IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS WEDNESDAY, THE 26TH AUGUST 2009 / 4TH BHADRA 1931 AS.No. 617 of 1998() -------------------- OS.270/1994 OF SUB COURT, NEYYATTINKARA .................... APPELLANT/DEFENDANT: ------------------------------------- R.SREENIVASAN, SON OF RAGHAVA PANICKER, AGED ABOUT 44 , RESIDING AT DEVAKI SADANAM, MANALUVILA, VENPAKAL P.O. THIRUVANANTHAPURAM. BY ADV. SRI.L.MOHANAN & ADV. SRI.D. SAJEEV RESPONDENT/PLAINTIFF: ------------------------------------ NEYYATTINKARA MUNICIPALITY, REP. BY ITS SECRETARY K. BHASKARAN, MUNICIPAL OFFICE, NEYYATTINKARA. BY ADVS. SRI.PIRAPPANCODE V.SREEDHARAN NAIR SRI.S.P.ARAVINDAKSHAN PILLAY SRI.PIRAPPANCODE V.S.SUDHIR THIS APPEAL SUITS HAVING BEEN FINALLY HEARD ON 20/08/2009, THE COURT ON 26/08/2009 DELIVERED THE FOLLOWING: ORDER ON C.M.P.NO. 5095/98 IN A.S.NO. 617 OF 1998 DISMISSED 26.8.2009 SD/- M.L.JOSEPH FRANCIS, JUDGE /TRUE COPY/ M.L. JOSEPH FRANCIS, J. - - - - - - - - - - - - - - - - - - - - - - A.S.No. 617 of 1998 - - - - - - - - - - - - - - - - - - - - - - Dated this the 26th day of August, 2009 JUDGMENT This appeal is filed by the defendant in O.S.No. 270 of 1994 on the file of the Sub Court, Neyyattinkara. The respondent/Municipality filed the above suit for realisation of a sum of Rs.61,200/- with interest from the appellant/defendant. The defendant has bid in public auction the right to collect sand from Chemarathivila- kadavu of Neyyar river for a period of one year from 1.4.1993 to 31.3.1994, for an amount of Rs.2,60,300/- The auction was confirmed in his name and an agreement was executed on 1.4.1993. Towards deposit Rs.3,000/- was paid by the defendant on 9.3.1993. The one half of the bid amount was remitted in two instalments i.e. Rs.50,000/- on 22.3.1993 and Rs.80,150/- on 1.4.1993. A.S.No. 617 of 1998 2 2. It is averred that the other one half of the bid amount ought to have been remitted on 30.8.1993 and the defendant has committed default in remitting the same. Therefore, since the terms and conditions of the agreement have been violated by committing default in payment of the instalments on due dates, the auction has been cancelled by the plaintiff on 6.12.1993. 3. According to the plaintiff, the defendant has to remit Rs.46,999/- upto 6.12.1993 after deducting the amount for the cancelled period. It was also contended that the defendant has collected sand from the river without any obstruction from 1.4.93 till 6.12.1993. The plaintiff was entitled to an amount of Rs. 61,200/- with interest. Hence a notice was issued to the defendant. Since the defendant was residing outside the jurisdiction of the Municipality, the Council resolved to file a suit for recovery of the above amount. 4. The appellant/defendant filed written statement contending that there was unauthorised collection of sand by A.S.No. 617 of 1998 3 others and they prevented the appellant from collecting the sand. The same was notified to the Municipality and requested for police protection. But the plaintiff failed to give protection, which was an implied condition for entering into the contract. Therefore, the defendant could not collect sand as per the agreement and the agreement was frustrated. The defendant had sought the help of the plaintiff/Municipality on several occasions and therefore the defendant himself requested the plaintiff to cancel the agreement and to discharge him from the liability. The plaintiff is not entitled to recover the amount, it was contended. 5. In the Sub Court, no oral evidence was adduced from the side of the plaintiff, but Exts.A1 to A8 were marked. On the side of the defendant, Dws. 1 and 2 were examined and Ext.B1 was marked. The learned Sub Judge, on considering the evidence, decreed the suit allowing the plaintiff to realise a sum A.S.No. 617 of 1998 4 of Rs.61,200/- with interest at the rate of 18% p.a. from the date of the suit till date of the decree and thereafter at the rate of 6% p.a. till realisaction and cost of the suit from the defendant and his assets. Against that judgment and decree, the defendant filed this appeal. 6. Heard the learned counsel for the appellant and the learned counsel for the respondent. 7. There is no dispute that the defendant bid in public auction from the plaintiff/Municipality the right to collect sand from Chemparathivilakadavu of Neyyar river for one year from 1.4.1993 to 31.3.1994 for an amount of Rs.2,60,300/- and the auction was confirmed in the name of the defendant. Ext.A1 agreement was executed on 1.4.1993 and the defendant remitted Rs.3,000/- on 9.3.1993 as security deposit. One-half of the bid amount was remitted by the defendant in two instalments, i.e. Rs.50,000/- on 22.3.1993 and Rs.80,150/- on 1.4.1993. A.S.No. 617 of 1998 5 8. The allegation of the plaintiff is that the other one-half of the amount ought to have been remitted by the defendant on 30.8.1993 and the defendant committed default in remitting the same. Since the defendant committed breach of the agreement, that agreement was cancelled by the plaintiff on 6.12.1993. The plaintiff alleged that the defendant has to remit Rs.46,999/- upto 6.12.1993 after deducting the amount for the cancelled period. It is also alleged that the defendant collected sand from the river from 1.4.1993 till 6.12.1993 without any obstruction and the plaintiff claimed Rs.61,200/- towards that, with interest. 9. The defendant contends that there was unauthorised collection of sand by third parties and they prevented the defendant from collecting sand. The defendant informed the matter to the plaintiff and requested for police help. But the plaintiff failed to give police protection and therefore the defendant could not collect sand as per the agreement and as such the agreement was frustrated. A.S.No. 617 of 1998 6 10. The defendant was examined as DW1. He deposed that he could collect sand from the river for one month only and thereafter he could not collect sand due to the obstruction from the local people and that he made complaints to the plaintiff/Municipality several times, but no action was taken by the plaintiff to give police protection to him to collect the sand from the river. Ext.A8 is the correspondence file kept by the Municipality, which contains the complaints made by the defendant. 11. DW2 was the Ward Member of the plaintiff Municipality during the relevant period. He deposed that when the defendant tried to collect sand from the river, people of the locality obstructed in collecting sand. Ext.A8 file contains the lawyer notice dt. 23.7.1994 issued by the defendant to the plaintiff/Municipality. In the lawyer notice it is stated that the defendant could collect sand for one month only and in the A.S.No. 617 of 1998 7 meantime the local people obstructed the collection of sand and the defendant informed about the obstruction to the plaintiff/ Municipality as per letters dt. 25.4.93, 10.5.93, 15.6.93, 20.7.93, 30.7.93, 2.8.93 and 14.8.1993. Inspite of these complaints, no action was taken by the plaintiff/Municipality to give protection to the defendant. In the lawyer notice the defendant had claimed Rs.1,11,696/- from the plaintiff. The present suit was filed by the plaintiff on 15.12.1994 after the receipt of the lawyer notice from the defendant. The plaintiff has not adduced any evidence to show that the defendant collected sand even after the obstruction from the people of the locality till 6.12.1993. 12. The learned counsel for the appellant invited my attention to the decision reported in Union of India v. M/s. C.Damani & Co. and others (AIR 1980 SC 1149), in which it was held that: “There is an implied condition in ordinary contracts that the parties shall be exonerated in case, A.S.No. 617 of 1998 8 before the breach, the performance becomes impossible on account of physical causes or legal prohibitions.” 13. The second para of Section 56 of the Contract Act deals with cases, where the impossibility supervenes after the contract has been made. It provides that a contract becomes void if it means the doing of an act which after the contract is made becomes impossible or becomes unlawful by reason of some event, which the promisor could not prevent. The unlawfulness must not have been arisen by reason of some events which the promisor could prevent. 14. In the decision reported in Satyabrata Ghose v. Mugneeram Bangur and Co. & anr. (AIR 1954 SC 44), it was held that: “The word “impossible” has not been used in the sense of physical or literal impossibility. The A.S.No. 617 of 1998 9 performance of an act may not be literally impossible but it may be impracticable 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 upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to do. The essential idea upon which the doctrine of frustration 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 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 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 S.56.” A.S.No. 617 of 1998 10 15. In the present case, the defendant could not perform the part of Ext.A1 agreement due to the obstruction of the local people and therefore it is clear that the contract being frustrated, the respondent cannot be allowed to say that their duty is only to hold the auction and that they were in no way responsible to see that no obstructions are caused in the enforcement of the right of the auction purchaser. Every licensor has got a duty to see that the licensee is not interrupted to reap the benefit of the licence and in as much as the appellant was prevented by the local people and the respondent failed to give protection to the appellant, the respondent is not entitled to get any amount from the appellant for the non-performance of Ext.A1 agreement. Therefore, I am of the view that the learned Sub Judge is not justified in decreeing the suit. 16. Accordingly this appeal is allowed. The judgment and decree in O.S. No. 270 of 1994 on the file of the Sub Court, A.S.No. 617 of 1998 11 Neyyattinkara is set aside and the suit is dismissed without cost. The parties are directed to suffer their respective cost in this appeal. (M.L. JOSEPH FRANCIS) Judge tm