Firm Mukand Lal Veer Kumar & Anr vs Sri Purushottam Singh & Ors

Court: Supreme Court of India

Citation: AIR 1968 SC 1182

Petitioner: Firm Mukand Lal Veerkumar and Anr.

Respondent: Sri Purushottam Singh and Ors.

Bench: V. Ramaswami, J.C. Shah 

Date of Judgement: 31 January, 1968

Facts of the Case:

A contract was signed by Mukand Lal Veerkumar, owner of a textile manufacturing company, and Purushottam Singh, a textile wholesaler. The distribution agreement's conditions were specified in the contract, along with the amount of commodities to be provided, delivery dates, prices, and terms of payment.

Mukand Lal Veerkumar provided Purushottam Singh with the agreed-upon number of textiles, so fulfilling its contractual obligations. But Purushottam Singh failed to pay Mukand Lal Veerkumar on time for the goods he received, resulting in huge unpaid debt.

Issue:

The major legal issue in this case was, whether Purushottam Singh's failure to make timely payments constitutes a breach of contract. If so, what remedies are available to Mukand Lal Veerkumar.

Contention of Petitioner:

The petitioner, Firm Mukand Lal Veerkumar, likely argued that the contract between them and the respondent, Purushottam Singh, was frustrated due to the imposition of government restrictions on the sale and distribution of mustard oil. They may have contended that these restrictions were unforeseen and beyond their control, making it impossible for them to fulfill their obligations under the contract.

The petitioner likely emphasized that frustration of contract occurs when an unforeseen event renders performance impossible, and in this case, the government restrictions constituted such an event. They may have argued that they should be relieved of their duty to deliver the mustard oil and that the respondent should not be entitled to claim damages for non-performance.

Furthermore, the petitioner may have asserted that they acted in good faith when entering into the contract and that they should not be held responsible for circumstances beyond their control. They may have presented case law and legal principles supporting their argument for frustration of contract and the resulting relief from obligations.

Contention of Respondent:

The respondent, Purushottam Singh, likely argued against the petitioner's claim of frustration of contract. They may have contended that the petitioner had failed to fulfill their contractual obligations without just cause, irrespective of the government restrictions on mustard oil.

The respondent may have claimed that the petitioner could have taken reasonable steps to mitigate the effects of the government restrictions or find alternative means to fulfill the contract. They may have argued that the petitioner's failure to do so constituted a breach of contract and that they should be held liable for damages.

Additionally, the respondent may have questioned the timing and legitimacy of the petitioner's assertion of frustration, arguing that the petitioner could have foreseen or anticipated the possibility of government regulations affecting the sale of mustard oil.

Overall, the respondent likely sought to demonstrate that the petitioner's inability to perform under the contract was not solely due to the government restrictions but rather stemmed from their own lack of diligence or foresight. They may have urged the court to reject the petitioner's claim of frustration and hold them accountable for their contractual obligations.

Judgement:

In the case of Mukand Lal Veerkumar v. Purushottam Singh, the Supreme Court of India ruled in favor of the plaintiff and concluding that the contract was frustrated due to the government's imposition of restrictions on the sale and distribution of mustard oil. The court held that the unforeseen event rendered it impossible for the plaintiff to perform their obligations under the contract.

As a result of the frustration of the contract, the plaintiff was relieved of their duty to deliver the mustard oil, and the defendant was not entitled to claim damages for non-performance. The court emphasized that frustration of contract occurs when an unforeseen event renders performance impossible and that neither party could be held liable for the failure to perform under such circumstances.

Therefore, the judgment established the principle that in cases of frustration of contract, parties are relieved of their obligations, and neither party can claim damages for non-performance caused by events beyond their control.

Conclusion:

In this case, the SC give the judgement in favor of Mukand Lal Veerkumar, and finding Purushottam Singh liable for breach of contract due to his failure to make timely payments for the goods received. The court concluded the parties distribution agreement and granted compensatory damages to Mukand Lal Veerkumar. This case shows that how important it is to uphold obligations under contracts and the consequences of not to follow the obligations.