Doctrine of Impossibility — the contract law concept SC says also applies to court orders

The Supreme Court of India | Photo : Manisha Mondal | ThePrint

New Delhi: While staying an Allahabad High Court order asking the Uttar Pradesh government to implement a series of measures to manage Covid-19, the Supreme Court Friday said “the doctrine of impossibility… would be equally applicable to court orders as well”.

The observation was made by a bench comprising Justice Vineet Saran and Justice B.R. Gavai, on the Centre’s appeal against an Allahabad HC order passed on 17 May, which suggested several measures for the development of medical infrastructure in the state and observed that the entire healthcare system in villages and small cities of the state was “Ram bharose (at God’s mercy)”.

In its order, the apex court appreciated the efforts of various high courts in taking up matters related to the management of Covid-19 in parts of the country but said “sometimes unwittingly, the Courts overstep and pass certain orders which may not be capable of being implemented”.

The court then asserted that “the High Court should normally consider the possibility of the implementation of the directions given by it, and such directions which are incapable of being implemented should be avoided”.

“The doctrine of impossibility, in our view, would be equally applicable to Court orders as well,” it added.

ThePrint explains what the ‘doctrine of impossibility’ means.

What is the doctrine of impossibility?

The doctrine of impossibility is a contract law concept and refers to situations in which it is impossible for a party to a contract to perform its obligations under it.

Section 56 of the Indian Contract Act 1872 states that “an agreement to do an act impossible in itself is void”.

It also talks about a scenario in which an act becomes impossible or unlawful or illegal, after the contract was drawn.

The provision notes that such a contract also becomes void when the act becomes impossible or unlawful. A contract is typically said to have been ‘frustrated’ if the performance of such a contract becomes impossible.

Section 56 lists down examples of such scenarios. One of the examples says that an agreement by which “A agrees with B to discover treasure by magic” is void. Another example said, “A contracts to act at a theatre for six months in consideration of a sum paid in advance by B. On several occasions A is too ill to act. The contract to act on those occasions becomes void.”

‘Impossible act’ according to Indian Contract Act and SC

In a landmark 1953 judgment, which is still followed by the courts when dealing with Section 56, the Supreme Court had explained that the first part of the provision “speaks of something which is impossible inherently or by its very nature, and no one can obviously be directed to an act”.

An example of this “inherent impossibility” is the example of one party agreeing to “discover treasure by magic”.

The second party of the provision talks about a “supervening impossibility or illegality of the act agreed to be done”. With regard to this, the court explained that the impossibility being spoken of in this provision is not “physical or literal impossibility”. It noted that “the performance of any act may not be literally impossible but it may be impracticable and useless from the point of view of the object and purpose which the parties had in view and if an untoward event”.

Section 56 also covers ‘force majeure’ events, if they are not covered by the contract. The provision, therefore, covers death or incapacity of a party to a contract, government interventions, etc.

However, conversely, it has been held that a mere rise in cost or expense, or a rise in price making the contract more expensive to perform would not frustrate a contract.

Last year, steel importers had approached the Bombay High Court relying on Section 56, and had sought a restrain on the encashment of their letters of credit by Korea-based exporters. The petitioners had contended that in view of the Covid-19 lockdown, their contracts with the exporters were terminated as “unenforceable on account of frustration, impossibility and impracticability”.

The high court, however, refused to allow their plea, observing, among other things, that the lockdown was only temporary and cannot allow them to “resile from its contractual obligations…of making payments”.

Allahabad HC’s ‘unimplementable’ orders

During the SC hearing Friday on the Allahabad High Court’s orders, Solicitor General Tushar Mehta referred to several of the directions passed by the high court and submitted that “howsoever much the State may be desirous of implementing the directions issued by the High Court, the same are incapable of being implemented”.

For instance, the apex court noted that the high court has directed that every ‘B’ grade and ‘C’ grade town of the state should be provided with at least 20 ambulances and that every village should be provided with at least 2 ambulances with intensive care unit (ICU) facilities. All this had been ordered to be done within a month.

However, Mehta said there are over 97,000 villages in UP and hence, it is “practically and humanly impossible” to provide two ambulances with such facilities in each village in such a short period of time.

He told the court that while the government is working to provide such facilities, such an order “would cause embarrassment to the State Government and officers who may not be able to implement the same and could be hauled up by the Court”.

This is the second Allahabad HC order relating to Covid-19 management in the state that the Supreme Court has stayed.

An earlier order, passed on 19 April, imposing a near lockdown in five cities in the state was stayed by the top court. This was after the UP government told the court that the HC order will create immense administrative difficulties and that a lockdown by a judicial order may not be the right approach.