Satyabrata Ghose v. Mugneeram Bangur & Co
🧾 Case Title:
Satyabrata Ghose v. Mugneeram Bangur & Co.
Citation: AIR 1954 SC 44
📌 Court:
Supreme Court of India
⚖️ Bench:
Justice Mukherjea (delivered the judgment)
🧑⚖️ Area of Law Involved:
Contract Law – Doctrine of Frustration of Contract under Section 56 of the Indian Contract Act, 1872.
1. Background and Facts of the Case:
Parties involved:
Plaintiff: Satyabrata Ghose
Defendant: Mugneeram Bangur & Co., a real estate company
The defendant company launched a real estate development scheme to sell plots of land.
Satyabrata Ghose entered into a contract to purchase a plot and paid an advance.
Before the land was handed over, the government requisitioned the land (took it over temporarily for wartime use).
The defendant claimed that performance of the contract became impossible due to requisition, and treated the contract as frustrated.
The plaintiff sued for specific performance of the contract or refund of advance.
2. Legal Issue:
Whether the requisitioning of land by the government amounted to frustration of contract under Section 56 of the Indian Contract Act, 1872?
3. Relevant Law:
🔹 Section 56 – Indian Contract Act, 1872:
Deals with “Agreement to do impossible act” and “Frustration of contract”.
If an act becomes impossible or unlawful after the contract is made, and without fault of the parties, the contract becomes void.
4. Arguments:
🔸 Defendant’s Argument (Mugneeram Bangur & Co.):
Since the land was requisitioned, they couldn’t deliver it.
Claimed the contract was frustrated and hence no longer enforceable.
🔸 Plaintiff’s Argument (Satyabrata Ghose):
Requisition was temporary, not permanent.
The performance was delayed, not made impossible.
He wanted specific performance once the land became available.
5. Judgment and Reasoning:
✅ The Supreme Court ruled in favor of Satyabrata Ghose, and held:
Temporary requisition of land does not make the contract impossible to perform.
The frustration of contract under Section 56 does not apply when performance is delayed, not impossible.
The requisition was temporary, and thus the contract could still be performed in the future.
Physical or literal impossibility is not required for frustration.
The Court emphasized that "impracticability" or "commercial sterility" is not enough.
The doctrine should be applied narrowly and only in cases of absolute impossibility.
English doctrine of frustration not strictly applicable.
While Indian law is similar to English law, the wording of Section 56 is broader, covering both physical and legal impossibility.
But courts should interpret it strictly, to avoid unnecessary discharge of contractual obligations.
6. Key Legal Principles from the Case:
| Legal Principle | Explanation |
|---|---|
| Frustration must be absolute | The contract must become impossible to perform, not merely inconvenient or delayed. |
| Temporary impossibility ≠ frustration | Requisition or temporary interference does not automatically frustrate a contract. |
| Strict interpretation of Section 56 | Courts should not easily allow parties to escape contracts by claiming frustration. |
7. Importance and Impact of the Judgment:
Landmark interpretation of Section 56 of the Indian Contract Act.
Prevented misuse of the doctrine of frustration by parties trying to avoid obligations.
Clarified that temporary difficulty or delay does not void a contract.
Balanced commercial certainty with practicality of contract performance.
8. Conclusion:
In Satyabrata Ghose v. Mugneeram Bangur & Co., the Supreme Court upheld the principle that a contract is not frustrated merely because performance is delayed due to temporary government action. The decision is a leading authority on frustration of contract in India and continues to guide courts in cases where impossibility or impracticability of performance is argued.
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