Indian Kanoon - Search engine for Indian Law

10. Although various theories have been propounded by the Judges and jurists in England regarding the juridical basis of the doctrine of frustration, yet the essential idea upon which the doctrine is based is that of impossibility of performance of the contract; in fact, impossibility and frustration are often used as interchangeable expressions. The changed circumstances, it is said, make the performance of the contract impossible and the parties are absolved from the further performance of it as they did not promise to perform an impossibility. The parties shall be excused, as Lord Loreburn says, see – Tamplin Steamship Co. Ltd. v. Anglo Mexican Petroleum Products Co. Ltd., 1916-2 AO 297 at p 403 (A).

“If substantially the whole contract becomes impossible of performance or in other words impracticable by some cause for which neither was responsible.” In - Joseph Constantine http://www.judis.nic.in Steamship Line Limited v. Imperial Smelting Corporation Ltd.’, 1942-AO 154 at p 168 (B) Viscount Maugham observed that the “doctrine of frustration is only a special case of the discharge of contract by an impossibility of performance arising after the contract was made.” Lord Porter agreed with this view and rested the doctrine on the same basis. The question was considered and discussed by a Division Bench of the Nagpur High Court in Kesari Chand v. Governor-General-inCouncil ILR (1949) Nag 718 (C), and it was held that the doctrine of frustration comes into play when a contract becomes impossible of performance after it is made, on account of circumstances beyond the control of the parties. The doctrine is a special case of impossibility and, as such, comes under Section 56 of the Indian Contract Act. We are in entire agreement with this view which is fortified by a recent pronouncement of this Court in Ganga Saran v. Ram Charan, AIR 1952 SO 9 at p 11 (D) where Fazl Ali, J., in speaking about frustration observed in his judgment as follows: “It seems necessary for us to emphasise that so far as the courts in this country are concerned, they must look http://www.judis.nic.in primarily to the law as embodied in Sections 32 and 56 of the Indian Contract Act, 1872.” We hold, therefore, that 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. 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 Indian Contract Act deals with a particular subject, it is exhaustive upon the same and it is not permissible to import the principles of English law dehors these statutory provisions. The decisions of the English Courts possess only a persuasive value and may be helpful in showing how the Courts in England have decided cases under circumstances similar to those which have come before our courts.

http://www.judis.nic.in

12. From the facts found in the 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.

(emphasis supplied)"

8.5. In Energy Watchdog vs. Central Electricity Regulatory Commission and others reported in (2017) 14 SCC 80, the apex court held thus:-

"35. Prior to the decision in Taylor v. Cadwell, the law in England was extremely rigid. A contract had to be performed, notwithstanding the fact that it had become impossible of performance, owing to some unforeseen event, after it was made, which was not the fault of either of the parties to the contract. This rigidity of the Common law in which the http://www.judis.nic.in absolute sanctity of contract was upheld was loosened somewhat by the decision in Taylor v. Cladwell in which it was held that if some unforeseen event occurs during the performance of a contract which makes it impossible of performance, in the sense that the fundamental basis of the contract goes, it need not be further performed, as insisting upon such performance would be unjust.