Court caseAIR 1971 SC 1756

Shortly before partition the owners of property in Gujranwala agreed to lease it and received money under the agreement. In August 1947 Gujranwala became part of Pakistan and the parties, who were in India, could neither deliver nor take possession. The lessees sued for the return of the money paid, contending that the agreement had become impossible of performance; the lessors argued that the property still existed and performance was not literally impossible.

The Supreme Court (Hegde J) held that the agreement had been frustrated. Following Satyabrata Ghose, the Court said that the word "impossible" in s. 56 is not used in the sense of physical or literal impossibility; the performance of an act may be impracticable and useless from the point of view of the object and purpose of the parties, and if an untoward event or change of circumstances totally upsets the very foundation on which the parties rested their bargain, the promisor may say that he never promised to do that. The lessees could not enjoy the property after partition; the contract was void and the money paid was recoverable.