Landmark Judgement
Bhagwandas Goverdhandas Kedia vs M/S. Girdharilal Parshottamdas And Co., 1965
Place of Acceptance; Postal rule and Instantaneous rule; Clarifying the jurisdiction and formation of contracts in the context of different communication methods.
Supreme Court of India·30 August 1965
Judgement Details
Court
Supreme Court of India
Date of Decision
30 August 1965
Judges
J.C. Shah ⦁ K.N. Wanchoo ⦁ M. Hidayatullah Dissenting Opinion :-Justice M. Hidayatullah
Citation
1966 AIR 543; 1966 SCR (1) 656
Acts / Provisions
Section 13(1)(ia), Hindu Marriage Act, 1955
Section 25, Hindu Marriage Act, 1955
Facts of the Case
- The dispute arose from a telephonic conversation between the parties regarding the sale of cotton seeds. In this case, the appellant Bhagwandas Goverdhandas Kedia Oil Mills had agreed to supply the seeds to the respondent M/s. Girdharilal Parshottamdas and Co. over a telephone.
- The contract was accepted over the phone at Khamgaon and delivery and payment of the goods were also at Khamgaon.
- After the acceptance, the defendant refused to deliver the goods, resulting in an alleged breach of contract.
- The appellant brought a suit against the respondent in Ahmedabad for appellant’s failure in the supply of goods.
- It was contended that the Civil Court of Ahmedabad had no jurisdiction over the suit as acceptance was made at Khamgaon and it was held by the Court of Ahmedabad that the Court had jurisdiction over the Court.
- Now the appellant had filed an appeal before the High Court of Gujarat, which was rejected, and the special leave petition was filed before the Supreme Court.
Issues
- Whether the Ahmedabad Court had jurisdiction over the suit?
- Whether the contract was formed at the place of acceptance or at the place acceptance is received?
Held
- This case distinguished between postal communication and instantaneous communication in contract law.
- It was held by the Court in this case that where contract are concluded by POSTAL COMMUNICATIONS the place of contract is where the letter of acceptance is dispatched.
- acceptance is only complete when it is received by the offeror.In case of INSTANTANEOUS COMMUNICATION the place of contract is where the acceptance is heard. (acceptance is only complete when it is received by the offeror.)
Analysis
- In this case, there was no mention of the contracts that are formed by other means like the contracts formed on e-contracts and there was no mention of what will happen if the receiver of the telephone were cut off by any third party who had ill intention than under which section of the Indian Contract Act,1872 there would be any remedy to the party who had incurred loss due to it.
- There was no mention of remedies for the breach of international contracts that are formed between two different countries via telephone acceptance and under which the court's authority would be the matter would be heard.
- This case does not give any information regarding under which authority the suit will be filed if the offeror is not able to hear the acceptance to the offer proposed by it due to certain uncertain reasons.
- This case is significant in clarifying the jurisdiction and formation of contracts in the context of different communication methods.