Kerala High Court
Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. vs Shri Andavar & Co. on 27 February, 1990
Equivalent citations: AIR1991KER134, AIR 1991 KERALA 134, (1990) 1 KER LJ 496 (1991) 2 BANKLJ 103, (1991) 2 BANKLJ 103
JUDGMENT
1. Defendant is the appellant. Plaintiff entered into an agreement (Ext. Bl) with the defendant for supply of 15000 tons of eucalyptus hybrid from Ari-malam Plantations of Pudukottai and 3000 tons of eucalyptus grandis from Cinchona Plantations 1, 2 and 3 of Coimbatore South Division and Kambamettu of Madurai South Division. Materials were to be supplied to the depot of the defendant at Pollachi. The plantations from which the plaintiff agreed to supply the firewood belonged to Tamil Nadu Forest Plantation Corporation and it was leased to the plaintiff.
2. Ext. Bl agreement provides that eucalyptus hybrid and grandis with a girth of 12"x24" and with a length of 1 to 2 metres have to be supplied to the defendant. Rupees 15,000/- was deposited by the plaintiff as security towards the performance of the contract. Though some quantities of firewood were supplied, plaintiff wrote Ext. B2 letter to the defendant on 27-3-1976 stating that due to difficulties in arranging lorries and labour he found it difficult to supply the specified firewood. Plaintiff informed the defendant that he should make his own arrangements to get the timber.
3. The gist of the plaintiffs case is that at the time of contract he was not aware of the non-availability of the specified type of eucalyptus firewood and he became aware of the shortage only later and so he could not perform his part of the contract for which he cannot be held liable. In Ext. A10 notice dated 17-7-1976 plaintiff complained that defendant refused to accept the supply of eucalyptus firewood on the ground that they are not of the specified girth. It is also stated in Ext. A10 that the plaintiff is unable to supply the type of firewood described in Ext. Bl as they are not available in Arimalam Plantations. In Ext. B2 which was sent long prior to Ext. A10 notice plaintiff did not have a case that the specified type of firewood was not available in Arimalam Plantations and Cinchona Plantations. In Ext. B2 the difficulty stated by the plaintiff was on account of transprt and labour problems.
4. In Ext. A4 letter sent to the defendant-plaintiff stated that more than 3/4 of the Arimalam Plantations constitute trees of natural growth and that he is not in a position to supply the specified category of firewood. Defendant sent Ext. A5 reply on 24-3-1976 impressing upon the plaintiff the necessity to get the specified type of firewood and nothing but that.
5. P.W. 2 stated that he was threatened and coerced to sign Exts. B2 and B3. Apart from the ipse dixit of P.W. 2 there is nothing to show that defendant exerted any act of coercion on him. Evidence of P.W. 2 that he did not know the contents of Exts. B2 and B3 is indeed difficult to be believed. It is pertinent to note that P.W. 2 did not say a word about threat or coercion in his chief examination. There is total lack of evidence in support of the aforesaid plea.
6. Plaintiffs case is that the specified category of firewood was not available in Arimalam Plantations and so he could not supply it to the defendant. Regarding nonavailability of the specified category of firewood there is only the interested evidence of P.W. 1. The trial Court held that plaintiff is entitled to avoid the agreement to supply the specified category of firewood as they are not available in the Arimalam Plantations. Mere non-availability cannot absolve the plaintiff of his liability under the agreement. When plaintiff sent Ext. A2 letter to the defendant he did not have such a case. At the time when the plaintiff entered into agreement with the defendant every opporunity was available to him to ascertain the availability of the specified category of firewood and if he. did not avail of it he alone need be blamed and not the defendant. Moreover, plaintiff could have taken out a commission to establish that firewood of the contracted variety was not available from Arimalam Plantations. As evidence is lacking regarding the nonavailability of the firewood plaintiff cannot contend that on account of supervening difficulties he was not in a position to supply it.
7. As the plaintiff has to blame himself for not ascertaining the availability of the firewood of the needed category before he entered into the agreement with the defendant he cannot seek the aid of Section 56 of the Contract Act. As there is no acceptable evidence that firewood of the specified variety was not available in Arimalam Plantations and as the plaintiff only stated in Ext. B2 that on account of transport and labour problems he was not able to supply the firewood and as he expressed his regrets, in Ext. B3 for sending Ext. A4, it is not possible to hold that at the time of contract there was anything suggestive of the impossibility of performance of the agreement by the plaintiff. Merely because the plaintiff was under the impression that it would not be possible for him to supply the specified variety of firewood it cannot be held that there occurred supervening difficulties in the performance of the agreement.
8. Doctrine of frustration cannot be successfully pleaded by the plaintiff as wilful non-performance of the contract is attributable to him. Before entering into a solemn agreement with the defendant the plaintiff had all the means and resources to gather full data regarding the availability of the firewood from the plantation leased to him by the Tamil Nadu Forest Plantation Corporation. For lack of plaintiff's diligence defendant cannot suffer. The essential idea upon which the doctrine of frustration is based is that of impossibility of performance of the contract. The changed circumstances may make the performance of the contract impossible. In such a situation the parties are absolved from the further performance of the contract. Plaintiff has no case that at the time of contract firewood of the specified category was available in plenty and due to unforeseen circumstances some of it were destroyed and so he could not arrange the supply.
9. The doctrine of frustration is based not only on the physical or literal impossibility of the performance of the agreement but also of circumstances which make it impossible or illegal for a contracting party to perform the contract. In a case where there is evidence of supervening events which shake the contract to the very root performance of the contract cannot be insisted upon by the Court. The doctrine of frustration according to Indian Law is really an aspect of part of the law of discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done.
10. Section 56 lays down a positive rule relating to frustration and does not leave the matter of frustration to the Courts to be determined according to the intention of the parties. To invoke the aid of Section 56 the party who wants to establish that the contract has become frustrated must establish the following conditions:
(1) that the performance of the contract has become impossible, (2) that the impossibility is not on account of some event which the promisor could not prevent or anticipate, and (3) that the impossibility is not self induced by the promisor or due to his negligence.
It is clear from Section 56 that where a person has promised to do something which he knew, or with reasonable diligence might have known and which the promisee did not know to be impossible or unlawful, such promisor must make compensation to such promisee for any loss sustained by him. The Court has to necessarily examine the contract, the circumstances under which it was made and whether the promisor could have reasonably been aware of the impossibilities of the performance. Courts cannot absolve a party from the liability to perform a contract merely on the ground that it has become more onerous. Express covenants in a contract cannot be lightly brushed aside when it was well within the knowledge of the promisor at the time of contract itself that it would not be possible for him to perform the agreement.
11. As the plaintiff could have very well ascertained how much quantity of firewood was there in the property before entering into the contract with the defendant, he cannot contend that he was not aware of its details. As the defendant could not have had any knowledge of the dearth of the materials to be supplied by the plaintiff, it cannot be said that the defendant was equally irresponsible in entering into the contract. As the plaintiff either knew or could have known had he been diligent that he would not be in a position to supply the specific type of firewood to the defendant he cannot take the stand that later he found it non-available in the plantation and so he cannot be blamed for the non-performance of the contract. The onus of proving frustration is on the party alleging the same. As the plaintiff contends that the firewood of the specified category is not available in the plantation he was bound to prove it.
12. There is no case for the plaintif that the defendant made him to believe that the specified type of firewood was available in Arimalam Plantations and he obtained lease of the property on that assumption. As plaintiff did not have such a case and as the plaintiff could very well inspect the property before entering into the agreement, the mere ipse dixit of the plaintiff will not be sufficient to hold that on account of supervening difficulties he could not perform his part of the contract.
13. As the plaintiff has failed to perform his part of the contract, defendant was entitled to forfeit the deposit and also to adjust the amount which was due as per accounts against the penal levy of Re. 1 / - per ton for the deficient quantity of eucalyptus which ought to have been delivered as per the agreement. Plaintiff is not entitled to avoid the terms and conditions in Ext, Bl agreement for the supply of eucalyptus hybrid and grandis of the specifications. Plaintiff is not entitled to any reliefs in the suit. Judgment and decree of the trial Court are set aside and the suit stands dismissed. The appeal is allowed. No costs.