Samaresh Bose v Amal Mitra
Samaresh Bose v. Amal Mitra (AIR 1952 Cal 84)
Facts of the Case:
Samaresh Bose entered into a contract with Amal Mitra for the sale of a flat (an apartment) located in a building under construction.
Before the contract could be fully performed, a government notification was issued under a law which prohibited the transfer/sale of the property or imposed restrictions on its sale.
Due to this notification, it became impossible legally to complete the sale and transfer of the flat.
Samaresh Bose sought to enforce the contract or recover damages for breach, while Amal Mitra contended that the contract was frustrated due to the impossibility caused by the government notification.
Legal Issues:
Whether the contract was frustrated due to the subsequent prohibition imposed by law on the sale of the property.
Whether impossibility of performance due to government intervention could discharge the parties from their contractual obligations.
What is the effect of frustration of contract under Indian law?
Court’s Analysis:
The Court examined the doctrine of frustration, which excuses parties from performing their contractual obligations when an unforeseen event makes performance impossible or unlawful.
It referred to the classic principles laid down in Taylor v. Caldwell (1863), a foundational English case on frustration, which stated that when a contract depends on the continued existence of a specific thing and that thing ceases to exist, the contract is discharged.
The court noted that the government notification, issued after the contract was made, created a legal impossibility for performance.
Since it became illegal to transfer the property, performance of the contract was not just difficult but impossible under the law.
The parties were therefore relieved from further performance, and the contract was considered frustrated.
The court held that frustration discharges both parties from the contract and neither can sue for breach.
Judgment:
The Court ruled in favor of Amal Mitra, holding that the contract was frustrated by subsequent illegality.
Samaresh Bose could not enforce the contract or claim damages since performance had become impossible due to the change in law.
The principle of frustration applies where performance is rendered impossible or unlawful due to events beyond the parties' control.
Legal Principles Established:
Doctrine of Frustration:
Contracts may be discharged when subsequent events make performance impossible, illegal, or fundamentally different.
Effect of Frustration:
Both parties are discharged from further obligations.
No party can claim damages for non-performance caused by frustration.
Subsequent Illegality:
If a law or government notification prohibits performance, it constitutes frustration.
Related Case Law:
Taylor v Caldwell (1863) 3 B & S 826
The classic English case establishing the doctrine of frustration where a music hall burned down, making the contract impossible to perform.
Krell v Henry (1903) 2 KB 740
Frustration due to cancellation of a coronation procession, which was the foundation of the contract.
Davis Contractors Ltd v Fareham UDC (1956) AC 696
Performance became more difficult and expensive but not impossible, so no frustration.
Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) (1982) AC 724
Further elaboration on frustration principles.
Summary:
Samaresh Bose v. Amal Mitra is a key Indian case on frustration of contract due to subsequent illegality.
It held that a contract is discharged if performance becomes unlawful because of a change in law after the contract is made.
This protects parties from being forced to perform illegal acts and prevents unjust enforcement of contracts that have become impossible.
The decision aligns Indian contract law with established common law principles on frustration.
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