By N. C. Jain, Advocate
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The
Law does not compel one to do that which one cannot
possibly perform. Where the law creates a duty or charge and circumstances
make it impossible to be performed for no fault of his, the law will, in
general, excuse him. The principle is expressed in the Latin maxim
‘impotentia excusat legam’ literally meaning ‘law excuses impossibility’.
The maxim is referred to in English judgments as ‘lex non cogit ad
impossibilia’ and is akin to Roman maxim ‘nemo tenetur ad impossibilia’.
2. As per Broom’s Legal Maxims “Where the law creates a duty
or charge, and the party is disabled to perform it, without any default in him,
and has no remedy over there, the law will in general excuse him, and though
impossibility of performance is in general no excuse for not performing an
obligation which a party has expressly undertaken by contract, yet when the
obligation is one implied by law, impossibility of performance is a good
excuse”.
3. Broom distinguishes obligation undertaken by the party
under a contract and one which is cast on him or implied by law. While the
former is not excused unless so provided expressly, the latter i.e.,
obligation implied by law stands excused by a supervening or other impossibility
beyond the control of the person obliged. The application of maxim in legally
implied obligation is illustrated by the case in which consignees of cargo are
prevented from unloading a ship promptly by reason of a dock strike. In the
absence of an express agreement to unload in a specified time, there was implied
obligation to unload within a reasonable time and the performance having become
impossible, the maxim ‘lex non cogit ad impossibilia, execuses it.
4. In Industrial Finance Corporation of India v. Spinning
and Weaving Mills, (2002) INSC 201, the Supreme Court was seized with the
question as to whether the guarantors of loan advanced by the plaintiff to the
respondent were discharged from their obligation on nationalisation of the
respondent’s undertaking and consequent vesting of its properties, which were
given as security, with the Government. Reliance was placed from the side of
guarantors on the provision of S. 141 of the contract Act under which a surety
is entitled to the benefit of every security which the creditor has against the
principal debtor and, if the creditor loses or without the consent of the surety
parts with the security, the surety is discharged to the extent of the value of
the security. The plea of ‘impotentia excusat legam’ from the side of the
plaintiff was sought to be countered on behalf of the sureties and it was argued
that loss of securities by the creditor will cover both voluntary and
involuntary act or acts of the creditor which will discharge the sureties from
their obligation to the extent of their value. After extensive discussion, the
Supreme Court held recourse to the principle of impossibility as misplaced and
held that despite vesting of properly in the government consequent to
nationalisation the contract of guarantee being an independent contract
unaffected by nationalisation and consequences thereof has, in all fairness, to
be honoured to fulfil the contractual obligation.
5. Even though the application of doctrine of impossibility
was considered not relevant, the IFCI decision (supra) makes in-depth
discussion of the doctrine. Even in matters of contractual obligation
distinction is to be drawn between cases where the event which causes the
impossibility was or might have been anticipated when the promisor, by an
absolute contract bound himself or where the impossibility arises from the act
or default of the promisor and cases where it cannot reasonably be supposed
to have been in the contemplation of the contracting parties when the contract
was made. In the latter case the principle of impossibility will apply. It
is for this reason that an act of God, in some cases, excuses the breach of
contract. It is not, however, uncommon in large contracts to incorporate a
force majeure clause providing for circumstances in which the performance
will be excused.
6. In Appeal No. 95/2007 decided on 17-3-2007 in the matter
of M/s. CSL Securities (P) Ltd v. Securities and Exchange Board of India,
the Securities Appellate Tribunal (SAT) relied on the doctrine of impossibility
as explained in the case of IFCI (supra) and held that if on
corporatisation, the erstwhile proprietor shareholder could not continue to be a
whole-time director for the required period of three years under Para 4 of
Schedule III of SEBI (Stock Brokers and Sub-brokers) Rules 1992, the company
will not be liable to pay the fees for the period for which the founder
shareholder has already been paid.
7. There are situations of impossibility sometimes in legal
provisions also. The maxim of ‘impotentia excusat lagam’ requires
application of legal provision keeping in view the impossibility of
implementation so as not to insist on application of that part of the provision
which is not capable of application. In Standard Chartered Bank v. the
Directorate of Enforcement, (2005) 4 SCC 50, the applicability of the
provision prescribing punishment of imprisonment and fine for an offence came to
be considered in the context of offence by corporations which, being juristic
persons, are incapable of being imprisoned. While both the majority as well as
minority judgments relied on the maxim ‘Lex non cogit ad impossibilia,
they differed on whether the entire provision is to be ignored or the same is to
be modified so as to remove the impossibility. Delivering the minority judgment
Srikrishna, J observed that the application of the maxim could persuade the
Court to ignore the language of the statutory provision in the case of juristic
person, there being no warrant for dissecting of the Section and treating only
one part as capable of implementation when the mandate of the Section is to
impose the whole of the prescribed punishment. K.J. Balkrishnan J, on the other
hand, delivering the majority decision, quoted from Bennions Statutory
Interpretation and observed that if an enactment requires what is legally
impossible, it will be presumed that Parliament intended it to be modified so as
to remove the impossibility element.
8. The principle also known as doctrine of frustration
finds expression in the Contract Act. As per Lord Radcliffe, “Frustration
occurs whenever the law recognises that without default of either party a
contractual obligation has become incapable of being performed, because the
circumstances in which performance is called for would render it a thing
radically different from that which was undertaken by the contract” (Davis
Contractors v. Fareham UDC, 1956AC696) S. 56 of the Contract Act provides
that an agreement to do an act impossible in itself is void. It further provides that a contract to do an act which, after the contract is made, becomes impossible or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the act becomes impossible or unlawful. Impossibility renders the act unlawful and therefore unenforceable.
