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CaseIQ

Rahim Bux v. Mohammad Shafi

Allahabad High Court

Jul 29, 1969

Judgment

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Factual and Procedural Background

This is a second appeal by the defendants (appellants) against a judgment and decree dated 5-1-1962 of the lower appellate court. The dispute concerns a shop in Lucknow. The plaintiff-respondent was a tenant of that shop, which formed part of a larger building owned by the defendants-appellants 1 to 3. The entire building, including the shop in dispute, was demolished by the landlords on 4-4-1958 in pursuance of a notice issued by the Municipal Board, Lucknow under Sec. 263(1) of the U.P. Municipalities Act.

The plaintiff filed a suit for injunction on 17-4-1958 restraining the landlords from interfering with his possession and offered to pay rent for the premises in their then condition; alternatively he sought a decree for possession. During the suit the trial court initially injuncted the landlords from making any construction but the injunction was later modified to permit rebuilding at the landlords' own risk. The trial court held that the tenancy had ended because the shop no longer existed and dismissed the plaintiff's claim to retain possession. The lower appellate court disagreed and held that the plaintiff was entitled to continue in possession until his tenancy was determined by a mode prescribed by law, and accordingly decreed the plaintiff's suit for possession and injunction. The defendants appealed.

Legal Issues Presented

Whether demolition of the shop by the landlord pursuant to a municipal notice rendered the lease void under Section 108(e) of the Transfer of Property Act.
Whether the contract of tenancy was frustrated and became impossible of performance under Section 56 of the Indian Contract Act.
Whether the decree for possession is incapable of execution because reconstruction during pendency made it difficult to identify the portion corresponding to the plaintiff's shop.

Arguments of the Parties

Appellants' Arguments

After demolition the lease became void under Section 108(e) of the Transfer of Property Act.
The contract of tenancy was frustrated and impossible of performance under Section 56 of the Contract Act.
Reconstruction during pendency made identification of the plaintiff's shop difficult and the decree is not capable of execution.
Reliance was placed on the ruling Kshitish Chandra Nondal v. Shiba Rani Debt (A.I.R. 1950 Cal. 441).

Respondent's Arguments

The demolition by the landlord pursuant to municipal notice is not destruction by an irresistible force within Section 108(e), and the option to avoid the lease under that clause rests with the tenant, not the landlord.
Section 56 embodies the doctrine of frustration applicable only to purely contractual obligations and not to a contract creating an estate in land which had already accrued; reliance was placed on Court of Wards Dada Siba Estate v. Rais Dharan Dev Chand (A.I.R. 1961 Punjab 143).
Even if reconstruction had occurred, the landlord could rebuild in the same form and the rights of lessor and lessee would be available with respect to the new premises; the landlords were allowed to rebuild at their own risk and the plaintiff's rights were not to be prejudiced.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Kshitish Chandra Nondal v. Shiba Rani Debt, A.I.R. 1950 Cal. 441	Applied in that case as a ground that destruction of premises could lead to application of frustration and ejectment.	The court held this ruling had no application to the present facts and did not accept it as deciding the present dispute.
Court of Wards Dada Siba Estate v. Rais Dharan Dev Chand, A.I.R. 1961 Punjab 143	Holds that Section 56 of the Contract Act embodies the doctrine of frustration, which is exhaustive for that doctrine, and that it applies only to purely contractual obligations and not to contracts creating an estate in land already accrued.	The court agreed with this principle and applied it to reject the appellants' contention that the tenancy was frustrated under Section 56.

Court's Reasoning and Analysis

The court proceeded in several steps:

On Section 108(e) of the Transfer of Property Act: The court rejected the appellants' contention that the lease became void under Sec.108(e). It reasoned that demolition by the landlord even if done pursuant to a municipal notice under Sec. 263(1) of the U.P. Municipalities Act cannot be characterised as destruction by an irresistible force within the meaning of Sec.108(e). The court also noted that the option to avoid a lease under that clause rests with the tenant, not with the landlord.
On Section 56 (doctrine of frustration): The court held that the doctrine of frustration applies to purely contractual obligations and not to a contract creating an estate or interest in land which had already accrued. The court endorsed the principle in Court of Wards Dada Siba Estate v. Rais Dharan Dev Chand (A.I.R. 1961 Punjab 143). It found the appellants' reliance on Kshitish Chandra Nondal (A.I.R. 1950 Cal. 441) inapplicable. Further, even if the doctrine were applicable, the facts did not show impossibility of performance because the landlord could rebuild the premises in the same form and the rights of lessor and lessee would then be available with respect to the new premises.
On executability after reconstruction: The court considered but did not decide the appellants' point that reconstruction made identification and execution difficult. It observed that because the landlords were permitted to rebuild at their own risk (implying the plaintiff's rights would not be prejudiced), the question of which part of the present premises corresponded to the plaintiff's shop should be addressed by the execution court after appropriate evidence.

Holding and Implications

DISPOSED OF — The appeal is dismissed.

Direct effect on the parties:

The lower appellate court's decree in favour of the plaintiff-respondent (entitling him to continue in possession until his tenancy is determined by law) is upheld.
Issues about identification of the premises after reconstruction are to be determined by the execution court, which may take such evidence as necessary to restore possession only of the portion that constituted the plaintiff's shop.
In the circumstances of the case, the parties shall bear their own costs in this Court.

No broader new precedent was created by this opinion beyond the court's application of the existing principles stated above.

Show all summary ...

Jagmohan Lal, J.:— This second appeal filed by the defendants is directed against a judgment and decree dated 5-1-1962 passed by the lower appellate court under which the claim of the defendants in respect of a shop situate in the town of Lucknow for possession and injunction has been decreed though the same had been dismissed by the trial court.

2. The facts of the case as found by the courts below are that the plaintiff-respondent is a tenant of a shop which was a part of a big building owned by the defendants-appellants 1 to 3. This entire building including the shop in dispute was demolished by the landlords on 4-4-1958 in pursuance of a notice issued to them by the Municipal Board, Lucknow under Sec. 263(1) of the U.P Municipalities Act.

3. The plaintiff-respondent filed a suit for injunction on 17-4-1958 restraining the landlords from interfering with his possession over the said premises, offering at the same time to pay rent for these premises even in the condition in which they existed then and in the alternative praying for a decree for possession. During the pendency of the suit the landlords were injuncted by the trial court from making any construction on this land but subsequently this injunction was modified and the landlords were permitted to re-build on this land at their own risk.

4. The trial court found that since the shop which had been let out to the plaintiff-respondent was no more in existance, his tenancy rights had come to an end and he was not entitled to retain possession over the site of the shop. The lower appellate court did not agree with this view. According to that court the plaintiff was entitled to continue in possession of the premises so long as his tenancy was not determined according to one of the modes prescribed by law. The plaintiff's suit for possession and injunction was, accordingly, decreed.

5. In this second appeal it has been contended on behalf of the appellants that after the shop had been demolished the lease became void under the provisions of Sec. 108(e) of the Transfer of Property Act. This contention is not acceptable. In the first place the demolition of a building by the landlord, even though in pursuance of a notice under Sec. 263(I) of the U.P Municipalities Act, cannot be said to be a destruction of the premises by an irresistible force within the meaning of the said clause of Sec. 108. In the second place the option to avoid the lease under this clause rests with the tenant and not with the landlord.

6. The next point that was raised on behalf of the appellants was that after the demolition of the building the contract of tenancy was frustrated and it became impossible of performance under Sec. 56 of the Contract Act. This argument also does not appear correct. In the first place the doctrine of frustration applies to purely contractual obligations and not to a contract creating an estate or interest in land which had already accrued in favour of a party. On behalf of the appellants reliance was placed on a ruling Kshitish Chandra Nondal v. Shiba Rani Debt . A.I.R 1950 Cal. 441.. This ruling has no application to the facts of the present case. In that case a thatched shop which had been let out to a tenant had been destroyed by a fire and subsequently the tenant in spite of protests from the landlord re-constructed that shop. The landlord after terminating the tenancy by a notice filed a suit for possession which was resisted by the tenant. The suit of the landlord was decreed on other grounds but an additional ground on which the tenant was held liable to ejectment was also given that after the destruction of the premises, the contract of tenancy became void by the doctrine of frustration. On behalf of the respondent reliance was placed on a ruling Court of Wards Dada Siba Estate v. Rais Dharan Dev Chand . A.I.R 1961 Punjab 143. which is more to the point. In this case it was held that Sec. 56 of the Contract Act embodies a positive rule of law relating to doctrine of frustration and this section must be heated as exhaustive so far as it goes and the same is applicable only to purely contractual obligations and not to contract creating an estate in land which had already accrued in favour of a party. With respects, I find myself in agreement with the principle laid down in this ruling. So this doctrine of frustration cannot apply to a lease of the present nature. Moreover, in this case even if this doctrine had been applicable, the facts do not show that the contract of lease has become impossible of performance. The landlord, who demolished the premises in compliance with a notice issued by the Municipal Board under Sec. 263(1) of the Municipalities Act, could rebuild the premises in the same form in which they existed before, and the rights of the lessor and lessee would then be available with respect to the new premises. So this second point raised on behalf of the appellants had also no force.

7. Lastly, it was contended that due to the reconstruction of the building during the pendency of the case it has become difficult to identify the portion of it on which the plaintiff's shop existed and so the decree is not capable of execution. In my opinion this point does not arise at this stage. As mentioned above, the landlords were permitted to rebuild the building at their own risk which implied that the rights of the plaintiff would not be prejudiced thereby. It would, therefore, be for the execution court to decide, after taking such evidence as may be necessary, as to which portion of the present premises consisted of the shop which was in the tenancy of the plaintiff and to restore possession to him only in respect of that portion.

8. Subject to the above observations the appeal is dismissed, but in the circumstances of the case the parties shall bear their own costs in this Court.

9. Appeal dismissed.