The division judge bench of the Jharkhand High Court held that Section 56 of the Indian Contract Act provides that an agreement to do an act impossible in itself is void, and impossibility, as envisaged under section 56, is not the literal impossibility and would refer to a situation in which it becomes impermissible before the parties to carry on their respective obligations.
Brief facts
The factual matrix of the case is that the respondent got a license for on payment of Rs.18 lacs as a license fee. Furthermore, the Respondent couldn’t carry on the business in view of the direction issued in “State of T.N. v. K. Balu. Thereafter, the Respondent approached the writ court in order to challenge the demand of Rs.18 lacs and the writ court remanded the matter to the Assistant Commissioner, Excise and the order was passed in which the respondent was directed to pay Rs.18 lacs as license fee.
Observations of the court
The Hon’ble Court observed that the Apex Court in the case of State of T.N. v. K. Balu issued a direction that prohibited the running of a bar within 500 meters of the national and state highways and while so, it was not legally permissible for the respondent to utilize the license granted to him on payment of Rs.18 lacs as license fee. The judgment rendered by the Supreme Court is the law of the land and binding on all authorities under Article 141 of the Constitution of India.
It was furthermore observed that Section 56 of the Indian Contract Act states that an agreement to perform an act that is impossible on its own is null and void. It is a well-established fact that the impossible envisioned by section 56 does not mean literal impossibility; rather, it refers to a circumstance in which it becomes improper for the parties to continue fulfilling their respective responsibilities.
Based on these considerations, the court was of the view that the decision rendered by the writ court in which it was held that the respondent was entitled to a proportionate reduction in the license fee requires no interference.
The decision of the court
With the above direction, the court disposed of the present appeal.
Case Title: The State of Jharkhand. Vs Gurdeep Singh
Coram: Hon’ble Mr. Acting Chief Justice Shree Chandrashekhar, and Hon’ble Mr. Justice Arun Kumar Rai
Case No.: L.P.A. No. 548 of 2023
Advocate for the Appellant: Mr. Ravi Prakash Mishra, AC to AAG-II
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