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1980 Supreme(Cal) 38

High Court Of Calcutta
Ramendra Mohan Datta, Bimal Chandra Basak
SANWARMAL GOENKA - Appellant
Versus
SOUMYENDRA CHANDRA GOOPTU - Respondent
A. F. O. O.  80  Of  1979
Decided On : 02/12/1980

Headnote:Contract Law - Offer and Acceptance - Indian Contract Act, Section 2(a), Carlill v. Carbolic Smoke Ball Company (1893) 1 QB 256, Harvey v. Facey (LR 1893 AC 552), Abdulla Ahmed v. Animendra Kissen Mitter, Durga Charan Mitra v. Rajendra Narayan Sinha (36 Cal LJ 467 : AIR 1923 Cal 57) - The court analyzed the letter of offer and held that it was not a firm offer but an invitation to treat, authorizing the broker to negotiate and procure a purchaser without binding the seller to any specific contract until further negotiations as to price were made. The judgment emphasized the need for certainty in price, parties, property, and other terms for a concluded contract.

Fact of the Case:

The appellant sought injunction against the respondent based on a letter of offer for sale of property.

Finding of the Court:

The court found that the letter was an invitation to treat and not a firm offer. ISSUES Whether the letter constituted a concluded contract or was merely an invitation to treat.

Ratio Decidendi:

The letter did not provide certainty in price, parties, property, and other terms required for a concluded contract. FINAL DECISION The appeal was dismissed as no prima facie case for injunction was established.

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 and Co. , Advocates and addressed to the respondent Gooptu 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 and 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 his share 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 a

















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