AIR 1973 SUPREME COURT 2380 ::1973 2 SCC 746 ::1974 JabLJ 6 ::1973 2 SCWR 37

Supreme Court Of India

(From: Madhya Pradesh)

Hon'ble Judge(s): D. G. Palekar, A. Alagiriswami , JJ

Contract Act (9 of 1872) , S.56— Frustration of contract -Auction sale of slack coal by Railway - Contract not in accordance with S. 175 Government of India Act - Refund of consideration with interest. Government of India Act (1935) (25 and 26 Geo Vi and 1 Edw VIII Cl.(2)) , S.175— Brief Note: - (A) The plaintiff was the highest bidder at a Railway auction sale of slack coal under the honest and reasonable belief that he would be allowed to transport the coal to his destination but he could not transport it due to the unreasonable attitude of the Coal Commissioner, although no condition had been imposed by him at the time of granting permission for the auction that the coal would not be allowed to be transported as it was to be consumed locally. Later on, the parties proceeded on the basis that the auction sale was to be cancelled and the plaintiff refunded the entire amount of consideration deposited by him with the Railway. By this time much of the coal had been lost and ultimately the Railway refused to refund the amount to the plaintiff apparently because it had re-auctioned the coal for a paltry amount and as such it would have been in difficulty to explain the loss caused. The plaintiff therefore sued for refund of consideration with interest. Held that there was a frustration of the contract and that in any case the contr....