Case: Viswesardas Gokuldas Vs. B. K. Narayan Singh &amp; Anr

1. The plaintiffs instituted a suit (O. S. No. 55 of 1957) against the defendant alleging that by a contract dated September 2, 1957 the defendant had agreed to assign to the plaintiffs his leasehold interest under a mining lease in respect of 184 acres of land in Kudrekanave Kaval, Hosadurga Taluk, and claiming specific performance of the contract. The Trial Court decreed the suit. The defendant filed an appeal against the decree. The High Court allowed the appeal and dismissed the suit. The present appeal has been filed by the paintiffs after obtaining a certificate under Article 133 of the Constitution.Under a contract dated August 3, 1957, the defendant agreed to sell to the plaintiffs 40,000 tons of float iron lying in the aforesaid mining area and gave them the right to win and remove the iron ore. We are not directly concerned with this contract in this appeal. On September 2, 1957 the defendant wrote the following letter to theFurther to our agreement dated 3rd August 1957 I hereby agree to assign the said lease area of 184 acres for iron and manganese ores, in your favour, subject to your paying me one lakh and eighty thousand rupees at your option to be decided by you within three months from this date.This document though worded as an agreement was in point of law an offer only. As a matter of fact, on September 2, 1957 the plaintiffs had not agreed to purchase the mining lease. Until both parties were bound there could be no concluded contract. The promise to keep the offer open for three months was not supported by any consideration. The defendant was at liberty to revoke the offer at any time before its acceptance by the plaintiffs. On October 31, 1957, the defendant posted a letter to the plaintiffs revoking the offer. This letter reached the plaintiffs on November 6, 1957. Before that date the plaintiffs did not accept the offer either orally or by any letter sent to the defendant.4. On November 1, 1957, the plaintiffs filed a suit (O. S. No. 46 of 1957) against the defendant claiming a declaration that they were entitled to remain in possession of the mining area. The primary object of the suit was to enforce the plaintiffs rights under the contract dated August 3, 1957. The defendant filed his written statement in that suit on November 5, 1957. The High Court held that the plaintiffs accepted the offer of September 2, 1957 by their plaint in O. S. No. 46 of 1957 and that this acceptance was communicated to the defendant before November 6, 1957.

Court's reasoning:
We need not say anything more on this point because we find that the plaintiffs have failed to establish the newargument is misconceived. We have held at the plaint in O. S. No. 46 of 1957 was not an acceptance. There was no other acceptance either oral or in writing. Mere mental assent of the plaintiffs to the defendants proposal is not sufficient. In the peculiar facts ofBloxams Case, (1864) 33 Beav529 a contract to take shares was concluded by an oral application for shares followed by allotment though no notice of allotment was given to the applicant. Ordinarily there is no contract unless there is an acceptance of the application for shares and the acceptance is communicated to theThe High Court held that the assignment of the mining lease could not be lawfully made without the sanction of the State Government and the approval of the Central Government and that as the governments concerned could not be compelled to accord the necessary sanction and approval, the contract to assign the mining lease could not be specifically performed and on this ground the High Court dismissed the suit. We do not think it necessary to express any opinion on this question. The appeal is liable to be dismissed in view of our conclusion that there was no concluded contract between the parties.