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Karan Singh Vs. the Collector, Chhatarpur and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 281 of 1975
Judge
Reported inAIR1980MP89
ActsContract Act, 1872 - Sections 2, 3, 4 and 8
AppellantKaran Singh
RespondentThe Collector, Chhatarpur and ors.
Appellant AdvocateP.C. Naik, Adv.
Respondent AdvocateS.L. Saxena, Govt. Adv.
DispositionPetition allowed
Cases ReferredNew Zealand Shipping Co. v. Satterthwaite
Excerpt:
- - 3. on the facts stated above it is clear that there was no formation of contract and the demand of lease money from the petitioner is clearly unauthorised. it is well settled that the general rule is that it is the acceptance of offer by the offeree and intimation of that acceptance to the offerer which result in a contract. this class of cases is covered by section 8 of the contract act and is illustrated by the well known case of carlill v. the demand of lease money from the petitioner was clearly unauthorised......of returning the amount deposited by the petitioner to him, a demand notice for realising the lease money was issued to petitioner. these facts which have been alleged by the petitioner are not specifically denied in the return filed by the respondents. 3. on the facts stated above it is clear that there was no formation of contract and the demand of lease money from the petitioner is clearly unauthorised. mere acceptance of the petitioner's bid on the file by the collector was not enough to convert the petitioner's bid into contract. it is well settled that the general rule is that it is the acceptance of offer by the offeree and intimation of that acceptance to the offerer which result in a contract. one of the exceptions to this general rule is that when by agreement, course of.....
Judgment:

Singh, C.J.

1. By this petition under Articles 226 and 227 of the Constitution, the petitioner challenges the notice of demand dated 31st January 1975 (Annexure A) by which the respondents seek to recover a sum of Rs. 1,801 from the petitioner on account of a quarry lease. The petitioner also prays for refund of Rs. 540.

2. The facts, briefly stated, are that the quarry lease was first auctioned on 27th February 1973. One Bhupat Singh was the highest bidder but his bid was not accepted. The quarry lease was reauctioned on 18th April, 1973. The petitioner's bid of Rs. 1,800 was the highest bid. The petitioner deposited Rs. 540 as security and earnest money in accordance with the auction conditions. The bid was, however not accepted at the time of auction. It appears that the bid was later accepted by the Collector on the file but instead of communicating the acceptance to the petitioner, the intimation of acceptance was sent to Bhupat Singh who was the highest bidder in the first auction. The officer concerned realised the mistake after the expiry of the lease, But instead of returning the amount deposited by the petitioner to him, a demand notice for realising the lease money was issued to petitioner. These facts which have been alleged by the petitioner are not specifically denied in the return filed by the respondents. 3. On the facts stated above it is clear that there was no formation of contract and the demand of lease money from the petitioner is clearly unauthorised. Mere acceptance of the petitioner's bid on the file by the Collector was not enough to convert the petitioner's bid into contract. It is well settled that the general rule is that it is the acceptance of offer by the offeree and intimation of that acceptance to the offerer which result in a contract. One of the exceptions to this general rule is that when by agreement, course of conduct or usage of trade, acceptance by post or telegram is authorised, the bargain is struck and the contract is complete when the acceptance is put into a course of transmission by the offeree by posting a letter or despatching a telegram: Bhagwandas v. Girdharilal & Co., AIR 1966 SC 543 at pp. 547, 548. But even in such cases, where the intimation of acceptance does not reach the offerer, it has to be shown that the letter or telegram of acceptance was correctly addressed to the offerer otherwise it could not, although posted or despatched, be said to have been put in a course of transmission to him: [Ramdas Chakarbati v. The Official Liquidator Cotton, Ginning Co. Ltd, (1887) ILR 9 All 366 at p. 385]. Another exception to the general rule embraces those cases where acceptance of consideration offered or performance of conditions of the offer constitute acceptance. This class of cases is covered by Section 8 of the Contract Act and is illustrated by the well known case of Carlill v. Carbolic Smoke Ball Co., (18931 1 QB 256 which was applied in recent years by the Privy Council in New Zealand Shipping Co. v. Satterthwaite (A. M.) & Co., (1974) 1 AH ER 1015 at p. 1020 (PC). The instant case is not covered by the exceptions to the general rule that the contract comes into existence on receipt of an intimation of acceptance by the offerer. The petitioner's bid was an offer. The bid was no doubt accepted on the file. But as no intimation of acceptance was sent to the petitioner and received by him there was no formation of contract. The demand of lease money from the petitioner was clearly unauthorised.

4. The petition is allowed. The demand notice is quashed. The respondents are directed to refund the amount of Rs. 540 to the petitioner. The petitioner will get costs of this petition. Counsel's fee Rs. 100 if certified. Security amount be refunded to the petitioner.


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