MUGNEERAM BANGORE AND CO. Vs. SATYABRATA GHOSH

JUDGEMENT

(1.) THE question for decision in this appeal is whether a contract for the sale -of land stood dissolved on the requisition of this land and other lands closely by the Government of West Bengal for an indefinite period, in consequence of which it became impossible to complete the construction of roads, which was an integral part of the contract. The appellant company had, in furtherance of a scheme of developing land in the vicinity of the Dhakuria Lakes within Greater Calcutta, invited offers for the numerous plots of land covered by the scheme. Under this scheme, the company's plan was to enter into contracts for the sale of lands with different parties, accept a very small portion of the consideration money, as earnest money, undertaking to construct roads and drains in order that the lands contracted to be sold might be suitable for building purposes, and agreeing to complete the conveyance on receipt of the balance of the consideration money after the construction of such roads and drains. The subject -matter of the present litigation is one of many contracts into which the company entered in furtherance of this scheme. This contract was between the company and one Bejoy Krishna Roy and is dated 5 -8 -1940. The express terms of the contract are to be found in the receipt which the appellant company gave to Bejoy Krishna Roy on receipt of rupees one hundred and one only, as earnest money, after the company had accepted his offer to purchase. The receipt is in these words : 'Received with thanks from Babu Bejoy Krishna Roy of 28 Tollygunge Circular Road, Tollygunge, the sum of Rs. 101/ - (Rupees one hundred and one only) as earnest money having agreed to sell to him or his nominee 5 K. ch. sq. ft. more or less in plot No. 76 on 20 and 20 ft. Road in Premises No. Lake Colony Scheme No. 1, Southern Block, at the average rate of Rs. 1000/ - (Rupees one thousand only) per cotta. The conveyance must be completed within one month from the date of completion of roads on payment of the balance of the consideration money, time being deemed as the essence of the contract. In case of default, this agreement will be considered as cancelled with forfeiture of earnest money. Mokarari Mourashi. Terms of payment: One -third to be paid at the time of registration and the balance within six years bearing Rs. 6/ - per cent, interest per annum.'

(2.) THE present respondent was nominated by Bejoy Krishna Roy for the purpose of the contract, on 30 -11 -1941. Prior to this date, however, on 12 -11 -1941, the Collector of 24 Parganas passed an order requisitioning the plot of land which was the subject -matter of this contract, and many other plots of land of this scheme. Possession of the lands thus requisitioned was taken on behalf of the Army authorities on 14 -11 -1941. The requisition was for the duration of the War and a period thereafter. Construction of roads and drains which had been taken up was thus interrupted, and could not be completed because of the occupation of the area by the Military authorities. In 1943, the Company addressed a letter to Bejoy Krishna Roy, informing him of the requisition of the lands by the Government and stating that as the proposed roads and drains could not be constructed during the continuance of the War and possibly for many years, even after the termination of the War, the Company had decided to treat the agreement as cancelled, and give him 'the option of taking refund of the earnest money' within one month from the receipt of the letter. An alternative offer was also made under which he would have to complete the registration of the conveyance within one month from the receipt of the letter, on payment of the balance of the price of the land as agreed upon, and the company would make the roads and drains, as soon as the circumstances would permit after the termination of the war. It was further stated in this letter that if he did not exercise his option in any of these two ways, the agreement would be deemed to have been cancelled and the earnest money forfeited.

(3.) MR . Gupta for the appellants has pressed before us the contention that the contract stood dissolved by frustration, as its performance became indefinitely impossible.