Name: RaviTej Reddy H

ID: TB21003
Batch: PGCBM-40
Assignment: Indian Legal Environment

Referring through the facts of the case, I’ve here evaluated the Law of Impossibility as to
build up a legal defence for the company using the provisions of Indian Contract Act, 1872.

1. The Plaintiff company’s cause of action was raised when the Respondent company failed
to Accomplish the project contracted by 01/12/2020, due the Covid-19 induced lockdown by
Government of India, and invocation of National Disaster Management Act, 2005. The
Government of India exercising powers conferred under Section 6 and Section 10 of the Act
directed all the 32 States and Union Territories to enforce preventive measures, thus taking
the entire nation under lockdown with limited exceptions to essential industries, where the
respondent company doesn’t fall under the essential category. The lockdown continued for
75 days from 24/03/20 to 8/06/2020, during the 75 days the work related to the project was
halted, thus causing the inevitable delay which was beyond the control of the company thus
making it impossible to perform his duty towards the contract.

2. The Indian Contract Act, says that a contract is typically said to be frustrated when
performance of contract becomes impossible. The section 56 of the Indian Contract Act,
1856 which speaks about agreement to do impossible act, also covers ‘Force Majeure”
events which means unforeseeable circumstances that prevent someone from fulfilling a
contract which also includes government interventions.

Referring through the case of Taylor vs. Caldwell, where the doctrine of frustration was first
dealt. The court held that the defendant was excused as its performance became impossible
and in the case of Satyabrata Ghose vs. Mugneeram Bagnur, the supreme court held that
the English laws only have a persuasive value in India and relied upon Section 56 of
Contract Act, and held the word “Impossibility” has to be interpreted in practical sense and
not in literal sense. Through which an inference can be drawn from these cases where the
respondent company’s duty to complete the project on time was impossible due to the
induced lockdown.

Similarly, under unforeseeable circumstance of lockdown, the company was unable to

perform its duty towards the committed contract. Thus, causing the ultimate delay and by the
above cases as precedents the Plaintiff’s suit for Specific Performance of Contract, damages
for breach of contract and claiming of liquidated damages have no Locus Standi as The
Doctrine of frustration as provided under Section 56 of The Indian Contract Act, 1872 is an
exception to the general rule of contracts where compensation is provided in case of a loss.
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Hence it can be understood that if a contract gets frustrated without the fault of either parties
the performance of the contract becomes impossible.

Due to the loss of time and delay in completion of project due to lockdown, the respondent
company is not entitled to pay any damages under Section 73 and Section 74 of the Act.
The company is very much committed towards the completion of project even today, and
would like to alter the terms of contract under Section 62 of The Indian Contract Act, 1856.
And to set a new date for completion of project in best interest of mutual benefit, equity,
justice and good conscience.

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