Court: Supreme Court of India
Full Case Name: Bhagwandas Goverdhandas Kedia vs. M/S. Girdharilal Parshottamdas
Date Decided: 30th August 1965
Citations: 1966 AIR 543, 1966 SCR (1) 656
Judges: J.C. Shah, K.N. Wanchoo and M. Hidayatullah.
Appellant: Bhagwandas Goverdhandas Kedia
Respondent: Girdharilal Parshottamdas & Co. & Ors.
Facts: On July 22nd 1959, Kedia Ginning Factory and Oil Mills (appellant) of Khamgaon entered into a contract over telephone to supply cotton seed cakes to M/s. Girdharilal Parshottamdas and Co. (respondents) of Ahmedabad. The respondents commenced an action against the appellant in the City Civil Court of Ahmedabad for failing to supply cotton seed cakes as per the aforementioned agreement. The respondents contended that the cause of action for the suit arose at Ahmedabad as the appellant’s offer to sell was accepted at Ahmedabad and the appellant was to be paid for the goods through a bank in Ahmedabad. The appellant contended that the respondents’ offer to purchase was accepted at Khamgaon; the delivery and payment of the goods were also agreed to be made in Khamgaon and the City Civil Court of Ahmedabad did not have jurisdiction to try the suit. The City Civil Court of Ahmedabad held that it had jurisdiction as the acceptance of the offer was intimated to the offerree at Ahmedabad and that is where the contract was made. The appellants filed a revision application in the High Court of Gujarat which was rejected. Then, the appellants preferred an appeal to the Supreme Court with special leave.
Contentions of appellant: In the case of a contract by telephone, only the court within whose territorial jurisdiction the acceptance of offer is spoken into telephone has jurisdiction to try any suit regarding the contract
Contentions of defendant: The contract is formed where the acceptance of offer is intimated to the offerree. Hence, the court in whose territorial jurisdiction such acceptance of offer was intimated can try such suit.
Judgement: The court held that the contract act does not expressly deal with the place where a contract has been made. As against cases of correspondence by post or telegram, in the present case of correspondence by a telephone, a contract was formed when acceptance was duly communicated to the offeror and hence at Ahmedabad.