Topic: Bhagwandas Goverdhandas Kedia vs M/S. Girdharilal Parshottamdas

Bhagwandas Goverdhandas Kedia vs M/S. Girdharilal Parshottamdas
Equivalent citations: 1966 AIR 543, 1966 SCR (1) 656 - Bench: Shah, J.C. - DATE OF JUDGMENT: 30 August, 1965

CITATION:
1966 AIR  543 1966 SCR  (1) 656

ACT:
Indian Contract Act,1872, ss.2,3,4-Contract when complete-Offer and Acceptance by telephone-Acceptance complete where spoken or where heard ?

HEADNOTE:
The respondents entered into a contract with the  appellants
by  longdistance  telephone.  The offer was  spoken  by     the
respondent at Ahmedabad and the acceptance was spoken by the
appellants  at    Khamgaon.   Alleging  breach  of  the    said
contract  the respondents Mod a suit at Ahmedabad.   On     the
issue  of jurisdiction raised by the appellants,  the  trial
court found that the Ahmedabad Court had jurisdiction to try
the suit.  The High Court rejected the appellant's  revision
petition  in limine whereupon by special leave, he  came  to
this Court.
HELD  :     (i) Making of an offer at a place  which  has    been
accepted elsewhere does not form part of the cause of action
in  a suit for damage-, for breach of contract.      Ordinarily
it  is    the  acceptance     of offer  and    intimation  of    that
acceptance which result in a contract.    The intimation    must
be  by same external manifestation which the law regards  as
sufficient. [660 C-E]
Baroda    Oil Cakes Traders v. Purshattam Naravandas and    Anr.
I.L.R.    [1954]    Bom. 1137 and Sepulechre  Brothers  v.    Sait
Khushal     Das  Jagjivan Das Mehta, I.L.R.  [1942]  Mad.    243,
referred to.
(ii) On     the general rule that a contract is concluded    when
an  offer  is accepted and acceptance is  intimated  to     the
offerer,  is  engrafted     an exception based  on     grounds  of
convenience which has the merit not of logic or principle in
support,  but of long acceptance by judicial decision.     The
exception may be summarised as follows : When by  agreement,
course of contract or usage of trade, acceptance by post  or
telegram  is  authorised,  the bargain    is  struck  and     the
contract  is  complete    when the acceptance is    put  into  a
course    of transmission the offeree by posting a  letter  or
dispatching a telegram. [662 G-H]
(iii)      The  rule  that applies to acceptance by  post  of
telegram  does    not  however  apply  to     contracts  made  by
telephone.  The rule which applies to contracts by telephone
is  the ordinary rule which regards a contract    as  complete
only when acceptance is intimated to the purchaser.  In     the
case of a telephonic conversation in a sense the parties are
in  the presence of each other, each party is able  to    hear
the   voice  of     the  other.   'Mere  is  an   instantaneous
communication  of speech intimating offer  and    -acceptance,
rejection and counter-offer.  Intervention of an  electrical
impulse which results in the instantaneous communication  of
messages  from a distance does not alter the nature  of     the
conversation so as to make it analogous to that of an  offer
and acceptance through post or by Telegram. [664 A-B]
It  is    true that the Posts and     Telegraphs  Department     has
general      control  over     communication    by   telephone     and
especially over long distance Telephones, but that is not  a
ground for assuming that the analogy of a
657
contract  made    by  post will govern  this  mode  of  making
contracts.   In     the  case  of    correspondence    by  post  or
telegraphic  communication,  a third agency  intervenes     and
without     the  effective intervention of that  third  agency,
letters or messages cannot be transmitted.  In the case of a
conversation  by telephone, once connection  is     established
there  is  in the normal course no further  intervention  of
another      agency.   Parties  holding  conversation  on     the
telephone  are    unable    to see each  other;  they  are    also
physically  separated in space, but they are in the  hearing
of  each other by the aid of a mechanical contrivance  which
makes  the voice of one heard by the  other  instantaneously
and  communication does not depend on external agency.    [664
D-E]
Emtores Ltd. v. Miles Far Eastern Corp. [1955] 2 Q.B.D.     327
relied on.
(iv) In     the  administration  of the law  of  contracts     the
courts    in India have generally been guided by the rules  of
English      common  law  applicable  to  contracts,  when      no
statutory provision to the contrary is in force.  The courts
in the former Presidency towns by the terms of their respec-
tive letters patents, and the courts outside the  Presidency
towns by Bengal Regulation III of 1793, Madras Regulation 11
of  1802  and Bombay Regulation IV of 1837, and     by  diverse
Civil  Courts Acts were enjoined in cases where no  specific
rule  existed  to act according to 'law and equity'  in     the
case  of  chartered High Courts and elsewhere  according  to
'justice, equity and good conscience' which expressions have
been  consistently interpreted to mean the rules of  English
common    law,  so far as they are applicable  to     the  Indian
Society and circumstances. [664 G-H]
(v)  The  draftsmen  of     the Indian  Contract  Act  did     not
envisage  use  of the telephone as a means  of    conversation
between     parties  separated  in space  and  could  not    have
intended  to make any rule in that behalf.  The trial  Court
wag right in the view which it took 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. [666 D-F]
Per  Hidayatullah, J. (dissenting) (i) In the  Entores    case
Lord  Denning  no  doubt  held    that  acceptance  given      by
telephone was governed by the principles applicable to    oral
acceptance  where the parties were in the presence  of    each
other and that the analogy of letters sent by post could not
be applied.  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
found  in  s.  4 of the Indian Contract     Act,  namely,    "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." [667 C-F]
Entores Ltd. v. Miles Far East Corporation. [1955] 2  Q.B.D.
327, distinguished.
(ii) The  law under consideration was framed at a time    when
telephone,  wireless,  Telstar    and  Early  Bird  were     not
contemplated.  If time has marched and inventions have    made
it  easy to communicate instantaneously over  long  distance
and the language of our law does not fit the new  conditions
it can be modified to reject the old principles.  But it  is
not  possible  to go against the language  by  accepting  an
interpretation given without considering the language of our
Act. [681 H]
(iii)      The  language of s. 4 of the Indian Contract    Act,
covers a 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,
658
cover  cases of these new inventions.  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    com-
mercial     circles to prove the dispatch of letters  but    very
difficult  to disprove a statement that the letter  was     not
received.  If the rule suggested on behalf of the plaintiffs
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 awry the implications of our law that  acceptance
is complete -as soon as it is put in course of    transmission
to the proposer. [681 D-G]
(iv) Where  the     acceptance  on telephone is  not  heard  on
account     of  mechanical defects there may be  difficulty  in
determining  whether at all a contract results.      But  where
the speech is fully heard and understood there is It  bindin
contract,  and in such a case the only question is  -.is  to
the  place  where  the contract can be said  to     have  taken
peace. [678 G-H]
(v)  In     the  present  case both  sides     admitted  that     the
acceptance  was clearly heard -,it Ahmedabad.  The  acceptor
was  in     a  position to say that the  communication  of     the
acceptance  in so far as he was concerned was complete    when
he (the acceptor) put his acceptance in transmission to     him
(the proposer) as to be out of his (the acceptor'.,,,) power
of  recall  in terms of s. 4 of the Contract  Act.   It     was
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 lo the proposer beyond his recall.
He  could not revoke acceptance thereafter.  It 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 resource  of  transmission  to     the
proposer. [680 E-H]
The   contract    was  therefore    made  at  Khamaon  and     not
Ahmedabad,
Case-law considered.



JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 948 of 1964. Appeal    by special leave from the judgment and    order dated July 24, 1964 of the Gujarat High Court in Civil Revision Application No. 543 of 1964.

A. V. Viswanatha Sastri, Bishan Narain, S. Murthy and B. P. Maheshwari, for the appellant.

G. B.    Pai, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondents.

The Judgment of Wanchoo and Shah, JJ. was delivered by Shah, J. Hidayatullah, J. delivered a dissenting Opinion. Shah,    J. Messrs Girdharilal    Parshottamdas    & Company- hereinafter called "the plaintiffs"-commenced an action in the City Civil Court at Ahmedabad against the Kedia Ginning Factory    Oil Mills of    Khamgaon-hereinafter called    "the defendants" for a decree for Rs. 31,150/- on the plea that the defendants had failed to supply cotton seed cake which they had agreed to supply under an oral contract dated July 22,    1959 negotiated between the parties by conversation on    long distance telephone. The plaintiffs submitted that the cause of action for    the suit arose at Ahmedabad,    because    the defendants had offered to sell cotton seed cake which offer was accepted by the plaintiffs at Ahmedabad, and    also because    the defendants were under the contract bound to supply    the goods at Ahmedabad, and the defendants were to receive    payment for the goods through a Bank at Ahmedabad. The defendants    contended that the plaintiffs had by a message communicated by telephone offered to purchase cotton seed cake. and they (the defendants) had accepted the offer at Khamgaon, that under the contract delivery of the goods contracted for was to be made at Khanigaon. price was    also to be    paid at Khamgaon and that no part of the cause of action    for the suit had arisen within the    territorial jurisdiction of the City Civil Court Ahemedabad. On the issue of jurisdiction, the Trial Court found that the plaintiffs had made an offer from    Ahemedabad by    long distance telephone to the defendants to purchase the goods and that the defendants had accepted the offer at Khamgaon, that the goods were under the contract to be delivered at Khamgaon and that payment was also to be made at Khamgaon. The contract was in the view of the Court to be performed at Khamgaon, and because of the offer made from Ahemedabad to purchase goods the Court at Ahemedabad could not be invested with jurisdiction to entertain the suit. But the Court held that when a contract is made by conversation on telephone, the place where acceptance of offer is intimated to    the offeror, is the place where the contract is made,    and therefore the Civil Court at Ahmedabad had jurisdiction to try the suit. A revision    application filed by-the defendants against the order, directing the suit to proceed on the merits, was rejected in limine by the High Court of Gujarat. Against the order of the High Court    of Gujarat, this appeal has been -preferred with special leave. The defendants    contend that in the case of a    contract by conversation on telephone, the place where the offer is accepted is the -place where the contract is made, and    that Court    alone has jurisdiction within the    territorial jurisdiction of which    the offer is    accepted and    the acceptance is spoken into the telephone instrument. It is submitted that the rule which determines the place where a contract is made is determined by ss. 3 & 4 of    the Indian Contract Act. and applies uniformly whatever may be the mode employed for putting    the acceptance    into a course of transmission, and that the decisions of the Courts in    the United    Kingdom, dependent not upon    express statutory provisions but    upon the somewhat elastic rules of common law, have no bearing in determining this question.    The plaintiffs on the other hand contend that making of an offer is a part of the cause of action in a suit for damages    for breach    of contract, and the suit lies in the court within the jurisdiction of which the offeror has made the offer which    on acceptance    has resulted    into a contract. Alternatively, they contend that intimation of acceptance of the offer being essential to the formation of    a contract, the contract takes place where such intimation is received by the    offeror. The    first    contention raised by    the plaintiff is without substance. Making of an offer at a place which has been accepted elsewhere does not form    part of the cause of action in a suit for damages for breach of contract. Ordinarily    it is the acceptance of offer    and intimation of that acceptance which result in    a contract. By intimating    an offer, when the parties are    not in    the presence of each other, the offeror is deemed to be making the offer continuously till the offer reaches the offeree. The offeror thereby merely intimates his intention to enter into a    contract on the terms of the offer. 'Me' offeror cannot impose upon the offeree an obligation to accept,    nor proclaim that silence    of the offeree shall be deemed consent. A contract being the result of an offer made by one party and acceptance of that very offer by    the other, acceptance of the offer and intimation of acceptance by some external manifestation which the law regards as sufficient is necessary.

By a long and uniform course of decisions the rule is well- settled    that mere making of an offer does not form part of the cause of action for damages for breach of contract which has resulted from acceptance of the offer: see    Baroda    Oil Cakes Traders v. Purshottam Narayandas Bagulia and Anr(1). The view to the contrary expressed by a single Judge of    the Madras High Court in Sepulchre Brothers v. Sait Khushal    Das Jagjivan Das Mehta ( 2 ) cannot be accepted as correct. The principal contention raised by the defendants raises a problem    of some complexity which must be approached in    the light of the    relevant principles of the common law    and statutory provisions contained in the Contract Act. A contract unlike a tort is not unilateral. If there be no "meeting of minds" no contract may result. There should therefore be an offer by one party, express or implied,    and acceptance of that offer by the (1) I.L.R. [1954] Bom. 1137.

(2) I.L.R. [1942] Mad. 243.

other in the same sense in which it was made by the other. But an agreement does not result from a mere state of mind : intent to accept an offer or even a mental resolve to accept an offer does not give rise to a contract. There must be intent    to accept and some external manifestation of    that intent by speech, writing or other act, and acceptance    must be--communicated to the offeror, unless he has waived    such intimation, or    the course of negotiations    implies    an agreement to the contrary.

The Contract Act does not expressly deal with the place where a contract is made. Sections 3 & 4 of the Contract Act deal with the communication, acceptance and revocation of proposals.    By s. 3 the communication of    a proposal, acceptance of a proposal, and revocation of a proposal    and acceptance, respectively, are deemed to be made by any    act or omission of the party proposing, accepting or revoking, by which he intends to communicate such proposal, acceptance or revocation, or which has the effect of communicating    it. Section 4 provides :

"The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
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;
as against the acceptor, when it comes to    the knowledge of the proposer.
The communication of a revocation is complete- as against the person who makes it, when it is put into    a course of transmission to    the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge."
In terms s. 4 deals not with the place where    a contract takes place, but with the completion of communication of a proposal, acceptance and revocation.    In determining    the place where a contract takes    place,    the interpretation clauses    in s. 2 which largely incorporate the    substantive law of    contract must be taken into    account. A person signifying to another his willingness to or to abstain    from doing anything, with a view to obtaining 66 2 the assent of that other to such act or abstinence is    said to make a proposal : cl. (a). When the person to whom    the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted, becomes a promise: cl. (b), and every promise    and every set of promises, forming the consideration for each other is an agreement: cl. (e). An agreement enforceable at law is a contract: cl.    (k). By the second clause of s. 4    the communication of an acceptance is complete as against    the proposer, when it is put in a course of transmission to him, so a,, to be out of the power of the acceptor.    This implies that where communication of an acceptance is made and it is put in    a course if transmission to    the proposer,    the acceptance is complete as against the proposer : as against the acceptor,    it becomes complete when it comes to    the knowledge of the proposer. In the matter of communication of revocation it is provided that as against the person    who makes the revocation it becomes complete when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it, and as against the person to whom it is made when it comes to his knowledge.    But s. 4 does not imply that the contract is made qua the proposer at one place and qua the acceptor at another place.    The contract becomes complete as soon as the acceptance is    made by the acceptor and unless otherwise agreed expressly or by necessary implication by the adoption of a special method of intimation, when the acceptance of offer is intimated to the offeror.

Acceptance and intimation of acceptance of offer are there- fore both necessary to result in a binding contract. In the case of a contract which consists of mutual promises,    the offeror    must receive    intimation that the offeree    has accepted his offer and has signified    his willingness to perform    his promise. When parties are in the    presence of each other, the method of communication will,    depend    upon the nature of the offer and the circumstances in which it is made.    When an offer is orally made,    acceptance may be expected to be made by an oral reply, but even a nod or other    act which indubitably    intimates acceptance    may suffice. If the offeror receives no such intimation.    even if the offeree has resolved to accept the offer, a contract may not result. But on this rule is engrafted an exception based on grounds of convenience which has the merit not of logic or principle in support, but of long acceptance by judicial decisions. If the parties are not in the presence of each other, and the offeror has not prescribed a mode of communication of acceptance, insistence upon communication of acceptance of the offer by the offeree would be found to be    inconvenient, when the contract is made    by letters sent by post. In Adams v. Lindsell(1) it was ruled as early as in 1818 by the Court of King's Bench in England that    the contract was    complete as soon as    it was    put    into transmission.    In Adams's case(1) the defendants wrote a letter to the plaintiff offering to sell a quantity of    wool and requiring an answer by post. The plaintiff accepted the offer and posted a letter of acceptance, which was delivered to the defendants nearly a week after they had    made their offer.    The defendants however sold the goods to a third party, after the letter of acceptance was posted but before it was received by the defendants. The defendants were held liable    in damages. The Court in that case is    reported to have observed    that "if the defendants were not bound by their offer when accepted by the plaintiffs till the answer was received, they the plaintiffs ought not to be bound till after they had received the notification that the defendants had received their answer and assented to it.    And so it might go on ad infinitum. The rule    Adam's    case(1)    was approved by the House of Lords in Dunlop and others v. Vincent    Higgins and others(1). The    rule was based on commercial expediency,    or what Cheshire calls "empirical grounds". It    makes a large inroad upon the    concept of consensus, "a    meeting    of minds" which is the basis of formation of a contract. It would be    futile however to enter upon an academic discussion, whether the exception is justifiable in strict theory, and acceptable in principle. The exception has long been recognised in the United Kingdom and in other countries where the law of contracts is based on the    common law of England.    Authorities in    India    also exhibit a fairly uniform trend that in case of    negotiations by post the contract is complete when    acceptance of    the offer is put into a course of transmission to the offeror : see Baroda Oil Cakes Traders' case(1) and    cases cited therein. A similar rule has been adopted when the offer and acceptance are by telegrams. The exception to the general rule requiring intimation of acceptance may be summarised as follows. When by agreement, course of conduct, or usage of trade,    acceptance by post or telegram is authorised,    the bargain    is struck and the contract is complete-when    the acceptance is    put into a course of transmission by    the offeree by posting a letter or dispatching a telegram. The defendants    contend that the same rule applies in    the case of contracts made by conversation on telephone.    The plaintiffs (1) 1 B. & Ald. 681.

(2) 1 H.L.C. 381.

(3) I.L.R. [1954] Bom. 1137.

p/65.14 6 64 contend    that the rule which applies to those contracts is the ordinary rule which regards a contract as complete    only when acceptance is intimated to the proposer.    In the    case of a telephonic conversation, in a sense the parties are in the presence of each other : each party is able to hear    the voice of the other. There is instantaneous communication of speech    intimating offer and    acceptance, rejection    or counter-offer.    Intervention of an electrical impulse which results in the instantaneous communication of messages    from a distance does not alter the nature of the conversation so as to make it analogous to that of an offer and acceptance through post or by telegraph.

It is    true that the Posts &    Telegraphs Department    has general    control over    communication    by telephone    and especially long distance telephones, but that is not a ground    for assuming that the analogy of a contract made by post will govern this mode of making contracts.    In the case of correspondence by post or telegraphic communication, a third    agency    intervenes and without the effective intervention of that    third agency, letters    or messages cannot    be transmitted. In the case of a conversation by telephone, once a connection is established there is in    the normal    course    no further intervention of another agency. Parties holding conversation on the telephone are unable to see each other : they are also physically separated in space, but they are in the hearing of each other by the    aid of a mechanical contrivance which makes the voice of    one heard by the other instantaneously, and communication    does not depend upon an external agency.

In the administration of the law of contracts, the Courts in India have generally been guided by the rules of the English common    law applicable    to contracts,    where no statutory provision to the contrary is in force.    The Courts in    the former    Presidency towns by the terms of their respective letters patents, and the courts outside the Presidency towns by Bengal Regulation III of 1793, Madras Regulation II of 1802 and Bombay Regulation TV of 1827 and by    the diverse Civil Courts Act were enjoined in cases where    no specific rule existed to act according to "law or equity" in the case of chartered High Courts and    else,    where according to justice, equity and good conscience-which expressions    have been consistently interpreted to mean the rule, of English common    law, so far as they are applicable to    the Indian society and circumstances.

In England the Court of Appeal has decided in Entores    Ltd. v. Miles Far East Corporation(1) that:

"where a    contract is made by instantaneous communication, e.g. by telephone, the contract is complete only when    the acceptance    is received    by the offeror, since generally an acceptance must be notified to the offeror to make a binding contract;"
In Entores Ltd's case(") the plaintiff made an    offer    from London    by Telex to the agents in Holland of the defendant Corporation, whose headquarters were in New York, for    the purchase of certain goods, and the offer was accepted by a communication received on the plaintiff's Telex machine in London.    On the allegation that breach of contract    was committed by the defendant Corporation, the plaintiff sought leave to serve notice of a writ on the defendant Corporation in New York claiming damages for breach of contract.    The defendant Corporation contended that the contract was    made in Holland. Denning L. J., who delivered the principal judcment of the Court observed at p. 332 "When a contract is made by post it is clear law throughout the common law countries    that the acceptance is complete as soon as    the letter is put into the post box, and that is the place where the contract is    made.    But there is no clear rule about contracts made by telephone    or by    Telex.    Communications by these means are virtually instantaneous    and stand on a different footing.", and after examining the negotiations made in    a contract arrived    at by telephonic conversation in different stages, Denning    L. J., observed that in the case of a telephonic conservation the contract is only complete when the answer accepting the offer was made and that the same rule applies in the    case of a contract by communication by    Telex.    He recorded his conclusion as, follows :

"that the rule about instantaneous communications between    the parties    is different    from the rule about the post.    The contract is only complete when the acceptance is received by the offeror : and the contract is made at the place where the acceptance is received."

It appears that in a large majority of    European countries the rule based on the theory of consensus ad idem, is that a contract (1) [1955] 2 Q.B.D. 327.

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, but    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 : America Jurisprudence,    2nd Edn., Vol. 17, Art. 54 p. 392    and Williston on Contracts, 3rd Edn. Vol.    1 p. 271. 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 be accepted.    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 inapplicable 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. The appeal therefore fails and is dismissed with costs. Hidayatullah, J. Where and when is the communication of an acceptance complete under the Indian    Contract Act,    when parties complete their contract by long distance telephone ? On the answer to this question depends the jurisdiction of the court trying the suit giving rise to this    appeal. A contract was made ,on the telephone and the proposer complains of its breach by the acceptor. We    are hardly concerned with the terms of the contract and they need not be mentioned. At the time of the telephonic conversation the proposers who are plaintiffs in the suit (respondents    here) were at    Ahmedabad and    the acceptor, who    is the defendant (appellant here), was at Khamgaon in Vidarbha.    The plaintiffs' suit has    been instituted at Ahmedabad. If the acceptance was complete and contract was made when the    appellant spoke into    the telephone at Khamgaon, the Ahamedabad court    would    lack jurisdiction to try the suit. It would, of    course, be otherwise if the acceptance    was complete only on    the reception of the speech at Ahmedabad and that was the place where the contract was made.

The rules to apply in our country are statutory but the Con- tract Act was drafted in England and the English Common    law permeates it;    however, it is obvious that    every    new development of the Common law in England may not necessarily fit into the scheme and the words of our statute. If the language of our enactment creates a non-possumus adamant rule, which cannot be made to yield to any new theories held in foreign courts our clear duty will be to read the statute naturally and to follow it. The Court of Appeal in England in Entores Ltd. v. Miles Far East Corporation(1) held that a contract made    by telephone is complete only where    the acceptance is    heard by the proposer (offeror    in English Common law) because generally an acceptance must be notified to the proposer to make a binding contract and the contract emerges    at the place where the acceptance is received    and not at the place where it is spoken into the telephone.    In so deciding, the Court of Appeal did not apply the    rule obtaining in respect    of contracts by correspondence or telegrams, namely, that acceptance is complete as soon as a letter of acceptance is put into the post box or a telegram is handed in for dispatch, and the place of acceptance is also the place where the contract is made. On reading    the reasons given in support of the decision and comparing    them with the language of the Indian Contract Act I am convinced that the Indian Contract Act does not admit our accepting the view of the Court of Appeal.

Sir William Anson compared the proposal (offer    in English Common law) to a train of gun-powder and the acceptance to a lighted    match.    This picturesque description    shows    that acceptance is the critical fact, even if it may not explain the reason underlying it. It is, therefore, necessary to see why the rule about acceptance by post or by telegram was treated    as a departure from he general rule of law    that acceptance must be communicated (1) [1955] 2 Q.B.D. 327.

The rule about acceptance by post or telegram is adopted in all countries in which the English Common law influence is felt and in many others and, as will be shown    later,    the Indian    Contract Act gives statutory approval to it.    That rule is that    a contract is complete    when a letter of acceptance, properly addressed and stamped is posted,    even if the    letter    does not reach the destination or having reached it is not read by the proposer.    The same principle applies    to telegrams.    See Cowan v. O 'Conner(1), Tinn v. Hoffman & Co.(1). The first question is whether the general rule or the special rule applies to contracts made on    the telephone and    the second what is the    position under    the Indian    Contract Act. The answer to the first    question is that there is difference of opinion in the countries of    the world on that    point and to the second that    the Indian Contract Act does not warrant the acceptance of the decision in the Entores case(1). To explain the true position, as I understand it, I may start from the beginning. A contract is an agreement enforceable by law and is    the result    of a proposal and acceptance of the proposal.    The proposal when    accepted becomes a promise. Now it may be conceded, that, as Bowen L. J. said in Carlill v. Carbolic Smoke Ball Co.(1) "........as an    ordinary rule    of law    an acceptance of an offer    made ought to be notified to the person who makes an offer, in order that the two minds may come together". or, as Anson puts it, acceptance means in general a communi- cated acceptance. This is the English Common law rule    and is also accepted in the United States, Germany and France. The communication must be to the proposer himself unless he expressly or impliedly provides that someone else    may receive    it. According to our law also (s. 7) in order to convert    a proposal into a promise the acceptance must be absolute and unqualified and in the manner prescribed or in some usual and reasonable manner. The intention to accept must be expressed by some act or omission of the party accepting. It must not be a mental acceptance proportion in mention retentum-though sometimes silence may be treated as acceptance. Section 3 of our Act says that the    com- munication of acceptance is deemed to be made by an act or omission of the party by which he intends to    communicate such acceptance or which has the effect of communicating it. (1) [1888] 20 Q.B.D. 640.

(3) [1955] 2 Q.B.D. 327.

(2) (1873) 29 L.T. 271, 274, 278.

(4) (1893)1 Q.B.D. 256 at 269.

The difficulty arises because proposals and acceptances    may be in praesentes or inter absentes and it is obvious    that the rules must vary. In acceptance by word of mouth,    when parties are face to face, the rule gives hardly any trouble. The acceptance    may be by speech, or sign    sufficiently expressive and    clear    to form a communication of    the intention to accept. The acceptance takes effect instantly and the contract is made at the same time and place. In the case of acceptance inter absentes the communication must be obviously by some agency. Where the proposer prescribes a mode of acceptance that mode must be followed. In other cases a usual and reasonable manner must be adopted unless the proposer waives notification. Cases in the    last category are offers of reward for some service (such as finding a lost purse or a stray dog (Williams v. Carwardine) (1) or fulfilling some condition, such as trying a medicine (Carlill v. Carbolic Smoke gall Co.-supra). The offer being to the whole world, the acceptance need not be notified    and the contract is made when he condition is fulfilled. Then come cases of acceptance by post, telegraph, telephone, wireless and so on. In cases of contracts by correspondence or telegram, a different rule prevails and acceptance is complete as soon as a letter of acceptance is posted or a telegram is handed on for dispatch. One way to describe it is that acceptance is complete as soon as the acceptor    puts his acceptance in the course of transmission to the proposer so as to be beyond his power to recall.    Acceptance by    post or telegram is considered a usual mode of communication    and it certainly is the most often allowed. But    letters    get lost or miscarried and telegrams get grabled.    What should happen if the letter got lost in the post or the telegraphic message    got mutilated or miscarried ? It was held as early as 1813 in Adams v. Lindsell(1) that even    in such a contingency acceptance must be taken to be complete as    soon as the letter is posted and not when it is delivered.    It was observed :

"For if the defendant were not bound by their offer when accepted by the plaintiffs till the answer was received, then the plaintiffs ought not to be bound till after they had received the notification    that the defendants    had received their answer and assented to it;    and so it might go on ad infinitum".
of course, if it is contemplated that the acceptance will be by post, what more can the acceptor do than post the letter ? The (1) 4 B &A 621.

(2) [1813] 106 E.R. 250.

above question    was asked by Lord Cottenham in Dunlop v. Higgins(1) and the Lord Chancellor also asked the question : How can he be responsible for that over which    he had no control ?"

Dunlop    v. Higgins(1) is the leading case in English Common law and it was decided prior to 1872 when    the Indian Contract Act was enacted. Till 1872 there was only one case in which a contrary view was expressed (British and American Telegraph Co. v. Columbus)(1) but it was disapproved in    the following year in Harris' case(3) and the later cases    have always taken a different view to that in Colson's case.    In Henthorn v. Fraser (4) , Lord    Hescehell considered    that Colson's case must be considered to be overruled. Earlier in 1879 4 Ex. D. 216 (Household Fire Insurance Co. v. Grant)    Bramwell L.J.    was assailed by    doubts    which    were answered by Thesiger L.J. in the same case :

"A contract complete on the acceptance of an offer being posted but liable to being put an end to by any accident in the post, would be more mischievous than a contract only binding on the parties upon the    acceptance actually reaching the offeror. There is no doubt    that the implication    of a complete, final    and absolutely binding contract being formed as soon as the acceptance of an offer is posted may in some cases lead to hardship but it is difficult to adjust conflicting rights between innocent parties.    An offeror, if he chooses, may always make the formation of the contract which he proposes, dependent on    the actual communication to himself of the    acceptance. If he trusts to the post, and if no answer is received, he can make enquiries of the person to whom the offer was addressed.......... On the other hand if the contract is not finally concluded    except in the event of    the acceptance actually reaching the offeror,    the door would be opened to the perpetration of fraud; besides there would be    considerable delay in    commercial transactions; for    the acceptor    would never be entirely safe in acting upon his    acceptance until he    had received notice that his letter of acceptance has reached its destination." 2,2 (1) (1948) 9 E.R. 805.
(3) (1872) L.J.C. 625.
(2) (1871) 6 Ex. 108.
(4) (1892) 2 Ch. 27.
It is hardly necessary to multiply examples. It is sufficient to point out that    Lord Denning (then Lord Justice) in    the Entores case also observes :
"When a contract is made by post it is clear law throughout the Common law countries that the acceptance is complete as soon as    the letter is put into the post box, and that is where the contract is made."
Although Lord Romilly M.R. in Hebbs' case(1) said that    the post office was the "common agent" of both parties, in    the application of this special rule the post office is treated as the agent of the proposer conveying his proposal and also as his agent for receiving the acceptance. The principles which underline the exceptional rule in English Common    law are:

(i) the    post office is the agent of    the offeror to deliver the offer and also to receive the acceptance;
(ii) no contract by post will be possible, as notification will have to follow    notification to make    certain that each letter was    duly delivered;
(iii) satisfactory evidence of    posting    the letter is generally available;
(iv) if the offeror denies the receipt of the letter it would be very difficult to disprove his negative; and
(v) the    carrier of the letter is a third person over whom the acceptor has no control.
It may    be mentioned that the law in the United States is also the same.    In the American Restatement (Contract    : _

74) it is stated that a contract is made at the time    when and the placewhere the last act necessary for its formation is performed.    In the Volume on Conflict of laws, _    326 reads :

"When an offer for a bilaterial    contract is made in one state and an acceptance is    sent from another state to the first state in an authorized manner the place of contracting is as follows :-
(a) if the acceptance is sent by an agent of the acceptor, the place of contracting is    the state where the agent delivers it; (1) (1857) L.R. 4 Eq. 9,12.
(b) if    the acceptance is sent by any other means, the place of contracting is the state from which the acceptance is sent." Comment on these clauses is "(a) When acceptance is authorized to be    sent by mail, the place of contracting is where the acceptance is mailed.
(b) When an acceptance is to    be sent by telegraph, the place of contracting is where the message of acceptance is received by    the telegraph company for transmission."
Professor Winfield (writing in 1939) said that this    rule prevailed in Canada, South Africa, New South Wales. Dealing with the European countries he said that three systems    are followed : (1) -the system of Information under which    the offeror    must be notified and the contract is    formed only when the offeror is so informed. This prevailed in Belgium, Italy,    Spain,    Roumania, Bulgaria and    Portugal; (2)    The system    of declaration, under which the contract is formed from the moment when the recipient of the offer declares his acceptance, even without the knowledge of the offeror.    This system is divided into three theories :

"(i) theory of declaration stricto sensu, that is to say, declaration alone is sufficient;
(ii) theory of expedition, that is to    say, the sending of    the acceptance    by post is enough though not a bare declaration;
(iii) theory of reception that is to say,    the reaching of the letter is the decisive factor whether the letter is read or not.
The theory of    reception as stated here is    accepted in Germany    Austria, Czechoslovakia, Sweden, Norway, Denmark, Poland and the U.S.S.R. Prof. Winfield however, concludes :

"But the    greater majority of states accept either the theory of declaration stricto sensu or the theory of expedition.    Among    many others Dr. de Visscher (in his    article in Revue de Droit    International    (1938)    "Du moments de lieu de formation yes contracts par correspondence en adroit international prive") mentions    Brazil,    Egypt,    Spain (Commercial Code),    Japan,    Morocco, Mexico........ France.......... in 1932.......... decided in favour of expedition theory."
(3) The mixed or Electric system : In this the contract is formed    when the acceptance is received but it relates    back to the time when the acceptance was sent.

We now come to the question of telephone. Prof. Winfield expressed the opinion that the rule which has been accepted for letters and telegrams should not be extended    to communications by telephone. He favoured the application of the general rule that an acceptance must be communicated. He asked a question if the line is in such bad working order that the offeror hears nothing and if the parties get in touch again and the    offer is cancelled before it is accepted, will there be a contract? He answered :

"It is    submitted that there is    no communication until the reply actually comes to the knowledge of the offeror.    In the first place, the telephone is much more    like conversation face to face than an exchange of letters ............ the risk of mistake    over the telephone is so great compared to written communications that businessmen would demand or expect a written confirmation of what is said over the telephone."
In this    opinion    Professor Winfield found support in the American Restatement (Contract : _ 65) "Acceptance given by telephone is governed by the principles applicable to oral acceptance where the parties are in the presence of    each other;"
but he conceded that the decided cases in    the United States are to the contrary. Williston (Contracts) at p. 238 gives all of them.    In the decided cases the analogy of post    and telegraph is accepted for telephones and it is observed :
"The point decided by these cases related to the place of a    contract rather than    its existence, but the decision that the place where the acceptor speaks is the place of    the contract    necessarily involves the conclusion that it is the speaking of the acceptor,    not the hearing of the offeror which completes the contract." (See Traders G. Co. v. Arnold P. Gin Co.-Tex Civ.    App. 225 S.W. 2d. 1011).
No doubt the decided cases are of the State courts but it is hardly    of be expected that a decision on such a point    from the Supreme 67 4 Court of the United States would be easily available.    The Swiss Federal    Code of obligations, it    may be mentioned, provides (Art.    4) "Contracts concluded by telephone    are regarded as made between parties present if they or their agents have been personally in communication." Williston whose revised edition (1939) was available to    Dr. Winfield, observed that a contract by    telegram suggested analogies to a contract by correspondence but    a contract over the telephone was more analogous to parties addressing each other in praesentes and observed :

"A contract by telephone presents quite as great an analogy to a contract made when the parties are orally addressing one another in each other's presence.    It has not    been suggested that in the latter case the offeror takes the risk    of hearing an    acceptance addressed    to him. The    contrary has    been held.......... If then it is essential    that the offeror shall hear what is said to him, or at least    be guilty of    some fault in    not hearing, the time and place of the formation of the contract is not when and where    the offeror speaks, but when and where the offeror hears or ought to hear and it is to be hoped that the principles applicable to contracts between parties in the presence of each other will be applied to negotiations by telephone." The Entores case fulfilled the hope expressed by Williston and Professor Winfield. Before I deal with that case I may point out that in Canada in Carrow Towing Co. v.    The Ed My Williams(1), it was    held, as the headnote correctly summarizes :
"Where a    contract is proposed and accepted over the    telephone, the place    where    the acceptance takes place constitutes the place where the contract is made. Acceptance over the telephone is of the same effect as if    the person accepting it had done so by posting a letter, or by sending off a telegram from that place."
Similarly, in the Restatement (Conflict of Laws) the comment in    326, partly quoted before, is :
(c) when an acceptance is to be given by telephone, the place of contracting is where the acceptor speaks his acceptance; (1) 46 D.L.R. 506.
67 5
(d) when it is by word of mouth between    two persons standing on opposite sides of a state boundary    line, the place of contracting is where the acceptor speaks at the time he makes his acceptance.
(e) This rule    does not apply to an offer which requires    for    acceptance actual communication of consent to the offeror.    In that case, the place of contracting is where the acceptance is received in accordance    with the offer.
64 in the Volume on Contract says "An acceptance may be transmitted by any means which the offeror has authorized the offeree to use and, if so transmitted, is operative and completes the contract as soon as put    out of the offeree's possession, without regard to whether it ever reached the offeror, unless the offer otherwise provides." (Emphasis supplied).
It may be mentioned that in an    old English case (Newcomb v. De Roos) (1) HUI J. observed: "Suppose    the two parties stood on different sides of the boundary line of the district : and that the order was then verbally given and accepted.    The contract would be made in    the district in which the order was accepted."
This case was expressly dissented from in the Entores    case to which I now proceed. I have quoted at    length    from Professor Winfield, Williston and the American    Restatement because    they lie beneath the reasons given by the Court of Appeal.

The question in the Entores case(1) was whether under    the Rules of the Supreme Court the action was brought to enforce a contract or to recover damages or other relief for or in respect    of the breach of a    contract made    within    the jurisdiction of the Court (or.    11 r. 1). As the contract consisted of an offer and its acceptance both by a telex machine, the proposer being in London and the    acceptor in Amsterdam, the question was whether the contract was made at the place where the acceptor tapped out the message on    his machine    or at    the place where the    receiving machine reproduced the message in London. If it was in (1) (1859) 2 B & E 271.

(2) [1955] 2 Q.B.D. 327.

London    a writ of Summons could issue, if in Amsterdam no writ was possible. Donovan J. held that the contract    was made in London. The Court of Appeal approved the decision and discussed the question of contracts by telephone in detail and saw no difference in principle between the telex printer    and the telephone and applied to both the    rule applicable to    contracts made by    word of mouth. Unfortunately no leave to appeal to the House of Lords could be given as the matter arose in an interlocutory proceeding. The leading judgment    in the case was    delivered by    Lord Denning    (then    Lord Justice) with whom Lord Birkett (then Lord Justice) and Lord Parker (then Lord Justice) agreed. Lord Birkett gives no reason beyond saying that the ordinary rule of law that an acceptance must be communicated applies to telephonic acceptance and not the special rule applicable to acceptance    by post or telegraph.    Lord    Parker    also emphasizes the ordinary rule observing that as that rule is designed for the benefit of the offeror, he may waive    it, and points out that the rule about acceptance by post or telegraph is adopted    on the    ground    of expediency. He observes that if the rule is recognized that telephone or telex telecommunications (which are received    instantane- ously) become operative though not heard or received, there will remain no room    for the general proposition    that acceptance must be communicated. He illustrates    the similarity by comparing an acceptance spoken so softly as not to    be heard by the offeror when parties are face to face, with a telephone conversation in which the telephone goes dead before the conversation is over. Lord Denning begins by distinguishing    contracts made by telephone or telex from contracts made by post or telegraph on the    ground    that in the former the communication is instantaneous like the communication of an acceptance by word of mouth when parties are face to face.    He observes that in verbal contracts, there is no contract if the speech is not    heard and gives the example of    speech    drowned in noise from an aircraft. The acceptance, he points out, in such cases must be repeated again so as to be heard and then only there is a contract. Lord Denning sees    nothing to distinguish contracts    made on the telephone or the telex from those made by word of mouth and observes that if    the line goes dead or the speech is indistinct or the telex machine fails at the receiving end, there can be no contract till the acceptance is properly repeated and received at the offeror's end.    But he adds something which is so important that I prefer to quote his own words 67 7 "    In all the instances I have taken so    far, the man who sends the message of acceptance knows that it has not been received or he    has reason to know it. So he must    repeat    it.

But, suppose that he does not know that    his message did not get home. He thinks it    has.

This may    happen    if the listener on    the telephone    does    not catch the    words    of acceptance, but nevertheless does not trouble to ask for them to be repeated : or the ink on the teleprinter fails at the receiving    end, but the clerk does not ask for the message to be repeated : so that the man who sends an acceptance reasonably believes    that    his message has been received. The    offeror in such circumstances is clearly bound, because he will be estopped from saying that he    did not receive the message of acceptance. It is his own fault that he did not get it.    But if there should be a case where    the offeror without    any fault on his part does    not receive the message of    acceptance-yet    the sender of it reasonably believes it has    got home when it has not-then I think there is no contract." (Emphasis supplied) Lord Denning thus holds that a contract made on    the telephone may be complete even when the acceptance is    not received by the proposer. With respect I would point out that Lord Denning does not say where the contract would be complete in such a case. If nothing is heard at    the receiving end how can it be said that the general rule about a communicated acceptance applies    ? There is    no communication at all. How can it be said that the contract was complete at the acceptor's end when he heard nothing ? If A says to B, "Telephone your acceptance to me" and    the acceptance is    not effective unless A has heard it,    the contract is not formed till A hears it.    If A is estopped by reason    of his not asking for the reply to be repeated, the making    of the contract involves a fiction that A has heard the acceptance.    This fiction rests on the rule of estopped that A's conduct induced a wrong belief in    B. But    the question is why should the contract be held to be concluded where A was and not on the analogy of letter and telegram where B accepted the offer ? Why, in such a case, not apply the expedition theory ?

Even in the case of the post the rule is one of assumption of a fact and little logic is involved. We say that    the proposal was received and accepted at the acceptor's    end. of course, we could have said with as much apparent logic that the proposal was made and accepted at the proposer's end. It is simpler to    put the acceptor to the proof that he put    his acceptance in effective course of transmission, than to investigate    the denial    of the proposer. Again, what would happen if    the proposer says    that he heard differently and the acceptor proves what he said having recorded it on a tape at his    end ? Would what    the proposer heard be the contract if it differs from what the acceptor said ? Telegrams get garbled in transmission but if the proposer asks for a telegram in reply he bears the consequences. As Ashurst    J. said in Lickbarrow v. Mason(1) "Whenever one of two innocent parties must suffer by the act of a third, he who has enabled such person to occasion the loss must sustain it."

Other difficulties may arise.    A contract may be legal in one ,state and illegal in another. Williston reports    one such case (Mullinix v. Hubbard) (1) in which the legality of a bargain dealing in cotton futures was held to be governed by New York law when orders were telephoned from Arakansas where such dealings were illegal, to New York    city where they were legal. What happens when the acceptor mistakes the identity of the proposer ? One such case (Tideman &    Co. v. McDonalo) (3 ) has led to much institutional discussion (See 39 Hary.    L. R. 388 :and (1926) 4 Tex L. Rev.    252) quoted by Williston.

It will be seen from the above discussion that there    are four -classes of cases which may occur when contracts    are made by telephone : (1) where the acceptance is fully heard and understood; (2) where the telephone fails as a machine and the proposer does not hear the acceptor and the acceptor knows that his acceptance has not been transmitted;    (3) where owing to some    fault at the    proposer's end    the acceptance is    not heard by him and he does not ask    the acceptor to repeat his acceptance and the acceptor believes that the acceptance has been communicated; and (4) where the acceptance has not been heard by the proposer and he informs the acceptor about this and asks him to repeat his words. I shall take them one by one.

Re: Bhagwandas Goverdhandas Kedia vs M/S. Girdharilal Parshottamdas

Where the speech is fully heard and understood there is a binding contract and in such a case the only question is as to the place where the contract can be said to be completed. Ours is that kind of a case. When the communication fails and the -acceptance is not heard, and the acceptor knows about it, there (1) (1787) 102 E.R. 1192.    (2) G.F. (2nd) 109 C.C.A. 8.

(3) 275 S.W. 70 (Tex Civ. App.) 6 7 9 is no    contract between the    parties at all because communication    means an effective communication or a communication reasonable in the circumstances, Parties    are not ad    idem at all. If a man shouts his acceptance    from such a long distance that it cannot possibly be heard by the proposer he cannot claim that he accepted the offer    and communicated it to the proposer as required by s. 3 oil    our Contract Act. In the third case, the acceptor transmits his acceptance but the same does not reach the, proposer and the proposer does not ask the acceptor to repeat his message. According to Lord Denning the proposer is bound because of his default.    As there is no reception at the proposer's end, logically the contract must be held to be complete at the proposer's end. Bringing in considerations of estopped do not solve the problem for us. Under the terms of s. 3 of our Act such communication is good because the acceptor intends    to communicate his acceptance and follows a usual and reasonable manner and puts his acceptance in the course of transmission to the proposer. He does not know that it has not reached. The contract then results in much the same way as in the case of acceptance by letter when the letter is lost and in the place where the acceptance was put in course of transmission.    In the fourth case if the acceptor is told by the offeror that his speech cannot be heard there will be no contract because communication must be effective communication and the act of acceptor has not the effect of communication it -and    he cannot claim that he acted reasonably.

We are    really not concerned with the case of    a defective machine    because the facts here are that the contract    was made with the machine working perfectly between the    two parties. As it is the proposer who is claimigi that the was complete hi.-, end, s. 4 of our Act must be read because it creates    t special rule. It is "a rather peculiar modification of the rule applicable to acceptance by post under the English Comnion law Fortunately the    language of s. 4 covers acceptance telephone wireless etc.    The section may be quoted at this stage "4. Communication when complete.

The communication of a proposal    is complete when it comes to ,he knowledge of the person to whom it is made.

The communication of    an acceptance    is complete,.

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;

sup/65 15 68 0 as against the acceptor, when it comes to    the knowledge of the proposer.

It will be seen that the communication of a    proposal is complete when    it comes to the knowledge of the person to whom it is made 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. Section 5 of the Contract Act next lays down that a proposal may be revoked at any time before the communication 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 proposer's end.

The present is a case in which the proposer is claiming    the benefit 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 (the proposer) so as to be out of his    (the acceptor's) power to recall. It is obvious that the,    word of acceptance    was spoken at Khamgaon and the    moment    the acceptor spoke    his acceptance hi, put it in course of transmission to the proposer beyond his recall. He could not revoke his acceptance thereafter. It 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 proposer, 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, Telstar and    Early    Bird were not contemplated.    If time has marched and inventions have made it easy to communicate instantaneously over    long 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.

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    com- mercial    circles to prove the dispatch of the    letters    but very difficult to disprove a statement that the letter    was not 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. No doubt the authority of the Encores case is there and Lord Denning recommended an uniform rule, perhaps as laid down by he Court of Appeal. But the Court of Appeal was not called upon to construe a written    law which brings in    the inflexibility if 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." 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.

In the result I would allow the appeal with costs. ORDER In view of the opinion of the majority the appeal is dismissed with costs.