Civil law
Querist :
Anonymous
(Querist) 10 November 2011
This query is : Resolved
Need urgent help on this topic-
In a case Ram owned a shop outside the bus stand of a town. He Rented the same shop to Sham for 20000 per month for five years. Sham regularly paid the rent, but after two years the bus stand got shifted to some other place. The number of customers in sham's shop considerably reduced and he refused to pay the rent on the plea that contract has came to an end due to the frustration of the object in view of shifting of the bus stand. Ram insists that Sham should continue to pay the rent for 5 years for which ram Filed a suit for the arrears of rent.
What are the legal provisions available to Ram for getting the rent Under the Indian Contract Act
And does any provisions of the Transfer of property act are available to Ram.
Please Reply Urgently Thank you
kuldeep kumar
(Expert) 10 November 2011
commercial hardship does t include in frustration of contract.contract shall be enforced.
Querist :
Anonymous
(Querist) 10 November 2011
Thanku Very Much Mr. Kuldeep
Is there any provision in the property law which helps ram?
prabhakar singh
(Expert) 10 November 2011
The doctrine of frustration is simply
that contractual obligations are discharged when an unexpected event takes place which MATERIALLY AFFECTS THE BASIS OF
THE CONTRACT OR CONTRACTUAL OBLIGATIONS
OF ONE PARTY BECOME IMPOSSIBLE OF
PERFORMANCE.
Then it can not be said that such an occurring has not taken place.In common
law and other Europe the doctrine of frustration does not apply to leases.
But we have two independent enactments
viz.,Contract Act which came into force first then came into being the Transfer
of property Act and both have lived to gather,where the latter refers also to
former.
It is section 56 of the Contract Act that speaks of the doctrine of Frustration.But it is a lease contract for which we need to examine the Transfer of Property Act where if any of its provisions found to deal the doctrine of frustration then not the general law but the special rule relating to leases laid down in TPA with regard to
leases shall have application to the exclusion of the section 56 of the
Contract Act.
I am inclined to apply the doctrine of frustration to even leases because it can
not be argued that after delivery of possession of a lease nothing remains between parties as an ongoing contract
as i find covenants and promises yet to be performed.
Then it becomes urgent to look into TPA
to find if there is any speak about
doctrine of frustration.
It is section 108 that i find which deals with rights and duties of lessors and lessees.
On a close examination it is section clause
(e)of 108(B)of TPA which reads as under:
108"(B) Rights and Liabilities of the Lessee...............................
(e) if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void:
Provided that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision;"
SO THIS IS THE ONLY SECTION IN THE TPA GIVING RIGHT TO LESSEE TO GIVE UP THE LEASE IN CASES ENUMERATED THERE IN WHICH OF COURSE DOES NOT COVER A CASE ARISEN IN HAND WHICH ON ANALYSIS OF 56 CONTRACT ACT SHALL STAND COVERED.
IN MY VIEW TPA SHALL OVERRIDE CONTRACT ACT AS THE MATER IS OF LEASE FOR WHICH TPA IS SPECIAL ENACTMENT.
HENCE I CONCLUDE THAT DEFENCE PLEADED BY
LESSEE IS NOT AVAILABLE TO HIM U/S 108(B)(e) WHICH HE COULD HAVE GOT U/S 56 OF CONTRACT ACT HAD IT NOT BEEN A CONTRACT OF LEASE IS MY WELL CONSIDERED OPINION.
Devajyoti Barman
(Expert) 12 November 2011
I do not think that the doctrine of frustration would apply here.
This is plain and simple case under Rent Act.
If there is change in circumstances leading to fall in rent in current market then the tenant can apply for fixation of fair rent before the Court or Rent Controller.
This is not the subject matter of Indian Contract Act.
prabhakar singh
(Expert) 12 November 2011
As it is a fixed term lease,and the building or premises is not to told to be under control of any Rent Control Act,we can not on our own assume jurisdiction of any rent Act.
Should any Rent control Act Applies,the Lease
Without any allotment order shall be void and lessee shall be deemed to be an unauthorized occupant.
This is a TPA governed case as already told by me.
