In a suit for damages for breach of contract, the making of the offer which upon acceptance eventually becomes the contract, should be regarded as forming part of the cause of action. The offer is as much an essential element of it as the acceptance. The acceptance is a continuing acceptance until it reaches the offerer. Therefore, a part of the cause of action arises where the offer is made and where the acceptance is communicated.

1. In this summons which is taken out by the defendant it is asked that the leave granted by my brother Tendclkar J. under clause 12 of the Letters Patent should be revoked.

2. The plaintiffs have filed this suit to recover a certain amount from the defendant under a contract. The offer was made from Bombay to the defendant at Belgaum by letter by the plaintiffs to transport certain logs of teak wood from the Kanara forests to Marmagoa and from Marmagoa to Karachi. The offer of the plaintiffs was accepted by the defendant by their officers letter posted to Belgaum. It is contended that in those circumstances no part of the cause of action has arisen in Bombay and therefore leave should not have been given. The plaintiffs in para 13 of the plaint say that the said contract was finally arrived at in Bombay when the acceptance of the offer was communicated to and received by the plaintiffs in Bombay.

3. The facts of this case are very simple. The offer was made by post from Bombay to enter into a particular contract. The offer was communicated to the defendant at Belgaum and the defendant accepted the offer at Belgaum by posting a letter which was received by tho plaintiffs in Bombay. The defendants rely upon the judgment of my brother Bhagwati J. in the case of -- Premchand Roychand Sons v. Moti Lall, AIR 1951 Bom 249 (A). In that case the plaintiffs who were carrying on business as sharebrokers in Bombay offered to sell to the defendant who was a share-broker residing and carrying on business in Delhi certain shares. The said offer was communicated to the defendant by telegram which was received by him in Delhi and he accepted the offer by telegram. The perforrnance of the contract by sending the share certificates together with the relative transfer forms and also the draft to the defendant was to be in Delhi. It was held by Bhagwati J. that no part of the cause of action had arisen in Bombay and even with leave under clause 12 of the Letters Patent, which the plaintiffs had obtained, the Court at Bombay had no jurisdiction to entertain the suit. The learned Judge said that the true principle was that even though the offer might have emanated from a place within jurisdiction it could not be said to have been made until that offer had been received by the party to whom it had been made. If the party to whom the offer was thus communicated resided or carried on business outside jurisdiction, the offer could not be said to have been made within jurisdiction That is tho substance of the learned Judges reasoning. It was contended in that case that even though ordinarily a contract could be said to have been made at the place where the offer was accepted there was a difference which obtained when considering whether a part of the cause of action in a suit on contract did arise within jurisdiction, and the judgment of Fulton J. in -- Dobson v. Bengal Spinning and Weaving Co., 21 Bom 126 (B), was quoted to the effect, viz. (p. 134) : "...But if the making of the contract be part of the cause of action it appears to follow that the act of concurrence of either party which is essential to the contract is itself a part of the cause of action, for without such act of concurrence the contract cannot come into existence."

Bhagwati J. held that this judgment of Fulton J. was dated as far back as 1896 and there have been further authorities both in England and in India which are contrary to the position enunciated in that judgment, and he relied upon the case of -- Clarke v. Knowles, (1918) 1 KB 128 (C). Bhagwati J. after referring to certain Indian decisions proceeded to say that if the party to whom an offer is thus communicated resides or carries on business outside jurisdiction, the offer cannot be said to have been made within jurisdiction. A certain judgment of Patanjali Sastri J. now the Chief Justice of India, reported in -- In re Perianna Mudali, AIR 1942 Mad 31 (D), was not followed on the ground that that decision was o