# s11 SUSHILA DEVI AND ANR. ' v. HARi SINGH AND ORS

- **Citation:** [1971] Supp. 1 S.C.R. 671
- **Court:** Supreme Court of India
- **Decided:** 1971-05-05
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/s11-sushila-devi-and-anr-v-hari-singh-and-ors-5391
- **Pages:** 6

## Headnote

s11
SUSHILA DEVI AND ANR.
'
A
v.
HARi SINGH AND ORS.
May 5, 1971.
I K. S. HEGDE & A. N. GROVER, JJ.]
B
Contract Act (9 of 1872), s. 56-Frustration-App/icabi/ity to leases.
The appellants were legal representatives of the owner of a village.
In January, .1947, the previous owner called for tenders for taking the
property on lease for a period of three years.
The respondents• tender
wail accepted and they deposited along with the tender earnest money
C
and security for the payment of rent. The terms of the tender required that
the lease deed should be got registered by the lessee and that the lessee
alone would be personally responsible for taking possession of the lands.
As a result of the partition of India the village became a part of
Pakistan. Even before actual partition, because ~f serious communal trou·
hies, it was not possible for the respondents to 10 to the village either to
cultivate the lands or to collect the rent from those who were culti~atinsD
No Ielise deed was executed or relistered.
Under those circumstances the respondents filed a suit claiming a
decree for the refund of the amounts deposited and damages. The lower
courts held that the contract had become impossible of performance and
decreed the suit in part.
In appeal to this Court,
HELD: (1) The law of frustration as embodied ins. 56 of the Contract
Act applies only to a contract that is, an agreement ~o lease, and does not
apply to leases.
[674A ; 675A-B)
Ra; Dhruv Dev Chand. v. Harmohinder Singh, [1968] 3 S.C.R. 33•,
referred to.
(2) But in this ·-case there was no .lease. Since lease was to be for a
period of three years it could have been validly made only under a registered instrumen\, and therefore, there was only an aarecment to lease and
not a lease. Such an agreement comes within the scope . of s. 56 of the
Contract' Act. (6750-B)
E
F
(3) The impossibility contemplated by s. 56 is not confined to someG
thing which is not humanly_ .possible. _H the performance _.[Jf a contract becomes irnpra<;ticahle or use:less having regard tO the ob1ect and purpose
of the p>\rtieli then it must be held that' the performance of the contract
becan1e 'Jmpossible.
But the supervening events -should , take away the
very bast£ of the contract and it .should be of such a 'character that it
striker. at :he root of the contract. [676C:Dl
Jn tr.e pte~nt case, the respondents sought to take on lease the properH
ties with a view to enjoy the properties either by personally cultivating
them ·tr by &Ub-leasill8··them. to others. · That abject became impossible
because of supervening even!S.
Under the terms of the agreement the
872
A
B
c
D
E
F
G
B
SUPREME COURT U:PORTS
(1971] SUPP. s.c.&.
lessor was not expected to deliver the actual possession of the properties
but because of the prevailing circumstances it was impossible for the respondents to either take possession of the properties or even to collect rent
from the cultivators. Therefore. the contract had become impossible of
performance. [676D-F]
Satyabrata Ghose v. Mugneeram Bangur and Co., [1954] S.C.R. 310.
referred to.
OVIL APPELLATE JURISDICTION : Civil Appeal No. 1225 of
1966.
Appeal by special leave from the judgment and decree dated
December 14, 1964 of the Jammu & Kashmir High Court in Civil
First Appeal No. I of 1960.
S. T. Desai and P. C. Bhartari, for the appellants.
Hardev Singh and Hirai Lal Kapoor, for respondents Nos.
12A to 12C.

## Text

s11
SUSHILA DEVI AND ANR.
'
A
v.
HARi SINGH AND ORS.
May 5, 1971.
I K. S. HEGDE & A. N. GROVER, JJ.]
B
Contract Act (9 of 1872), s. 56-Frustration-App/icabi/ity to leases.
The appellants were legal representatives of the owner of a village.
In January, .1947, the previous owner called for tenders for taking the
property on lease for a period of three years.
The respondents• tender
wail accepted and they deposited along with the tender earnest money
C
and security for the payment of rent. The terms of the tender required that
the lease deed should be got registered by the lessee and that the lessee
alone would be personally responsible for taking possession of the lands.
As a result of the partition of India the village became a part of
Pakistan. Even before actual partition, because ~f serious communal trou·
hies, it was not possible for the respondents to 10 to the village either to
cultivate the lands or to collect the rent from those who were culti~atinsD
No Ielise deed was executed or relistered.
Under those circumstances the respondents filed a suit claiming a
decree for the refund of the amounts deposited and damages. The lower
courts held that the contract had become impossible of performance and
decreed the suit in part.
In appeal to this Court,
HELD: (1) The law of frustration as embodied ins. 56 of the Contract
Act applies only to a contract that is, an agreement ~o lease, and does not
apply to leases.
[674A ; 675A-B)
Ra; Dhruv Dev Chand. v. Harmohinder Singh, [1968] 3 S.C.R. 33•,
referred to.
(2) But in this ·-case there was no .lease. Since lease was to be for a
period of three years it could have been validly made only under a registered instrumen\, and therefore, there was only an aarecment to lease and
not a lease. Such an agreement comes within the scope . of s. 56 of the
Contract' Act. (6750-B)
E
F
(3) The impossibility contemplated by s. 56 is not confined to someG
thing which is not humanly_ .possible. _H the performance _.[Jf a contract becomes irnpra<;ticahle or use:less having regard tO the ob1ect and purpose
of the p>\rtieli then it must be held that' the performance of the contract
becan1e 'Jmpossible.
But the supervening events -should , take away the
very bast£ of the contract and it .should be of such a 'character that it
striker. at :he root of the contract. [676C:Dl
Jn tr.e pte~nt case, the respondents sought to take on lease the properH
ties with a view to enjoy the properties either by personally cultivating
them ·tr by &Ub-leasill8··them. to others. · That abject became impossible
because of supervening even!S.
Under the terms of the agreement the
872
A
B
c
D
E
F
G
B
SUPREME COURT U:PORTS
(1971] SUPP. s.c.&.
lessor was not expected to deliver the actual possession of the properties
but because of the prevailing circumstances it was impossible for the respondents to either take possession of the properties or even to collect rent
from the cultivators. Therefore. the contract had become impossible of
performance. [676D-F]
Satyabrata Ghose v. Mugneeram Bangur and Co., [1954] S.C.R. 310.
referred to.
OVIL APPELLATE JURISDICTION : Civil Appeal No. 1225 of
1966.
Appeal by special leave from the judgment and decree dated
December 14, 1964 of the Jammu & Kashmir High Court in Civil
First Appeal No. I of 1960.
S. T. Desai and P. C. Bhartari, for the appellants.
Hardev Singh and Hirai Lal Kapoor, for respondents Nos.
12A to 12C.
The Judgment of the Court was delivered by
Begde, J.-The appellants are the legal representatives of
Dewnani Vidya Wati.
The said Vidya Wati was the owner of
the village known as Kotli Delbagh Rai in Tehsil Gujranwalla.
It appears that she used to give the lands in that village on lease
for a term of years by calling for tenders and accepting the
highest tender.
In about January 1947, she published a notice
inviting tenders from interested persons for taking those lands
on lease for a period of three years beginning from kharif 1947
to Rabi 1950.
The tenders had to be submitted before January 1, 1947.
Clause (3) of the tender notice stated that "the
terms of lease can be perused in the Dewan estates office Jammu
before filing of the tenders.
No excuse of ignorance as to the
time will be entertained after the acceptance of the lease."
A note containing the terms on which the lands would be
leased was exhibited for the information of the tenderers in the
office of the lessor.
For our present purpose the only terms
that are relevant are those contained in Clauses 4 and 5 of the
note. Clause 4 reads :
"According to the terms of the tender, the lessee
shall be the essence of contract.
In case the lessee is
15 days from the date of the acceptance of the lease. The
expenses of the completion and Registration of the deed
shall be borne by the lessee.
The period of 15 days fixed for the completion and registration of the lease deed
shall be the essence of contract In case the lessee is
negligent to get the lease deed registered, the lease shall
..
~USlllLA •• HARi SINGH (Hegde, J.)
673
stand cancelled.
The ~nest money and the securitY,
A
shall also be forfeited.
A fresh tender for the lands shall be called for and
any loss caused in this connection shall be borne by the
lessee."
Clause 5 says :
"The lessee shall be personally responsible to get
the possession of the lands under Patta after the registration of lease deed.
On getting the possession of the land
the lessee shall get the counter part of the lease deed
executed from his cultivators and deposit the same in the
estates office.
And shall furnish a certificate for any
part of land which he ~eeps for his self-cultivatio~. He
shall inform and deposit fresh counter lease deed m case
of any change in his cultivators and shall get a written
receipt from the Manager for the same."
The respondents tendered in response to the notice calling
for tenders.
Their tender was accepted.
Alongwith the tender
they deposited a sum of Rs. l,000 as earnest money.
Later on
they deposited a sum of Rs. 34,000 as security for the payment
of rent.
·
No lease was executed or registered.
From the material on
record, it is not possible to find out as to who was responsible
for the non-execution of the lease.
But that aspect is not material for our present purpose.
The landlord has not sought to cancel the contract.
The agreement to lease continued to be in force
even after the per,od within
which the lease deed had to
be
registered.
Tehsil Gujranwalla became a part of Pakistan as a result of
partition of India on August 15, 1947. Even before the partition
Vidya Wati as well as the respondents
had migrated to India
because of the com111unal disturbances.
Considerable evidence
was led in the case to establish that even before the actual partition of India took place, because of the serious communal troubles,
it was not possible for the respondents to go to Gujranwalla either
to cultivate the lands or even to collect the rent from those who
were cultivating the lands.
Under those circumstances the respondents called npon Vidya Wati to refund the amount deposited
as security for the payment of rent as well as to pay them a
sum of Rs. 2,000 as damages.
She declined to comply with that
demand.
Thereafter they filed the suit from which this appeal
arises claiming a decree for Rs. 36,000, Rs. 34,000 as refund of
the amonnt deposited and Rs. 2,000 as damages.
Vidya Wati
43- .( S.C.lndia/71
B
c
»
E
F
G
H
674
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[1971] SUPP. s.c.R.
resisted the suit on various grounds.
She pleaded that she had
done all that she was expected to do under the contract.
Therefore the claim made against her was not sustainable. According to her the lands sought to be leased were in the possession of
the actual cultivators ; she was not required to evict those cultivators and deliver physical possession to the respondents. She was
only required to deliver the landlord's possession of the lands
proposed to be leased.
According to her she had given to th~
respondents such possession as she could have given under the
circumstances.
She further pleaded that the doctrine of frustration is not applicable to leases.
In addition she p!.eaded that the
suit was barred by limitation.
She also contended that under the
contract she was entitled to forfeit the amount deposited as security.
At the trial most of the contentions advanced by Vidya Wati
were given up.
The only issue on which the parties went to trial
was whether the contract was frustrated because of the supervening circumstances mentioned earlier.
The trial court rejecting
the contention of the plaintiffs came to the conclusion that Vidya
Wati was not expected to deliver physical possession of the properties intended to be leased. She had only to give such possession as she had.
But at the same time it upheld the contention
of the plaintiffs that the agreement to lease was frustrated.
ln
appeal a Division Bench of the High Court of Jammu and Kashmir
agreed with the trial court that the contract referred to in the plaint
was frustrated becalJSI) of the supervening circumstances. It
opined that the doctrine of frustration applied to leases as well.
It further held that under the contract Vidya Wati was expected
to deliver actual possession of the property to the plaintiffs and
that she had neither delivered physical nor even symbolic possession of the same to the plaintiffs.
In the result it affirmed the
decision of the trial court. Thereafter this appeal has been brought
by special leave.
Diiring the pendency of the appeal to the High
Court Vidyawati died and the present appellants were brought
on record as her legal representatives.
The only question that falls for decision in this appeal is
whether the contract referred to in the plaint has become void in
view of the circumstances established. In other words had the performance of the contract become impossible in view of the prolonged and widespread communal troubles and the long drawn out
tension that prevailed between India and Pakistan.
The law of
frustration is embodied in Section 56 of the Contract Act. That
section to the extent material for our present purpose reads :
' "A contract to do an act which, after the contract
is made, becomes impossible, or, by reason of some event
SUSHILA v. HARi SINGH (H egde, J.)
which the promisor could not prevent, unlawful, becomes
void when the act becomes impossible or unlawful."
The conclusion of the Division Bench of the Jammu and
Kashmir High Court that Section 56 of the Contract Act applies
to leases as well cannot be accepted as correct.
Section 56 applies
only to a contract.
Once a valid lease comes into existence the
agreement to lease disappears and its place is taken by the lease.
It becomes a completed conveyance under which the lessee gets
an interest in the property. There. is a clear distinction between
a completed conveyance and an executory contract. Events which
discharge a contract do not invalidate a concluded transfer-see
Raja Dhruv Dev Chand v. Harmohinder Singh and anr(').
In
view of that decision the view taken by some of the High Courts
that Section 56 of the Contract Act applies to leases cannot be
accepted as correct.
Further the English decisions bearing on the
point can have no further relevance.
But in thjs case there was no lease. There was .only an agreement to lease.
As seen earlier, the agreement between the parties
was that the properties in question should be leased to the plain-
'liffs for a period of three years.
Such a lease could not have
been validly made except under a registered instrument. As seen
earlier the contract between the parties provided that the lease
deed should be registered within 15 days from the date of the
acceptance of the tender.
For one reason or the other, the contemplated lease deed was neither executed nor registered.
There.
fore we have before us only an agreement to lease and not a lease.
Such an agreement comes within the scope of Section 56 of the
Contract Act.
We agree with the trial court that under the terms of agreement Vidya Wati was not expected to deliver actual possession of
the properties sought to be leased.
The contract between the
parties provided that :
'
"The lessee shall be personally responsible to get
the possession of the lands under Patta after the registration of lease deed".
In our opinion on this point the conclusion of the appellate
court is not sustainable.
But in fact as found by the trial court
·as well as by the appellate court, it was impossible for the plaintiffs to even get into Pakistan.
Both the trial court as well as the
appellate court have found that because of the prevailing circumstances, it was impossible for the plaintiffs to either to take possession of the properties intended to be leased or even to collect rent
(1) [1968] 3 S. c. R. 339.
675
A
B
c
D
E
F
G
H
676
A
B
c
D
E
F
SUPREME COURT REPORTS
[1971) ~un. s.c.R'
from the cultivators.
For that situation the plaintiffs were not
responsible in any manner. As observed by this Court in Satya~
brata Ghose v. Mugneeram Bangur and Co. and anr ('), 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 Jaw on the subject of frustration is not correct. Section 56
of the Indian Contract Act Jays down a rule of positive Jaw and
does not leave the matter to be determined according to the intention of the parties.
The impossibility contemplated by Section
56 of the Contract Act is not confined to something which is not
humanly possible. If the performance of a contract becomes impracticable or useless having regard to the object and purpose the
parties had in view then it must be held that the performance of
the contract has become impossible.
But the supervening events
should take away the basis of the contract and it should be of
such a character that it strikes at the root of the contract.
From the facts found in this case it is clear that the plaintiffs
sought to take on lease the properties in question with a view to
enjoy those properties either by personally cultivating them or by
sub-leasing them to others.
That object became impossible
because of the supervening events.
Further the terms of the
agreement between the parties relating to taking possession of the
properties also become impossible of performance.
Therefore we
agree with the trial court as well as the appellate court that the
contract had become impossible of performance.
In the result this appeal fails and the same is dismissed. But
taking into consideration the fact that both the plaintiffs as well as
the defendant had become the victim of circumstances which were
beyond their control, we direct the parties to bear their own costs
in this appeal.
V. P. S.
Appeal dismissed.
(I) [1954) S. C. R. 310.