Case: Raja Dhruv Dev Chand Vs. Harmohinder Singh &amp; Anr

1. The appellant obtained from the Court of Wards, Dada Siba Estate, a lease of five squares of land in Tahsil Okara District Montgomery in the undivided Punjab for the Kharif season 1947 and Rabi season 1948. Following upon the partition of India in July 1947 and allotment of the territory in which the lands were situate to Pakistan, the appellant migrated to India        2. An action commenced by the appellant against the Court of Wards in the Court of the Subordinate Judge, Kangra, at Dharamsala for a decree for refund of the rent paid by him was decreed. But the High Court of Punjab reversed the decree, holding that the doctrine of frustration of contract did not apply to leases of immovable property and that in any event on the facts proved there was no case of frustration established by the appellant. With certificate granted by the High Court. this appeal is preferred by the appellant. Raja Harmohinder Singh and Kanwar Rajinder Singh have now been substituted in place of the Court of Wards as the respondents.        3. The appellant claimed a decree for refund of the rent on the ground that the consideration for the lease failed, because the covenants of the lease had become impossible of performance as a result of communal riots in the District of Montgomery and the inability of non-muslims to continue to reside in that area. The High Court rejected the contention.        4. The following findings of the High Court are not challenged before us:        5. After obtaining possession of lands from the Court of Wards the appellant carried on agricultural operations for Kharif cultivation and "partly enjoyed benefit therefrom by taking fodder etc.", that the right to the demised land continued to remain vested in the appellant even after he migrated to India, that the lands demised were neither destroyed nor had they become permanently unfit for the purpose of agriculture, and that there was no agreement- express or implied -that the rent was payable only if the appellant was able personally to attend to or supervise the agricultural operations.

Reasoning: 10. We are unable to agree with counsel for the appellant in the present case that the relation between the appellant and the respondents vested in a contract. It is true that the Court of Wards had accepted the tender of the appellant and had granted him lease on agreed terms of lands of Dada Siba Estate. But the rights of the parties did not after the lease was granted rest in contract.By S. 4 of the Transfer of Pro party Act the chapters and sections of the Transfer of Property Act which relate to contracts are to be taken as part ofthe Indian Contract Act, 1872. That section however does not enact and cannot be read as enacting that the provisions of the Contract Act are to be read into the Transfer of Property Act. There is a clear distinction between a completed conveyance and an executory contract, and events which discharge a contract do not invalidate a concluded transferits express terms S. 56 of the Contract Act does not apply to cases in which there is a completed transfer. The second paragraph of S 56 which is the only paragraph material to cases of this nature has a limited application to covenants under a lease. A covenant under a lease 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 unlawfu1. But on that account the transfer of property resulting from the lease granted by the lessor to the lessee is not declared void12. By the agreement of lease the appellant undertook to pay rent for the year1947-48 and the Court of Wards agreed to give on lease the land in its management. It is not claimed that the agreement of lease was void or voidable. Nor is it the case of the appellant that the lease was determined in any manner known to law. The appellant obtained possession of the land. He was unable to continue in effective possession on account of circumstances beyond his control. Granting that the parties at the date of the lease did not contemplate that there may be riots in the area rendering it unsafe for the appellant to carry on cultivation, or that the crops grown by him may be looted, there was no covenant in the lease that in the event of the appellant being unable to remain in possession and to cultivate the land and to collect the crops, he will not be liable to pay the rent. Inability of the appellant to cultivate the land or to collect the crops because of widespread riots cannot in the events that transpired clothe him with the right to claim refund of the rent paidThe Court found that possession of the demised land was not given to the lessee, and the landlord was on account of riots unable to deliver possession. Obviously on that finding the tenant was entitled to claim refund of the rent paid. But the Court proceeded to consider the questionr the doctrine of frustration applies to a contract of lease of agricultural lands" and recorded an answer that the doctrine of frustration applies to leases.The Court observed at p.t the doctrine of frustration does apply to leases, but even if it does not apply in terms to contract of lease of agricultural land the broad principle of frustration of contract applies to leases".We are unable to agree with that observation, and the observation at p. 11 that "According to Indian law, sales of land as also leases are contracts" -Under a lease of land there is a transfer of right to enjoy that land. If any material part of the property be wholly destroyed or renderd substantially and permanently unfit for the purpose for which it was let out, because of Fire, tempest, flood, violence of an army or a mob, or other irresistible force the lease may at the option of the lessee, be avoided. This rule is incorporated in S. 108 (e) of the Transfer of Property Act and applies to leases of land, to which the Transfer of Property Act applies, and the principle thereof to agricultural leases and to leases in areas where the Transfer of Property Act is not extended. Where the property leased is not destroyed or substantially and permanently unfit, the lessee cannot avoid the lease because he does not or is unable to use the land for purposes for which it is let to him.