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Republic Medico Surgical Co. v. Union of India

IN THE HONBLE
HIGH COURT OF KARNATAKA

In the matter of
Republic Medico Surgical Co.
(Petitioner)
V.
Union of India
(Respondent)
ON SUBMISSION TO THE HIGH COURT
MEMORANDUM FOR THE PETITIONER

COUNSEL FOR THE PETITIONER

(ISHITA CHAKRABARTY)
Roll. No. 80 Semester: 1

HIDAYATULLAH NATIONAL LAW UNIVERSITY, RAIPUR

Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

TABLE OF CONTENTS
LIST OF ABBREVIATIONS

INDEX OF AUTHORITIES

STATEMENT OF JURISDICTION

STATEMENT OF FACTS

ISSUES RAISED

SUMMARY OF PLEADINGS

WRITTEN SUBMISSION

PRAYER FOR RELIEF

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Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

LIST OF ABBREVIATIONS
&

And

AIR

All India Reporter

Art.

Article

Co.

Company

C.P.C

Code of Civil Procedure

Govt.

Government

HC

High Court

Honble

Honourable

HL

House of Lords

ILR

Indian Law Reports

Kant

Karnataka

Ltd.

Limited

No.

Number

S.

Section

v.

Versus

Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

INDEX OF AUTHORITIES
JUDICIAL DECISIONS

Brinkbon Ltd v Stahag Stahl Und Stahlwarenhandelsgesellschaft M.B.H., (1983) 2

AC 34: (1982) 2 WLR 264 (HL)
British & American Telegraph Co v. Colson, (1871) LR 6 Ex 108
Crest Nicholson (Londinium) Ltd v. Akaria Investments Ltd (2010)
Destiny 1 Ltd v. LLyods TSB Bank plc
Holwell Securities Ltd v. Hughes
Holwell Securities Ltd. v. Hughes (1974) 1 WLR 155
Kamisetti Subbaih v. Katha Venkataswami, ILR (1903) 27 Mad 355, 359.
Scot Law Commission No.144 [1993] para 4.5
Sepulchre Bros. v. Sait Khushal Das Jagjivan Das Mehta, AIR 1942 Mad 13

STATUTES:
Indian Contract Act, 1872
Code of Civil Procedure, 1908
BOOKS
Ansons law of Contracts, 29th Ed.
Chitty on Contracts
Law of Contracts, Janet OSullivan & Jonathan Hillad

Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

STATEMENT OF JURISDICTION
The Appellant has approached the Honble High Court of Karnataka under Article 226 and
Article 227 of the Indian Constitution.

Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

STATEMENT OF FACTS
1. The Appellant Company in the present case, made an offer for the supply of silt
equipages to the Executive Engineer Southern Gauging Division Bangalore, in
response to a tender released by the aforesaid Company.
2. The Offer though made to the Southern Gauging Division Bangalore, was addressed
to the Defendant Company.
3. The tender was accepted by the Defendant Company for the supply of silt equipages
for which the Defendant was liable to pay the price of Rs. 32897.86.
4. There was a breach of contract on the part of the Defendant Company with respect to
the balance to be paid.

5. The Appellant initially brought a suit against the Defendant Company in the Court of
The Principal Civil Judge, Bangalore City.
6. The present case is an Appeal directed against the order passed by the Bangalore City
Court, on Issue No.1 in O.S. No. 150 of 1972 on the file.

Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

ISSUES RAISED
1. Whether a Contract exists between the parties?
2. Whether the Postal rule is legally valid? Also whether the Cause of Action arose
in Bangalore and subsequently the Bangalore City Court has any jurisdiction on
the above matter?

SUMMARY OF ARGUMENTS
Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

1. Communication of acceptance is necessary for a contract and it is one of essential

of contract in general term In the present case there is Offer since the tender offer
has been addressed to the Defendant Company and subsequently accepted by an overt
manifestation (notification of acceptance).
2. The Postal rule of the place where the contract is concluded is not legally valid
Since it puts the offeree at an advantageous position as compared to the offeror who
has no knowledge of when the contract has risen.
3. The Cause of Action takes place in Bangalore and hence the Bangalore city court
has jurisdiction over the matter Since a contract is binding on both the parties, it
comes into existence where the acceptance is received, i.e. where the offeror resides.
Hence the Cause of Action lies with the Bangalore City court.

WRITTEN PLEADINGS
Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

ISSUE 1 Contract is complete when acceptance is received

Offer, Acceptance and Consideration together constitute the essentials of a contract. Here
though the offer was initially made with the intention of supplying silt equipages to the
Executive Engineer, Southern Gauging Division Bangalore, the same was addressed to the
Defendant Company.
According to the Indian Contract Act, 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.1 In Crest Nicholson (Londinium) Ltd v. Akaria Investments Ltd (2010) , it
was laid down that the general rule is that whatever be the mans intention, if he so conducts
himself that a reasonable man would believe that he wishes to act upon the terms proposed
and the other party accepting the same enters into a contract with him, the man conducting
himself that way would be bound.2

ISSUE 2(A) Legality of the Postal Rule

Several Jurists have put forth views regarding scrapping of this position and adopting the
principle of consensus or meeting of minds in reference to the postal communications since
it favours the offeree who knows the exact position of the agreement. 3 Again, the post office
is not an agent to whom the acceptance can be communicated hence the rule applying to telex
should be applied here too. It was held in the case Holwell Securities Ltd. v. Hughes (1974) that
the postal rule provides the offeror protection by requiring actual notification of the
acceptance.4 Unlike the English law, where it is laid down that the Contract comes into
existence as soon as the Acceptance is dispatched so as to be out of the reach of the acceptor,
the Indian Contract Act adopts a peculiar modification. The English Law also has its own

1 S.2(b) Indian Contract Act

2 Also in Destiny 1 Ltd v. LLyods TSB Bank plc
3 Scot Law Commission No.144 [1993] para 4.5
4 Holwell Securities Ltd. v. Hughes (1974) 1 WLR 155
Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

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dissenting judgements regarding the place where the contract is concluded such as the ruling
by Lord Bramwell in the case of British & American Telegraph Co v. Colson 5
According to the Indian Contract Act, the proposer becomes bound as soon as the acceptor
sends his letter of acceptance, but the acceptor becomes bound only when the letter is
received by the proposer.
The communication of an acceptance is complete as against the proposer when it is put in a
course of transmission so as to be out of the power of the acceptor; as against the acceptor
when it comes to the knowledge of the proposer.6
Whereas, a contract is an agreement binding on both the parties. In Kamisetti Subbaih v.
Katha Venkataswami, the Madras HC held that the Contract should be complete at the place

where the Acceptance is received.7 This was affirmed in a decision passed by the House of
Lords in Brinkbon Ltd v Stahag Stahl Und Stahlwarenhandelsgesellschaft.8Again, in Sepulchre
Bros. v. Sait Khushal Das Jagjivan Das Mehta, the Court held that although an acceptance by

post is complete when the letter is posted, it is a continuing act until it reaches the person to
whom it is communicated and thus can be taken to be made also at the place where the
acceptance is received.9 In Holwell Securities Ltd v. Hughes, it was held that the mere posting
of a notice of acceptance to purchase the land, which was never delivered, is not valid.

ISSUE 2(B) Where the Cause of Action arises and the court that has Jurisdiction.
According to the C.P.C10, suits for recovery or compensation can be instituted where the
defendant/s reside/s, or where the Cause of Action wholly or in part arises. It is contended
that the offer was made at Bangalore hence a part of the Cause of Action arises in Bangalore.
5 Lord Bramwell in British & American Telegraph Co v. Colson, (1871) LR 6 Ex 108
6 S.4 Communication when complete; Indian Contract Act,1872
7 Kamisetti Subbaih v. Katha Venkataswami, ILR (1903) 27 Mad 355, 359.
8 Brinkbon Ltd v Stahag Stahl Und Stahlwarenhandelsgesellschaft M.B.H., (1983) 2 AC 34: (1982) 2
WLR 264 (HL)
9 Sepulchre Bros. v. Sait Khushal Das Jagjivan Das Mehta, AIR 1942 Mad 13
10 S.20(c) of the Civil Procedure Code
Memorandum on Behalf of the Petitioner

Republic Medico Surgical Co. v. Union of India

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Moreover the Contract is concluded at the place where the acceptance has been received, i.e.
Bangalore, since only then is consensus ad idem established and the contract becomes
binding on both the parties.

PRAYER FOR RELIEF

Wherefore in the lights of the facts stated, authorities cited, arguments advanced, the
petitioner humbly requests the Honble Court to adjudge and declare that:1. The appeal be admitted
2. The Legality of the Postal Rule of Communication be reviewed.
3. A writ of Certiorari passed considering the failure of the City Court in exercising
its jurisdiction.
4. The balance amount be returned to the Appellant.
And, pass any order or decree in the favour of the petitioner as the Court may deem fit in the
lights of Justice, Equity & Good Conscience. All of which is most humbly prayed.

COUNSEL ON BEHALF OF APPELLANT

ISHITA CHAKRABARTY

Memorandum on Behalf of the Petitioner

OCTOBER 5, 2015