Hirdey Singh (Raja) vs Murlimanohar (Seth)

Shivdayal, J.—The appellant was the Malguzar of village Kamti Tahsil Gadarwara. He let out his rights to the plaintif-respondent for a period of eleven years from 1945 to 1956 under a registered lease-deed dated June 11, 1945, for a consideration of Rs. 8,000/- By virtue of the M. P. Abolition of Proprietary Rights Act, 1951, the plaintiff was dispossessed of the lease property. The Compensation Officer paid him only Rs. 1437-6-6. He instituted the suit for the recovery of Rs. 5,000/- for the deprivation of the fruit which he would have earned during the remaining period of the lease. The trial Judge decreed the plaintiff''s claim. The defendant''s appeal has been dismissed by the Additional District Judge, Narsinghpur.

Among other things, the suit was resisted as barred by time and it was also contended that the defendant was not liable to pay any damages to the plaintiff because there was no breach of any covenant on his part. Both the Courts below have applied Article 116 of the Limitation Act to the suit. In my opinion that was erroneous.

This is not a case of breach of contract. Article 116 of the Limitation Act applies when because of some act or omission on the part of the defendant the plaintiff suffers damages. Here it was only because of the new legislation that the plaintiff was deprived of possession of the suit property. It is not possible to hold that there was a breach of a covenant for quit possession on the part of the defendant. Article 116 of the Limitation Act is attracted only when there is "breach of a contract". Shri Sen, learned counsel for the respondent relies on Kashiram vs. Sabu 28 N. L. R. 31 (Full Bench). That case has no application here because there the sale was held void ab initio. Here the lease was valid and operative and it remained so until there was frustration, for no fault of the lessor. Another case relied on by the learned counsel is Gulabchand Daulatram Vs. Suryajirao Ganpatrao, . That case too is not apposite here. There a contract was entered into to circumvent certain provisions of the Court of Wards Act. In the present case the transaction was not void ab initio; there was no illegality in the contract and the lease was good and operative and would have remained so but for the supervening legislation.

It seems clear to me that this is really a case of frustration because of a new legislation. The presumption is that the parties intended to contract with reference, to the law as existing at the time when the contract was made. And if its performance is rendered impossible by an Act of the legislature which is passed after the contract was made, the promisor is excused from performing his promise, unless it appears that he intended to bind himself with reference to the future state of the law as well. See 8 Halsbury (Salmond) 184. Observation in Satyabarta Ghosh vs. Mugneeram 1954 S.C.R. 310 may also be referred to. Admittedly, there is no covenant in the deed of lease as to a contingency emerging out of a future legislation. Here the lease became inoperative and ineffective just because the lessor and the lessee were both divested of their rights under the new enactment. To put it differently, there was an existing consideration-a consideration which was neither void ab initio nor illegal-but it failed afterwards. Such a case is governed by Article 97 of the Limitation Act. Period of Limitation prescribed is three years to be computed from the date of the failure of consideration. Since the Abolition of Proprietary Rights Act came into force on March 31, 1951, cause of action accrued to the plaintiff on that date, as averred in the plaint. The suit was instituted on April 1, 1957 (31st March being a holiday). Having been instituted after three years, it was clearly barred by time.

This appeal is, therefore, allowed. The judgments and decrees of both the Courts below are set aside. Having regard to all the circumstances of the case I direct that the parties shall bear their own costs throughout.