Necessity of communicating final acceptance of bid.

This appeal by the defendant, the Rajanagaram Co-operative Society, is against the decree for specific performance of a contract of sale granted in favour of the plaintiff by the lower appellate Court. The only question that has to be considered is whether there was a concluded contract in favour of the plaintiff for the sale of the property by the defendant to the plaintiff.

The property in dispute was purchased on the 29th May, 1941, by the defendant-society at an auction sale for a sum of Rs. 300 vide Exhibit P-1. In 1943 the defendant wanted to dispose of this property by public auction. The terms of the auction sale are contained in Exhibit D-1, dated 17th June, 1943. Under clause 1 it is stated "the sale will be knocked down in favour of the highest bidder subject to the approval of the Mahasabha (the defendant) and the Chittoor District Bank. There were also other conditions which have been laid down but it is unnecessary to refer to them as nothing turns on those conditions. The sale took place on the 23rd June, 1943, and the plaintiff became the highest bidder of the property for a sum of Rs. 700. He deposited Rs. 175 on the date of sale with the sale officer and the balance of the price of Rs. 525 was deposited by him with the defendant on the 29th June, 1943. The Chittoor District Central Bank took up the matter for consideration at the meeting of its executive committee on the 29th July, 1943 and approved the sale (vide Exhibit P-4). This resolution however was not communicated to the plaintiff and no sale deed was executed by the bank in favour of the plaintiff. The plaintiff, by his notice dated the 1th December, 1943, Exhibit P-3, called upon the defendant to execute a conveyance in his favour. Thereupon the Bank cancelled its previous resolution and directed a resale of the property by its proceedings of 15th December, 1943. The plaintiff instituted the suit therefore for enforcing the sale on the basis that there was a concluded contract in his favour. This was denied by the defendant in the written statement.

The main contention urged on behalf of the defendant was that the contract did not become final and complete as the approval of the Chittoor District Central Bank was not communicated to the defendant. Under section 4 of the Contract Act it is claimed that even the approval should have been communicated like acceptance as according to the contention of the defendant that constitutes a final acceptance of the contract. This position was accepted by the trial Court and the suit was dismissed. On appeal the decision of the District Munsif was reversed and the appellate Court granted a decree for specific performance of the contract in favour of the plaintiff.

In this second appeal the same question has been strenuously argued on behalf of the defendant appellant by Mr. Somasundaram. His contention is that the approval constitutes acceptance of the offer by the defendant and unless that was communicated to the plaintiff there was no concluded contract. The question is whether this contention is sound.

The defendant appointed a sale officer who, under the terms of Exhibit D-1 was authorised to knock down in favour of the highest bidder the property subject of course to the approval of the Mahasabha and the Chittoor District Central Bank. No point was raised in the Courts below, and indeed it could not be raised before me. that this sale officer had no authority to accept any bid on behalf of the defendant. Further there was also no plea anywhere that there was no approval of the sale by the Mahasabha, that is the defendant. The defendant should have known if there was no such approval and should have put that matter in the forefront of the case if really there is any substance in that contention which is sought to be raised for the first time though faintly in the second appeal. The matter therefore for consideration is whether the sale officer, in knocking down the bid subject to the approval of the Bank