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1955 DIGILAW 71 (KER)

K. Caacko (Representing Puthupally Valiapally) v. Chacko Thomman

1955-05-31

JOSEPH VITHAYATHIL, K.SANKARAN

body1955
JUDGMENT : K. Sankaran, J. This appeal arises out of a suit for recovery of the rent due under the lease deed Ext. B executed by the defendants in favour of the Puthupalli Church at Kottayam to which the suit property belongs. Under the terms of Ext. B the defendants took the property for cultivation for three years, i.e., 1121, 1122 and 1123, the annual rent stipulated being 430 paras of paddy as per Kalloorkadan measure. The rent for the first year was admittedly paid and the claim in the plaint was confined to the rent due for the next 2 years. The 1st defendant deposited in court the rent for the year 1123 and contended that the defendants were not liable to pay the rent for the year 1122 because the crop that had been raised in the property had been completely destroyed by unexpected floods and it was not possible to raise a second crop during that year. This plea was accepted by the lower court and the plaint claim was negatived in respect of the rent for that year. Plaintiffs who instituted the suit on behalf of the Church have come up in appeal questioning the correctness of the lower court’s decree exonerating the defendants from the liability to pay the rent for the year 1122. 2. In the plaint there was an alternative claim that the defendants are liable to pay the rent for the year 1123 at double the rate stipulated in Ext. B, in case no rent is payable for the year 1122 on account of failure of crops. The ground stated in support of such a special claim was that if no crop had been raised in the year 1122, the yield next year would have been almost double the normal yield. The lower court found that there was no evidence to support such a special claim and hence rent was allowed for the year 1123 also at the stipulated rate only. Even though this question also was raised in the appeal memorandum, it was not pressed at the time of hearing. 3. The position taken up by the appellants is that as per the agreement embodied in Ext. B, the defendants are liable to pay the rent for the year 1122 also irrespective of any question as to whether they cultivated the property or not during that year. 3. The position taken up by the appellants is that as per the agreement embodied in Ext. B, the defendants are liable to pay the rent for the year 1122 also irrespective of any question as to whether they cultivated the property or not during that year. It may be mentioned here that the correctness of the trial court’s finding that the crops of the year 1122 were destroyed by floods is not challenged by the appellants. There is also clear evidence in support of that finding. Other properties in the neighbourhood of the plaint item had been cultivated by Dws. 1 and 2 and they swear that the unusual floods of the year 1122 had destroyed the crops in all the properties in that area and that it was impossible for anybody to raise the crops again during that year. That there was such a flood in that year is admitted by Pw. 1 also, the only witness examined on the plaintiff’s side. It is clear from the evidence of these witnesses that the defendants as lessees of the property had done everything in their power to cultivate the property and to raise the crop even in the year 1122 and that the failure of the crops was due to circumstances over which they had no control. It is argued on behalf of the appellants that even in such a situation the defendants are not absolved from their liability to pay the rent for that year and that the doctrine of frustration cannot be made applicable to a lease transaction. No doubt the doctrine of frustration is generally applied to contracts. Frustration means the premature determination of a contract owing to the occurrence of an intervening event or change of circumstances so fundamental that the same may be regarded as striking at the root of the agreement and as wholly beyond the contemplation of the parties when they entered into the agreement. A lease is something more than a mere contract or agreement in so far as it results in the creation of an estate in favour of the lessee. This additional feature present in a lease cannot by itself rule out the applicability of the doctrine of frustration to a lease transaction. A lease is something more than a mere contract or agreement in so far as it results in the creation of an estate in favour of the lessee. This additional feature present in a lease cannot by itself rule out the applicability of the doctrine of frustration to a lease transaction. At any rate, the applicability of this doctrine to a lease at least to a limited extent has been given statutory recognition in India as is clear from Cl. (e) of S. 108 of the Transfer of Property Act. That clauses states that: “If by fire, tempest or flood or violence of an army or of a mob or other irresistable force, any material part of the property is wholly destroyed or rendered substantially and permanently unfit for the purpose for which it was let, the lease shall at the option of the lessee, be void: Provided that if the injury is occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision”. In view of this provision, there is no force in the argument that the doctrine of frustration is wholly inapplicable to leases. It is unnecessary to pursue this matter any further because the defendants have no case that the plaint lease came to an end as a result of frustration caused by the unforeseen floods of the year 1122. On the other hand, it is admitted that the lease arrangement continued for the full term of three years up to the end of the year 1123. The only contention is that the stipulation to pay the rent for the year 1122 has become unenforceable on account of the supervening event of the floods which made it impossible for the lessees to collect the yield from the property by subjecting it to the normal agricultural operations. 4. Even though the lease was for a fixed period of three years, the stipulation was to pay rent due for each of these years separately and at the end of each year. There is a separate agreement as it were in respect of the rent payable each year. The parties may be relieved of their obligations under any of these separate and distinct agreements on the happening of a frustrating event which may not affect their obligations under the other agreements embodied in the same lease transaction. There is a separate agreement as it were in respect of the rent payable each year. The parties may be relieved of their obligations under any of these separate and distinct agreements on the happening of a frustrating event which may not affect their obligations under the other agreements embodied in the same lease transaction. Such an event happened in the year 1122 and it put an end to the contract relating to the rent for that year. The same is the effect of a true construction of the agreement embodied in Ext. B. In this document there is no absolute and unconditional undertaking by the lessees to pay the rent for each of the three years covered by the lease. On the other hand there are clear indications in the document itself to suggest that the liability to pay the rent was to follow from the possibility of the land being cultivated during the relevant period. The undertaking to pay the rent is preceded by other under-takings to the effect that the lessees will attend to the agricultural operations at the appropriate stages and that they will raise the crop in the same manner as other neighbouring cultivators. From these statements it is obvious that the parties entered into the agreement regarding the payment of rent on the basis that with the required diligence on the part of the lessees they would be in a position to cultivate the land and to collect the yield. It is also fairly clear that the parties did not contemplate that the agreement should apply even to a fundamentally different situation in which the cultivation of the property was absolutely impossible. The contract by which the parties intended to regulate their rights and liabilities under normal circumstances cannot apply to a totally different situation over which the parties had no control whatever, for the obvious reason that they could not have bargained for such a contingency. This position has been fully explained and emphasised in British Movietonews Ld. v. London and District Cinemas Ld., (1952 Appeal Cases 166). This position has been fully explained and emphasised in British Movietonews Ld. v. London and District Cinemas Ld., (1952 Appeal Cases 166). It was ruled in that case that “if a consideration of the terms of the contract in the light of circumstances existing when it was made shows that the parties never agreed to be bound in a fundamentally different situation which has unexpectedly emerged, the contract ceases to bind at that point, because on its true construction it does not apply to the situation”. This principle appears to have been followed by the Travancore High Court from very early times in dealing with the obligations arising out of agricultural leases. In Kochenujathy Kunjkochamma v. Mathew Varghese (4 T.L.J. 65), Bhagavatheeswara Iyer v. Kathivelu (17 T.L.J. 885), Venkiteswara Iyer v. Uthuppu (5 T.L.T. 1097), and in Joseph v. Thommen (1945 T.L.R. 707) the lessees had been absolved of their liability of pay rent for the period for which they could not cultivate the leasehold property on account of supervening events completely beyond their control. In the present case also the lessees had to face a similar situation in the year 1122 and the lower court was right in taking the view that the defendants lessees are not liable to pay any rent during that year. 5. In the result this appeal fails and it is accordingly dismissed with costs. Dismissed.