A contract thought telephone is considered concluded at the place where acceptance is heard In which...........

Indian Contract Act (ICA)1872 Performance of a Contract

A contract thought telephone is considered concluded at the place where acceptance is heard. In which of the following cases it was held?

Bhagwandas V/s Girdharilal

Carlill V/s Carbolic Smoke Ball Co.

Lalman Shukla V/s Gauridutt

Satyabrata Ghosh V/s Mugneeram

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Explanation:

Bhagwandas Goverdhandas Kedia vs. Girdharilal Parshottamdas & Co. & Ors.

Facts of the Case: –

Bhagwandas Goverdhandas Kedia, the respondent, came in contract with M/s Girdharilal Parshottamdas & co, the plaintiff, via a telephonic line to supply cotton seed cakes; however, the respondent failed to supply the goods this resulted to the filing of the case in city civil court of Ahmedabad.

The respondent argued that Ahmedabad Civil Court does not have jurisdiction over the matter; however, it was held that City Civil Court had jurisdiction over the matter as the offeror informed about the offer to offeree in Ahmedabad where the contract was made; further, a revision application was filed in Gujarat High Court which was rejected therein finally a special leave petition was filed in the Hon’ble Supreme Court.

Issue Raised: –

1. Whether the conversation resulted in contract at Khamgaon or Ahmadabad and did the Ahmedabad City Civil Court had jurisdiction over the matter?

Judgment: –

A majority of Judges relied on the English law laid down in the Entores case and saw no reason to extend the post office rule (laid down Adams Case) to telephonic communication. The court stated that the language of the Contract Act cannot be completely ignored. Saha, J stated that when acceptance of the offer was intimated by the offeror the contract becomes complete. The Hon’ble Supreme Court stated that trail court was correct and the decision exercised was rightfully within the jurisdiction of the City Civil court thereby the petition was dismissed with costs.

Personal Opinion: –

The Case has widened the scope of communication of offer since when the law was drafted the legislators have not contemplated telephone, wireless, early bird. When the words of acceptance were spoken in a telephone; they were put into a course of transmission to the offeror and are beyond the power of the acceptor.

Also, the context of jurisdiction is well explained by the Honorable Court and the said order can be used as mutatis mutandis in a similar situation matrix.