RAMJI RAO Vs. CHINDAN NAIR
HIGH COURT OF KERALA
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(1.) The revision petition arises out of a suit for the recovery of rent due for the Malabar year 1140. The contract of lease between the parties is evidenced by Ex. B 1 dated 27-5-1948. The rent fixed in Ex B 1 is 22 parahs of paddy per annum. It is seen from Ex. B 1 that a sum of Rs. 200/- was received by the plaintiff from the defendant for which interest at 8 parahs of paddy per annum is stipulated. According to the terms of Ex. B 1 the defendant is entitled to appropriate the interest due to him from out of the rent payable to the plaintiff. In O. A. No. 1492 of 1964 fair rent for the property comprised in Ex. B 1 has been fixed at 16 1/2 mudra parahs of paddy per annum under the provisions of Kerala Act 1 of 1964. The suit is filed by the plaintiff for recovery of the value of 16 1/2 mudra parahs of paddy being the rent payable for 1140 M.E. One of the contentions raised by the defendant with which alone we are concerned in the civil revision petition is that he is entitled to appropriate the interest due to him from out of the fair rent and he is liable only for the balance. The plea of the defendant was upheld by the learned Munsiff and the plaintiff was granted a decree for recovery of the value of 8 1/2 parahs of paddy. The plaintiff claims in the civil revision petition a decree for the value of the balance 8 parahs of paddy.
(2.) An almost identical question arose for decision in Kunhi Velayi alias Velayudhan v. P. K. Velayudhan 1961 KLT 449 . The facts were that the landlord filed a suit for recovery of fair rent fixed under the provision of the Malabar Tenancy Act. The tenant claimed for deduction of the interest due on the munpattom amount from the rent. It was contended on behalf of the landlord that the right to deduct paddy on account of interest cannot survive the proceedings for the fixation of fair rent and the right of the tenant to claim interest was lost on account of impossibility of performance or frustration. In overruling these contentions M. A. Ansari, C. J. observed thus:
"Under S.16 of the Malabar Tenancy Act the obligation to pay rent is variable but that power does not extend beyond, and the right to deduct interest on account of munpattom is not so intimately connected with the fixation of fair rent as to be governed by the section. Therefore permission for deduction would not be varied by exercise of powers under the section, not, as a matter of fact, any such other been given in this case. It follows that the right of the tenant has not been lost unless the landlord claims impossibility of performance or frustration. But then, changed conditions, under all circumstances are not sufficient ground for discharging the obligation. ............ Though by fixation of fair rent, the landlord's benefits been substantially reduced, yet it cannot be said that the right has become radically different. The right to receive the rent is there; and so is the advance amount with the landlord. It is true the obligation has become more burdensome; but, on that ground alone, contractual rights cannot be eliminated."
The above observations were relied on for the respondent to support the decree passed by the lower court.
(3.) The learned counsel for the revision petitioner submitted that the provisions of Kerala Land Reforms Act, 1963 (Act 1 of 1964) have brought about a radical change in the relationship of landlord and tenant and the contract under Ex. B 1 has been discharged on account of the doctrine of frustration and therefore plaintiff is not liable for any interest on the sum of Rs. 200/- received under Ex. B 1 Apart from the question of the applicability of the doctrine of frustration to agricultural leases it is not possible to hold that the supervening legislation has rendered the contract evidenced by Ex. B 1 totally impossible of performance. With reference to the doctrine of frustration their Lordships of the Supreme Court in Satyabrata v. Hugneeram AIR 1954 SC 44 observed thus:
"We bold, 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 S.56 of the Indian Contract Act. It would be incorrect to say that S.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.''
S.56 of the Indian Contract Act runs thus:
"An agreement to do an act impossible in itself is void.
A contract to do an act which, after 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.
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."
Dealing with the above provision Mukherjea, J., stated thus in the decision of the Supreme Court in Satyabrata v. Rugnezram AIR 1954 SC 44 already referred to:
"The first paragraph of the section lays down the law in the same way as in England. It speaks of something which is impossible inherently or by its very nature, and no one can obviously be directed to perform such an act. The second paragraph enunciates the law relating to discharge of contract by reason of supervening impossibility or illegality of the act agreed to be done. The wording of this paragraph is quite general, and though the illustrations attached to it are not at all happy, they cannot derogate from the general words used in the enactment. This much is clear that the word 'impossible' has not been used here in the sense of physical or literal impossibility. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor found it impossible to do the act which he promised to do."
The rule of frustration cannot operate merely because the circumstances in which the contract was made are altered. The supervening events should destroy the foundation of the contract and that has not happened in the case before us. The plea based on the doctrine of frustration cannot therefore be accepted.;
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