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PETITIONER: VISWESARDAS GOKULDAS

       Vs.

RESPONDENT: B. K. NARAYAN SINGH & ANR.

DATE OF JUDGMENT: 06/02/1969

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. SIKRI, S.M. HEGDE, K.S.

CITATION:  1969 AIR 1157            1969 SCR  (3) 581  1969 SCC  (1) 547

ACT: Contract Act, 1872 (9 of 1872), ss. 2 (6), 3 and 7-Suit  for specific performance of contract-Contract whether concluded- Acceptance  of  offer through plaint filed in  another  suit whether  constitutes  proper acceptance-Service of  copy  of plaint whether constitutes communication of Acceptance.

HEADNOTE: Under  a contract dated August 3, 1957 the defendant  agreed to sell to the plaintiffs 40,000 tons of float iron lying in a  mining area in the Hosadurgo Taluka in Mysore State,  and gave, them a right to win and remove iron ore.  On September 2, 1957, the defendant wrote to the plaintiffs          that further to the agreement dated August 3, 1957, he agreed  to assign    the  said  lease area of 184 acres  for  iron  and manganese ores to the plaintiffs subject to their paying one lakh  and eighty thousand rupees  within three months.   The three  months expired on November 6, 1957 without the  offer being  accepted by the plaintiffs orally or by  letter.   On October  31,  1957  the defendant posted  a  letter  to  the plaintiffs  revoking  the  offer,  which  reached  them   on November  6, 1957.  The plaintiffs instituted a  suit  (O.S. No.  55  of  1957) against the defendant  alleging  that  by contract dated September 2, 1957 the defendant had agreed to assign  to  the  plaintiffs his leasehold  interest  in  the aforesaid   184   acres  of  land  and   claiming   specific performance  of the contract.  The trial court  decreed  the suit.   The  defendant appealed to the High Court.   On  the question whether the offer made in the defendant’s letter of September  2, 1957 had been accepted by the  plaintiffs  the High Court held- that the plaintiffs had accepted the said offer  in  their  plaint in another  suit  relating  to  the possession of the same land (O.S. No. 46 of 1957) a copy  of which was served on the defendant on November 5, 1957 a  day earlier  than  the defendant’ s letter  revoking  the  offer reached  the plaintiffs.  Despite this finding,  on  another ground,  the  High Court allowed the  defendant  appeal  and dismissed  the  suit,  namely, O.S. No.  55  of  1957.   The plaintiff appealed with certificate to this Court. HELD : The appeal must be dismissed on the ground that there

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was no concluded contract between the parties. [585 C-D] The letter dated September 2, 1957 sent by the defendant  to the  plaintiffs, though worded as an agreement was in  point of  law  an  offer only.  The defendant was  at  liberty  to revoke  the offer at any time before its acceptance  by  the plaintiffs.   The  defendant’s  letter  revoking  the  offer reached  the  plaintiffs on November 6. 1957.   Before  that date  the plaintiffs did not accept the offer either  orally or by letter.  The High Court was wrong in holding that  the plaintiffs accepted the offer by their plaint in O.S. No. 46 of  1957  and that this acceptance was communicated  to  the defendant before November 6, 1957. [583 B-B] Considering  the  contents of its  relevant  paragraphs  the plaint in question was not in point of law an acceptance  of the  offer, nor was it intended to be an acceptance.  It  is not usual to accept a business offer by a plaint; nor is  it usual to communicate an acceptance by serving a copy 592 of  the  plaint through the medium of the Court.   To  hold thus  would be straining the language of s-S. 2(6), 3 and  7 of the Contract Act. [585 A-B] The  old chancery practice under which the mere filing of  a bill in a suit to enforce specific performance was  regarded as sufficient acceptance of the defendant’s offer unless the offer  had  been withdrawn before the filing  of  the  suit, cannot  be applicable under the present Indian practice  and procedure. [585 C-E] The  argument based on Bloxam’s case that the  communication of an assent was not necessary and mere mental assent of the plaintiffs  to the defendant’s proposal was sufficient.  was misconceived. [585 F] Boys v. Ayerst, (1822) 6 Madd. 316, 326=56 E.R. 11 12, 1115, Agar  v.  Biden, (1833) 2 L.J. Ch. 3 and Bloxam’s  case,  33 Beav 529, distinguished. In re : Pellatt’s case, L.R. 2  Ch. App. 527, applied.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1851 of 1968. Appeal  from the judgment and decree dated June 19, 1963  of the Mysore High Court in Regular Appeal No. 231 of 1960. Shyamala Pappu and Vineet Kumar, for the appellant. K.   R. Chaudhuri and K. Rajendra Chaudhuri, for  respondent No. 1. S.   V.  Gupte,  G, R. Ethirajulu Naidu, B. N.  Sen,  0.  P. Khaitan, A.    N.  Parikh, K. R. Chaudhuri and K.  Rajendra Chaudhuri, for respondent to. 2 The Judgment of the Court was delivered by Bachawat  J. The plaintiffs instituted a suit (O.s. No.  515 of  1957 against the defendant alleging that by  a  contract dated  September 2, 1957 the defendant had agreed to  assign to  the  plaintiffs his leasehold interest under  a,  mining lease in respect of 184 acres of land in Kudrekanave Kaval, Hosadurga  Taluk, and claiming specific performance  of  the contract.  The Trial Court decreed the suit.  The  defendant filed an appeal against the decree.  The High Court  allowed the  appeal and dismissed the suit.  The present appeal  has been  filed by the plaintiffs after obtaining a  certificate under  Art.  133  of the Constitution.   The  main  question arising  in this appeal is whether there. was a contract  as alleged in the plaint. Under a contract dated August 3, 1957, the defendant  agreed to sell to the plaintiffs 40000 tons of float iron lying  in the aforesaid mining area and gave them the right to win and

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remove  the  iron ore.  We are not directly  concerned  with this  contract  in this appeal.  On September  2,  1957  the defendant wrote the following letter to the plaintiffs:-                             583               "Further  to our agreement  dated  3rd  August               1957  I hereby agree, to assign the  sad  lone               area of 184 acres for iron and manngase  ores,               in your favour, subject to your paving me  one               lakh and eighty thousand rupees at your option               to be decided by you within three months  from               this date." This document though worded as an agreement was in point  of law  an offer only.  As a matter of fact,. on  September  2, 1957  the plaintiffs had not agreed to purchase  the  mining lease.  Until both parties were bound there could be no con- cluded  contract.   The promise to keep the offer  open  for three  months was not supported by any  consideration.   The defendant  was  at liberty to revoke the offer at  any  tune before,its  acceptance  by the plaintiffs.  on  October  31, 1957,  the  defendant  posted a letter  to  the  ’Plaintiffs revoking  the offer.  This letter reached the plaintiffs  on November 6, ’1957.  Before that date the,plaintiffs did  not accept the offer either orally or by any letter sent to  the defendant. On November 1, 1957, the plaintiffs filed suit (O.S. No.  46 of  1957) against the defendant claiming a declaration  that they  were  entitled to remain in possession of  the  mining area.   The  primary object of the suit was to  enforce  the plaintiffs’  right under the contract dated August 3,  1957. The  defendant filed his written statement in that  suit  on November 5, 1957.  The High Court  held that the  plaintiffs accepted the offer of September 2, 1957 by  their plaint  in O.S.   No.  46  of  1957  and  that  this   acceptance   was communicated to, the defendant before November6, 1957.    We are unable to agree with this finding. The pleadings and issues raised the question whether a  con- tract  was  made on September 2, 1957.   If  the  plaintiffs desired to set up a new case that the contract was concluded in  November 1957 they should have amended  their  pleadings accordingly.   We need not say anything more on  this  point because we find that the plaintiffs have failed to establish the new case. In paragraphs 14 and 19 of the plaint in O.S. No. 46 of 1957 the plaintiffs alleged that by the letter dated September 2, 1957  the defendant agreed to assign the mining lease,  that they  ,were  ready and willing to perform the  contract  and that  they reserved their right to file a suit for  specific performance.   The  suggestion  was that  the  contract  was concluded  on  September 2, 1957 and that in breach  of  the contract  the defendant failed to apply for and  obtain  the necessary   consent  of  the  central  government   to   the assignment of the mining lease.  Paragraph 17 and the prayer portion  of  the  plaint suggested that by  virtue  of  this contract and the earlier contract dated August 3, 1957 they were entitled to remain in possession of the mining area. 584 The  Suggestion  was an atempt to add to the  terms  of  the offer  of  September  2 1957.  On acceptance  of  the  offer according  to  its  terms the plaintiffs  could  not  get  a possessory  right  before execution of a conveyance  of  the mining  lease.   In  point of law, the  Plaint  was  not  an acceptance  of  the  offer, not was it  intended  to  be  an acceptance.  It is not usual to accept a business offer by a plaint;  nor  is it usual to communicate  an  acceptance  by serving  a  copy  of the plaint through the  medium  of  the

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Court. We shall be straining the language of ss. 2(6), 3 & 7 the  Contract Act if we were to hold that the Plaint was  an acceptance and  that the service of a copy of  the  plaint along  with the writ of summons was a communication of the acceptance. Under  the old chancery practice the mere filing of a bill in  a suit to enforce specific performance was  regarded  as sufficient  acceptance of the defendant’s offer  unless  the offer had been withdrawn before, the filing of the suit, see Boys  v.  Ayerst(1),  Agar  v.  Biden(2),  Fry  on  Specific Performance,  8th  ed.,  art.  306,  page  142,  Pomeroy  on Specific Performance, 3rd ed., art. 66, PP. 169-170.  It may well  be  doubted  whether this rule  can  apply  under  our present  practice  and procedure.  A plaint in  a  suit  for specific performance should allege a concluded contract, see the  Code of Civil Procedure 1st Schedule Appendix  A,  Form No. 48.  The offer as well as the acceptance should Pr=& the institution  of the suit.  However, the precise  point  does not arise in this case.  O.S. No. 46 of 1957 was not a  suit for  specific  performance  of  the  contract.   Before  the present  suit for specific performance of the  contract  was instituted, the offer had been withdrawn. Counsel  for the appellant relying on Bloxam’s Case(3)  sub- mitted  that  the  communication of an  acceptance  was  not necessary. The argument is misconceived.  We have held  that the  plaint  in O.S. No. 46 of 1957 was not  an  acceptance. There  was  no other acceptance either oral or  in  writing. Mere  mental  assent  of the plaintiffs  to  the  defendants proposal  is  not  sufficient.  In  the  peculiar  facts  of Bloxam’s case a contract to take shares was concluded by  an oral application for shares followed by allotment though  no notice of allotment was given to the applicant., Ordinarily’ there  is no contract unless there is an acceptance  of  the application for shares and the acceptance is communicated to the applicant, see In re: Pellatt’s Case(4) . In the last case Lord Cairns, L.J. pointed out that Bloxam’s case turned on its own special facts.  Bloxam was orally in- formed that if he did not receive an answer within a certain time  he  was to consider his application granted.   In  the peculiar cir- (1)  1822 .6 Madd. 316, 326= 56 E.R. 11 1 2, 1115. (3)  33 Beav. 529. (2)  1833 2 L. J. Ch. 3. (4)  L.R. 2 Ch.  App. 527. 5 85 cumstances,  Bloxam  could be regarded as  having  dispensed with  the necessity of the communication of the  acceptance. In the present case we are not concerned with a contract  to take shares.  The defendant made an offer to assign a mining lease.   No  acceptance  was made  or  communicated  to  the defendant  before  hi  withdrew the  offer.   There  was  no concluded, contract and the appeal must fail on this ground. The High Court held that the assignment of the mining  lease could not be lawfully made without the sanction of the State Government  and the approval of the Central  Government  and that as the governments concerned could not be compelled  to accord the necessary sanction and approval, the contract  to assign the mining lease could not be specifically  performed and on this ground the High Court dismissed the suit.  We do not  think  it  necessary to express  any  opinion  on  this question.   ’Me appeal is liable to be dismissed in view  of our conclusion. that there was no concluded contract between the parties. In the result, the appeal is dismissed.  The appellant  will pay one set of costs to the respondents.

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G.C.                            Appeal dismissed. 586