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
MC 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 1000 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 paymentOne 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 1947 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 133Ic 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 LBD2SCI 6a 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 says1 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 Ltd2 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 Council3 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 Charan4 where Fazl 1 See Tamplin Steamship Co Ltd vs Anglo Mexican Petroleum Products Co Ltd1916 2 AC 397 403
2 at 168
3 ILR 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 Caldwell1 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 Davison1 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 demands2
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 occurrence1
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 Ltd1
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 Ltd1 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 Ltd1 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 BD 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 LJ
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 implied1
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
LBD2SCI 7a 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 object1
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 Curling1 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 ER 666
2 at 234
325 sale of land1
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 ER853
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 case2
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 elementwhich 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


Summary:
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 AC 154 Tamplin Steamship Co Ltd vs Anglo American Products Co Ltd 1916 AC 397 Kesari Chand vs Governor General in Council ILR  Ganga Saran vs Ram Charan 1952 SCR 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