KEYWORDS: Concluded contract
As there was no concluded contract, the decree passed by him awarding compensation to the plaintiff for breach of contract cannot be sustained
AIR 1951 SC 184 : (1951) SCR 161
(SUPREME COURT OF INDIA)
|Col. D. I. Mac Pherson||Appellant|
|M. N. Appanna and another||Respondent|
(Before : Saiyid Fazl Ali, B. K. Mukherjea And N. Chandrasekhara Aiyar, JJ.)
Civil Appeal No. 35 of 1950, Decided on : 09-02-1951.
Contact—No concluded contract—Decree passed awarding compensation to the plaintiff for breach of contract cannot be sustained—offer and acceptance.
Counsel for the Parties:
Shri C. R. Pattabhi Raman, Advocate, instructed by Shri M. S. K. Sastri, Advocate for Appellant. Shri Jindra Lal, Advocate, instructed by Shri Rajinder Narain, Advocate for Respondents.
Fazl Ali, J—(on behalf of himself and Mukherjea And Chandrasekhara Aiyar JJ.)—This is an appeal from a judgment of the Judicial Commissioner of Coorg in a suit filed by respondent 1 (hereinafter referred to as the plaintiff) against the appellant (hereinafter referred to as defendant 1) and respondent 2 (herein after referred to as defendant 2), for the specific performance of a contract. Defendant 1 owned a bungalow in Mercara known as “Morvern Lodge.’ The suit which has given rise to this appeal was instituted by the plaintiff for the specific performance of an alleged contract of sale in respect of this bungalow.
2. It appears that defendant 1 owned certain estates in Mercara, and one Mr. White was an alternative Director in one of the estates, and Youngman was the manager of another estate also belonging to defendant 1 and was looking after “Morvern Lodge’’ during his absence. It seems that about the middle of 1944, the plaintiff asked White if be would cable to defendant 1 his offer of ` 4,000 for the bungalow, and, on 1-6-1944, White sent a cable to defendant 1 to the following effect:”Have enquiries Mercara bungalow if for sale, wire lowest figure.’’ On 24-7-1944, the plaintiff wrote to defendant 1 that he was prepared to purchase the bungalow for ` 5,000 and if the offer was acceptable to him, he (defendant 1) should inform the plaintiff to which bank he should issue a cheque in payment of the price. This letter was followed up by a cable from Youngman to defendant 1 to the following effect:”Have had offer Morvern Lodge rupees six thousand ,for immediate possession.’’ On 8-8-1944, Youngman received a cable from defendant 1 saying:
“Won’t accept less than rupees ten thousand.” On 7- 8-1944, the plaintiff wrote to Youngman asking him whether his offer had been accepted, and saying that he was prepared to accept any higher price if found reasonable. Meanwhile, on the 8th August, defendant 1 sent an airgraph to Youngman, which states inter alia:
“I got a cable from you a few days ago saying you had an offer of ` 6,000 for Morvern Lodge. At the same time I got one from White saying value of Bungalow was ` 10,000. So wired you-’’Won’t accept less than ` 10,000. “ ‘
On 9-8-1944, Youngman wrote to the plaintiff as follows:
“In reply to your letter, dated 7th August, I received yesterday a cable from Col. MacPherson regarding your offer of ` 6.000, which reads as follows:”Won’t accept less than rupees ten thousand” MacPherson.”
The plaintiff has stated in his plaint that this letter of Yoangman was received by him on 14-8-1944, and he immediately accepted the “counter-offer made by defendant 1,” and confirmed it in writing in a letter addressed to Youngman. In his evidence, however, the plaintiff has stated that he met Youngmen on the 11th August after receiving his letter and told him personally that he would pay ` 10,000 for the bungalow and will require immediate delivery. There was also some talk about the conveyance charges, and ultimately the plaintiff agreed to bear those charges. Afterwards, he wrote to Youngman a letter on the 14th August in which after referring to the conversation he had with the latter he stated as follows:
“I hereby confirm my oral offer of ten thousand for the bungalow. I shall be grateful if you will kindly hurry up with consultation with your lawyers at Madras and make arrangement to receive the money and hand over the bungalow as early as practicable.”
It appears that 3 days later, i. e, on the 17th August, one Subbayya Wrote to Youngman stating that “he confirmed his offer of ` 10,500 made to him (Youngman) the previous dey for the purchase of the bungalow,” and he excepted that the latter had cabled to defendant 1 communicating the offer as promised. It seems that Youngman did not communicate Subbayya’s offer to defendant 1 but sent a cable to him on the 26th August to the following effect:”Offered ten thousand Morvern Lodge immediate possession. May I sell.’’On the same day, White cabled to defendant 1 in the following terms:
“Hold offer for Morvern Bungalow rupees eleven thousand cash subject immediately acceptance and occupation. Strongly recommend acceptance.”
On the 29th August, Youngman sent an airgraph to defendant 1 in which he wrote as follows:
“Thank you for your Airgraph letters of 8th August which reached me on 24th instant. I cabled you on Saturday an offer of ` 10,000 for Morvern Lodge from the would-be purchaser who previously had offered ` 6,000, but I had a call from White a day or two ago and he tells me that he cabled an offer on the same day of ` ll,000. I expect you will have answered these and will have accepted White’s offer. If you have decided will you please arrange for a Power-of-Attorney to be prepared as soon as possible.”
In the meantime, defendant 1 sent a cable to White to the following effect:
“Accept rupees eleven thousand Morvern Lodge occupation permitted, when full amount deposited my account Mircantile Bank Madras inform Youngman.”
Thereafter, defendant 1 paid the amount of Rs, 11,000 and occupied the bungalow.
3. The question to be decided in this Case is whether in view of the correspondence which has been reproduced, it could be held that there was a concluded contract for the sale of “Morvern Lodge” in favour of the plaintiff on the14th August, as stated by him in the plaint. The Judicial Commissioner of Coorg who tried the suit held that there was a concluded contract, but, instead of giving to the plaintiff a decree for specific performance, awarded a sum of ` 3,000 as compensation to him. Against this decree, defendant 1 alone has appealed, after obtaining a certificate under S. 109 (c), Civil P. C. from the Judicial Commissioner. The plaintiff has not preferred any appeal.
4. The plaintiff’s case, (supra) is that the cable sent by defendant 1 on the 5th August, and received by Youngman on the 8th, to the effect that he would not accept less than ` 10,000, was a counter-offer made by him through Youngman to the plaintiff, and the contract was complete as soon as he accepted it. We however find it difficult to hold on the entire facts of the case that there was any concluded contract on 14-8-1944, and we are supported in this view by the well-known case of Harvey v. Facy,(1893) A. C. 552:’ (62 L. J. P. C. 127), in which the facts were somewhat similar to those of the present case. In that case, the appellants had telegraphed to the respondents “Wil1 you sell us B. H.P.?’ Telegraph lowest cash price’’, and the respondents had telegraphed in reply. “Lowest price for B. H. P. £900,” and then the appellants telegraphed. “we agree to buy B. H. P’. for £900 asked by you. Please send us your title deed in order that we may get early possession,.’ but received no reply. On these facts, the Privy Council held that there was no contract, and Lord Norris, who delivered the judgment of the Board, observed as follows:
“The third telegram from the appellants treats the answer of L. M. Facey stating his lowest price as an unconditional offer to sell to them at the price named. Their Lordships cannot treat the telegram from L.M. Facey as binding him in any respect, except to the extent it does by its terms, viz., the lowest price. Everything else is left open, and the reply telegram from the appellants cannot be treated as an acceptance of an offer to sell them ; it is an offer that required to be accepted by L. M. Facey. The contract could only be completed if L.M. Facey had accepted the appellant’s last telegram. It has been contended for the appellants that L. M. Facey’s telegram should be read as saying ‘yes’ to the first question put in the appellant’s telegram, but there is nothing to support, that contention. L. M. Facey’s telegram gives a precise answer to a precise question, viz., the price. The contract must appear by the telegrams, whereas the appellants are obliged to contend that an acceptance of the first question is to be implied. Their Lordships are of opinion that the mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at that price to the persons making the inquiry.”
5. The conclusion at which we have arrived is strengthened by certain facts which emerge from the correspondence between the parties. The real question is whether defendant had made a counter offer in his cable of 5th August or he was merely inviting offers. The plaintiff in his letter of 14th August addressed to Youngman, stated that he confirmed his oral offer of ten thousand for the bungalow, and he did not say in so many words that he accepted the ‘counter. offer’ of defendant 1. Similarly, in the cable which Youngman sent to: defendant 1 on 28th August, he did not state that the latter’s offer had been accepted, but stated that he had been offered ` 10,000 for the bungalow and concluded with the words “May I sell?” Neither party thus treated defendant 1’s cable as containing a counter-offer. On the other hand, they proceeded on the footing that the plaintiff had made an offer of ` 10,000 which was subject to acceptance by defendant 1. Apparently, defendant 1 was in communication not only with Yonngman but also White, and both of them rightly thought that no transaction could be concluded without obtaining defendant 1’s express assent to it.
6. Mr. Jindra Lal, counsel for the plaintiff, who pressed his points with force and ability, contended that by 26-8-1944, Youngman had come under the influence of the rival bidder or at least that of White who was supporting him, and the cable to defendant 1 was deliberately framed by Youngman in such a way as to prejudice the plaintiff. There is however nothing in the evidence to support such an extreme conclusion. On the other hand, Youngman has frankly stated in his evidence that he felt it improper to entertain Subbayya’s higher offer and did not communicate it to defendant 1. This statement is supported by the cable of 26th August, and, if Youngman can be said to have had any leaning at all, it was certainiy in favour of the plaintiff. In these circumstances, it would be difficult to hold that Youngman had deliberately misdescribed the plaintiff’s acceptance of the counter-offer as his offer in the cable which he sent on 26th August to defendant 1.
7. It seems to us that the view taken by the Judicial Commissioner is not correct, and, as there was no concluded contract, the decree passed by him awarding compensation to the plaintiff for breach of contract cannot be sustained. We therefore allow the appeal, set aside the judgment and decree of the Judicial Commissioner and dismiss the plaintiff’s suit. Having regard to the circumstances of the case, we make no order as to costs.