Frustration under Section 56 applies to land-sale contracts, but temporary requisition did not discharge this bargain.

Section 56 of the Indian Contract Act, 1872 is the statutory source for discharge of contracts by supervening impossibility or illegality, and frustration is included within that provision; English law is only persuasive where the Act does not cover the field. The doctrine applies to contracts for sale of land in India because such contracts do not themselves create an interest in property under Section 54 of the Transfer of Property Act, 1882. On the facts, temporary requisition orders did not frustrate the contract, since the delay was within the parties' contemplation, no fixed completion time was stipulated, and performance was not rendered impossible in the practical statutory sense.

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Issues: (i) Whether the doctrine of frustration forms part of Section 56 of the Indian Contract Act, 1872 and excludes resort to English law as an independent source; (ii) whether the doctrine of frustration applies to contracts for sale of land in India; (iii) whether the requisition orders in the present case frustrated the contract.

Issue (i): Whether the doctrine of frustration forms part of Section 56 of the Indian Contract Act, 1872 and excludes resort to English law as an independent source

Analysis: Section 56 was held to be the statutory source governing discharge of contracts by supervening impossibility or illegality. The concept of frustration was treated as a special case of impossibility of performance arising after the contract is made. The Court held that, where the Indian Contract Act covers the field, English law cannot be imported dehors the statute; English decisions are only of persuasive value. The word "impossible" in Section 56 was construed in a practical sense, not as literal or physical impossibility.

Conclusion: The doctrine of frustration is included within Section 56 of the Indian Contract Act, 1872, and operates as part of Indian statutory law.

Issue (ii): Whether the doctrine of frustration applies to contracts for sale of land in India

Analysis: The English reluctance to apply frustration to land-sale contracts was traced to the equitable doctrine by which a purchaser acquires an interest in the land upon conclusion of the bargain. That basis does not exist under Section 54 of the Transfer of Property Act, 1882, because a contract for sale of land does not itself create any interest in the property. The contractual obligations in such transactions therefore remain governed by the ordinary principles applicable to contracts.

Conclusion: The doctrine of frustration is applicable to contracts for sale of land in India.

Issue (iii): Whether the requisition orders in the present case frustrated the contract

Analysis: The contract was part of a development scheme with no fixed time for completion of roads and drains. The requisition orders were temporary and war conditions, scarcity of materials, and other restrictions were already within the contemplation of the parties when they contracted. Since no definite completion period was stipulated, the delay caused by requisition did not strike at the foundation of the bargain or render performance impossible in the statutory sense. The alternative contention of illegality was not accepted, as the requisition merely restricted use during its operation and did not, on the facts, make performance impossible.

Conclusion: The contract was not frustrated by the requisition orders.

Final Conclusion: The appeal succeeded, the High Court's decree was set aside, and the decrees of the courts below were restored.

Ratio Decidendi: A contract is discharged under Section 56 only when a supervening event renders performance impossible in a practical sense and destroys the foundation of the bargain; where delay or difficulty is foreseeable or no fixed time for performance is stipulated, temporary governmental requisition does not by itself frustrate the contract.

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