Indirect speech :He bade his love good bye.
A) He wished his love ,"Goodbye."
B)He said , " Goodbye my love."
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"Bade", as used here, means "said". The correct answer is (b). He is saying the words, "Goodbye my love". He is not wishing for anything to happen.
Arguably this case could be ambiguous. The word "goodbye" was originally a contraction for "God be with you", as in, "oh, you are leaving? I pray that God will be with you until we meet again". So you could say that he is "wishing" that God will be with this person.
But the word "bade" itself does not mean "wished", it means "said".
In this sense, "bade" is the simple past tense of "to bid" with regard to this definition:
To utter (a greeting or salutation); to give expression to: I bade him farewell as he was leaving. (simple past tense)
Its past participle is "bidden" in this sense. Some other meanings of the verb "bid" have their past tense and past participle forms as both "bid" whereas other definitions of "bid" use "bade" and "bidden" respectively. These "bade / bidden" definitions are as follows:
To issue a command to; direct, tell, order: I did as I was bidden.
To invite to attend; summon: We were bidden to the wedding.
Even though the past tense of "bid" can be "bade" and the past participle "bidden" for these three particular definitions of "bid", they can both be "bid" as well, just as the other definitions of "bid" have a past tense of "bid" and a past participle of "bid"; however, none of these other definitions of "bid" can have a past tense form of "bade" and a past participle form of "bidden"; only these three specific definitions have alternate past tense and past participle forms.
There are other common verbal forms in English that are related to "bid" and so have the same or similar past tense and past participle forms:
forbid: past tense: forbad / forbade / forbid; past participle: forbidden / forbid
bide: past tense: bode / bided; past participle: bidden / bided
abide: past tense: abode / abided; past participle: abode / abidden / abided
As you can see, "forbad" is a variant past tense of "forbid". An obsolete past tense of bid is "bad", which is where "forbad" comes from; however, the modern past tense of bid is "bade", which is where "forbade" comes from.
You're asking about a distinction that, to a native speaker, doesn't seem to exist.
This usage of the verb "to bid"* is archaic, if not obsolete -- so much so that bidding good-bye seems awkward and strange to my ear. Modern usage tends toward quantifiable proposals, involving such things as a number of dollars, a number of hours, a number of hands to win in a round of cards, and so on. For it to sound natural to my American ear, it would have to sound consistently old-fashioned: "He bade me fare-well" and "he bade me take my leave" don't sound at all awkward, even if they do sound a tad pretentious.
It is common to describe reported speech as either direct or indirect. Although common and sometimes even useful, that description is factually wrong. Either you report speech directly, or you do not report speech at all. What is often called "indirect speech" is simply paraphrasing -- reporting the meaning without reporting the speech itself.
He bade his love fare-well.
We have no idea what he said, or even whether he said anything at all. This sentence tells us something about what he meant, or at least what whoever paraphrased it thought he meant. It does not tell us how he originally conveyed that meaning. He might have used the spoken word, or the written word, or sign language or interpretive dance or a video montage or a telepathic bond or goodness knows what else.
Even if we assume that he spoke words, we can only guess what those words might have been. Any of these, and countless more besides, are possible:
He said "Goodbye, my love".
He said "Until next time, sweetheart".
He said "See ya later, alligator."
He gently kissed her hand and whispered "Catch you on the flip-side, toots."
He waved over his shoulder and said "ta-ta, toodles and such" while walking away from the man that he hoped to make his husband.
Neither of the verbs "to wish" and "to say" carry exactly the same meaning as the verb "to bid". Verbs like "to propose", "to suggest", "to offer", "to ask" and "to require" are also close in meaning, but still not exactly the same. In the right context, any of them can be a useful substitute.
Paraphrasing in general and so-called indirect speech in particular is a lossy interpretation. There is no way to reconstruct the original from the paraphrased version.
John: Merry Christmas, ya filthy animals.
Jack: Right back atcha, weirdo.
[John exits. Jill enters.]
Jill: Did John leave without saying goodbye?
Jack: Nah. He wished us a happy holiday.
Jack's interpretation of John's parting comment is reasonable. Although Jill understands what John meant, she has no idea what he said.
* An alternate view is that, rather than two uses of the same verb, there are two separate "to bid" verbs: the archaic verb bid/bade/bidden and the contemporary verb bid/bid/bid.