Habibullah Sarwar vs General Manager, Govt. Distilleries

Srinivasachari, J.—The Defendant against whom a suit for the recovery of damages for breach of contract was filed and decree passed, has now filed this revision petition. The Plaintiff filed a suit alleging that the Defendant agreed to transport coal from the Hyderabad Railway Station to the Narayanguda Distillery and this contract was entered into for the year 1357F. (1-10-1947 to 30-9-1948). He further stated that from 19th Thir 1357F. (May 1948) to the end of Aban 1357F. (September 1948) the Defendant failed to transport the coal as per the terms of the contract in consequence of which other arrangements had to be made for transporting coal for which the Plaintiff had to incur an expenditure of Rs. 1996/6/-.

The Plaintiff after giving credit for Rs. 500/- due to the Defendant for the supply of coal and Rs. 500/- being earnest money deposited by him claimed Rs. 996-6-0 from the Defendant. The Defendant while admitting the agreement and also the fact that he stopped transport after 19th Thir 1357F. alleged that the contract was for the transport of "coal by lorry and that the Plaintiff had undertaken to supply coupons of petrol or alcohol for being used in the lorry and inasmuch as the plaitiff failed to supply the coupons he was unable to use the lorry and (sic)s such it became impossible for him to transport the coal during those months. He urged that inasmuch as the Plaintiff had not performed his part of the agreement in that he failed to supply the coupons no damages could be recovered from him as the breach of contract did not occur on account of him.

Besides these pleas the Defendant also raised a plea that the suit as filed was not proper and was liable to be dismissed because it had not been shown that the General Manager had been authorised to file the suit on behalf of the Government. The lower Court held, in so far as the legal objection about the frame of the suit was concerned, that because the contract was with the Government Department it was not necessary that the suit should be in the name of the Government. The Plaintiff was competent to sue in his official capacity. It, therefore negatived the plea of the Defendant.

On the merits it held that there was not breach of the agreement on the part of the Plaintiff and it decreed the suit of the Plaintiff to the extent of Rs. 965/- with proportionate costs. This revision has been filed by the Defendant against the aforesaid judgment.

It might be mentioned here that when the matter came up in Revision here the question was raised as to whether the General Manager, Hyd. Distilleries was authorised to file the suit on behalf of the Government. Arguments were heard and a finding was given by this Court that this was only a defect in the form of procedure and the suit, therefore, could not be dismissed by reason of this irregularity in proceedings. I, therefore, permitted the Plaintiff to amend his plaint and accordingly the plaint was amended by changing the cause title as ''The State of Hyderabad'' in place of ''General Manager, Govt. Distilleries, Narayanguda''.

Coming to the merits of the case die main and foremost argument of the learned advocate for the Petitioner was that this case was governed by Section 56, Contract Act and there was no obligation, on the part of the Defendant to carry out the terms of the contract because petrol became unavailable, the coupons not having been furnished.

I heard the arguments of the learned advocates in extenso. The principle underlying the doctrine u/s 56, Contract Act may be stated as follows. Where the law casts a duty upon a man which through no fault of his he is unable to perform, he is excused for non-performance. It has to be noted that a party to a contract can always guard against unforseen contingencies by express stipulation but if he voluntarily undertakes an absolute and unconditional obligation, he cannot complain merely because events turned out to his disadvantage.

Some times although there may not be a term absolving one of the parties to a contract, from performance of his part of the contract, the Court can infer from the nature of the contract and die surrounding circumstances that a condition which was not express, was the foundation upon which the parties contracted and relieve the party from the obligation to perform the obligation of the contract if that condition cannot be fulfilled.

The test therefore in this case would be as to whether the transport of coal by a lorry alone was the foundation of the contract or whether the contract was only for the transport of coal by any vehicle whatsoever. In this case it could not be said that the transport of coal was only to be by lorry and that was the foundation of the contract. It can be gathered from the evidence that the Defendant only undertook to transport coal to the Plaintiff from Nampalli Station to the Distilleries at Narayanguda. There was no further condition attached to it.

Ex. 30 is clear in this respect. There was no stipulation that coal shall be not transported except by a lorry. There was not and there could not be- such an unreasonable condition, This fact is further supported by the admission of the Defendant himself that during a particular period die Plaintiff agreed to get the coal by carts and agreed to share half the extra charge that the Defendant might incur. The Defendant agreed to this. This is evidenced by Ex. 4 which is a document admitted by die Defendant.

Mere difficulty or the need to pay abnormal prices cannot exonerate a party from carrying out his part of the contract and such a ease would not be governed by Section 56, Contract Act. For the law will allow discharge of a contract if the act to be performed is rendered illegal or impossible of performance. There should be a total impossibility. As observed above, none of these things could be found, in this case. At the worst it could be said that the Defendant would have had to incur the heavy charges in transporting the coal.

As was observed by their Lordships of the. Supreme Court in the case of - Satyabrata Ghose Vs. Mugneeram Bangur and Co. and Another, , the test would be, had the events which happened subsequently, in this case the paucity of petrol, made the contract impossible; of performance. If not, it could not be said that there has been a frustration of the contract. I hold that it was open to the Defendant to have arranged for the coal being transported to the Distilleries by other means, although the transport charges may have been prohibitive. A clear line of distinction should be drawn between cases of physical or legal| impossibility and mere difficulty in carrying out the contract.

The next argument urged by the learned advocate for the Petitioner was that even if there was a breach in the terms of the agreement the Plaintiff could not claim damages but was only entitled to forfeit the deposit money paid by the Defendant. For this purpose reliance was placed on Clause 8 and 9 of the agreement, Ex. 3. Clause 8 reads as follows:

In the event of a breach of agreement the deposit amount would be forfeited and the contract cancelled.

Clause 9 says:

On the contract being cancelled and a fresh auction being held, the loss, if any, in the re-auctioning would be claimed from the party.

These clauses would clearly show that the Plaintiff had the right to forfeit the deposit amount, cancel the contract and also claim the loss if any that he might incur in re-auctioning the business. There is evidence of the fact that the Plaintiff called for fresh tenders as would appear from the newspapers which, have been filed and the Plaintiff has proved that he had to incur additional expenditure for transport and under those circumstances what the Plaintiff has claimed must be paid to him because he- has given credit for sums due to the Defendant. 1, therefore, uphold the judgment of the lower Court and dismiss this revision with costs of both the Courts.