W.P. No.4006/2008. 03/11/2011 We have heard learned counsel for the petitioner, learned counsel for the State, and the learned counsel for the respondent No. 2 (which is hereinafter referred to as the Corporation). The petitioner is hereafter in this order referred to as KMPL. An written agreement dated 5.4.1997 was entered into between the KMPL and the Corporation. The part of the agreement which is relevant for this case, is reproduced below: "In consideration to the First Party transferring its lease hold rights in favour of KMPL the first party will be given 5% (Five percent) of its proposed share capital of Rs.75 lakhs only amounting to a maximum of Rs.3.75 lakhs only. KMPL will pay to the First Party royalty as fixed by the State Government from time to time of the material removed or consumed till the time lease is transferred in the name of JVC Local are development charges shall be paid to the first party every month. KMPL further agrees to pay an additional amount equivalent of 600% of the Royalty payable for per tonne of Granite consumed or removed from the allotted areas in Village Chandla, Khasra No.1979/2 (Rakba 5.000 hectares) and @ 200% of the royalty in respect of area in Village Madwa Khasra No.587 Rakba 5.000 hectares." The above quoted portion of the agreement makes it clear that the payment of 200% of royalty by KMPL to the Corporation was part of the ‘consideration’ for the agreement between the parties. This along with other obligations of the KMPL was the consideration in lieu of the Corporation transferring its lease rights in favour of KMPL. The part relating to 600% in the abovequoted portion does not relate to the parties before us. Subsequently, on 22.1.2007, another agreement called a supplementary agreement was executed between the parties in which the ‘consideration’ of payment of amount equivalent to 200% of the amount of royalty was substituted and it was agreed between the parties that in lieu of the aforesaid condition KMPL would have to pay to the Corporation the amount of Rs.800/- per cubic meter of Granite consumed or removed from the allotted area. The fact that this amount was called the Local Area Development Fund is not material, and what is material is that this was part of the ‘consideration’. By the impugned order dated 4.11.2007, the Corporation has intimated to the KMPL that instead of Rs.800/- per cubic meter, the KMPL would have to pay Rs.1600/- per cubic meter to the Coporation,. The learned counsel for the Corporation, as well as the learned counsel for the State, have argued that such unilateral modification of a bilateral agreement is permissible because the basis, on which the second agreement dated 22.1.2007 was entered into, has been subsequently altered. The argument fails to appreciate the difference between the “basis” of an agreement and the “reason” for an agreement. The “reason” for the second agreement was admittedly an order of the State Government dated 19.12.2006 wherein the State Government allowed the Corporation to collect the Local Area Development Fund @ Rs.800/- per cubic meter instead of 200% of the royalty. Subsequently, the State Government has initially suspended the said order dated 19.12.2006 by order dated 25.4.2007, and ultimately has vide order dated 26.10.2009 cancelled the same. The learned counsel for the Corporation and the State have urged firstly that since the State Government has withdrawn its earlier order dated 19.12.2006, the ‘consideration’ for second agreement has become ‘unlawful’ and therefore hit by Section 23 of the Act. The argument is based upon a total misunderstanding of Section 23 of the Act, as well as a total misunderstanding of the word ‘consideration’. The ‘reason’ or ‘motive’ for the agreement is not the ‘consideration’ for the agreement. When the second agreement dated 22.1.2007 was entered into, the consideration was lawful. ‘Consideration’ means what one party is required to do something for the other party, which in the present case was payment of money by KMPL to the Corporation. Why that party is required to do that thing is not relevant and is no part of the consideration. We are of the opinion that Section 23 of the Act has no application to the present situation. The learned counsel for the Corporation has then argued that the contract has become ‘frustrated’, because of the change of circumstances namely the State Government suspending its order dated 19.12.2006 by its subsequent order dated 25.4.2007 and finally canceling the same vide order dated 26.10.2009. This submission again betrays total misunderstanding of doctrine of frustration. A contract gets frustrated only when its performance becomes impossible, which is not the case here. The agreement dated 22.1.2007 is a bilateral binding agreement between two parties namely KMPL and the Corporation. Its unilateral alteration by one party is not permissible under the Indian Contract Act, 1972. In the result, the writ petition is allowed. The order dated 4.11.2007 Annexure P/11 and the order dated 30.1.2008 Annexure P/13 as well as order dated 22.2.2008 contained in Annexure P/15 are hereby quashed. (Sushil Harkauli) (Alok Aradhe) Acting Chief Justice Judge AK W.P. No.8105/2008. 03/11/2011 The connected writ petition namely W.P. No.4006/2006 has been allowed by a detailed order passed today. The order dated 16.5.2008 Annexure P/13 as well as order dated 22.2.2008 Annexure /11 are quashed. The writ petition is allowed. (Sushil Harkauli) (Alok Aradhe) Acting Chief Justice Judge YS/