Introduction:
It is not a new thing to the law that many times there are cases where people don’t even have a strong cause of action for their appeal. Several people, most of the time in the sight of rage, jealousy, and other personal intentions like merely ruining the social image of a person drag them to court with a plea that has no genuine or proof to back it up. Let us see a similar case today. Banwari Lal and Others vs. Sukhdarshan Dayal[1] is a case from 1973 that will help us notice certain aspects of appeal that people often ignore as well as how little things and facts end up determining the result of a case. This case raised a relatively new concept related to offer and its legality- “offer made over the loudspeaker”.
Facts of the Case
A large-scale area located in Plot number 765 of Mauza Bhaunjar (Ghaziabad) was further split into smaller plots by the respective co-owners as a part of a housing scheme being implemented which was called “Chandrapuri colony”. The plaintiffs, representing many of the purchasers of several smaller divided plots, filed a suit saying that a particular plot (plot no. 19) was to be left unsold so that a Dharmshala could be made on the same but instead it was sold to a woman named ‘Manohari Devi’. This woman later went on to sell the plot to the defendant. The plaintiffs wanted that plot no. 19 should be set aside especially for the construction of a Dharmshala and that the plot is taken out of the possession of the defendant permanently. The fact that the defendant had built a boundary wall surrounding the plot was also mentioned by the plaintiffs and they asked for taking down the same along with the affirmation that the defendant will not impede or disturb the construction of the Dharmshala in any way.
The Plaintiffs also contended that since the representation was made by or on behalf of the co-owners of the plot to all the buyers saying that the plot was supposed to be for the Dharmshala which was also the reason that the buyers paid a hefty amount for their plots; the co-owners had no right to sell the plot to Manohari Devi, who also didn’t have the right to further sell it to the defendant.
The defendant, however, disagreed that plot no. 19 was set aside especially so that a Dharmshala could be built there and said that since Manohari Devi bought the plot fair and square from the co-owners with not even a single paperwork error had become the rightful owner of the piece of land and hence was rightfully entitled as well to sell the same to him willingly.
The Offer made on Loudspeaker
It was being said that when the housing scheme was being introduced & advertised, it was announced on the speaker that plot 19 will be specifically kept aside so that a Dharmshala can be built on it. This was an important stone in the case that wasn’t to be left unturned. However, there was no evidence whatsoever about who was the person that on behalf of the co-owners made the representation that a Dharmshala was to be built on the plot. How does this matter and how exactly is it important? What is the nature of such an offer? Is this offer valid or even enforceable? What was the court’s opinion on this? Let us understand.
The Nature of Offer made on Speaker
An offer that has been made on a speaker cannot be exactly termed as an ‘offer’. Such ‘seeming offers’ are mere ‘invitations to offer’. These two terms are very closely related and can often be hard to differentiate. Offer as defined in Section 2(a) of the Indian is- “when one person signifies to another his willingness to do or abstain from doing something to obtain the assent of the other to such an act or abstinence, he is said to propose”.[2] However, an ‘invitation to offer’, as the name suggests, is an invitation by a seller for buyers to come and make the offer in order to form a contract. This means that when someone accepts an offer it creates a binding agreement, but when someone accepts an ‘invitation to offer’ it means ‘making an offer’.
The offer made on the loudspeaker which was essentially an invitation to offer in the form of an advertisement was meant to attract customers for the scheme. One more thing that has to be kept in mind is that in an invitation to offer there is no intention of a specific party to take part in forming the contract since the seller is free to reject anyone and will accept the offer of only that person who provides him with the best offer. On the other hand, in an offer, parties on both sides do have an intention to form a binding contract via negotiations. This intention being absent in invitations to offer brings us to the fact that the announcement made on the speaker could have in fact been a false invitation to offer just to attract more buyers and due to this even if someone went to the people announcing it they would be legally eligible at that time to reject them. This brings us to the question of validity and enforceability.
Validity and Enforceability of an Offer made on the Loudspeaker
We can interpret that based on the fact that there was never any evidence to be found regarding who, on the behalf of the co-owners made the representation that a Dharamshala was going to be built on the plot, as well as on the fact that it was not exactly an offer but essentially and probably a fake invitation to offer, that the validity of such a proposition is questionable. As we previously saw how offer involves negotiations and intention to create a binding agreement and the fact that almost all the buyers assumed the announcement to be legitimate and no one negotiated regarding the same with the co-owners we can see that the scenario is full of holes of doubt. Propositions like the one made on the loudspeaker are hence not valid unless confirmed and talked out with the authorities making the offer. When it comes to the enforceability of such a proposition in the court of law it is obvious that since there is no valid contract due to the absence of ‘offer’ as well as ‘invitation to offer’ in this case, there are no legal injuries or infringement of rights. Therefore, there is no reason for it being enforceable as well as it will not be enforceable per se.
The Supreme Court on Offer made on Loudspeaker (with decisions of previous courts)
The Trial Court held that the co-owners had lost their ownership over that plot and therefore they had no right to sell it to anyone.[3] Nothing was said or mentioned as such regarding the offer made on the loudspeaker and the matter went to the next court.
The First Appellate Court upheld the decision of the lower court and just like the previous court did not question anything about the offer made on the loudspeaker. The appeal was filed in the High Court.
The High Court did mention something new and gave a judgment stating that the title of the co-owners to plot no. 19 was not divested and that the plaintiffs had no cause of action to bring up the suit[4] , but failed to elaborate it further by focussing on the issue of the announcement made on loudspeaker. The suit was dismissed and was filed into the Supreme court.
The Apex court, unlike the previous courts, noticed the absence of evidence regarding the person who on the behalf of the co-owners made such a representation that a Dharamshala was going to be built on the concerned plot, and said that since even the plaintiffs were oblivious and were unable to find & prove as to who made the particular announcement, the issue completely lacked basis. It was said by the court that even if modern gizmos and gadgets like speakers and mics truly are being very useful in the conveyance of views and opinions in a clear manner but they still did not have the power to carry binding statements, offers, and promises. The court clarified that most of the times promises and offers made on speakers are nothing but shams in the name of politics. They must not be trusted or taken seriously unless confirmed officially by the announcer. They cannot be legally enforced without proper proof and confirmation as well. Similarly in the above case, the announcement seemed to be nothing but an extravagant exaggeration for attracting buyers for the property.
For the sake of complete understanding of the case, here are the other judgments by the court:
- It was seen that when the annexation of maps was done to a few of the sale/conveyance deeds it was found that plot no. 19 was exclaimed as “Dharmshala”. However, in this particular context, the aforementioned condition cannot be interpreted as having a representation that the plot will forever be like that with no constructions taking place on it. Even after the plot had been sold to Manohari Devi, the annexed maps of the same showed the plot being called “Dharmshala”. No matter what the conflicts were, the fact that the transfer of property to Manohari Devi was a legitimate registration and transfer action, was deemed true by the court. Hence, it can be said that all the buyers after this sale deed had constructive notice that plot no. 19 was not subject to any restraining agreement. It was noted that the maps, in this case, are not annexed to the conveyance deeds and hence cannot be involved to be part of the conveyance deed by integration or otherwise. In sooth, no conveyance deed describes any map in the context of using plot no. 19.
- It was also told to be noted that on record not even one of the conveyance deeds had mentioned that plot no. 19 was to be used as common land for building the Dharmshala. Due to this, no reservation is said to have been made in any of the conveyance deeds as far as the use of the plot is being questioned. Since most of the deeds contain features like the creation and development of drains, roads, etc by the co-owners, and if the plot was set apart specially for common use, then it is not possible that this info was not mentioned in all the conveyance deeds of the buyers.
Conclusion
Seeing how the plaintiffs assumed that a mere speaker announcement will be legally binding without even knowing or officially confirming if the fact was true and who announced the same; is what decided the case then and there. From this case, we can infer that offers and statements made on speakers are not at all legally binding and possibly won’t ever be. They have the potential to give rise to a binding contract only when the invitation to offer announced is legitimate and calls for further negotiation in person. Such announcements are not valid on their own, are not enforceable, and must be confirmed with clarity before making any decisions for and against them.
References:
[1] Banwari Lal and Ors. vs. Sukhdarshan Dayal , 1 SCC 294 (1973) , See full judgement- https://indiankanoon.org/doc/12263/
[2] Section 2(a) in the Indian Contract Act, https://indiankanoon.org/doc/420719/
[3] Id under point no. 5
[4] Id under point 9
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