Case Name : South East Asia Marine Engineering and Constructions Ltd (SEAMEC Ltd) vs Oil India Ltd
Case Reference: (2020) 4 SCR 254 :
Neutral Citation:
Case Number: CA 673/2012
Court: Supreme Court
Bench: 03
Coram: NV Ramana (Author), M Shantanagoudar, Ajay Rastogi
Date: 11.05.2020
Impossibility, Frustration of Contracts
When parties have not provided what would happen when an event renders the performance of the contract impossible, section 56 comes into effect. (Para 20) In view of section 56, parties are exempted from further performance and the contract becomes void. Parties have the option to choose the consequences that flows on the happening of an uncertain future event, as permissible under section 32. The effect of doctrine of frustration is that it discharges all parties from future obligation. (Para 26)
Restitution for frustration
Section 65 provides for a limited mechanism to ameliorate the consequences of frustration. (Para 23)
– Refer also: Satyabrata Ghose vs Mugneeram Bangur, AIR 1954 44 (Para 15) Doctrine of supervening impossibility and illegality; The word impossible must be taken practically and not literally. Section 56 lays down a positive law and does not leave the matter to be determined according to the intention of the parties. Fibrosa Spolka Akeyjna vs Fairbarin Lawson Combe Barbour Ltd, (1942) UKHL 4 Recognised harsh consequences of frustration; moderating it by introducing law of restitution.
See also: A&C Act, 1996 - Section 34 A&C Act, 1996 - Section 37 Contracts - Section 32 Contracts - Section 65