PARSHOTAM DAS SHANKAR DAS Vs. MUNICIPAL COMMITTEE

JUDGEMENT

(1.) This is a second appeal from a judgment and decree of the District Judge, Gurdaspur, whereby he accepted an appeal from the decree of Subordinate Judge Second Class, Batala, and dismissed the plaintiff's suit for recovery of Rs. 5000/- against the Municipal Committee, Batala. The facts briefly stated are as follows: On 24 March 1944, the defendant Municipal Committee conducted an auction sale of what was described as the contract of the tonga stands situate within the municipal limits, but which really consisted of the lease of the said tonga stands for a period of one year from 1 April 1944 to 31 March 1945. The sale was knocked in favour of Parshotam Das for Rs. 5000/- and he paid the entire amount to the Municipal Committee before the 1 of April. It, however, appears that Parshotam Das was unable to take advantage of the lease and dispute between him and the Municipal Committee started at the very inception. After some correspondence between the parties, Parshotam Das eventually instituted a suit for the refund of Rs. 5000/- on 19 January 1945. He alleged, (1) that the Municipal Committee did not fulfil its part of the contract, (2) that the tongas for which the stands leased out to him were meant did not use them and accordingly he was not able to recover any fees from them, (3) that the tongas were all along using private stands and the Municipal Committee took no steps to have those stands closed, (4) that the tonga drivers did not care for the Municipal Committee and contended inter alia that the auction of the lease of the stands by the Committee was illegal, and (5) that the Committee neither could compel the tonga drivers to use its tonga stands and to pay any fees nor did it do so in fact. On these allegations, the plaintiff maintained that he was entitled to sue the Municipal Committee for damages, which, he assessed at the rate of Rs. 885/- per month but he merely contented himself by claiming the refund of the amount that he had paid to it. It may be mentioned at this stage that though no evidence has been adduced by either side to prove this fact, it is admitted by both the counsel that according either to the rules framed by the Municipal Committee or practice every tonga driver who had to use the municipal tonga stand was to pay to the contractor, or to use the correct term, to the lessee of the tonga stand, one anna per rupee of his earning. The Municipal Committee admitted the grant of the lease of the tonga stands to the plaintiff and the payment of the amount of Rs. 5000/- by him. It also admitted that the plaintiff was entitled to recover one anna per rupee from the tonga drivers who had to use the tonga stands leased out to him but it denied that it had been guilty of breach of any of the terms of the contract or that the plaintiff was entitled to claim refund from it. The following three issues were framed by the trial Sub-Judge: 1. Whether the defendant Committee had not fixed up any tonga stands and the possession of the same was not delivered to the plaintiff and what is its effect?

(2.) Whether it was agreed between the plaintiff and defendant committee that the tongas plying for hire will not stand at any other place except the fixed tonga stands; if so, what is its effect?

(3.) Whether the defendant committee had no right to levy the fee from tongawalas for the use of the tonga stands and for that reason the sale in question is null and void? The first and the third issues were found against the plaintiff but the second issue was found in his favour and in the result the suit was decreed. On appeal the District Judge upheld the finding of the trail Sub- Judge on the 1 issue. As regards the other issues, his judgment is not by any means clear. He observed that according to the plaint the breach on the part of the Municipal Committee consisted of its failure (1) to appoint any particular stands and (2) to close the private stands. The first part, he held not established but as regards the second, his opinion was that the evidence on the point was not final though it leans more in favour of the assumption that the Committee did take steps against the tonga drivers, but that either the police or tha Magistrate refused to proceed according to law, purely on humanitarian grounds. Further on, he made the following observations: I do not, however, consider that such evidence was material to the present case for it could never have been a condition of the contract that the committee would compel tonga drivers to use the municipal stands. At the time when the lease was auctioned on 24 March 1944, the tonga drivers were behaving normally and of this circumstance the plaintiff must have been aware, if be was prepared to take the lease. All that the Committee did was to lease its property for a year to return for Rs. 5,000/- and for its own part to make the Municipal tonga stands available to the plaintiff.... It might be found that he has incurred a loss of Sve thousand rupees, but it might also be found that he has realized a part of the fees due to him, in which case the amount of damages would be below Rs. 5000/-. It is for this reason that the present suit cannot be treated as one for damages and as the Committee has not failed to fulfil any essential condition of the contract, it is idle to argue that the contract is at an end, and that the plaintiff is entitled to a refund to his money. 2. The main argument of the appellant's counsel before us was that the District Judge has ignored most of the oral and documentary evidence that the plaintiff had produced in support of his case and he also made an effort to show that the findings of the District Judge, where-ever they were clear, were erroneous. He maintained that according to the terms of contract between the parties, it was the duty of the Municipal Committee (1) to specify tonga stands where the tongawals were to keep their vehicles, (2) to compel all tongawalas who plied their vehicles for hire within the municipal limits not to use any other stand except those specified by the Municipal Committee, and (3) to compel the tonga drivers to pay a fee of one anna per rupee to the plaintiff for using the municipal stands. He further maintained that the plaintiff had succeeded in proving by evidence that the Municipal Committee had failed in fulfilling the above said terms and since this amounted to a breach of the contract, the plaintiff was entitled to the refund of the amount in suit. I have no hesitation in coming to the conclusion that these contentions were wholly devoid of force and had they constituted the only grounds on which the plainttff's claim was based, I would have had no hesitation in agreeing with the lower appellate Court in non-suiting the plaintiff. My reasons for coming to this conclusion are that there was no evidence on the record to support the plaintiff's contention that the committee had taken upon itself the duty either to appoint any particular tonga stands or to close other stands. I am, further, of opinion that the statement of Mukand Lal, Sanitary Inspector and Mohammad Latif, Cart Inspector, when read in the light of the reports made by them from time to time and Resolution No. 1 passed by the Committee in its meeting of 6 April, 1944 (Ex. P-5) leave no doubt that the Committee took every possible action to compel the tongawals to use the municipal tonga stands and if in spite of all this tonga drivers did not use the municipal stands and in the result the plaintiff was not able to, realise a single pie by way of fees, the reason for this was that the Committee was practically helpless in the matter. I say practically helpless, because it was open to the Municipal Committee to have the tonga drivers, who made their vehicles stand at unauthorised places, prosecuted and there is ample evidence to show that it was not found wanting in this, but it could not take the tongawals physically to its stands and make them pay the requisite charges to the plaintiff. It is true that no case against any one of the tonga drivers was actually put in Court, but the main responsibility for this lay on the shoulders of certain local police officials and executive authorities, who took up the attitude that unless the Committee redressed some of the grievances of the tonga drivers they could not be called upon to take up the cases against them. I am, however, inclined to think that even if every tongawala had been successfully prosecuted and punished, since they were determined not to use the municipal stands, those stands would have remained unused all the same and the plaintiff would still have not been able to receive a single pie by way of fees. In my judgment, therefore, it was not a case in which refund of the amount paid by the plaintiff to the defendant committee could be decreed on the ground that the defendant had failed to perform his part of the contract and the Courts below were wrong in treating it as merely a suit of that kind. To start with, the appellant's counsel also made the same mistake, but when his attention was drawn to the allegations contained in para 3 of plaint, he took up the position that the refund should be allowed because the contract had been frustrated. 3. The learned Counsel for the respondent-committee urged that the plea of frustration should not be allowed at this stage, because (1), it had not been raised specifically in the plaint, and (2), that it has never been argued in the Courts below. As regards the first objection, I concede that the term "frustration" is not used anywhere in the plaint but since my opinion is that the facts set out therein are sufficient to make out a case of frustration, and if is a well-recognized rule that the pleading of the Mufassil Courts should not be construed strictly, I do not think it correct to rule out the plea merely on this ground. As regards the second objection all that I wish to say is that if the facts on record are sufficient to make out a plea, it would be wrong to ignore it simply because it did not strike counsel in the Courts below. It was then urged by the respondent's learned Counsel that doctrine of frustration goes much beyond Section 56, Contract Act, and in view of the fact that that section is exhaustive, no relief can be granted by Courts in India on the basis of that doctrine. As I shall show hereafter, "frustration" has a very wide meaning and Section 56, deals with some aspects of it. The first part of the section deals with an agreement to do an act impossible in itself and lays down that such an agreement is void. This is exactly the rule of common law. The second paragraph lays down that a contract to do an act of which the contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. The words of the third paragraph are that where one 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 which such promisee sustains through (the non-performance of the promise. Now it is not denied that all the conditions of a contract need not be expressed in words and there are conditions which may be implied from the nature of the transaction. The section does not, deal with cases in which an event, the parties took it for granted will never happen does happen and makes the performance of the contract impossible. If it be held that Section 56 is exhaustive, no relief could be granted to any of the parties on the happening of such an event, but this would be against the very principles underlying Section 56. In Hurnandrai Fulchand V/s. Pragdas Budhsen A.I.R. 1923 P.C. 54, the observations made by Lord Sumner would go to show that he had no doubt in his mind that the doctrine of frustration was applicable to India. In Firm of Hussainbhoy Karimji V/s. Haridas and Ors. A.I.R. 1928 Sind 21, the question for consideration involved the interpretation of Section 56. While dealing with this point, Tyabji, A.C.J. who delivered the judgment of the Bench made the following observations: Considered in this light, the law in India does not, it seems to me, stand on a basis very different from that of England, and the significance of the decision of the Privy Council in Hurnandrai Fulchand V/s. Pragdas Budhsen A.I.R. 1923 P.C. 54, becomes clear. Lord Sumner in that case referred to the discussions and decisions in England on the doctrine of "frustration" in such terms as to show that they were applicable to India, as well as the principle of Taylor V/s. Caldwell (1863) 11 W.R. 726 and of the Coronation cases Krell V/s. Henry (1903) 19 T.L.R. 711 etc. Pollock in his well-known book on Contracts (Edition 1946) while dealing with the doctrine, of frustration makes the following remarks: The Indian Contract Act attempted to generalize the doctrine as long ago as 1872. (Then he reproduces paragraph 2 of Section 56). This is unsatisfactory both in excess and in defect. It purports to lay down a positive rule of law regardless of the parties intention, and therefore is too wide; yet it fails in terms to include the case of lateral performance being possible but useless, and in that respect 13 too narrow. It does not appear, however that there has in practice been any material divergence from English doctrine. In Cricklewood Property Ltd. V/s. Leighton's Investment Trust Lid. 1945 A.C. 221 Viscount Simon L.C., defined frustration as "the occurrence of an intervening event or change of circumstances so fundamental as to be regarded by the law both as striking at the root of the agreement, and as entirely beyond what was contemplated by the parties when they entered into the agreement." There can be no doubt that if an event which could not be foreseen by the parties supervenes, frustration would apply. The question whether it would also apply in a case where the supervening events may have been foreseen by the parties but no express provision was made with respect to them, Pollock answers the question in the affirmative. The following passage appears at p. 228 of his Book: If the inability to perform the contract is due to the fault of one of the parties, he cannot successfully plead frustration. It is also true that if the parties expressly contract with reference to the occurrence of the supervening events, frustration is inapplicable. But there is another type of case outside these rules. The parties when they made the contract, may have foreseen the supervening events as probable, but may have made no express provision with respect to them. Here if the events occur, frustration can be pleaded." The learned author relied upon Tatem Ltd. V/s. Gamboa 1939 1 K.B. 132 in support of his view.