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Sanwarmal Goenka Vs. Soumyendra Chandra Gooptu - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 80 of 1979
Judge
Reported inAIR1981Cal37
ActsCode of Civil Procedure (CPC) , 1908 - Order 39, Rule 1; ;Contract Act, 1872 - Section 2
AppellantSanwarmal Goenka
RespondentSoumyendra Chandra Gooptu
DispositionAppeal dismissed
Cases ReferredRosenbaum v. Belson
Excerpt:
- .....negotiation would materialise the said offer would enable baid to earn his brokerage at 2% of the sale price. the offer mentioned in the said letter was an offer to pay the commission to baid at 2% in case the purchaser would be found out by the broker and to whom the property would be sold.6. gooptu having disputed the claim the appellant filed a suit in this court and made an application herein for injunction against gooptu. it is to be noted that the broker no longer remained in the scene.7. the question to be decided is whether this was an offer to be bound in which case it would be a contract by the acceptance thereof or, whether this was a mere invitation to treat. was it simply an offer to negotiate the sale or did it authorise the broker to act as the agent of the vendor to.....
Judgment:

Ramendra Mohan Datta, J.

1. This is an appeal from the judgment and order dated 19th February, 1970 passed by Mrs. Khastgir, J.; whereby the learned Judge dismissed the application for injunction of the appellant and directed him to pay the costs thereof.

2. The facts relevant for the purpose of this appeal are that the respondent Gooptu gave a letter to the broker, one B.C. Baid, in connection with the sale of promises No. 11, Rowdon Street, Calcutta of which admittedly he was a part owner. The said letter read as follows :

'Sri B.C. Baid,

207, Maharshi Debendra Road,

12th December, 1978,

Dear Sir,

Re : Premises No. 11, Rowdon Street, Calcutta.

I shall sell the above property for a price of not less than Rs. 7,50,000/-. If you can arrange the purchaser I shall give you commission of 2% (two per cent). This offer will remain valid for three weeks.

Yours faithfully,

Sd. Soumyendra Chandra Gooptu.'

3. By letter dated January 1, 1979 written by Messrs. T. Banerji & Co., Advocates and addressed to the respondentGooptu the said advocates intimated Gooptu that one of their clients had instructed them to accept the said offer and the said client was agreeable to purchase the said property at the price mentioned in Gooptu's letter. The said letter of the said Advocates read as follows :

'Dr. Soumyendra Chandra Gooptu

85, Rash Behari Avenue,

Calcutta-26.

1-1-1979.

Dear Sir,

Re : Premises No. 11, Rowdon Street, Calcutta.

With reference to the letter of authority dated 12th December, 1978, issued by you in favour of Sri B. C. Baid of 207, Maharshi Debendra Road, Calcutta-7, please note that we have been instructed by one of our clients to accept the offer and let you know that our said client is agreeable to purchase the above property at the price mentioned in your letter.

Please send us full description of the property so that we may draft the agreement and send the same to your lawyer for approval on your behalf.

Yours faithfully.

T. Banerji & Co.

P.K. Banerji.

Partner.'

4. It is submitted before us on behalf of the appellant that the offer contained in the said letter dated 12th December, 1978, was a firm offer and the same became concluded contract between the parties immediately upon acceptance thereof by the said letter dated January 1, 1979. The contention is that Baid was acting as the agent of Gooptu with an authority to enter into the agreement for sale in respect of the said premises on behalf of Gooptu. The price mentioned therein was the minimum price at which Gooptu was agreeable to sell to any person who would accept the said minimum price. The word 'offer' mentioned in the last sentence of the letter dated 12th December, 1978, signified that the offer to sell was to any person who would be agreeable to accept the said minimum price of Rs. 7,50,000/- within the said period of three weeks.

5. On behalf of the respondent it is contended that it was not an offer by Gooptu to be bound by the same. It was nothing but an offer to the broker to arrange for intending purchaser with whom the respondent would negotiate the sale of the premises to the extent of hisshare therein and in case the said negotiation would materialise the said offer would enable Baid to earn his brokerage at 2% of the sale price. The offer mentioned in the said letter was an offer to pay the commission to Baid at 2% in case the purchaser would be found out by the broker and to whom the property would be sold.

6. Gooptu having disputed the claim the appellant filed a suit in this Court and made an application herein for injunction against Gooptu. It is to be noted that the broker no longer remained in the scene.

7. The question to be decided is whether this was an offer to be bound in which case it would be a contract by the acceptance thereof or, whether this was a mere invitation to treat. Was it simply an offer to negotiate the sale or did it authorise the broker to act as the agent of the vendor to enter into the agreement for sale?

8. Mr. Ghosh appearing on behalf of the appellant refers to Section 2(a) of the Contract Act which reads as follows :

'2. In this Act the following words and expressions are used in the following senses, unless contrary intention appears from the context;

(a) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal'.

It is contended that Gooptu expressly signified his willingness to sell the property and gave the letter with a view to obtaining the assent of a prospective purchaser within three weeks. The letter of authority was written in such language that the assent of the purchaser was good enough to make it a firm proposal so as to bind the offerer. The test is, whether there was any intention to be bound. Was there any express promise? Was it binding? Was the offer a continuous offer for three weeks or until previously revoked?

9. Mr. Ghosh has relied on the case of Carlill v. Carbolic Smoke Ball Company, (1893) 1 QB 256. That was a case where the reward was announced to any person who would suffer from epidemic influenza, colds, or any disease caused by taking cold, after having used the particular medicine three times daily for two weeks according to the printed directions supplied with each ball. The advertisement showed that a sum of 1000 wasdeposited with the Alliance Bank, Regent Street, showing the sincerity of the company in the matter. The advertisement also contained various other assurances. The plaintiff Carlill on the faith of the said advertisement used the said medicine in the manner it was directed to be taken when she was attacked by influenza but could not get the desired result as claimed. The trial court held in favour of the plaintiff. The Court of Appeal dismissed the appeal. Bowen L. J. at page 268 observed :

'It is an offer made to all the world; and why should not an offer be made to all the world which is to ripen into a contract with anybody who comes forward and performs the condition? It is an offer to become liable to anyone who, before it is retracted, performs the condition, and, although the offer is made to the world, the contract is made with that limited portion of the public who come forward and perform the condition on the faith of the advertisement. It is not like cases in which you offer to negotiate, or you issue advertisements that you have a stock of books to sell, or houses to let, in which case there is no offer to be bound by any contract. Such advertisements are offers to negotiate -- offers to receive offers -- offers to chaffer, as, I think, some learned Judge in one of the cases has said. If this is an offer to be bound then it is a contract the moment the person fulfils the condition.'

10. In my opinion, in the instant case before us, it could not be said to be an offer to be bound so that the moment the person fulfilled the condition it ripened into a contract. It was nothing but an offer to negotiate. It was simply an offer to receive offers. It was an invitation to treat. The above decision of the Court of Appeal (supra) has no application because in our case it comes within the exceptions as indicated by Bowen L. J. at page 268 when he said 'It is not like cases in which you offer to negotiate, or you issue advertisements that you have a stock of books to sell, or houses to let, in which case there is no offer to be bound by any contract........'

11. It is contended by Mr. Ghosh that the price mentioned therein is the lowest price on the basis whereof Gooptu was agreeable to sell the property. In other words, whoever would come forward and accept the lowest price as offered by Gooptu would, be entitled to buy the property at that price.

12. Mr. Ghosh refers to the case of Harvey v. Facey reported in LR 1893 AC 552 (PC). It was a case of a contract entered into by exchange of telegrams. That was a case where the Judicial Committee of the Privy Council considered and construed the two telegrams. By the first telegram two questions were asked. The first question was as to the willingness of Facey to sell the Bumper Hall Pen property to Harvey, and the second question was relating to the lowest price. It was construed by the Judicial Committee that the word 'Telegraph' was in its collocation addressed to that second question only. Facey replied to the second question only and gave his lowest price. The first telegram read 'will you sell us Bumper Hall Pen? -- Telegraph lowest cash price'. To that Facey telegraphed in reply 'Lowest price for Bumper Hall Pen 900.' The third telegram by the appellants read 'we agree to buy Bumper Hall Pen for 900 asked by you'. It was held by their Lordships that the purchaser could not treat the telegram from Facey as binding him in any respect, except to the extent it did by its terms, viz., the lowest price. It was held that everything else was left open, and the reply telegram from the appellants could not be treated as an acceptance of an offer to sell to them; it was an offer that required to be accepted by Facey. The contract could only be completed if Facey had accepted the appellant's last telegram.

13. In our opinion, in our case, the position is different. There is no indication in the letter that it was of that nature where a simple acceptance by someone would conclude the matter. In Bumper Hall Pen case (supra) the enquiry as to the intention to sell was not answered. Only the lowest price was intimated. Mr. Ghosh contends that the Judicial Committee did not consider such a quotation of the lowest price to be in any manner uncertain so as to make the contract void. On the basis of that Mr. Ghosh argues that in our case also the minimum price has been quoted and that would not make the offer uncertain. In my opinon the Judicial Committee in that case considered the main question viz., whether the intention to sell was expressed thereby or not and did not decide that case on the question of the quotation of the lowest price. In my opinion, the above Privy Council decision cannot help the appellant in any way.The decision in Harvey v. Facey was considered by the Supreme Court in the case of Col. D.I. Mac Pherson v. M.N. Appanna reported in : [1951]2SCR161 where also the Supreme Court held that there was no concluded contract as there was no express assent to the offer made by the plaintiff; but in that case also there was no such question involved as to the acceptance of the minimum offer.

14. Mr. Ghosh relies On a passage from Cheshire and Fifoot's Law of Contract, Ninth Edition page 27 which reads as follows :

'An offer, capable of being converted into an agreement by acceptance, must consist of a definite promise to be bound provided that certain specified terms are accepted. The offeror must have completed his share in the formation of a contract by finally declaring his readiness to undertake an obligation upon certain conditions, leaving to the offeree the option of acceptance or refusal. He must not merely have been feeling his way towards an agreement, not merely initiating negotiation from which an agreement might or might not in time result. He must be prepared to implement his promise, if such is the wish of the other party. The distinction is sometimes expressed in judicial language by the contrast of an 'offer' with that of an 'invitation to treat'. Referring to the advertisement in the Carlill case, ((1893) 1 QB 256), Bowen L. J. said : 'It is not like cases in which you offer to negotiate, or you issue advertisements that you have got a stock of books to sell, or houses to let, in which case there is no offer to be bound by any contract. Such advertisements are offers to negotiate -- offers to receive offers -- offers to chaffer.........'

15. On the basis of the said passage Mr. Ghosh wants me to read the said letter as containing a definite promise to be bound once the minimum price was offered to Gooptu. I do not consider that Mr. Ghosh's contention should be accepted in view of the language used in the said letter. It is not a letter containing any offer to the public at large. It did not contain any definite promise to be bound nor was it given to any definite intending purchaser. It could not be said that Gooptu must have completed his part in the formation of the contract by finally declaring his readiness to undertake an obligation from any person leaving the whole matter to the offereefor his acceptance or refusal. It is a letter to the broker authorising him to negotiate and procure a purchaser with whom negotiations for sale of the premises might be carried on so that the broker might be interested to get his commission which would be arrived at on the basis of the sale price to be agreed between the parties. The word 'offer' in the said letter cannot be read as an offer to the world; it related to the broker alone. It is not an offer to the world at large through the broker as the agent, as centended by Mr. Ghosh. Until further negotiations the letter as such must be held to remain uncertain and could not constitute any definite offer to the world at large to accept it.

16. I am inclined to accept the contention of Mr. P.K. Das appearing on behalf of the respondent that the letter of authority of this kind merely gives an authority to the broker to get a suitable purchaser for the purpose of enabling parties to negotiate the sale. It is not an offer to the world at large so as to mean that the property is open for sale to anybody who would offer that minimum price. In order to have a completed contract for the specific enforcement thereof there must be four certainties viz. certainty as to price, certainty as to parties; certainty as to property and certainty as to other terms (See Fry on Specific Performance 6th Edn. page 157 et seq.)

17. Here the essential ingredient as to the certainty as to price cannot be held to be present where only the minimum price was mentioned. The expression 'not less than Rs. 7,50,000/-' would signify that the negotiation should be made to get the highest price and if after negotiations such highest price or any higher price would not be available then only the said price of Rs. 7,50,000/- might be considered; but if any purchaser is brought at a price lesser than that then the contract with the broker would not materialise and he would not earn his 2% commission. Accordingly, until further negotiations as to price the same would remain uncertain.

18. As regards the parties and property the letter does not indicate to what extent Gooptu was entitled to the same. Admittedly, he is the part owner of the said property and there are other parties who are interested in the remaining part. The property and/or the subject matterof the offer has to be ascertained so that a definite offer could be accepted.

19. Lastly, there must be certainty as to other terms particularly when the offer is in respect of land. The question of earnest money was also the usual term which is stipulated in the agreement for sale but this is also not to be found in either of the two letters dated 12th December, 1978 and 1st January, 1979. Of course, this is a point of little importance. In the plaint filed by Goenka the appellant has asked for sale of the property free from encumbrances. No such stipulation is to be found in the letter dated 12th December, 1978.

20. The letter of T. Banerjee & Co. would show that the said advocates also understood it to be an offer to Baid and not to the public in general. It mentions that it was the letter of authority to the broker and it also shows that it was an offer to receive an offer. In the case of Abdulla Ahmed v. Animendra Kissen Mitter, reported in : [1950]1SCR30 such a letter of authority was considered in a case where the broker asked for commission. It was held by the majority of the Judges that the letter could not be read as authorising the appellant to conclude a binding contract with the purchaser for the purchase and sale of the property on behalf of the respondent. In the case of Durga Charan Mitra v. Rajendra Narayan Sinha, 36 Cal LJ 467 : AIR 1923 Cal 57 it was observed that the broker was to bring the purchaser and not to enter into the contract with the purchaser on behalf of the seller unless that authority was expressly given in the letter itself. That was also a case of the sale of a land for which the defedant gave a letter of authorisation which, inter alia, provided :

'I hereby authorise you to negotiate the sale of the lands...............If you cansecure a purchaser to purchase the same at a gross value of Rs. 16,000/- I shall pay you Rs. 200/- as your remuneration .........Please note that this letter of authority will remain in force for a fortnight only to complete the transaction; after that this letter will stand cancelled.'

Dealing with similar question Mookerjee J. (later Sir Asutosh) in the Division Bench judgment observed at p. 470 :

'The essential question is, whether the agent employed is authorised to make a binding contract for sale. Such an authority may be expressly conferred, as in Rosenbaum v. Belson, (1900) 2 Ch 267. AsBuckley, J., points out, there is a substantial difference between an authority to sell and an authority to find a purchaser. Authorising a man to sell means an authority to conclude a sale; authorising him to find a purchaser means less than that; it means, to find a man willing to become a purchaser, not to find him and also make him a purchaser'.

21. In Bowstead on Agency, Fourteenth Edition, page 88 in illustration 6 it is stated that an estate agent in England has normally no authority to sell land; even though he is instructed as to the price at which the vendor will sell, his function is to solicit offers and transmit them to his principal. But he may be authorised expressly or impliedly to sell though in such circumstances he normally has no authority to sign anything but an open contract. In any case, he is prima facie authorised to describe the property, state to an intending purchaser the circumstances which may affect its value and to receive a deposit, but not to receive payment, nor to warrant that it may legally be used for a particular purchase. In my opinion, that is also the position in India with regard to the broker who negotiates the sale and purchase of the land and buildings.

22. Mr. Ghosh wanted us to note the averments in the affidavit in opposition of Gooptu and how he understood the said letter which he gave to the broker. In my opinion, in the absence of any vagueness in the language of the letter itself it is immaterial as to what the defendant's view at the time was in that regard. The Court alone has to consider the letter and to construe it in its literal sense and in the manner it has been written to ascertain its meaning and purpose. If the Court is satisfied that there is no vagueness in its language it need not go into any other question except to gather its meaning from the letter itself. Whether a concluded contract was arrived at or not is a question of fact and the parties and their lawyers could not make the same concluded if it was otherwise not so. What the parties understood at the time the said letter was written was to be gathered from the language of the letter itself and not from the statements which were made at a subsequent point of time.

23. Mr. Das has taken the point that the plaint does not disclose a cause of action because there is no averment that any demand was made on Gooptu to specifically perform his part of the contract. There is an amendment application pending with regard thereto and we need not make any observation as to the same at this stage.

24. In my opinion, no prima facie case for an order of injunction at this stage has been made out and the learned Judge of the Court below has rightly refused to grant such relief in the application. In any event, the balance of convenience is in favour of the defendant respondent Gooptu and the order of injunction should not be granted so as to delay the sale of the premises. Accordingly, the appeal is bound to be and is hereby dismissed with costs. All interim orders are vacated.

Bimal Chandra Basak, J.

25. I agree.


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