Case: Bhagwandas Goverdhandas Kedia Vs. M/S. Girdharilal Parshottamdas And Co. Andothers

but a different rule is made about acceptance. Communication of an acceptance is complete in two ways - (1) against the proposer when it is put in the course of transmission to him so as to be out of the power of the acceptor; and (2) as against the acceptor when it comes to the knowledge of the proposer. The theory of expedition which was explained above has been accepted. S.5 of the Contract Act next lays down that a proposal may be revoked at any time before the commutation of its acceptance is complete as against the proposer, but not afterwards and an acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. In the third case in my above analysis this section is bound to furnish difficulties, if we were to accept that the contract is only complete at the proposers end. 34. The present is a case in which the proposer is claiming the benefit of the completion of the completion of the contract at Ahmedabad. To him the acceptor may say that the communication of the acceptance in so far as he was concerned was complete when he (the acceptor) put his acceptance in the course of transmission to him (the proposer) so as to be out of his (the acceptors) power to recall. It is obvious that the word of acceptance was spoken at Khamgaon and the moment the acceptor spoke his acceptance he put it in course of transmission to the proposer beyond his recall. He could not revoke his acceptance thereafter. I may be that the gap of time was so short that one can say that the speech was heard instantaneously, but if we are to put new inventions into the frame of our statutory law we are bound to say that the acceptor by speaking into the telephone put his acceptance in the course of transmission to the proper, however quick the transmission. What may be said in the English Common law, (which is capable of being moulded by judicial dicta,) we cannot always say under our statutory law because we have to guide ourselves by the language of the statute. It is contended that the communication of an acceptance is complete as against the acceptor when it comes to the knowledge of the proposer but that clause governs cases of acceptance lost through the fault of the acceptor. For example, the acceptor cannot be allowed to say that he shouted his acceptance and communication was complete where noise from an aircraft overhead drowned his words. As against him the communication can only be complete when it comes to the knowledge of the proposer. He must communicate his acceptance reasonably. Such is not the case here. Both sides admit that the acceptance was clearly heard at Ahmedabad. The acceptance was put in the course of transmission at Khamgaon and under the words of our statute I find it difficult to say that the contract was made at Ahmedabad where the acceptance was heard and not at Khamgaon where it was spoken. It is plain that the law was framed at a time when telephones, wireless, Tester and Early Bird were not contemplated. If time has marched inventions have made it easy to communicate instantaneously over Lougl distance and the language of our law does not fit the new conditions it can be modified to reject the old principles. But we cannot go against the language by accepting an interpretation given without considering the language of our Act. 35. In my opinion, the language of S. 4 of the Indian Contract Act covers the case of communication over the telephone. Our Act does not provide separately for post, telegraph, telephone or wireless. Some of these were unknown in 1872 and no attempt has been made to modify the law. It may be presumed that the language has been considered adequate to cover cases of these new inventions. Even, the Court of Appeal decision is of 1955. It is possible today not only to speak on the telephone but to record the spoken words on a tape and it is easy to prove that a particular conversation took place. Telephones now have television added to them. The rule about lost letters of acceptance was made out of expediency because it was easier in commercial circles to prove the despatch of the letters but very difficult to disprove the denial that the letter was received. If the rule suggested is accepted it would put a very powerful defence in the hands of the proposer if his denial that he heard the speech could take away the implications of our law that acceptance is complete as soon as it is put in course of transmission to the proposer. 36. No doubt the authority of the Entores case, 1955 (2) QB 327, is there and Lord Denning recommended an uniform rule, perhaps as laid down by the Court of Appeal. But the Court of Appeal was not called upon to construe a written law which brings in the inflexibility of its own language. It was not required to construe the words : "The communication of an acceptance is complete as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor." 37. Regard being had to the words of our statute I am compelled to hold that the contract was complete at Khamgaon. It may be pointed out that the same result obtains in the conflict of laws as understood in America and quite a number of other countries such as Canada, France, etc. also apply the rule which I have enunciated above even though there is no compulsion of any statute. I have, therefore, less hesitation in propounding the view which I have attempted to set down here. 38. In the result I would allow the appeal with costs.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]13. It appears that in a large majority of European countries the rule based on the theory of consensus idem, is that a contract takes place where the acceptance of the offer is communicated to the offeror, and no distinction is made between contracts made by post or telegraph and by telephone or Telex. In decisions of the State Courts in the United States, conflicting views have been expressed, buy the generally accepted view is that by "the technical law of contracts the contract is made in the district where the acceptance is spoken". This is based on what is called "the deeply rooted principle of common law that where the parties impliedly or expressly authorise a particular channel of communication, acceptance is effective when and where it enters that channel of communication". In the text books there is no reference to any decision of the Supreme Court of the United States of America on this question : American Jurisprudence, 2nd Edn., Vol. 17, Art. 54, p. 392 and Williston on Contracts, 3rd Edn., Vol. 1, p. 27114. Obviously the draftsman of the Indian Contract Act did not envisage use of the telephone as a means of personal conversation between parties separated in space, and could not have intended to make any rule in that behalf.The question then is whether the ordinary rule which regards a contract as completed only when acceptance is intimated should apply, or whether the exception engrafted upon the rule in respect of offers and acceptances by post and by telegrams is to beaccepted.If regard be had to the essential nature of conversation by telephone, it would be reasonable to hold that the parties being in a sense in the presence of each other, and negotiations are concluded by instantaneous communication of speech, communication of acceptance is a necessary part of the formation of contract, and the exception to the rule imposed on grounds of commercial expediency is inapplicable14. Obviously the draftsman of the Indian Contract Act did not envisage use of the telephone as a means of personal conversation between parties separated in space, and could not have intended to make any rule in that behalf.The question then is whether the ordinary rule which regards a contract as completed only when acceptance is intimated should apply, or whether the exception engrafted upon the rule in respect of offers and acceptances by post and by telegrams is to beaccepted.If regard be had to the essential nature of conversation by telephone, it would be reasonable to hold that the parties being in a sense in the presence of each other, and negotiations are concluded by instantaneous communication of speech, communication of acceptance is a necessary part of the formation of contract, and the exception to the rule imposed on grounds of commercial expediency is inapplicable15. The Trial Court was, therefore, right in the view which it has taken that a part of the cause of action arose within the jurisdiction of the City Civil Court, Ahmedabad, where acceptance was communicated by telephone to the plaintiffs.