{"id":134187,"date":"1951-11-01T00:00:00","date_gmt":"1951-10-31T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ganga-saran-vs-ram-charan-ram-gopal-on-1-november-1951"},"modified":"2019-02-19T14:51:10","modified_gmt":"2019-02-19T09:21:10","slug":"ganga-saran-vs-ram-charan-ram-gopal-on-1-november-1951","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ganga-saran-vs-ram-charan-ram-gopal-on-1-november-1951","title":{"rendered":"Ganga Saran vs Ram Charan Ram Gopal on 1 November, 1951"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Ganga Saran vs Ram Charan Ram Gopal on 1 November, 1951<\/div>\n
Equivalent citations: 1952 AIR, 9\t\t 1952 SCR 36<\/div>\n
Author: S Fazal Ali<\/div>\n
Bench: Fazal Ali, Saiyid<\/div>\n
           PETITIONER:\nGANGA SARAN\n\n\tVs.\n\nRESPONDENT:\nRAM CHARAN RAM GOPAL\n\nDATE OF JUDGMENT:\n01\/11\/1951\n\nBENCH:\nFAZAL ALI, SAIYID\nBENCH:\nFAZAL ALI, SAIYID\nKANIA, HIRALAL J. (CJ)\nMAHAJAN, MEHR CHAND\n\nCITATION:\n 1952 AIR    9\t\t  1952 SCR   36\n CITATOR INFO :\n R\t    1954 SC  44\t (10)\n R\t    1959 SC 135\t (20)\n R\t    1968 SC 522\t (7)\n\n\nACT:\n    Indian  Contract  Act (1 of 1872), s.  56--Contract\t for\ndelivery of goods manufactured by particular Mill as soon as\nthey are supplied --Construction of contract--Non-receipt of\ngoods\t from\t Mill\t within\t   time--Whether     excuses\nperformance--Doctrine of frustration.\n\n\n\nHEADNOTE:\n    The\t respondents agreed to deliver 61 bales of cloth  to\nthe  appellant\tby the 17th November,  1941.  The  agreement\nprovided  \"we  shall continue sending the goods as  soon  as\nthey  are  prepared  to you up to  Magsar  Badi\t 15,  Sambat\n1998   ......  We shall go on supplying goods to you of\t the\nVictoria  Mills\t as soon as they are supplied to us  by\t the\nsaid  Mills   ......We shall go on delivering the  goods  to\nyou   ......   out of the goods noted above  which  will  be\nprepared by the Mill.\" In a suit for damages for  non-deliv-\nery  of the goods the respondents pleaded that as  they\t had\nnot  received the goods from the Victoria Mills\t before\t the\n17th  of  November, 1941, performance of  the  contract\t had\nbecome impossible by reason of an event which they could not\nprevent\t and  the contract had therefore become\t void  under\nSec. 56, Indian Contract Act:\n    Held,  (i)\tthat, on a proper construction of  the\tcon-\ntract,\tdelivery  of the goods was not\tmade  contingent  on\ntheir  being  supplied to the respondents  by  the  Victoria\nMills.\tThe  words \"prepared by the Mills\" were only  a\t de-\nscription  of the goods to be supplied, and the\t expressions\n\"as  soon  as they are prepared\" and \"as soon  as  they\t are\nsupplied to us by the said Mill \"simply indicated the  proc-\ness of delivery.  This was not therefore a case in which the\ndoctrine  of frustration of contract could be invoked.\t(ii)\nEven  apart from the construction of the agreement,  as\t the\nrespondents had not shown that they had placed an order\t for\nthe  goods  with the Victoria Mills and yet  the  Mills\t had\nfailed\tto supply, there was a clear breach of\tcontract  to\ndeliver and the appellant was entitled to recover damages.\n    Harnandrai\tv.  Pragdas (L. R. 15 I.A.  9)\tand  British\nMovietone News v. London Cinemas [1951] 2 A.E.R. 617) relied\non.\n\n\n\nJUDGMENT:\n<\/pre>\n
    CIVIL APPELLATE  JURISDICTION:  Civil  Appeal No. 56  of
\n1951.\n<\/p>\n
    Appeal  from a judgment and decree of the High Court  of
\nAllahabad  (Malik  and Wali Ullah JJ.) dated  14th  February
\n1946, in Appeal No. 240 of 1943 which
\n37<\/span>
\narose out of a decree dated 19th January, 1943, of the Court
\nof  the Civil and Sessions.Judge, Kanpur, in  Original\tSuit
\nNo. 34 of 1942.\n<\/p>\n
    Achhru Ram\t(P. S. Safeer,\twith him) for the appellant.
\n    S.P. Sinha (K. N. Aggarwala, with him) for the  respond-
\nent.\n<\/p>\n
    1951. November 1.  The Judgment of the Court was  deliv-
\nered by
\n    FAZL ALI J.–This is an appeal by special leave  against
\na  decision  of the High Court at Allahabad,  reversing\t the
\ndecision  of  the trial court, in a suit instituted  by\t the
\nappellant  to recover damages from the\trespondent-firm\t for
\nbreach of a contract.\n<\/p>\n
    It\tappears that between the 10th and 18th April,  1941,
\nthe parties entered into 5 contracts, by which the  respond-
\nent-firm  undertook to supply to the appellant 184 bales  of
\ncloth  of  certain specifications manufactured\tby  the\t New
\nVictoria Mills, Kanpur, and the Raza Textile Mills,  Ramput.
\nOnly  99 bales were taken up and there was a  dispute  about
\nthe remaining 85 bales. On the 17th October, 1941, a settle-
\nment  was arrived at between the parties, and it was  agreed
\nthat the respondent-firm should deliver to the appellant  61
\nbales,\tand that the goods should be delivered by  the\t17th
\nNovember,  1941.  The actual text of the agreement  (exhibit\n<\/p>\n
4) was as follows:—\n<\/p>\n
    ” 61 bales as noted below are to be given to you by us.
\n    We\tshall  continue sending goods as soon  as  they\t are
\nprepared to you upto Magsar Badi 15 Sambat 1998. We shall go
\non  supplying goods to you of the Victoria Mills as soon  as
\nthey are supplied to us by the said Mill.\n<\/p>\n
(Specifications of cloth given here). We shall go on  deliv-
\nering the goods to you upto Magsar Badi 15 out of the  goods
\nnoted above which will be prepared by the Mill.”\n<\/p>\n
38<\/span><\/p>\n
    As the 61 bales were not supplied, the appellant sent  a
\ntelegraphic notice to the respondent-firm on 20th  November,
\n1941, to the following effect
\n“Give delivery of our 61 bales through Bank.
\nOtherwise  suing within a days.”\n<\/p>\n
 The appellant did not receive any reply to this notice, and
\nso  he\tinstituted  the suit which has given  rise  to\tthis
\nappeal, on the 23rd April, 1942, claiming a sum of Rs. 9,808
\nand  odd,  which,  according to him,  represented  the\tloss
\nsustained  by him on account of the rise in the market\trate
\nof  the\t contracted  goods, and he also\t claimed  costs\t and
\ninterest.  The respondent-firm resisted the suit on a number
\nof  grounds,  but their main plea, with which alone  we\t are
\nconcerned  in this appeal, was that the performance  of\t the
\ncontract  had been frustrated by circumstances beyond  their
\ncontrol and hence the appellant’s claim must fail. This plea
\nwas  negatived by the trial court, but it was upheld by\t the
\nHigh Court, and hence this appeal.\n<\/p>\n
 The  only point which arises in this appeal  is  whether
\nthe  circumstances  of\tthe case afford any  basis  for\t the
\napplication  of the doctrine of frustration of. contract,  a
\ndoctrine  which is embodied, so far as this country is\tcon-
\ncerned,\t in sections 32 and 56 of the Indian  Contract\tAct,
\n1872.\n<\/p>\n
    The\t main grounds of attack against the judgment of\t the
\nHigh Court are :–\n<\/p>\n
    (1) that it has misread the agreement (exhibit 4)  dated
\nthe 17th October, 1941, on which both parties rely; and
\n    (2) that it has paid more attention to an abstract legal
\ndoctrine than to the facts of the case.\n<\/p>\n
In  our\t opinion, both these contentions  are  correct.
\n The  construction placed by the High Court upon the  agree-
\nment  and its conclusion based thereon, are set out  in\t the
\nfollowing  passage in the leading judgment of Wali Ullah  J.
\n:–\n<\/p>\n
    “It\t seems to me that the parties clearly intended\tthat
\nthe defendant was to supply the goods to the
\n39<\/span>
\nplaintiff’ if and when–and only in that event–the particu-
\nlar  goods  were  prepared by the Victoria  Mills  and\twere
\nsupplied to the defendant between the 17th of October, 1941,
\nand 17th of November, 1941. As the fundamental assumption on
\nwhich the contract was made ceased to exist during the\ttime
\nof performance and consequently it became impossible for the
\ndefendant  to fulfil the contract, it must be held that\t the
\ncontract was discharged by supervening impossibility.”\n<\/p>\n
    The construction suggested by the High Court is precise-
\nly  the\t construction  which was attempted to be  put  on  a
\nsimilar contract by the defendant-respondents in the case of
\nHarnandrai  v. Pragdas (1) but the Privy  Council  negatived
\nit.’ In that case, the provision as to delivery of goods ran
\nas follows :–\n<\/p>\n
    “The said goods are to be taken delivery of as and\twhen
\nthe same may be received from the Mills.”\n<\/p>\n
    The\t Mills\tfailed to perform their\t contract  with\t the
\ndefendants  as they were engaged in fulfilling certain\tcon-
\ntracts with the Government, and consequently the  defendants
\ncould not supply the goods to the plaintiffs. The  questions
\nraised\tbefore the Privy Council were as to the\t meaning  of
\nthe contract and whether its performance had been  frustrat-
\ned,  and the Privy Council disposed of them in\tthese  words
\n:–\n<\/p>\n
    “It\t was also suggested that the words ‘as and when\t the
\nsame may be received from the Mills’ should be construed, as
\nif they were ‘ if and when the same may be received from the
\nMills.’\t This is to convert words, which fix the  quantities
\nand  times  for deliveries by instalments into\ta  condition
\nprecedent, to the obligation to deliver at all, and virtual-
\nly  makes a new contract.  The words certainly regulate\t the
\nmanner\tof  performance, but they do not  reduce  the  fixed
\nquantity  sold to a mere maximum, or limit the sale to\tsuch
\ngoods,\tnot exceeding 864 bales, as the Mills might  deliver
\nto the defendants during the remainder of the year.”
\nTheir Lordships then proceeded to observe:–
\n(1) (1888) L.R. 15 I.A. 9.\n<\/p>\n
40<\/span><\/p>\n
    “The Mills, from which the goods were to come, no  doubt
\nwere  contemplated as continuing to exist, though  it  does’
\nnot  follow  that, in a bargain and sale such as  this,\t the
\nclosing or even the destruction of the Mills would affect  a
\ncontract between third parties, which is in terms  absolute;
\nbut  the  Mills did continue to exist and  did\tcontinue  to
\nmanufacture  the goods in question, only they were made\t for
\nand delivered to somebody else.”\n<\/p>\n
    We agree with the reasoning of the Privy Council, and it
\nseems  to  us that the considerations which  prevailed\twith
\nthem  must  govern the construction of\tthe  agreement\twith
\nwhich we are concerned in this case. The agreement does\t not
\nseem  to us to convey the meaning that the delivery  of\t the
\ngoods  was  made contingent on their being supplied  to\t the
\nrespondent firm by the Victoria Mills. We find it  difficult
\nto  hold that the parties ever contemplated the\t possibility
\nof the goods not being supplied at all.\t The words “prepared
\nby  the\t Mill”\tare only a description of the  goods  to  be
\nsupplied, and the expressions “as soon as they are prepared”
\nand  “as soon as they are supplied to us by the\t said  Mill”
\nsimply indicate the process of delivery. It should be remem-
\nbered  that what we have to construe is a commercial  agree-
\nment entered into in a somewhat common form, and, to use the
\nwords of Lord Sumner in the case to which reference has been
\nmade,  “there is nothing surprising in a merchant’s  binding
\nhimself\t to procure certain goods at all events, it being  a
\nmatter of price and of market expectations.”  Since the true
\nconstruction of an agreement must depend upon the import  of
\nthe  words used and not upon what the parties choose to\t say
\nafterwards,  it is unnecessary to refer to what the  parties
\nhave said about it.\n<\/p>\n
    Even  apart from the construction of the  agreement,  it
\nseems  to us that the plea of the respondents must  fail  on
\ntheir  own  admissions.\t  The defendant has  stated  in\t his
\nevidence  that he had not sold the 61 bales of cloth to\t any
\nother person at the time he received the telegraphic  notice
\nof the 20th November, 1941, (exhibit 1).  On his own  admis-
\nsion, therefore, he was
\n41<\/span>
\nin a position to supply 61 bales of the contracted goods  at
\nthe time when the breach of the agreement is alleged to have
\nhappened.   That  being so, we are unable to hold  that\t the
\nperformance  of\t the contract had  become  impossible.\t The
\nmatter\thowever does not rest there. Guruprasad, a clerk  of
\nthe Mills Company, who is the second witness for the defend-
\nants,  has  made  an important statement  to  the  following
\neffect
\n    “The customers all place  their requirements before\t the
\nsales  manager.\t If the goods required are ready,  they\t are
\nsold  to the customers and if they are not ready and if\t the
\ncustomer wants them to be manufactured they are delivered to
\nthe  customers\tafter manufacture.  An order book  is  main-
\ntained at the Mills.”\n<\/p>\n
    Such being the practice which prevailed in the  Victoria
\nMills,\tit was for the defendants to show that an order\t for
\nthe manufacture of the contracted goods was placed with\t the
\nMills and yet the Mills failed to supply the goods.  No such
\nevidence  has however been offered by the  defendants-\t The
\nHigh Court has surmised that it might not have been possible
\nto  supply  the\t goods within the period  mentioned  in\t the
\nagreement,  but there is no material to support that  state-
\nment.\n<\/p>\n
    In these circumstances, this is obviously not a case  in
\nwhich  the  doctrine of frustration of contract can  be\t in-
\nvoked.\tThat  doctrine\thas been explained in  a  number  of
\ncases, some of which are referred to in the judgment of\t the
\nHigh  Court, but the latest pronouncement with regard to  it
\nis  to be found in the speech of Viscount Simon\t in  British
\nMovietone  News\t v.  London Cinemas(1), in  which  the\tLord
\nChancellor referred with approval to the following  enuncia-
\ntion  of  the doctrine by Earl Loreburn in a  previous\tcase
\nF.A.  Tamplin  S.S.  Co. Ltd.  v.   Anglo-Mexican  Petroleum
\nProducts Co., Ltd(2):-\n<\/p>\n
    “…a  court can and ought to examine the  contract\t and
\nthe circumstances in which it was made, not of course
\n (1)  [1951] A.E.L.R. 617.\t     (2) [1916] 2 A.C.\t403,\n<\/p>\n
404.
\n    6<\/span>
\n42<\/span>
\nto vary, but only to explain it, in order to see whether  or
\nnot  from the nature of it the parties must have made  their
\nbargain\t on the footing that a particular thing or state  of
\nthings would continue ,to exist.  And if they must have done
\nso, then a term to that effect will be implied, though it be
\nnot  expressed\tin  the contract  ……  no  court  has  an
\nabsolving  power,  but it can infer from the nature  of\t the
\ncontract and the surrounding circumstances that a  condition
\nwhich  is  not expressed was a foundation on which the\tpar-
\nties contracted,”\n<\/p>\n
    It\tseems necessary for us to emphasize that so  far  as
\nthe  courts  in this country are concerned, they  must\tlook
\nprimarily  to the law as embodied in sections 32 and  56  of
\nthe  Indian Contract Act, 1872.\t These sections run as\tfol-
\nlows :–\n<\/p>\n
    “32.   Contingent contracts to do or not to do  anything
\nif  an uncertain future event happens cannot be enforced  by
\nlaw unless and until that event has happened.
\nIf the event becomes impossible such contracts become void.”
\n“56.   An  agreement to do an act impossible  in  itself  is
\nvoid.\n<\/p>\n
    A  contract\t to do an act which, after the\tcontract  is
\nmade, becomes impossible, or, by reason of some event  which
\nthe promisor could not prevent, unlawful, becomes void\twhen
\nthe act becomes impossible or unlawful………
\n    The enforcement of the agreement in question was, as  we
\nhave already pointed out, not contingent on the happening of
\nan  uncertain future event, nor does the present  case\tfall
\nwithin the second paragraph of section 56, which is the only
\nprovision  which  may be said to have any relevancy  to\t the
\nplea put forward by the respondents.  Clearly, the  doctrine
\nof  frustration cannot avail a defendant, when the  non-per-
\nformance of a contract is attributable to his own default.
\n    We accordingly allow the appeal, set aside the  judgment
\nof  the\t High  Court, and restore the decree  of  the  trial
\ncourt. The appellant will be entitled to his costs  through-
\nout.\n<\/p>\n
\t\t       Appeal allowed.\n<\/p>\n
Agent for the appellant: R.S. Narula. Agent for the respond-
\nent: S.S. Sukla.\n<\/p>\n
43<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Ganga Saran vs Ram Charan Ram Gopal on 1 November, 1951 Equivalent citations: 1952 AIR, 9 1952 SCR 36 Author: S Fazal Ali Bench: Fazal Ali, Saiyid PETITIONER: GANGA SARAN Vs. RESPONDENT: RAM CHARAN RAM GOPAL DATE OF JUDGMENT: 01\/11\/1951 BENCH: FAZAL ALI, SAIYID BENCH: FAZAL ALI, SAIYID KANIA, HIRALAL J. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-134187","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nGanga Saran vs Ram Charan Ram Gopal on 1 November, 1951 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ganga-saran-vs-ram-charan-ram-gopal-on-1-november-1951\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ganga Saran vs Ram Charan Ram Gopal on 1 November, 1951 - 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