UNION OF INDIA VS M/S BHIMSEN WALAITI RAM
1971 AIR 2295
Case Summary
[Acceptance]
FACTS:
A liquor shop was knocked down to a bidder at a public auction. This was subject to confirmation by the Chief Commissioner, who had the power to inquire about the bidder's financial condition before granting the licence. The bidder had to pay one-sixth part of the price immediately, and in case of any default on his part, the Government had the power to re-auction the shop, and the shortfall, if any, was recoverable from the bidder. He failed to pay one-sixth part; therefore, the Chief Commissioner did not confirm the bid and ordered resale. Resale realized much less than the original bid, and the question of the bidder’s liability to pay the shortfall arose, and the plaintiff/appellant sued for recovery of the deficiency in price and all expenses.
ISSUE:
Whether the defendant is entitled to any relief under s. 7 of the Indian Contract Act?
JUDGEMENT:
Ramaswami J. U/s 7(a) of ICA, the acceptance must be absolute and unqualified, leaving no ground for doubt or uncertainty. If the acceptance is conditional, no valid contract is formed, and the offer can be withdrawn at any moment until the absolute acceptance has occurred within a reasonable time of such offer. In the present case, the “…contract for sale wasn’t complete till the chief commissioner confirmed the bid, and till such confirmation, the bidder was entitled to withdraw the bid.”
When the bid is withdrawn before the commissioner’s confirmation, the bidder will not be liable for breach or damages. Since there was never any (complete)sale of the liquor shop's license to the defendant, no liability can be imposed on him to pay the deficiency. It is not disputed that the Chief Commissioner had disapproved of the bid offered by the defendant/respondent. If the Chief Commissioner had granted sanction in favour of the respondent, there would have been a completed transaction, and he would have been liable for any shortfall on the resale.
Ishika Tanwar
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