Skip to content


Sepulchre Brothers, Proprietors, the Belgium East India Trading and Engineering Company Vs. Sait Khushal Das Jagjivan Das Mehta Trading in the Name of J. Khushal Das and Company - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported inAIR1942Mad13; (1941)2MLJ481
AppellantSepulchre Brothers, Proprietors, the Belgium East India Trading and Engineering Company
RespondentSait Khushal Das Jagjivan Das Mehta Trading in the Name of J. Khushal Das and Company
Cases ReferredEvans v. Nicholson
Excerpt:
.....to have stopped at this point with laying down as law that a contract is complete when its terms are..........pointing out that it did not appear from the affidavit on which the application was based that any letter of acceptance was received at west hartlepool and the case in kamisetti subbiah v. katha venkataswamy i.l.r.(1903) mad. 355 by observing that no attempt was made there to support the judgment under appeal on the ground that the letter of acceptance was received in kurnool.4. mr. rajagopala aiyangar urged that this decision should not be accepted as sound because it was opposed to the two later cases decided by divisional benches of this court and reported in, the national insurance company limited, calcutta v. seethammal : air1933mad764 , and ahmad bux v. fazal karim : air1940mad49 , in both of which the decision should have been the other way if venkata reddy v. nataraja setti :.....
Judgment:

Patanjali Sastri, J.

1. The only question argued in this civil revision petition relates to the jurisdiction of the Court below to entertain the suit. The issue has been found for the plaintiff and the defendant has preferred this revision petition.

2. The suit was for damages for breach of contract for delivery of certain perforated steel Sheets according to specification to the plaintiff who is a merchant trading at Bezwada. The defendants who are carrying on business at Bombay are the representatives of a Belgian firm of steel manufacturers. The plaintiff averred that the defendants broke the contract by failing to deliver the goods and they sued in the District Munsif's Court at Bezwada alleging that their cause of action arose in part at Bezwada. The defendants pleaded inter alia that the Court had no jurisdiction to entertain the suit as no part of the cause of action arose at Bezwada. The issue was tried by consent of parties as a preliminary issue and the letters by means of which the contract was concluded have been included in the record. The lower Court took the view that the indent form which the defendants finally sent to the plaintiff to be duly completed and returned after the specifications and quotations had been exchanged must be taken to be the offer and the plaintiff's posting it duly signed and completed was the acceptance and that therefore the contract was concluded at Bezwada. The learned District Munsif was further of opinion that the Court had jurisdiction as the goods were to be received finally at Bezwada via Madras.

3. Mr. Rajagopala Aiyangar, the learned Counsel for the petitioner, urged that the view taken by the learned District Munsif was unsustainable. He contended that the plaintiff's return of the indent form duly completed and signed was merely a customary formality which the defendants required their customers to observe in such cases, and that the contract was really concluded by the defendants' telegram from Bombay accepting the plaintiff's order for the goods at the price quoted by the defendants. Mr. Rajagopala Aiyangar further submitted that the correspondence showed that the contract was on c.i.f., terms and that the shipping documents were to be delivered against payment at Bombay, while the harbour at which the goods were to be unloaded was Madras. The place of delivery, he therefore argued must be taken to be either Bombay or Madras and not Bezwada. The respondent's learned Counsel Mr. Seshagiri Rao did not attempt to repel these contentions but sought to support the decision of the Court below on the ground that if the telegram was to be treated as the acceptance, its receipt by the plaintiff was a part of the cause of action and as this was admittedly at Bezwada, the Court below had jurisdiction to entertain the suit under Section 20 Clause (c) of the Code of Civil Procedure. The decision of Ramesam, J. in Venkata Reddi v. Nataraja Setti : (1924)46MLJ371 , was cited in support of this contention. After referring to the decisions holding that in suits arising out of contracts a part of the cause of action must be deemed to arise where the letter containing the offer was received, the learned Judge held that the receipt of acceptance when the contract was complete was a part of the contract 'there being no reason why acceptance should be in a worse position than offer'. The learned Judge distinguished the case of Clarke Brothers v. Knowles (1918) 1 K.B. 128 by pointing out that it did not appear from the affidavit on which the application was based that any letter of acceptance was received at West Hartlepool and the case in Kamisetti Subbiah v. Katha Venkataswamy I.L.R.(1903) Mad. 355 by observing that no attempt was made there to support the judgment under appeal on the ground that the letter of acceptance was received in Kurnool.

4. Mr. Rajagopala Aiyangar urged that this decision should not be accepted as sound because it was opposed to the two later cases decided by Divisional Benches of this Court and reported in, The National Insurance Company Limited, Calcutta v. Seethammal : AIR1933Mad764 , and Ahmad Bux v. Fazal Karim : AIR1940Mad49 , in both of which the decision should have been the other way if Venkata Reddy v. Nataraja Setti : (1924)46MLJ371 , were to be regarded as good law. In both these cases which arose out of suits filed on the Original Side of this Court, it appears no doubt from the statement of facts that the communication of acceptance was received at Madras. But it is to be observed that no point was made of such receipt as being part of the cause of action and the decision of Ramesam, J., referred to above does not appear to have been brought to the notice of the learned Judges who held that the cause of action in each case did not arise in part within the Original Civil Jurisdiction of this Court.

5. It was also argued that there was no real analogy between the receipt of an offer and the receipt of an acceptance; for, while the former was an essential step in the making of a contract as there could be no acceptance unless the offer was received, the receipt of acceptance was not necessary to complete the contract which was concluded as soon as the letter of acceptance was posted as settled by a long course of decisions. The argument is not without force and I should have hesitated to follow the decision of Ramesam, J., if there was nothing more to support it than the analogy of the receipt of an offer on which apparently it was based. But there is authority for the view that although an acceptance is complete as against the proposer as soon as the letter containing it is posted, it is a continuing act until it reaches the person to whom it is communicated and may thus be taken to be made also at the place where it is received. This was the view taken in Evans v. Nicholson (1875) 32 L.T. 778 which arose out of a motion for a writ of prohibition to the Mayor's Court on the ground that it had no jurisdiction to entertain an action for money due on an account stated as the whole cause of action did not arise within the city of London. The defendant in that case received out of the city some goods which he had ordered from the plaintiff and in answer to a letter requesting payment of the price wrote that he would remit the amount as requested as soon as possible. This letter was posted at the defendant's place of residence out of the city and was received by the plaintiff at his place of business in the city. It was argued on the analogy of cases relating to acceptance of an offer that the account must be deemed to have been stated out of the city where the defendant's letter was posted but the Court held that although a statement of an account was analogous to the acceptance of a contract and it was settled law that a contract was concluded as soon as the acceptance was posted, the statement, like the acceptance, was a continuous act until it reached the person to whom it was communicated and that therefore the defendant's letter was an account stated to the plaintiff at the place where the latter received it namely, the city of London. Lord Coleridge, C. J., observed at page 780:

It has been pointed out, indeed, and with perfect truth, that the cases referred to have stopped at this point with laying down as law that a contract is complete when its terms are accepted; and that the acceptor need not wait till the other party receives his letter notifying his acceptance. But, then, that was all that it was necessary to decide in all those cases. Adams v. Lindsell (1818) 1 B. & Aid. 681 : 106 E.R. 250 Duncan v. Topham (1849) 8 C.B. 225 : 137 E.R. 495 and The Imperial Land Company of Marseilles (Harris' Case) (1872) L.R. 7 Ch. Ap. 587 and the Courts there needed not to go on and say whether the acceptance was a continuous act; still, all the reasoning in the cases upon which the judgments are founded, though the judgments themselves are confined to the points necessary to be decided, is applicable to the further proposition which we are now considering, namely, that the acceptance continues to be an act done by the person accepting in a uniform and unbroken course of dealing until it reaches the other person to whom it is notified. And, in my opinion, although when he sends it off by post it is made then as against him, it is nonetheless made also when it reaches the mind of the offerer by reason of its having also been made before- This leads me to be unable to distinguish an acceptance so explained from a statement of an account; and so, to apply the proposition to the facts in this' case, I should say that although an account was undoubtedly stated at Copthorne, wherever that may be, it was nonetheless stated again when the letter containing the admission was received in the city.

6. Lindley and Archibald, JJ., expressed a similar opinion. Denman, J., while agreeing that an account must be deemed to be stated where the person to whom it was addressed received the statement, doubted the applicability of the analogy of the posting of the letter of acceptance concluding a contract, to the case of an account stated. He added however:

But I do agree, that, if the letter speaks at the moment it is posted, it is in the nature of a continuous statement, and speaks also at the moment when it is received.

7. It will thus be seen that though the point actually decided related to an account stated, the decision was based on general principles applicable to all contracts and this has been recognised in Hals. Vol. 8, page 191 where this decision among others is cited as an authority for the proposition that where an offer is made and accepted through post, a part of the cause of action arises where the letter accepting the offer is posted and a part where it is delivered. In this view, a part of the cause of action in the present case must be taken to have arisen at Bezwada where the defendant's telegram accepting the plaintiff's order was received by the plaintiff.

8. Mr. Rajagopala Aiyangar cited two English cases, namely, Cowan v. O'Connor (1888) 20 Q.B.D. 640 and Holland v. Bennett (1902) 1 K.B. 867 as being in conflict with Evans v. Nicholson (1875) 32 L.T. (N.S.) 778 referred to above. In the former an order to make certain bets was transmitted by postal telegraph by the plaintiff residing outside the city of London to the defendant within the city, who telegraphed that the order had been carried out, and it was held that the contract of agency was made in the city and that the action was properly laid in the Lord Mayor's Court as the whole cause of action arose within the jurisdiction of the city. This, however, does not conflict with the view adumbrated in Evans v. Nicholson (1875) 32 L.T. (N.S.) 778 for, as already observed, all that was held in the latter case was that an acceptance must also be deemed to have been made where the offerer received it. The fact, therefore, that the contract of agency could also be deemed to have been made at the plaintiff's place of residence without the city of London did not militate against the exercise of jurisdiction by the Lord Mavor's Court within whose jurisdiction the contract was concluded by the despatch of the defendant's telegram notifying the carrying out of the plaintiff's order.

9. The case of Holland v. Bennett (1902) 1 K.B. 867 related to an alleged wrongful dismissal of the plaintiff who was employed in England by a letter posted by his employer the defendant who was residing abroad. It was held that there was a complete breach of the contract when the letter giving notice of dismissal was posted abroad and that the English Court had no jurisdiction to entertain the action under Order 11, Rule 1 (e) of the Rules of the Supreme Court which authorised service out of the $ jurisdiction of a writ of summons in cases, inter alia where the action was 'in respect of a breach committed within the jurisdiction of a contract wherever made.' The facts were entirely different and the provision under which the case was decided did not make the exercise of jurisdiction by the Court depend upon the arising of the cause of action wholly or in part within the jurisdiction. I cannot therefore regard the case as being in conflict with Evans v. Nicholson (1875) 32 L.T. (N.S.) 778.

10. For the reasons indicated, I hold that the Court below is competent to try the suit and accordingly I dismiss the civil revision petition with costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //