Indian Precedents on Force majeure

Indian Precedents on Force majeure

How do the Indian precedents define Force Majeure?

Over the years, Indian Courts have dealt with various situations where they have defined or illustrated force majeure in different manners. Some of those are enlisted below.

a.In Dhanrajamal Gobindram vs Shamji Kalidas And Co., AIR 1961 SC 1285, the Supreme Court dealing with force majeure held that,

19. McCardie J. in Lebeaupin v. Crispin ([1920] 2 K.B. 714), has given an account of what is meant by “force majeure” with reference to its history. The expression “force majeure” is not a mere French version of the Latin expression “vis major”. It is undoubtedly a term of wider import. Difficulties have arisen in the past as to what could legitimately be included in “force majeure”. Judges have agreed that strikes, breakdown of machinery, which, though normally not included in “vis major” are included in “force majeure”. An analysis of rulings on the subject into which it is not necessary in this case to go, shows that where reference is made to “force majeure”, the intention is to save the performing party from the consequences of anything over which he has no control. This is the widest meaning that can be given to “force majeure”, and even if this be the meaning, it is obvious that the condition about “force majeure” in the agreement was not vague. The use of the word “usual” makes all the difference, and the meaning of the condition may be made certain by evidence about a force majeure clause, which was in contemplation of parties.

b.   In Energy Watchdog vs Central Electricity Regulatory, Civil Appeal Nos.5399-5400 of 2016, the Supreme Court held that,

Force majeure” is governed by the Indian Contract Act, 1872. The Supreme Court held: “In so far as a force majeure event occurs de hors the contract, it is dealt with by a rule of positive law under Section 56 of the Contract. The performance of an act may not be literally impossible but it may be impracticable and useless from the point of view”.

 c. Similarly, in Alopi Parshad & Sons Ltd. v. Union of India,[1960 (2) SCR 793], the Supreme Court observed that,

the Act does not enable a party to a contract to ignore the express covenants thereof and to claim payment of consideration, for performance of the contract at rates different from the stipulated rates, on a vague plea of equity. Parties to an executable contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate, for example, a wholly abnormal rise or fall in prices which is an unexpected obstacle to execution. This does not in itself get rid of the bargain they have made.”

At various points of time, different Courts of India and England have dealt with the subject matter of force majeure but the concept and substance of the entire concept more or less remains the same subject to facts and contracts which vary from case to case.

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