http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 5  

PETITIONER: COL. D.I.MAC PHERSON

       Vs.

RESPONDENT: M.N. APPANNA AND ANOTHER.

DATE OF JUDGMENT: 09/02/1951

BENCH: FAZAL ALI, SAIYID BENCH: FAZAL ALI, SAIYID MUKHERJEA, B.K. AIYAR, N. CHANDRASEKHARA

CITATION:  1951 AIR  184            1951 SCR  161

ACT:    Contract--Offer  and  acceptance--Statement.  of   lowest price and counter-offer distinguished.

HEADNOTE:    On receiving an offer from A for the purchase of a  house belonging to B, Y who was looking after the house, cabled to B  that  there was an offer of Rs. 6,000 for the  house.   B sent a cable in reply on the 5th August, 1944, that he would not  accept less than Rs. 10,000.  Y conveyed this  informa- tion  to A on the 9th and on the 14th A wrote a letter to  Y stating  that  he thereby confirmed the oral  offer  of  Rs. 10,000  that  he had made to Y on the 11th.  On the  26th  Y cabled  to B as follows: "Offered Rs. 10,000.  May I  sell". On  the same day, W, another friend  of B, with whom also  B was  in correspondence, sent an offer for Rs. 11,000  and  B accepted it.  A sued for specific performance alleging  that B’s  cable  of  the 5th was a counter-offer and  as  he  had accepted it on the 14th, there was a concluded contract  for sale in his favour on that day.    Held,  that  the cable sent by B on the 5th  was  a  mere statement  of  the lowest price at which he would  sell  and contained  no implied contract to sell at that  price.   A’s letter of the 14th was under the circumstances only a  fresh offer;  and as B had not accepted it there was no  concluded contract in favour of A. Harvey v. Facey [1803] A.C. 552 applied.

JUDGMENT: CIVIL  APPELLATE JURISDICTION.   Appeal from a judgment  and decree  of  the  Judicial Commissioner of  Coorg  dated  1st April, 1946, in Original Suit No, 1 of 1945. C.R. Pattabhi Raman, for the appellant. Jindra Lal, for the respondent.     1951.  February 9. The judgment of the Court was  deliv- ered by     FAZL  ALI J.--This is an appeal from a judgment  of  the Judicial Commissioner of Coorg in a suit filed by the  first respondent  (hereinafter  referred  to  as  the   plaintiff)

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 5  

against the appellant (hereinafter referred to as the  first defendant) and the second respondent 162 (hereinafter  referred to as the second defendant), for  the specific  performance of a contract.  The  first  defendant’ 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.     It  appears that the first defendant owned  certain  es- tates  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 the first defendant  and was  looking after’ ’Morvern Lodge" during his  absence.  It seems  that  about the middle of 1944, the  plaintiff  asked White if he would cable to the first defendant his offer  of Rs.  4,000  for the bungalow, and, on the  1st  June,  1944, White  sent a cable to the first defendant to the  following effect :--     "Have  enquiries  Mercara  bungalow if  for  sale,  wire lowest figure."     On the 24th July, 1944, the plaintiff wrote to the first defendant that he was prepared to purchase the bungalow  for Rs.  5,000 and if the offer was acceptable to him,  he  (the first defendant) 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 the first defendant to the following effect :--     "Have had offer  Morvern Lodge  rupees six thousand  for immediate possession."     On the 8th August, 1944, Youngman received a cable  from the  first defendant saying: "Won’t accept less than  rupees ten thousand". On the 7th August, 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, the first defendant sent an  airgraph to  Youngman, which states inter alia :--     "I  got a cable from you a few days ago saying  you  had had an offer of Rs. 6,000 for Morvern Lodge. 163 At the same time I got one from White saying value of Bunga- low  was Rs. 10,000. So wired you- ’Won’t accept  less  than Rs.  10,000’."  On the 9th August, 1944, Youngman  wrote  to the plaintiff as follows :-     "In  reply to your letter, dated 7th August, I  received yesterday a cable  from Co1. MacPherson regarding your offer of Rs. 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  Youngman was received by him on the 14th  August,  1944, and  he immediately accepted the "counter-offer made by  the first  defendant ", and confirmed it in writing in a  letter addressed to Youngman.  In his evidence, however, the plain- tiff  has  stated that he met Youngman on  the  11th  August after  receiving his letter and told him personally that  he would  pay  Rs.  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

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 5  

with  consultation   with your lawyers at  Madras  and  make arrangements to receive the money and hand over the bungalow as early as practicable."     It  appears  that three days later, i.e.;  on  the  17th August,  one  Subbayya wrote to Youngman  stating  that  "he confirmed his offer of Rs. 10,500 made to him (Youngman) the previous  day  for the purchase of the bungalow  ",  and  he expected  that the latter had cabled to the first  defendant communicating the offer as promised. It seems that  Youngman did not communicate Subbayya’s offer to the first defendant, but sent a cable to him on the 26th August to the  following effect :-- 164     "Offered  ten thousand Morvern Lodge  immediate  posses- sion.   May I sell."  On the same day, White cabled  to  the first defendant 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  the first defendant 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  Rs. 10,000 for Morvern Lodge from  the  would  be purchaser who previously had offered Rs. 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 Rs. 11,000. 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, the first defendant sent a  cable  to White to the following effect:-     " Accept rupees eleven thousand Morvern Lodge occupation permitted  when full amount deposited my account  Mercantile Bank Madras inform Youngman."     Thereafter, the second defendant paid the amount of  Rs. 11,000 and occupied the bungalow.     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  the 14th  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  plain- tiff a decree for specific performance, awarded a sum of Rs. 3,000  as  compensation to him.  Against  this  decree,  the first  defendant alone has appealed, after obtaining a  cer- tificate  under section 109 (c) of the Civil Procedure  Code from  the Judicial Commissioner. The plaintiff has not  pre- ferred any appeal. 165     The plaintiff’s case is that the cable sent by the first defendant on the 5th August, and received by Youngman on the 8th,  to the effect that he would not accept less  than  Rs. 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  con- tract on the 14th August, 1944, and we are supported in this view by the well-known case of Harvey v. Facey(1), in  which the  facts  were somewhat similar to those  of  the  present case.   In that case, the appellants had telegraphed to  the respondents "Will you sell us B.H.P.? Telegraph lowest  cash price  ",  and  the respondents had  telegraphed  in  reply, "Lowest price for B.H.P. pound 900," and then the appellants

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 5  

telegraphed, "We agree to buy B.H.P. for pound 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 uncondi- tional  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 (1) [1893] A.C. 552. 166 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."     The conclusion at which we have arrived is  strengthened by  certain facts which emerge from the  correspondence  be- tween  the parties. The real question is whether  the  first defendant  had made a counter-offer in his cable of the  5th August  or he was merely inviting offers. The  plaintiff  in his letter of the 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  ac- cepted  the ’ counter-offer ’ of the first defendant.  Simi- larly, in the cable which Youngman sent to the first defend- ant  on the 28th August, he did not state that the  latter’s offer had been accepted, but stated that he had been offered Rs.  10,000  for the bungalow and concluded with  the  words "May I sell ?" Neither party thus treated the first  defend- ant’s  cable  as containing a counter-offer.  On  the  other hand,  they proceeded on the footing that the plaintiff  had made an offer of Rs. 10,000 which was subject to  acceptance by the first defendant.  Apparently, the first defendant was in communication not only with Youngman but also White,  and both  of them rightly thought that no transaction  could  be concluded  without obtaining the first  defendant’s  express assent to it.     Mr.  Jindra Lal, counsel for the plaintiff, who  pressed his  points  with force and ability, contended that  by  the 26th August, 1944, Youngman had come under the influence  of the rival bidder or at least that of White who was  support- ing  him, and the cable to the first defendant was  deliber- ately 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 167 not communicate it to the first defendant. This statement is supported  by the cable of the 26th August and, if  Youngman

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 5  

can be said to have had any leaning at all, it was certainly in favour of the plaintiff. In these circumstances, it would be difficult to hold that  Youngman had deliberately  misde- scribed  the plaintiff’s acceptance of the counter-offer  as his  offer in the cable which he sent on the 26th August  to the first defendant.     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  plain- tiff’s suit. Having regard to the circumstances of the case, we make no order as to costs.                                 Appeal allowed. Agent for the appellant: M.S.K. Sastri. Agent for the respondent: Rajinder Narain.