# SUPREME COURT REPORTS [1952} GANGA SARAN v. RAM CHARAN RAM GOPAL

- **Citation:** [1952] 1 S.C.R. 36
- **Court:** Supreme Court of India
- **Decided:** 1952
- **Case number:** CIVIL APPELLATE No. 56 of 1951
- **Bench:** Harilal Kania C.J, FAZL Au, Mehr Chand Mahajan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/supreme-court-reports-1952-ganga-saran-v-ram-charan-ram-gopal-19
- **Pages:** 7

## Headnote

Indian Contract Act (/ of 1872)', s. 56--Contract for delivery of
goods manufactured by particular Mill as soon as they are supplied
-Construction of contract-Non-receipt of goods
from Mill within
time-Whether excuses performance-Doctrine of frustration.
The respondents agree to deliver 61 bales of cloth to the appellant by the 17th November, 1941.
The agreement provided "we
shall continue sending the goods as soori as they are prepared to
you up to Magsar Badi 15, Sambat 1998...... We shall go on
supplying goods to y_ou of the Victoria Mills as soon as they are
supplied to us by the said Mills. . . . . . We shall go on delivering the
goods to you ...... out ·of the goods noted above which will be prepared by the Mill."
In a suit for damages for non-delivery of the
goods the respondents pleaded that as they had not received
the
goods from the Victoria Mill~ before the 17th of November, 1941,
performance of the contract had become impossible by reason of
an event which they could not prevent and the contract had
therefore become void under Sec. 56, Indian Contract Act :
Held, (i) that, on a proper construction of the contract, delivery
of the goods was not made contingc;nt on their being supplied
to
the respondents by the Victoria Mills.
The words "prepared by
the Mills" were only a description of the goods to be supplied,
and the expressions "as soon as they are prepared" and "as
soon as they are supplied to us by the said Mill" simply
indi~
cated the 'process of delivery.
This was not therefore a case
in
which the doctrine of frustration of contract
could
be
invoked.
(ii) Even apart from the construction of the agreement, as the
respondents had not shown that they had placed an order for the
goods with the Victoria Mills and yet the Mills had failed to
supply, there was a clear breach of contract to deliver and the
appellant was entitled to recover damages.
l-Iarnaf}drai v. Pragdas (L. R. 15 I.A. 9) and British Nfovietont:
News v. London Cinemas [1951] (2 A.E.R. 617) relied on.
CIVIL
APPELLATE
No. 56 of 1951.
JuRISDICTION :
Civil
Appeal
Appeal from a judgment and decree of the
High
Court of Allahabad (Malik and Wali Ullaha JJ.) dated
f
14th February 1946, in Appeal No. 240 of 1943 which
1t
t
)
S.C.R.
SUPREME COURT REPORTS
37
arose out of a decree dated 19th January, 1943, of the
Court- of the
Civil and
Sessions Judge, Kanpur, in
Original Suit No. 34 of 1942.
Ac41iru Ram (P. S. Safeer, with him) for the
appellant.
S. P. Sinha (K.. N. Aggarwala, with him) for the
respondent.
1951. November 1. The Judgement of the Court
was delivered by
FAzL Au J .-This is an
appeal by special leave
agaimt a decision of ,the High Court at
Allahabad,
reversing
the
decision
of the trial court, in a suit
instituted by the appellant to recover
damages from
the respondent-firm for breach of a contract.
It appears that between the
10th and 18th April,
1941, · the parties entered into 5 contracts, by which
the respondent-firm undertook to supply to the appellant 184 bales
of cloth of certain
specifications manufactured by the New Victoria Mills, Kanpur, and the
Raza
Textile
Mills,
Rampur.
Only 99
bales were
taken up and there was a dispute about the remaining
85 bales. On the 17th October, 1941, a settlement was
arrived at between the parties, and it was agreed that
the respondent-firm should deliver
to the
appellant
61 bales, and that the goods should be delivered by
the 17th November, 1941.
The actual text of the
agreement (exhibit 4) was as follows:-
"61 bales as noted below are rto be giiven to you
by us.
we shall continue sending
goods as soon as they
are prepared to you upto Magsar Badi 15 Sambat 1998.
We shall go on supplying. goods to you of the Victoria
Mills as
soon as they
are supplied · to
us by the
said Mill.
(Specifications of cloth given here).
We shall go on delivering the goods to you upto
Magsar Badi 15 out of the goods noted above which
will be prepared by the Mill." ·
/
1951 ..
Ganga Sarar
\'.'
Ram Charan-·
Ram Gopal~.
'
1951
Ganga

## Text

1951
Nov. J,
36
SUPREME COURT
REPORTS
[1952}
GANGA SARAN
v.
RAM CHARAN RAM GOPAL
[HARILAL KANIA C.J., FAZL Au AND MEHR CHAND
MAHAJAN JJ.]
Indian Contract Act (/ of 1872)', s. 56--Contract for delivery of
goods manufactured by particular Mill as soon as they are supplied
-Construction of contract-Non-receipt of goods
from Mill within
time-Whether excuses performance-Doctrine of frustration.
The respondents agree to deliver 61 bales of cloth to the appellant by the 17th November, 1941.
The agreement provided "we
shall continue sending the goods as soori as they are prepared to
you up to Magsar Badi 15, Sambat 1998...... We shall go on
supplying goods to y_ou of the Victoria Mills as soon as they are
supplied to us by the said Mills. . . . . . We shall go on delivering the
goods to you ...... out ·of the goods noted above which will be prepared by the Mill."
In a suit for damages for non-delivery of the
goods the respondents pleaded that as they had not received
the
goods from the Victoria Mill~ before the 17th of November, 1941,
performance of the contract had become impossible by reason of
an event which they could not prevent and the contract had
therefore become void under Sec. 56, Indian Contract Act :
Held, (i) that, on a proper construction of the contract, delivery
of the goods was not made contingc;nt on their being supplied
to
the respondents by the Victoria Mills.
The words "prepared by
the Mills" were only a description of the goods to be supplied,
and the expressions "as soon as they are prepared" and "as
soon as they are supplied to us by the said Mill" simply
indi~
cated the 'process of delivery.
This was not therefore a case
in
which the doctrine of frustration of contract
could
be
invoked.
(ii) Even apart from the construction of the agreement, as the
respondents had not shown that they had placed an order for the
goods with the Victoria Mills and yet the Mills had failed to
supply, there was a clear breach of contract to deliver and the
appellant was entitled to recover damages.
l-Iarnaf}drai v. Pragdas (L. R. 15 I.A. 9) and British Nfovietont:
News v. London Cinemas [1951] (2 A.E.R. 617) relied on.
CIVIL
APPELLATE
No. 56 of 1951.
JuRISDICTION :
Civil
Appeal
Appeal from a judgment and decree of the
High
Court of Allahabad (Malik and Wali Ullaha JJ.) dated
f
14th February 1946, in Appeal No. 240 of 1943 which
1t
t
)
S.C.R.
SUPREME COURT REPORTS
37
arose out of a decree dated 19th January, 1943, of the
Court- of the
Civil and
Sessions Judge, Kanpur, in
Original Suit No. 34 of 1942.
Ac41iru Ram (P. S. Safeer, with him) for the
appellant.
S. P. Sinha (K.. N. Aggarwala, with him) for the
respondent.
1951. November 1. The Judgement of the Court
was delivered by
FAzL Au J .-This is an
appeal by special leave
agaimt a decision of ,the High Court at
Allahabad,
reversing
the
decision
of the trial court, in a suit
instituted by the appellant to recover
damages from
the respondent-firm for breach of a contract.
It appears that between the
10th and 18th April,
1941, · the parties entered into 5 contracts, by which
the respondent-firm undertook to supply to the appellant 184 bales
of cloth of certain
specifications manufactured by the New Victoria Mills, Kanpur, and the
Raza
Textile
Mills,
Rampur.
Only 99
bales were
taken up and there was a dispute about the remaining
85 bales. On the 17th October, 1941, a settlement was
arrived at between the parties, and it was agreed that
the respondent-firm should deliver
to the
appellant
61 bales, and that the goods should be delivered by
the 17th November, 1941.
The actual text of the
agreement (exhibit 4) was as follows:-
"61 bales as noted below are rto be giiven to you
by us.
we shall continue sending
goods as soon as they
are prepared to you upto Magsar Badi 15 Sambat 1998.
We shall go on supplying. goods to you of the Victoria
Mills as
soon as they
are supplied · to
us by the
said Mill.
(Specifications of cloth given here).
We shall go on delivering the goods to you upto
Magsar Badi 15 out of the goods noted above which
will be prepared by the Mill." ·
/
1951 ..
Ganga Sarar
\'.'
Ram Charan-·
Ram Gopal~.
'
1951
Ganga Saran
v.
Ram Charan
Ram Gopal.
Fazl Ali J.
38
SUPREME COURT REPORTS
[1952]
As the 61 bales were not supplied, the appellant sent
a telegraphic notice
to the respondent-firm on 20th
November, 1941, to the following effect:-
"Give delivery of our 61 bales through Bank.
Otherwise suing within 3 days."
The appellant did not receive any reply to this
notice, and so he instituted the suit which has given
rise to this appeal, on the 23rd Apfil, 1942, claiming a
sum of Rs. 9,808 1and odd, which, according to him,
represented the loss sustained by him on account of
the rise in the market rate of the contracted goods,
and he also claimed · costs and interest.
The respondent-firm resisted the suit on a number of grounds, but
their main plea, with which alone we are concerned
in this
appeal, was
that the
performance of the
contract had been frustrated by circumstances beyond
their control and hence the appellant's
claim
must
fail. This plea was negatived by the trial court, but it
was upheld by the High Court, and hence this appeal.
The only point which arises in this appeal is
whether the
circumstances of the case afford
any
ba,is for the application of the doctrine of frustration
of contract, a doctrine which is embodied, so far as
this country is concerned, in sections 32 and 56 of the
Indian Contract Act, 1872.
The main grounds of attack against the judgment
of the High Court are:-
( I) that it has misread the agreement (exhibit 4)
dated the 17th October, 1941, on which both parties
rely; and
(2) that it has paid more attention to an abstract
legal doctrine than to the facts of the case.
In our opinion, both these contentions are correct.
The construction placed by the High Court upon the
agreement and its
conclusion based
thereon, are set
out in the following passage in the leading judgment
of Wali Ullah J:-
•
•·
"It seems to me that the parties clearly intended
;;.
that the defendant was to supply the goods to the
~
l +
)
)
...
S.C.R.
SUPREME COURT REPORTS
39
Plaintiff 'if and when'-and only In that event-the
particular goods were prepared by the · Victoria Mills
and were supplied to the defendant between the 17th
of October, 1941, and 17th of November, 1941. As the
fundamental assumption on which the contract was
made ceased to exist during the time of performance
and consequently it became impossible for the defendant
to fulfil the contract, it must be held that the contract
was discharged by supervening impossibility."
The construction suggested by the High Court is
precisely the construction which was attempted to be
put on a similar contract by the defendant-respondents
in the case of Harnandrai v. Pragdas(1), but the Privy
Cooncil negatived it.
In that case, the
provision
as
to delivery of goods ran as follows :-
"The said goods are to be taken delivery of as and
when the same may be received from the Mills."
The Mills failed to perform their co.ntract with the
defendants as they were engaged in fulfilling certain
contracts with the Government, and consequently - the
defendants could not supply the goods to the plaintiffs.
The questions raised before the Privy Counci:l were as
to the meaning of the contract and whether its performance had been frustrated,· and the J>rivy
Council
disposed of them in these words:-
"It was also suggested that the words 'as and
when the same may be received from the Mills' should
be construed, as if they were 'if and when the same
may be received from the Mills.' This is to convert
words, which fix the quantities and times for deliveries
by instalments into a· condition precedent to the obligation to deliver at all, and virtually makes a new
contract.
The words certainly regulate the manner of
performance, but they do not reduce the fixed quantity
sold to a mere maximum, · or limit the sale to such
goods,
not exceeding 864 . bales, as the Mills might
deliver to the defendants during the remainder of the
year.''
Their Lordships .then proceeded to observe:-
(!) (1888) L.R. 15 I.A. 9.
1951
Ganga Saran
v.
Ram Charan
Ram <jopal.
Fazl Ali /.
\
1951
Ganga Saran
v.
Ram Charan
Ram Gopal.
Fazl Ali /.
40
SUPREME COURT REPORTS
[1952]
"The Mills, from which the goods were to come, no
doubt were contemplated as continuing to exist, though
it does not follow
that, in a bargain and sale such
as this, the closing or even the destruction of the Mills
would affect a contract between third parties, which
is in terms absolute; but the Mills did continue to
exist and did continue to manufacture the goods m
question, only they were ma:de for and delivered to
somebody else.
We agree with the reasoning of the Privy Council,
and it seems to us that the considerations which prevailed with them must govern the construction of the
agreement with which we are concerned in this case.
The agreement does not seem to us to convey the
meaning that the delivery of the goods was made
contingent on their being supplied to the respondentfirm by the Victoria Mills. We find it difficult to hold
that the parties ever contemplated the possibility of
the goods not being supplied at all. The words "prepared by the Mill" are only a description of the goods
to be supplied, and the expressions "as soon as they
are prepared" and "as soon as they are supplied to
us by the said Miil" simply indicate the process of
delivery. It should be remembered that what we have
to construe is a commercial agreement entered into in a
somewhat common form, and, to use the words of Lord
Sumner in the case to which reference has been made,
"there is nothing surprising in a merchant's bindmg
himself to procure certain goods at all events, it being
a matter of price and of market expectations". Since
the true construction of an agreement must depend
upon the import of the words used and not upon what
the parties choose to say afterwards, ic is unnecessary
to refer to what the parties have said about it.
Even apart from the construction of the agreement
it seems to us that the plea of the respondents must
fail
on
their own
admissions. The defendent
has
stated in his evidence that he had not sold the 61 bales
of cloth to any other person at the time he received
the1
1telegraphic notice of the 20th November, 1941,
(exhibit I). On his own admission, therefore, he was
\
f
• ).I
)
)
- '
S.C.R.
SUPREME COURT REPORTS
41
in a position to supply 61 bales of the contracted goods
at the time when the breach of the agrnement is alleged
to have happened.
That being so, we are unable to
hold that the performance of the contract had become .
impossible. The matter however does not rest there.
Guruprasad, a clerk of the Mills Compapy, who is the
second witness for the defendants, has made an important statement to the following effect:-
"The
customers
all place
their
requirements
before. the sales manager. If the goods required are
ready, they are sold to the customers and if they are
_not ready and if the customer want> them to be manufactured
they are delivered to the customers after
manufacture. An order book is maintained at the
Mills".
Such being the practice which prevailed in the
Victoria , Mills, it was for the defendants to show that
an order for the manufacture of the contracted goods
was placed with the Mills and yet the Mills1 failed to
supply the goods.
No such evidence has however
·been offered by the defendants.
The High Court has ·
surmised
that it might not have
been possible
to
supply the goods within the period mentioned in the
agreement, but there ' is no material to support that
statement.
In these circumstances, 'this
ii~ obviously no~ a case
in which the doctrine of frustration of contract can be
invoked. That doctrine has been explained in a number
of cases, some of which are referred to in the judgment
of the High Court, but the latest pronoucement with
reg-ard to it is to be found in the speech of Viscount
Simon in British Movietone News v. London Cinemas(1)
in which the •Lord Chancellor referred with approval
to the following enunciation of the doctrine by Earl
Loreburn in a previous case
F. A. Tamplin S. S.
Co. Ltd. v.
Anglo-Maxican
Petroleum Products Co.,
Ltd.(2) :~
" ... a court can and ought to examine the cop.tract and
the circumstances in which it was made, not _of course
(1) [ 1951 J A.E.L.R. 617
(2) [ 1916] 2 A.C. 403, .404.
1951
Ganga Saran
v.
Ram Charan
Ram Gopal.
Fazl Ali f.
1951
Ganga Saran
v.
Ram Charan
Ram Gopal.
Faz! Ali J.
42
SUPREME COURT REPORTS
[1952]
to vary, but only to explain it, in order to see whether
or not from the nature of it the parties must have
made their bargain on the footing that a particular
thing or state of th'ings would continue to exist.
And
if they must have done so, then a term tlo that effect
will be implied, though it be not expressed in the
contract. ..... no court has an absolving power, but it can
infer from the nature of the contract and the surrounding
circumstances
that a
condition which
is
not
expressed
was a foundation on which the
parties
contracted."
It seems necessary for us to emphasise that so far
as the courts in this country are concerned, they must
look primarily to the law as embodied in section
32
and 56 of the Indian Contract Act, 1872. These sections run as follows:- .
"32. Contingent contracts to do or not to do anything if an uncertain
future event happens cannot be enf0rced by law unless and until that
event has happened.
If the event becomes impossible 1such contracts become voi<l."
"56. An agreement to do an act impossible in itself is void.
A contract to do an act which, after the contract is made, becon1es impossible, or, by reason of some event which the promiser could not
prevent, unlawful, becomes void when the act becomes impossible or
unlawful. ... ".
The enforcement of the agreement in question was,
as we have already pointed out, not contingent on the
happening of an uncertain future event, nor does the
present case fall within the second paragraph of section 56, which is the only provision which may be
said to have any relevancy to the plea put forward by
the respondents. ·Clearly, the
doctrine
of frustration
<:annot avail a defendant when the non-performance
of a contract is attributable to his own default.
We accordingly allow the appeal, set aside the judgment of the High Court, and restore the decree of the
trial court.
The appellant will be entitled to his costs
throughout.
Appeal allowed.
Agent for the appellant: R. S. Narula.
Agent for the respondent: S. S. Sukla.
..