1976 (12) TMI 192 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of the doctrine of frustration under Section 56 of the Indian Contract Act.
2. Validity of the agreement to sell in light of Section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948.
3. Competence of the Additional Collector to grant permission after refusal by the Prant Officer.

Issue-Wise Detailed Analysis:

1. Applicability of the Doctrine of Frustration Under Section 56 of the Indian Contract Act:

The primary issue was whether the agreement became void under Section 56 of the Indian Contract Act due to the refusal of the Prant Officer to grant permission for the sale. Section 56 states that a contract becomes void if an act agreed upon becomes impossible or unlawful after the contract is made. The court referred to the definition of "impossible of performance" as laid out in Tampfin Steamship Co. Ltd. v. Anglo-Mexican Petroleum Products Co. Ltd., which asserts that parties are excused if the whole contract becomes impracticable due to unforeseen circumstances. The court also cited Satyabrata Ghose v. Mugneeram Bangur and Co., emphasizing that impossibility includes impracticability from the perspective of the contract's purpose. The court concluded that the refusal by the Prant Officer was not catastrophic enough to render the contract impracticable or impossible, as it was a technical refusal due to the absence of a necessary certificate, not a conclusive decision on the merits.

2. Validity of the Agreement to Sell in Light of Section 63 of the Bombay Tenancy and Agricultural Lands Act, 1948:

Section 63 of the Act restricts the sale of agricultural land to non-agriculturists unless permission is granted by the Collector. The court noted that the agreement was not void ab initio since Section 63 allows for such sales with appropriate permission. The refusal by the Prant Officer was based on the technicality that the appellants had not obtained the necessary certificate, not on the merits of the case. The court found that this did not make the contract impossible to perform, as the appellants could still seek the required permission from the appropriate authority.

3. Competence of the Additional Collector to Grant Permission After Refusal by the Prant Officer:

The court addressed whether the Additional Collector had the authority to grant permission after the Prant Officer's refusal. It was determined that the Collector or the authorized officer under Section 63 acts in an administrative capacity, not a judicial or quasi-judicial one. The refusal by the Prant Officer was administrative and did not preclude the appellants from reapplying for permission. The court cited various judgments supporting the view that administrative decisions do not have the same finality as judicial decisions and can be revisited. The refusal by the Prant Officer did not bar the Additional Collector from granting the necessary certificate and permission, which he did on June 6, 1959.

Conclusion:

The court allowed the appeal, setting aside the judgments and decrees of the lower courts. The respondents' suit was dismissed, with the court concluding that the agreement was not void under Section 56 of the Contract Act, and the Additional Collector was competent to grant the permission required under Section 63 of the Act. The appeal was allowed without any order as to costs.