# ff -· RAJA DHRUV DEV CHAND v. HARMOHINDER SINGH & ANR

- **Citation:** [1968] 3 S.C.R. 339
- **Court:** Supreme Court of India
- **Decided:** 1968-03-01
- **Case number:** Civil Appeal No. 407 of 1965
- **Bench:** J. C. Shah, V. Ramaswami, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ff-raja-dhruv-dev-chand-v-harmohinder-singh-anr-4383
- **Pages:** 7

## Headnote

Contract Act, s. 56-Doctrine of frustralion, if applies, to lease$ of
agricultural land.
The appellant obtained lease of a land in the undivided Punjab and
carried on agricultural operations in it.
Following the partition Of India
and allotment of the t«ritory in which the lands were situate to Pakistan
tJic appellant migrated to India. The appellant commenced an action for
a decree for refund of the rent on the plea that the l'Onsideration for tbe
lease failed, beoauSe the covenants of the lease had become impossible
of performance as a fflluit of communal riots in that locality and the inability of non·muslims to continue to mide in that area. The claim was
decreed but the High Court reversed the decree.
Dismissina the ftP,peal
this ~urt,
HELD: Where the propeny leased is not destroyed or rendered substantially and permanently unfit, the lessee cannot avoid that lease even
'if be does not or is unable to use the land for purposes for which it is
let to him. Under a lease of land there is a transfer of right to enjoy that
land. If any material part of the propeny be wholly
destroyed or
rendered substantially and pcrman~ntly 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 incorporatod in s. 108(e) of the Transfer of Property
Act and applies to leases of land to which the Tran:sfer of Property Act
applies, and the principle thei'eof applies to agricultural leases and to
leases in areas to which the Transfer of Property Act is not extend!>!.
{345 D-F]
In the present case the relation between the appellant and the reopandents did not rest in contract. It is !'rue that the representative Of the respandents-owners had accepted the tender of the apPe}lant and had granted
him a lease on agreed terms. But the rights of the parties did not after the
lease was aranted rest in contract. By s. 4 of the Transfer of Property
Act the chapters and sections of the Transfer of Property Act which relate
to contracts are to be taken as part of the Indian Contract Act, 1872. That
oection however cannot be read as enacting that the provisions of the Con1lact Act are to be read into the Transfer of Property Act. There is a
clear distincton between a completed conveyance and an executory contract,
and events which discharge a contract do not invalidate a concluded
transfer. [342 E-HJ
Granting that the parties at the date of the lease did not cootemplate
that there may be riots in the area rendering it unsafe for the apPe}lant 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 poasession 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 becall!e Of widespread riots cannot in the event that transpinod clothe him with the right to claim refund
of the rent paid, [343 0-EJ
,
340
SUPREME COURT REPORTS
[1968] 3 S.C.R.
Paradlne v. laM, (1647) Aleyn. 26, Denny Mott end Dickson Ltd. v.
lmnes B. Fraser & Co. Ltd. [19441 A.C.
265,
Satybrata Ghose v.
Mugneeram Bangur & Co. & Anr. [19541 S.C.R. 310, Abdul Hashem
& Anr. v. Balahari Monda! & Ors. A.J.R. 1952 Cal. 380 Tarabai Jivanlal
Parekh v. Lela Padamchand A.1.R. 1950 Bom. 89, Alanduraiappar Koil
Chithakkadu b,v its Trustee M. Ramananda Nainar & Ors. v. T. S. A.
Hamid and Anr, A.1.R. 1963 Mad. 94, Sri Amuruvi Perumal Dew:stltanam v. K. R. Sabapathi Pillai & Anr. A.LR. 1962 Mad. 132 and Jnder
Pershad Singh v. Campbell, L.1.R. 7 Cal. 474, referred to.
Parshotam Das Shankar Da.• v. Municipal Committee, Batala A.I.R.
1949 E.P. 301, overruled.

## Text

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-·
RAJA DHRUV DEV CHAND
v.
HARMOHINDER SINGH & ANR.
March 1, 1968
[J. C. SHAH, V. RAMASWAMI AND G. K. MITTER, JJ.]
Contract Act, s. 56-Doctrine of frustralion, if applies, to lease$ of
agricultural land.
The appellant obtained lease of a land in the undivided Punjab and
carried on agricultural operations in it.
Following the partition Of India
and allotment of the t«ritory in which the lands were situate to Pakistan
tJic appellant migrated to India. The appellant commenced an action for
a decree for refund of the rent on the plea that the l'Onsideration for tbe
lease failed, beoauSe the covenants of the lease had become impossible
of performance as a fflluit of communal riots in that locality and the inability of non·muslims to continue to mide in that area. The claim was
decreed but the High Court reversed the decree.
Dismissina the ftP,peal
this ~urt,
HELD: Where the propeny leased is not destroyed or rendered substantially and permanently unfit, the lessee cannot avoid that lease even
'if be does not or is unable to use the land for purposes for which it is
let to him. Under a lease of land there is a transfer of right to enjoy that
land. If any material part of the propeny be wholly
destroyed or
rendered substantially and pcrman~ntly 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 incorporatod in s. 108(e) of the Transfer of Property
Act and applies to leases of land to which the Tran:sfer of Property Act
applies, and the principle thei'eof applies to agricultural leases and to
leases in areas to which the Transfer of Property Act is not extend!>!.
{345 D-F]
In the present case the relation between the appellant and the reopandents did not rest in contract. It is !'rue that the representative Of the respandents-owners had accepted the tender of the apPe}lant and had granted
him a lease on agreed terms. But the rights of the parties did not after the
lease was aranted rest in contract. By s. 4 of the Transfer of Property
Act the chapters and sections of the Transfer of Property Act which relate
to contracts are to be taken as part of the Indian Contract Act, 1872. That
oection however cannot be read as enacting that the provisions of the Con1lact Act are to be read into the Transfer of Property Act. There is a
clear distincton between a completed conveyance and an executory contract,
and events which discharge a contract do not invalidate a concluded
transfer. [342 E-HJ
Granting that the parties at the date of the lease did not cootemplate
that there may be riots in the area rendering it unsafe for the apPe}lant 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 poasession 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 becall!e Of widespread riots cannot in the event that transpinod clothe him with the right to claim refund
of the rent paid, [343 0-EJ
,
340
SUPREME COURT REPORTS
[1968] 3 S.C.R.
Paradlne v. laM, (1647) Aleyn. 26, Denny Mott end Dickson Ltd. v.
lmnes B. Fraser & Co. Ltd. [19441 A.C.
265,
Satybrata Ghose v.
Mugneeram Bangur & Co. & Anr. [19541 S.C.R. 310, Abdul Hashem
& Anr. v. Balahari Monda! & Ors. A.J.R. 1952 Cal. 380 Tarabai Jivanlal
Parekh v. Lela Padamchand A.1.R. 1950 Bom. 89, Alanduraiappar Koil
Chithakkadu b,v its Trustee M. Ramananda Nainar & Ors. v. T. S. A.
Hamid and Anr, A.1.R. 1963 Mad. 94, Sri Amuruvi Perumal Dew:stltanam v. K. R. Sabapathi Pillai & Anr. A.LR. 1962 Mad. 132 and Jnder
Pershad Singh v. Campbell, L.1.R. 7 Cal. 474, referred to.
Parshotam Das Shankar Da.• v. Municipal Committee, Batala A.I.R.
1949 E.P. 301, overruled.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 407 of
1965.
Appeal from the judgment and order dated September 23,
1959 of the Punjab High Court in R.F.A. No. 143 of 1952.
Vikram Chand Mahajan and Hardev Singh, for the appellant.
B. P. Malieshwari, Sobhag Mal Jain and R. K. Maheshwari,
for respondent No. 2.
The Judgment of the Court was delivered by
Shah, .J. 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.
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 !Ae 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.
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 perfonnance 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.
The following findings of the High Court are not challenged
before us:
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DHRUV DEV I'. HARMOHINDER (Shah, J.)
341
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After obtaining possession of lands from the Court of Wards
the appellant carried on agricu:tural 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 with neither destroyed nor bad they become permanently unfit
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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 10 attend to or supervise the
agricultural
operations.
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Under the English common law the earlier cases laid down the
rule of "absolute contract" that when a duty was cast upon a person
who bound himself by contract absolutely to do a thiug, he could
not escape liability for damages for breach by proof that as events
turned out performance was futile or even impossible : see Paradine
'" Jane(').
This rule was later mitigated by an exception that if
further fulfilment of the contract is brought to an abrupt stop by
'ome irresistible and extraneous cause for which .neither party is
responsible, the contract shall terminate forthwith and the parties
be discharged: see Denny, Mott and Dickson Ltd. v. James B.
Fraser & Co. Ltd.(2). The rationale of the doctrine of frustration under the English common law need not be considered, for
in India by the provisions of the Indian Contract Act have turned
a limited exception under the English common law into a positive
general rule in s. 56 of the Indian Contract Act. Section 56, insofar as it is material provides :
"An agreement to do an act impassible 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.
"
Under s. 56, where an event which could not reasonably have been
in the contemplation of the parties when the contract was made
renders performance impossible or unlawful the contract is rendered ~oid, a~d ~e parties are excused from' performance of their
res~ecl!ve o~hgattons. _Thei:efore where performance is rendered
by mtervenllon of law mvahd, or the subject matter assumed by
the parties to continue to exist is destroyed or a state of thing
assumed to be the foundation of the contract fails, or does not
happen, or wher~ the per~ormance is to be rendered personally
and the person dies or 1s disabled, the contract stands discharged.
(1) (1647) Aleyn, 26.
(2) [19441 A.C. 26S.
342
SUPREME COURT REPORTS
[1968) 3 S.C.R.
It has been held by this Court that the rule in s. 56 exhaus1ively deals with the doctrine of frustration of contracts, and it
cannot be extended by analogies borrowed from the English
common law. In Satyabrata Ghose v. Mugneeram Bangur & Co.
and Anr.('), Mukherjea, J., observed at p. 319:
" ...... the doctrine of frustration is really an aspect
or part of the Jaw 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. 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 fndian Contract Act deals with a particular subject, it is exhaustive
upon the ~ame and it is not permissible to import the
principles of English law dehors
these statutory
provisions."
No useful purpose will be served by referring to the judgmeijnts
of the Supreme Court of the United States of America and
·
Court of Session in Scotland to which our attention was invit .
Section 56 of the Contract Act lays down a positive rule relating
to frustration of contracts and the Courts cannot travel outside the
terms of that section. The view eXpressed by the East Punjab High
Court in Parshotam Das Shankar Das v. Municipal Committee,
Batala('), thats. 56 of the Contract Act is not exhaustive of the
law relating to frustration of contracts in India must be deemed
not to be good law to that extent.
We are unable to agree with counsel for the appellant in the
present case that the relation between the appellant and the respondents rested in a contract. It is true that the Court of Wards bad
accepted the tender of the appellant and had granted him a 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 Property Act the chapters and sections
of the Transfer of Property Act which relate to contracts are to be
taken as part of the 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 transfer.
(l) [19S4) s.c.R. 310.
(2) A.l.R. 1949B.l'. 301.
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DHRUB DEV V. HARMO!IlNDER (Shah,/.)
343
A
By its express terms s. 56 of the Contract Act does not apply
to cases in which there is a completed transfer. The !ICC<>nd 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
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promisor could not prevent unlawful, becomes void when the ac't
becomes impossible or unlawful.
But on that account the transfer
of property resulting from the lease granted by the lessor to the
lessee is not declared void.
By the agreement of lease the appellant undertook to pay rent
for the year 1947-48 and the Court of Wards agreed to give on
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lea5e tlle 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
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area rendering it unsafe for the appellant to carry on cultivation,
or that the crops grown by hiin 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
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widespread riots cannot in the events that transpired clothe him
with the right to claim refund of the rent paid.
Authorities in the Courts in India have generally taken the
view that s. 56 of the Contract Act is not applicable when the
rights and obligations of the parties arise under a transfer of property under a lease. In Abdul Hashem and another v. Balahari
F
Monda! and Others('), the Calcutta High Court held that in a
case where during the continuance of a tenancy, a notice was
served on the tenant requiring him to place a part of the land
under his tenancy at the disposal of the Land Acquisition Collector, and the Collector took possession of the premises let out to
him, it was held that even though the occurrence was unforeseen
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and was not contemplated by the parties when the lease was created, the occurrence was not so fundamental as to be regarded in
law to strike at the root and destroy the basis of the relationship
of landlord and tenant.
In Tarabai Jivanlal Parekh v. Lala Padamchand(') it was
he!~ that monthly tenants of residential premises from whose occu~
H
pahon the premises were requisitioned continued to remain the
monthly tenants of the landlord as before and that by reason of
the requisition there was no eviction by title paramount or a
(l) A.I.R. 1952 Cal. 380.
(2) A.I.R. 1950 Bom. 89.
L6Sup, CJ/68-9
344
SUPREME COURT. REPORTS
[1968] 3 S.C.R.
frustration of adventure.
The Court in that case observed that
the doctrine of frustra1ion did not apply where there is a lease
whether the term is one for a fixed period or one which can be
terminated by notice to quit, as the estate vested in the lessee by
a lease is not extinguished by the order of requisition which is of
a temporary nature.
In Alanduraiappar Kail Chithakkadu by its Trustee M. Ramananda Nainar and Ors. v. T. S. A. Hamid and Another('), a lessee
of a shandy tape agreeing to pay an annual rent for a period of
five years was held not to be entitled to remission merely for the
reason that the shand,v was hit by two cyclones during the period
of lease and that for some period on account of the cyclone, "the
shandy did not form properly or regularly and the Jessee did not
get any income". The Court held in that case that in the absence
of any provision for remission on account of losses, no such remission can be granted by the Courts.
In Sri Amuruvi Perumal Devasthanam v. K. R. Sabapathi
Pillai and another(') the plaintiff Devasthanam granted a lease
of lands in open auction to the defendant on the terms and conditions set out in the auction no1ices and a deed of lease was executed by the Devasthanam and the defendants. The Government
of Madras thereafter promulgated Ordinance IV of 1952 which
restricted the quantum of rent payable by the tenants to the landlords. The defendants remained in possession till after the expiry
of the period of the lease, but neglected to pay rent and failed to
comply with the terms of the lease. It was held that the plaintiff
was held entitled to recover the stipulated rent from the defendants.
Our attention was, however, invited to certain cases in which
counsel claimed that the doctrine of frustration had been applied
to leases. In Inder Pershad Singh v. Campbell(') the plaintiff
agreed to cultivate indigo for the defendant for a specified number
of years in certain lands with respect to a portion of which lands
the plaintiff was a sub-tenant only.
During the continuance of
the contract, the plaintiff Jost possession of those lands through his
immediate landlord having failed to pay the rent, and having been
in consequence ejected therefrom by the owner. Jn a suit by the
plaintiff to have so much of the contract as related to those lands
cancelled, on the ground that it had become impossible of perforn1
ance through no neglect on his part, it was held that the case fell
within cl. 2 of s. 56 of t1te Contract Act.
But between the parties
to the litigation there. was no relation of landlord and tenant. .The
pl,aintiff was unable to raise· indigo and supply to the defendants
because the plaintiff's landlord failed to pay .the rent due, and the
plaintiff was on that .account ejected from the land. That case'
(l).J.R. 1963 Mad. 94.
(2) A.J.R. 1962 Mad. 132.
(3) J.L.R. 7 Cal. 474.
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DHRUB DEV v. HARMOHINDER (Shah, J.)
345
does not, in our view, support the contention that the doctrine of
frustration applies to the case of a lease.
The case strongly relied upon by counsel for the appellant was
Gurdarshan Singh and Anr. v. Bishen Singh('). In that case a
lease was executed on January 8, 194 7 in respect of agricultural
land situated in an area which on partition of India fell within
West Pakistan.
The 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 question "whether 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. 13-,-"that the doctrine of frustration does apply to leases, but even if it does not' apply in terms
to a 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 Jaw there is a transfer of right to enjoy that land. If
any material part ()f the property be wholly destroyed or rendered
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 Jet to him.
The appeal fails and is dismissed with costs.
Y.P.
A ppea/ dismissed.
(I) I L.J!., (1962J_Puojab 5