JASWANT SINGH, J. - (1.) THIS appeal by special leave which is directed against the judgment and decree dated 29/01/1968, of the High Court of Judicature at Bombay involves a question of the applicability or otherwise of the doctrine of frustration embodied in Section 56 of the Contract Act which to use the words of Viscount Manugham in Joseph Constantine Steamship Line Limited v. Imperial Smelting Corporation Ltd., (1942 AC 154 at p. 168) "is only a special case of the discharge of contract by an impossibility of performance arising after the contract was made'' or to use the language of Mukherjea, J. in Satyabrata Ghose v. Mugheeram Bangur and Co., (1954 SCR 310) = ( AIR 1954 SC 44) "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.''
(2.) THE facts giving rise to this appeal lie in a short compass and may be briefly stated: the respondents who are the owners of four plots of agricultural land admeasuring 7 acres and 13 gunthas and a bungalow standing thereon situate in village Majwade, near Pokhran Talao Road, Thana, having bought the same from Homi D. Dubash under a sale deed dated 9/09/1953 agreed to sell the same to the appellants in lieu of Rupees 25,000/- vide agreement dated 16/05/1957, relevant clauses whereof provided as follows:- "5. If the purchasers shall insist on any requisitions or objections as to the title, evidence of title, conveyance, possession, receipt of rents or any other matters on the abstract of or this agreement or connected with the sale which the vendors shall be unable or on any ground unwilling to remove or comply with, the vendors shall be at liberty notwithstanding any negotiation or litigation in respect of such requisition or objection, to give to the Purchasers or their Solicitors notice in writing of their intention to rescind the contract for sale unless such requisition or objection be withdrawn and if such notice be given and the requisition or objection be not withdrawn within ten days after the day on which the notice was sent, the contract shall, without further notice be rescinded. THE Vendors shall thereupon return to the purchasers the deposit but without any interest, costs of investigating the tile or other compensation or payment whatever. 6. If the title be not approved by the Purchaser's attorneys or if the purchase is not completed within the said period of two months owing to any default on the Vendor's part, is shall be at the option of the purchaser to rescind this agreement and in that even the purchase shall be entitled to receive back the earnest money from the vendors, together with out of pocket costs incurred in the preparation of this agreement and investigation of title, advertisement, Bataki, correspondence etc. But in case of the Vendors' wilful default the Vendors shall also pay to the Purchasers interest at 6 Per Cent per annum on the amount of earnest money from the date hereof till the date of return of the earnest money and all costs of the Purchasers. 7. If the sale is not completed within time provided for completion owing to the fault of the Purchaser, the Vendors shall be entitled to put an end to this contract and to forfeit the earnest money.'' Pursuant to the aforesaid agreement, the respondent's attorneys delivered the documents of title to the appellant's attorneys on May 17, 1957 for investigation of title and in the third week of May, 1957. The respondents gave possession of the aforesaid property to the appellants in part performance of the said agreement. On 22/08/1957, the respondent and the appellants made a joint application to the District Deputy Collector, Thana Prant, under Section 63 of the Bombay Tenancy and Agricultural Lands Act, 1943 (hereinafter referred to as 'the Act') seeking permission to sell and purchase the aforesaid agricultural land. Section 63 of the Act reads: "63. (1) Save as provided in this Act- (a) no sale (including sales in execution of a decree of a Civil Court or for recovery of arrears of land revenue or for sums recoverable as arrears of land revenue), gift, exchange or lease of any land or interest therein, or (b) no mortgage of any land or interest therein, in which the possession of the mortgaged property is delivered to the mortgagee, shall be valid in favour of a person who is not an agriculturist (or who being an agriculturist will after such sale, gift, exchange, lease or mortgage, hold land exceeding two thirds of the ceiling area determined under the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 or who is not an agricultural labourer): Provided that the Collector or an officer authorised by the State Government in this behalf may grant permission for such sale, gift, exchange, lease or mortgage, on such conditions as may be prescribed....'' It may be mentioned that the conditions alluded to in the proviso to the above quoted Section 63 have been prescribed by Rule 36 of the Bombay Tenancy and Agricultural Lands Rules, 1956 (hereinafter referred to as "the Rules'), the relevant portion whereof is to the following effect: "36. Conditions on which permission for sale, etc., of land under Section 63 may be granted.- (1) The Collector or other officer authorised under the proviso to sub-section (1) of Section 63 shall not grant permission for sale, gift, exchange. lease or mortgage of any land in favour of a person who is not either an agriculturist or agricultural labourer or who, being an agriculturist, cultivates personally land not less than the ceiling area whether as owner or tenant or partly as owner and partly as tenant unless any of the following conditions are satisfied. ... . (f) the land is required for cultivating it personally by a person, who, not being an agriculturist, intends to take to the profession of agriculture and to whom the Collector after having regard to the order of priority mentioned in clause (c) of sub-section (2) of Section 32-P, has given a certificate that such person intends to take to the profession of agriculture and is capable of cultivating land personally; ... ..''
(3.) BY means of communication No. TNC 48 dated 8/12/1958, the Prant Officer, Thana, informed the respondents that their request to sell the aforesaid lands to appellant No. 1 could not be granted as the intending purchaser had not obtained the certificate from the Collector to the effect that "he intends to take to the profession agriculture and is capable of cultivating land personally.'' On 21/01/1959, the respondents' attorneys wrote to the appellants informing them that no effect could be given to the aforesaid agreement of sale dated 17/05/1957 as the permission under the Act to sell the suit property had been refused by the Prant Officer by his letter dated 8/12/1958 (supra) for appellant No. 1's failure to obtain the certificate to the effect that he intended to take to the profession of agriculture and was capable of cultivating land personally. The respondents'. attorneys also called upon the appellants by means of the said 'communication to return the title deeds adding that on the return of the tile deeds, the earnest money paid by them at the time of execution of the aforesaid agreement would be returned to them. On 4/03/1959, the appellant's advocate wrote to the respondent's attorneys requesting them to authorise the appellants to approach the higher authorities for securing the necessary permission. On 14/03/1959, the respondent's attorneys wrote to the appellant's attorneys evasively replying that no useful purpose would be served by approaching the higher authorities having regard to the provisions of the Act. On the respondent's refusal to co-operate with the appellants in the matter of obtaining permission or sanction under the Act, appellant No. 1 made an application to the Collector, Thana District, Thana on 8/04/1959, bringing the above mentioned facts to his notice and requesting him to grant him a certificate of an agriculturist and the necessary permission to purchase the aforesaid plots of land. Acceding to the request of appellant No. 1, the Additional Collector, Thana by his order dated 6/06/1959 granted to the former the requisite certificate under Rule 36 of the Rules as also the permission to purchase the aforesaid plots of land from the respondents as required under Section 63 (1) of the Act read with Rule 36 of the Rules. The said order ran as follows:- No. CB/TNC, 1800 Collector's Office, Thana, Thana, 6/06/1959. Read: Application of the applicant Shri G. G. Patel, dated the 8/04/1959. Read: Papers ending with Mamlatdar, Thana's No. TNC. SR. 400 dated the 11/05/1959. ORDER A certificate is hereby granted to Shri Govindbhai Gordhanbhai Patel residing at House No. 404, Majiwade, Taluka Thana on his application dated 8/04/1959 under sub-clause 'C' of clause 1 of Rule 36 that he intends to take to the profession of Agriculture. After having gone through the merits of the priority list mentioned in clause (c) of "Section 2 of Section 32-P, through the Mamlatdar Thana, permission is hereby granted to Shri Govindbhai Gordhanbhai Patel to purchase the land mentioned below from Shri Ibrahim Ismail Jetpurwala etc. under Section 63 (1) read with Rule 36 under the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1955 on the conditions as mentioned under:- JUDGEMENT_179_3_1977Html1.htm Conditions:- Permission to purchase the land mentioned above is granted subjected to the condition that if the applicant Shri G. G. Patel ceases to cultivate the land personally or transfers his interest in the said land by sale, gift, exchange, lease or mortgage without the previous sanction of the Collector, the permission given under sub-section (1) of Section 63 shall be deemed to have been cancelled. Sd/- for Additional Collector,Thana'' On 25/06/1959, the appellant's attorneys addressed a communication to the respondent's attorneys forwarding therewith a copy of the aforesaid order No. CB/TEC/ 1800 dated 6/06/1959, made by the Additional Collector, Thana granting permission to appellant No. 1 for the purchase of the aforesaid plots of land and requesting the respondents to let them know as to when their clients would desire to complete the sale and further asking them whether they had got the property transferred to their names in the records of the Collector of Thana, whereupon the respondents' advocate by his letter dated 30/06/1959 addressed to the appellant's attorneys replied saying that his clients could not take notice of the aforesaid permission. Thereafter the respondents served a notice on the appellants on 25/08/1959 calling upon them to return the title deeds and to restore possession of the aforesaid property. Thereupon, the appellants' advocate wrote to the respondents attorneys on 24/11/1959 pointing out to them that appellant No. 1 having obtained the requisite sanction from the Collector, the respondents were bound to complete the sale and to execute the conveyance in favour of appellant No. 1 and that the aforesaid agreement could not be put an end to in the manner in which the respondents were attempting to do. Not heeding the aforesaid communication of the appellants dated 24/11/1959, the respondents filed a civil suit, being suit No. 36 of 195 9/11/1959 in the Court of the Civil Judge, Senior Division, Thana, for declaration that the aforesaid agreement dated 16/05/1957 was void in law and of no legal effect and for possession of the aforesaid property as also for compensation at the rate of Rs. 150.00 per mensem for wrongful retention of the property from June, 1957 till delivery of possession thereof. In spite of the stout resistance put up by the appellants, the trial Court decreed the suit in favour of the respondents subject to their paying to the appellants or depositing in Court the earnest money of Rs. 5,000/ and the compensation amount of Rs. 882.25 holding inter alia that the aforesaid agreement dated 16/05/1957 which was void ab initio being violative of Section 63 of the Act was discovered by the respondents to be void in June, 1957 when they found that the permission under Section 63 of the Act was necessary. Aggrieved by the judgment and decree of the trial Court, the appellants took the matter in appeal to the high Court of Bombay but their appeal remained unsuccessful. The High Court held that the aforesaid agreement to sell was not void ab initio as Section 63 of the Act itself envisaged sale etc. in favour of a non-agriculturist with the permission of the Collector or an officer authorised by the State Government in that behalf subject to the conditions which may be prescribed and Rule 36 of the Rules prescribed only a certificate by the relevant authority to the effect that the intending purchaser intended to adopt the profession of an agriculturist. The High Court, however, opined that the aforesaid agreement became incapable of being performed on 8/12/1959 when the Prant Officer declined permission to the respondents to sell the property to the appellants. Rejecting the contention advanced on behalf of the appellants to the effect that the aforesaid letter dated 21/01/1959 written by the respondents to the appellants did not terminate or rescind the agreement, the High Court further held that the said letter amounted to cancellation of the agreement.;