Business Law Assignment

Review of a Recent Case

Relating to the Indian Contracts Act, 1972
Submitted By Sambit Rath
Roll No. : UM14103, Section B


























Times of India Online , Kolkatta Edition, 30-07-2014
Assignment on the Indian Contract Act, 1972
Case:
16 UPA ministers have been served Eviction Notice and penalised up to 2.5 Lacs.
As per the Case:
Sixteen former UPA ministers overstaying in government bungalows have been
served eviction notices. The ministers owe a total of Rs 21 lakh approximately for one
months unauthorized stay ending July 26. In a written reply submitted in the Lok Sabha,
urban development minister Venkaiah Naidu said that the penalties range from Rs 53,250 to
Rs 2,43,678 per month for overstaying.
The list of former ministers who are in unauthorized possession of such bungalows
include Kapil Sibal, Ajit Singh, Farooq Abdullah, Beni Prasad Verma, Pallam Raju, Girija Vyas,
Krishna Tirath, Srikant Jena, Sachin Pilot, Jitendra Singh, Pradip Jain Aditya, Porika Balram
Naik, Killi Kriparani and Manikrao Gavit.
Naidu said another 21 former ministers are staying in general pool bungalows and
they have been given 15 days to move into their entitled accommodation to be provided by
respective House Committees.
Provision of the Indian Contract Act, 1972 relevant to the above mentioned case:
According to Indian Contract Act, 1972 a Contract may be discharged in any one of
the 6 ways.
By Performance
By Mutual Agreement
By operation of Law
By impossibility of Performance
By lapse of time
By breach

Also Section 73 of the Indian Contracts Act, 1972 provides that,
When a contract has been broken, the party who suffers by such breach is entitled to receive, from
the party who has broken the contract, compensation for any loss or damage caused to him thereby,
which naturally arose in the usual course of things from such breach, or which the parties knew, when
they made the contract, to be likely to result from the breach of it.
Such compensation is not to be given for any remote and indirect loss or damage sustained by reason
of the breach.
Compensation for failure to discharge obligation resembling those created by contract.-When an
obligation resembling those created by contract has been incurred and has not been discharged, any
person injured by the failure to discharge it is entitled to receive the same compensation from the
party in default, as if such person had contracted to discharge it and had broken his contract.
Explanation.-In estimating the loss or damage arising from a breach of contract, the means which
existed of remedying the inconvenience caused-by the non-performance of the contract must be
taken into account.
Analysis of the Facts of the case:
In this case the contract has been discharged because of lapse of time of contract.
The guilty party had been given the govt. bungalows to stay until their working period June
26. But even after the lapse of time the properties were not vacated by the said 16
ministers. So contract was void for the members.
Here since the contract was broken by the ministers, they can be asked to pay as
compensation for damages (according to Section 73 of Indian Contract Act, 1972) as those
properties could have been given to other ministers by the government. That is why they
have been asked to pay a sum of penalties ranging from Rs 53,250 to Rs 2,43,678 per month
for overstaying.
Conclusion according to Personal Viewpoint:
After analysing the case using the Indian Contract Act, 1972 in my opinion the Notice served
and the penalties given to the 16 ministers are appropriate.