Civil Appeal No 56 of 1951
Appeal from a judgment and decree of the High Court of Allahabad Malik and Wali Ullah JJ dated 14th February 1946 in Appeal No 240 of 1943 which 37 arose out of a decree dated 19th January 1943 of the Court of the Civil and Sessions
Judge Kanpur in Original Suit No 34 of 1942
Achhru Ram P section Safeer with him for the appellant
SP Sinha K N Aggarwala with him for the respond ent 1951
November 1
The Judgment of the Court was deliv ered by FAZL ALI J
This is an appeal by special leave against a decision of the High Court at Allahabad reversing the decision of the trial court in a suit instituted by the appellant to recover damages from the respondent firm for breach of a contract
It appears that between the 10th and 18th April 1941 the parties entered into 5 contracts by which the respond ent firm undertook to supply to the appellant 184 bales of cloth of certain specifications manufactured by the New Victoria Mills Kanpur and the Raza Textile Mills Ramput
Only 99 bales were taken up and there was a dispute about the remaining 85 bales
On the 17th October 1941 a settle ment was arrived at between the parties and it was agreed that the respondent firm should deliver to the appellant 61 bales and that the goods should be delivered by the 17th November 1941
The actual text of the agreement exhibit 4 was as follows  61 bales as noted below are to be given to you by us
We shall continue sending goods as soon as they are prepared to you upto Magsar Badi 15 Sambat 1998
We shall go on supplying goods to you of the Victoria Mills as soon as they are supplied to us by the said Mill
Specifications of cloth given here
We shall go on deliv ering the goods to you upto Magsar Badi 15 out of the goods noted above which will be prepared by the Mill
 38 As the 61 bales were not supplied the appellant sent a telegraphic notice to the respondent firm on 20th November 1941 to the following effect Give delivery of our 61 bales through Bank
Otherwise suing within a days
 The appellant did not receive any reply to this notice and so he instituted the suit which has given rise to this appeal on the 23rd April 1942 claiming a sum of Rs 9808 and odd which according to him represented the loss sustained by him on account of the rise in the market rate of the contracted goods and he also claimed costs and interest
The respondent firm resisted the suit on a number of grounds but their main plea with which alone we are concerned in this appeal was that the performance of the contract had been frustrated by circumstances beyond their control and hence the appellant s claim must fail
This plea was negatived by the trial court but it was upheld by the High Court and hence this appeal
The only point which arises in this appeal is whether the circumstances of the case afford any basis for the application of the doctrine of frustration of
contract a doctrine which is embodied so far as this country is con cerned in sections 32 and 56 of the 
The main grounds of attack against the judgment of the High Court are  1 that it has misread the agreement exhibit 4 dated the 17th October 1941 on which both parties rely and 2 that it has paid more attention to an abstract legal doctrine than to the facts of the case
In our opinion both these contentions are correct
The construction placed by the High Court upon the agree ment and its conclusion based thereon are set out in the following passage in the leading judgment of Wali Ullah J  It seems to me that the parties clearly intended that the defendant was to supply the goods to the 39 plaintiff  if and when and only in that event the particu lar goods were prepared by the Victoria Mills and were supplied to the defendant between the 17th of October 1941 and 17th of November 1941
As the fundamental assumption on which the contract was made ceased to exist during the time of performance and consequently it became impossible for the defendant to fulfil the contract it must be held that the contract was discharged by supervening impossibility
 The construction suggested by the High Court is precise ly the construction which was attempted to be put on a similar contract by the defendant respondents in the case of Harnandrai vs Pragdas 1 but the Privy Council negatived it  In that case the provision as to delivery of goods ran as follows  The said goods are to be taken delivery of as and when the same may be received from the Mills The Mills failed to perform their contract with the defendants as they were engaged in fulfilling certain con tracts with the Government and consequently the defendants could not supply the goods to the plaintiffs
The questions raised before the Privy Council were as to the meaning of the contract and whether its performance had been frustrat ed and the Privy Council disposed of them in these words  It was also suggested that the words as and when the same may be received from the Mills  should be construed as if they were  if and when the same may be received from the Mills  This is to convert words which fix the quantities and times for deliveries by instalments into a condition precedent to the obligation to deliver at all and virtual ly makes a new contract
The words certainly regulate the manner of performance but they do not reduce the fixed quantity sold to a mere maximum or limit the sale to such goods not exceeding 864 bales as the Mills might deliver to the defendants during the remainder of the year
 Their Lordships then proceeded to observe 1 1888 LR 15 IA 9 40 The Mills from which the goods were to come no doubt were contemplated as continuing to exist though it does  not follow that in a bargain and sale such as this the closing or even the destruction of the Mills would affect a contract between third parties which is in terms absolute but the Mills did continue to exist and did continue to manufacture the goods in question only they were made for and delivered to somebody else
 We agree with the reasoning of the Privy Council and it seems to us that the considerations which prevailed with them must govern the construction of the agreement with which we are concerned in this case
The agreement does not seem to us to convey the meaning that the delivery of the goods was made contingent on their being supplied to the respondent firm by the Victoria Mills
We find it difficult to hold that the parties ever contemplated the possibility of the goods not being supplied at all
The words prepared by the Mill are only a description of the goods to be supplied and the expressions as soon as they are prepared and as soon as they are supplied to us by the said Mill simply indicate the process of delivery
It should be remem bered that what we have to construe is a commercial agree ment entered into in a somewhat common form and to use the words of Lord Sumner in the case to which reference has been made there is nothing surprising in a merchant s binding himself to procure certain goods at all events it being a matter of price and of market expectations
 Since the true construction of an agreement must depend upon the import of the words used and not upon what the parties choose to say afterwards it is unnecessary to refer to what the parties have said about it
Even apart from the construction of the agreement it seems to us that the plea of the respondents must fail on their own admissions
The defendant has stated in his evidence that he had not sold the 61 bales of cloth to any other person at the time he received the telegraphic notice of the 20th November 1941 exhibit 1
On his own admis sion therefore he was 41 in a position to supply 61 bales of the contracted goods at the time when the breach of the agreement is alleged to have happened
That being so we are unable to hold that the performance of the contract had become impossible
The matter however does not rest there
Guruprasad a clerk of the Mills Company who is the second witness for the defend ants has made an important statement to the following effect The customers all place their requirements before the sales manager
If the goods required are ready they are sold to the customers and if they are not ready and if the customer wants them to be manufactured they are delivered to the customers after manufacture
An order book is main tained at the Mills
 Such being the practice which prevailed in the Victoria Mills it was for the defendants to show that an order for the manufacture of the contracted goods was placed with the Mills and yet the Mills failed to supply the goods
No such evidence has however been offered by the defendants The High Court has surmised that it might not have been possible to supply the goods within the period mentioned in the agreement but there is no material to support that state ment
In these circumstances this is obviously not a case in which the doctrine of frustration of contract can be in voked
That doctrine has been explained in a number of cases some of which are referred to in the judgment of the High Court but the latest pronouncement with regard to it is to be found in the speech of Viscount Simon in British Movietone News vs London Cinemas1 in which the Lord Chancellor referred with approval to the following enuncia tion of the doctrine by Earl Loreburn in a previous case FA Tamplin SS Co Ltd vs Anglo Mexican Petroleum Products Co Ltd2  a court can and ought to examine the contract and the circumstances in which it was made not of course 1  2  404
6 42 to vary but only to explain it in order to see whether or not from the nature of it the parties must have made their bargain on the footing that a particular thing or state of things would continue to exist
And if they must have done so then a term to that effect will be implied though it be not expressed in the contract  no court has an absolving power but it can infer from the nature of the contract and the surrounding circumstances that a condition which is not expressed was a foundation on which the par ties contracted It seems necessary for us to emphasize that so far as the courts in this country are concerned they must look primarily to the law as embodied in sections 32 and 56 of the 
These sections run as fol lows  32
Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened
If the event becomes impossible such contracts become void 56
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 promisor could not prevent unlawful becomes void when the act becomes impossible or unlawful 
The enforcement of the agreement in question was as we have already pointed out not contingent on the happening of an uncertain future event nor does the present case fall within the second paragraph of section 56 which is the only provision which may be said to have any relevancy to the plea put forward by the respondents
Clearly the doctrine of frustration cannot avail a defendant when the non per formance of a contract is attributable to his own default
We accordingly allow the appeal set aside the judgment of the High Court and restore the decree of the trial court
The appellant will be entitled to his costs through out
Appeal allowed
Agent for the respond ent SS Sukla


Summary:
The respondents agreed to deliver 61 bales of cloth to the appellant by the 17th November 1941
The agreement provided we shall continue sending the goods as soon as they are prepared to you up to Magsar Badi 15 Sambat 1998 
We shall go on supplying goods to you of the Victoria Mills as soon as they are supplied to us by the said Mills 
We shall go on delivering the goods to you  out of the goods noted above which will be prepared by the Mill
 In a suit for damages for non deliv ery of the goods the respondents pleaded that as they had not received the goods from the Victoria Mills before the 17th of November 1941 performance of the contract had become impossible by reason of an event which they could not prevent and the contract had therefore become void under Sec
56 Indian Contract Act Held i that on a proper construction of the con tract delivery of the goods was not made contingent on their being supplied to the respondents by the Victoria Mills
The words prepared by the Mills were only a de scription of the goods to be supplied and the expressions as soon as they are prepared and as soon as they are supplied to us by the said Mill simply indicated the proc ess of delivery
This was not therefore a case in which the doctrine of frustration of contract could be invoked
ii Even apart from the construction of the agreement as the respondents had not shown that they had placed an order for the goods with the Victoria Mills and yet the Mills had failed to supply there was a clear breach of contract to deliver and the appellant was entitled to recover damages
Harnandrai vs Pragdas L R 15 IA 9 and British Movietone News vs London Cinemas relied on