly or expressly a term, according to which it would stand discharged on the happening of certain circumstances, the dissolution of the contract would take place under the terms of the contract itself and such cases would be outside the purview of section 56 altogether.
Although in English law these cases are treated as cases of frustration, in India they would be dealt with under section 32 of the Indian Contract Act which deals with contingent contracts or similar other provisions contained in the Act.
In the large majority of cases however the doctrine of frustration.
is applied not on the ground that the parties themselves agreed to an implied term which operated to release 311 them from the performance of the contract.
The relief is given by the court on the ground of subsequent impossibility when it finds that the whole purpose or basis of a contract was frustrated by the intrusion or occurrence of an unexpected event or change of circumstances which was beyond what was contemplated by the parties at the time when they entered into the agreement.
Here there is no question of finding out an implied term agreed to by the parties embodying a provision for discharge, because the parties did not think about the matter at all nor could possibly have any intention regarding it.
When ' such an event or change of circumstance occurs which is so, fundamental as to be regarded by law as striking at the root of the contract as a whole, it is the court which can pronounce the contract to be frustrated and at an end.
The court undoubtedly has to examine the contract and the circumstances under which it was made.
The belief, knowledge and intention of the parties are evidence, but evidence only on which the court has to form its own conclusion whether the changed circum stances destroyed altogether the basis of the adventure and its underlying object.
This may be called a rule of construction by English Judges but it is certainly not a principle of giving effect to the intention of the parties which underlies all rules of construction.
This is really a rule of positive law and as such comes within the purview of section 56 of the Indian Contract Act.
The reason underlying the rule of English law that the doctrine of frustration does not apply to contracts for the sale of land.
is that under the English law, ,is soon as the agreement to sell is complete the buyer becomes the owner of the land in equity.
As a mere agreement to sell does not confer any rights of ownership on the buyer under the Indian law, the doctrine of frustration is as applicable in India to agreements for sale of land as in the case of other agreements.
In 1940 as an integral part of a development scheme of an extensive area of land started by the defendant company, it entered into a contract with the plaintiff 's predecessor for the sale of a Plot of land to the latter accepting a small sum of money as earnest.
It undertook to construct roads and drains and the conveyance was to be completed soon after the completion of tile roads on payment of the balance of the Price.
As a considerable portion of the area comporised in the scheme was requisitioned by the Government for military Purposes in 1941, the company wrote to the defendant that the road construction could not be taken up for an indefinite period and required him to treat the agreement as cancelled and receive back his earnest: Held.
that having regard to the nature and terms of the contracts the actual existence of war condition at the time when it was entered into the extent of the work involved in the scheme fixing no time limit in the agreement for the cons truction of the roads etc., and the fact that the order of requisition was in its very nature of a temporary character, the requisition did not affect the fundamental basis of the contract; nor 312 did the performance of the contract become illegal by reason of the requisition, and the contract had not therefore become impossible within the meaning of section 56 of the Indian Contract Act.
Joseph Constantine Steamship Co. vs Imperial Smelting Cor poration Ltd. ([1942] A.C. 154), Tamplin Steamship Co. Ltd. vs Anglo American Products Co. Ltd. ([1916] A.C. 397), Kesari Chand vs Governor General in Council (I.L.R. , Ganga Saran vs Ram Charan ([1952] S.C.R. 36), Taylor vs Caldwell (3 B. and section 826), Robinson vs Davison ; Denny Mott and Dickson Ltd. vs James B. Frazer & Co. Ltd. ; referred to.


judgement:
Appeal No. 844 of 1963.
169 Appeal by special leave from the judgment and decree date November 1, 1960 of the Madras High Court in Appeal No. 199 of 1957.
A. Ranganadham Chetty and A.V. Rangam, for the appellant.
A.V. Vishwanatha Sastri and R. Thiagarajan, for respondent Nos. 1 and 2.
The Judgment of the Court was delivered by Shah, J.
Venkatarama lyengar, Kasthuri Iyengar and Ranga lyengar, residents of the village Kariamanikam in Tiruchirappalli District, with the aid of contributions, subscriptions and donations set up a Samaradhanai Fund for feeding Brahmin pilgrims attending Sri Venkatachalapathiswami shrine at village Gunaseelam on the occasion of Rathotsavam festival.
Between the years 1936 and 1940 seven acres of land were purchased for Rs. 10,500 to provide a permanent income for the Fund.
It was found that the expenses incurred for the Rathotsavam festival did not exhaust the entire income and the balance was utilised for Vanabhojanam in Kariamanikam village in the month of Kartigai and on the Dwadesi following Vaikunta Egadesi day.
The President, Hindu Religious and Charitable Endowments Board, sought to levy for the years 135 1 to 1354 Fasli contributions under section 69 of Madras Act 2 of 1927 in respect of the Fund.
But in Suit No. 297 of 1947 of the file of the District Court at Tiruchirappalli that claim was disallowed.
The District Court held that the charity was not a "specific endowment" within the meaning of Act 2 of 1927.
After the Madras Hindu Religious and Charitable Endowments Act 19 of 1951 was enacted, the Deputy Commissioner of Hindu Religious and Charitable Endowments initiated a fresh proceeding under section 57(d) of that Act and held that the Samardhanai Fund was a "religious charity" within the meaning of section 6(13) of the Act.
Against that order an appeal was carried by the trustees of the Fund to the Commissioner of Hindu Religious and Chartiable Endowments.
The Commissioner held that feeding Brahmins in connection with the religious festival of Hindus was a public charity and also a religious charity within the meaning of section 6(13) of Madras Act 19 of 1951.
The trustees of the Fund then instituted Suit No. 181 of 1954 in the Court of the Subordinate Judge.
Tiruchirappalli to set aside the order of the Commissioner on the plea that the Samardhanai Fund was a private charity not associated with any Hindu festival or service in a temple and was not religious charity or a specific endowment or a public charity, and that it could in no manner become subject to control of the Commissioner, Madras Hindu Religious and Charity Endowments.
The suit was resisted by the Commissioner contending that the Fund was held and administered for a religious charity viz. feeding Brahmin pilgrims on the occasion of a Hindu festival.
The Subordinate Judge held 170 that the Fund was a public charity and that it was also "a religious charity" within the meaning of section 6(13) of the Act,.
the charity being associated with the Hindu festival of Rathotsavam at the Gunaseelam temple.
In appeal against the order of the Subordinate Judge dismissing the suit filed by the trustee_, the High Court of Madras held that the Samardhanai Fund was a public charity within the meaning of section 6(13) of the Act, but not being associated with any Hindu festival or observance of a religious character it was not a "religious charity" and the Commissioner had no jurisdiction to bring it under his control.
The High Court accordingly allowed the appeal and decreed the suit filed by the trustees.
With special leave, the Commissioner has appealed to this Court.
The only question which falls to be determined in this appeal is whether on the facts found by the Court of First Instance and confirmed by the High Court, the Samardhanai Fund is a "religious charity" within the meaning of section 6(13) of Madras Act 19 of 1951.
Clause (13) of section 6 defines "religious charity" as meaning "a public charity associated with a Hindu festival or observance of a religious character, whether it be connected with a math or temple or not".
The definition prescribes two conditions which go to constitute a religious charity: there must be a public charity and that charity must be associated with a Hindu festival or observance, co of a religious character.
If these be fulfilled, a public charity will be a religious charity, even if it is not connected with a math or temple.
The Subordinate Judge held on the evidence that the "charity in question is a feeding charity conducted during the ten days of the Rathotsavam in the Prasanna Venkatachallapathiswami temple in Gunaseelam in the month of Purattasi.
Only Brahmins are fed and not other community people.
There are similar feeding charities for the different communities conducted by the respective community people.
The charity in question has no connection with the Gunaseelam temple in the sense that the food "prepared is not offered to the deity, and feeding is done not in the temple premises but at a separate place originally in a specially erected pandal and now in Seshagiri Iyer 's choultry (Dharamshalla).
The other communities are not fed at this charity.
The temple authorities have no voice in the conduct of the feeding", and the High Court agreed with that view.
The Subordinate Judge held on those findings that the Samardhanai Fund was a public charity within the meaning of section 6(13) and with that view also the High Court agreed.
The Subordinate Judge also held that the charity was associated with the Hindu festival of Rathotsavam in Sri Prasanna Venkatachallapathiswami temple in Gunaseelam Rathotsavam being an observance of a religious character when the deity is taken out in procession in a chariot and therefore the charity in question was clearly one associated with a Hindu festival and also with the observance of a religious character.
In disagreeing with that view, the High Court observed that the expression "associated with a Hindu festival or observance of a religious character" imported some unity of purpose or 171 common object or common endeavour between the festival and the charity and in the absence of such unity, common object or common endeavour, the charity could not be regarded as a religious charity within the meaning of section 6(13)of the Act.
In the view of the High Court that feeding Brahmin pilgrims during the Rathotsavam festival of Sri Venkatachallapathiswami shrine at Gunaseelam did not constitute an association between the Fund and the Rathotsavam festival itself, for the trustees of the shrine conducting the festival "had no manner of check, control or supervision over the feeding charity or Samardhanai Fund", they could not insist upon the feeding being done during the festival, and "cessation or discontinuance of the feeding by the trustees of the feeding charity may constitute a breach of trust on their part but cannot in the least affect the due performance of the Rathotsavam festival itself".
They further observed that belief of the founders of the charity that feeding Brahmins on the occasion of an important festival was meritorious.
will not establish "any link or connection" between the festival and the charity.
We are unable to agree with the view so expressed by the High Court.
The expression "associated" in section 6(13) of Act 19 of 1951 is used having regard to the history of the legislation, the scheme and objects of the Act, and the context in which the expression occurs, as meaning "being connected with" or "in relation to".
The expression does not import any control by the authorities who manage or administer the festival.
A Hindu religious festival or observance may have a local significance, in that it is celebrated or observed in a particular locality in connection with a shrine, temple or math, or it may be a festival or observance celebrated generally without any connection with any temple or math.
In the case of such general festivals or observances there is no one who can be so said to control the celebrations, and the definition of "religious charity" includes such general festivals and observances.
It cannot be assumed that there must always be a set of persons who control the celebration of a festival or an observance.
The test suggested by the High Court that in order that there should be, between the charity and the festival or observance such a relation that the administration of the charity must be controlled by those who celebrate the festival or observance in a temple or math, besides being inapt in the case of general festivals and observances can only be evolved if words which are not found in the definition of "religious charity" are added thereto.
Mr. Vishwanatha Sastri appearing on behalf of the respondenttrutees contended that the expression "associated with a Hindu festival or observance of a religious character" in the definition of "religious charity" implies that the public charity must be an integral part of the Hindu religious festival or observance.
But there is nothing in the Act which indicates any such intention on the part of the Legislature.
Mr. Sastri sought to give diverse illustrations in support.
of his contention that mere feeding of Brahmins on the occasion of a Hindu festival or observance will 172 not amount to association within the meaning of section 6(13).
It is unnecessary to deal with these illustrations, for the definition contemplates a public charity which alone can be a religious charity if the other conditions are fulfilled.
A voluntary celebration of an event of religious significance by feeding Brahmins does not make it a public charity.
There must be an institution which may in law be regarded as a public charity, before it may by its association with a religious festival or observance be regarded as a religious charity.
The association undoubtedly must be real and not imaginary, but to constitute association it is not predicated that the administration of public charity must be controlled by the persons responsible for celebrating the religious festival in a temple or math or be an integral part of the festival or observance.
On the facts found, it is clear that on the occasion of the Rathotsavam festival of Sri Prasanna Venkatachalapathiswami shrine, pilgrims from many places attend the festival and the object of the charity is to feed Brahmins attending the shrine on the occasion of this festival.
It is not disputed that setting up a Fund for feeding Brahmins is a public charity.
The primary purpose of the charity is to feed Brahmin pilgrims attending the Rathotsavam.
This public charity has therefore a real connection with the Rathotsavam which is a Hindu festival of a religious character, and therefore it is a religious charity within the meaning of section 6(13) of Madras Act 19 of 1951.
Surplus income of the Fund is used in Vanabhojanam in the month of Kartigai, and on the day following the Vaikunta Ekadeshi.
it is not suggested that on that account the Fund is not a "religious charity".
We therefore set aside the order passed by the High Court and restore the order passed by the Trial Court.
There will be no order as to costs throughout.
Appeal allowed.

summary/full:
A Samaradhanai Fund was started for the purpose of feeding Brahmin pilgrims attending Sri Venkatachalapathiswami shrine at village Gunaseelam (in Madras State) on the occasion of Rathotsavam festival.
On the enactment of the Madras Hindu Religious and Charitable Endowments Act 19 of 1951 the Deputy Commissioner of Hindu Religious and Charitable Endowments initiated proceedings under section 57(d) of the Act and held that the aforesaid fund was a religious charity ' within the meaning of section 6(13) of the Act.
His order was upheld by the Commissioner.
The Trustees of the Fund then filed a suit to set aside the order of the Commissioner contending that the Samaradhanai Fund was neither a public charity nor a religious charity '.
In section 6(13), 'religious charity ' is defined as a "public charity associated with a Hindu festival or observance a religious character, whether it be connected with a math or temple or not".
The trial court decided against the trustees but the High Court held in their favour.
According to the High Court feeding the Brahmins was a public charity but it was not a 'religious charity in as much as those who conducted the celebration of the Rathotsavam at the shrine had no control over the feeding of Brahmins out of the Samaradhanai Fund.
On appeal to the Supreme Court by the Commissioner, with special leave.
HELD: Feeding of Brahmins out of the Samaradhanai fund was associated with the celebration of the Rathotsavam at the Venkatachalapathiswami shrine.
The expression "associated" in section 13 of Act 19 of 1951 is used having regard to the history of the legislation the scheme and objects of the Act and the context in which it occurs, as meaning "being connected with" or "in relation to".
The expression does not import any control by the authorities who manage or administer the festival.
There are many Hindu festivals which are celebrated by the public generally without any connection with any temple or math.
The definition of "religious charities" includes such general festivals and observances.
It cannot be said that there must always be a set of persons who control the celebration of a festival or an observance.
F171 D G] Nor can it be contended that the expression "associated with a Hindu festival or observance of a religious character" in the definition of "religious charity" implies that the public charity must be an integral part of the Hindu religious festival or observance.
There is nothing in the Act which indicates any such intention on the part of the legislature.
[171 H]