1971 (5) TMI 71 - SC - Indian Laws

Summary

Issues:
1. Whether the contract was frustrated due to supervening circumstances.
2. Applicability of Section 56 of the Contract Act to leases.
3. Validity of the agreement to lease in the absence of a registered lease deed.
4. Responsibility to deliver possession of the leased properties.
5. Interpretation of the doctrine of frustration in the context of the contract.

Analysis:
1. The case involved a dispute where the respondents tendered for leasing lands from the appellant, but due to communal troubles and migration before the partition of India, the lease was not executed. The main issue was whether the contract was frustrated due to these supervening circumstances.
2. The Division Bench of the High Court held that the contract was frustrated, applying Section 56 of the Contract Act to leases. However, the Supreme Court disagreed, stating that Section 56 applies only to contracts, not completed leases. The Court cited the Raja Dhruv Dev Chand case to support this distinction.
3. Since no lease deed was executed or registered, only an agreement to lease existed. The failure to register the lease deed rendered the agreement to lease void under Section 56 of the Contract Act, as a lease could not be validly made without registration.
4. The terms of the agreement specified that the lessee was responsible for obtaining possession of the lands after the registration of the lease deed. The Court agreed with the trial court that the appellant was not required to deliver actual possession of the properties intended to be leased.
5. The Court interpreted the doctrine of frustration in light of the circumstances, emphasizing that if the performance of a contract becomes impracticable or useless due to supervening events beyond the parties' control, it can be deemed impossible. The Court found that the contract had become impossible to perform due to the communal troubles and migration, leading to frustration.

In conclusion, the Supreme Court dismissed the appeal, upholding the lower courts' decision that the contract had become impossible to perform. The Court directed each party to bear their own costs due to the uncontrollable circumstances both parties faced.