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Devidatt Ramniranjandas Vs. Shriram Narayandas - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai
Decided On
Case Number0.C.J. Appeal No. 9 of 1931 and Suit No. 1374 of 1929
Judge
Reported inAIR1932Bom291; (1932)34BOMLR236; 137Ind.Cas.381
AppellantDevidatt Ramniranjandas
RespondentShriram Narayandas
DispositionAppeal allowed
Excerpt:
letters patent, clause 12-leave to sue-leave, a condition precedent to the suit- waiver by a party not sufficient-indian evidence act (i of 1875), section 13, 65 -secondary copies of income-tax return, admissibility of-pakka adatia.; under clause 12 of the letters patent, the obtaining of leave to sue, in a case where the cause of action has arisen in part within the local limits of the original jurisdiction of the high court, is a condition precedent to the entertainment of the suit, and the condition is not one which it is competent to the court to ignore or for the parties to waive.; hadjee ismail hadjee hubbeeh v. hadjee mahomed hadjee joosub (1874) 13 beng. l.r. 91, abdul kadir v. doolanbibi (1913) l.l.r. 37 bom 563 : s.c. 15 bom. l.r. 673, rampurtab samruthroy v. premsukh chandamal.....john beaumont, kt., c.j. 1. this is an appeal from a decision of mr. justice blackwell. the question at issue is whether the firm of anupsing batumal, in which defendants nos. 2, 3 and 5, who are the respondents in this appeal, were partners, was itself a partner in the firm of narayandas shriram. the question is ultimately one of fact, but the case raises some interesting points of law.2. the suit as originally constituted was against four defendants of whom the second was anupsing thakersidas. the claim of the plaintiffs was that they had been employed by the defendants as brokers and pakka adatias and they claimed payment of rs. 7,305-10-3, or alternatively rs. 5,256-11-6 if the firm of anupsing batumal was liable, as the balance due on the accounts. paragraph 7 of the plaint contained.....
Judgment:

John Beaumont, Kt., C.J.

1. This is an appeal from a decision of Mr. Justice Blackwell. The question at issue is whether the firm of Anupsing Batumal, in which defendants Nos. 2, 3 and 5, who are the respondents in this appeal, were partners, was itself a partner in the firm of Narayandas Shriram. The question is ultimately one of fact, but the case raises some interesting points of law.

2. The suit as originally constituted was against four defendants of whom the second was Anupsing Thakersidas. The claim of the plaintiffs was that they had been employed by the defendants as brokers and Pakka Adatias and they claimed payment of Rs. 7,305-10-3, or alternatively Rs. 5,256-11-6 if the firm of Anupsing Batumal was liable, as the balance due on the accounts. Paragraph 7 of the plaint contained an allegation that a material part of the cause of action having arisen in Bombay, with leave granted under Clause 12 of the Letters Patent this Court had jurisdiction to try the suit.

3. Soon after the suit had been instituted it was discovered that Anupsing Thakersidas had died before the date of the suit, and on October 8, 1929, defendant No. 2, the minor son of Anupsing, was joined by amendment. In the meantime, viz., on August 19, defendant No. 5 had also been joined by amendment. Although leave under Clause 12 of the Letters Patent was obtained on the institution of the suit, no further leave was obtained when defendants Nos. 5 and 2 were respectively joined, and it is clear that the original leave would not cover the suit against the fresh defendants. In the points of defence no question as to jurisdiction was raised, but on December 10, the defendants asked leave to raise certain fresh issues directed to this point and at the same time the plaintiffs raised an issue as to whether the defendants had waived their right to object as to jurisdiction.

4. At the trial in the Court below the question as to waiver was not argued, but Mr. Setalvad has argued the point in this Court. In the view I take as to the rest of the action it is not essential to decide this point, but as the question is one of general importance, and as it has been fully argued on both sides and I have formed a clear opinion upon it, I think it desirable to decide the question.

5. Clause 12 of the Letters Patent provides that the High Court in the exercise of its ordinary original civil jurisdiction shall be empowered to receive, try and determine suits of every description if (apart from the provisions as to suits relating to immoveable property) the cause of action shall have arisen either wholly, or, in case the leave of the Court shall have been obtained, in part, within the local limits of the ordinary original jurisdiction of the High Court. In cases in which some condition has to be performed before the Court can entertain a suit, the question always arises whether the condition is matter of procedure only, so that failure to perform it may be regarded as an irregularity which may be excused or waived ; or whether the condition is one going to the root of the Court's jurisdiction in which case the performance of the condition cannot be waived since it is not competent to parties by conductor contract to enlarge the jurisdiction of the Court. The English cases on the subject are discussed in the judgment of Bankea L.J. in Smythe v. Wiles (1921) 2 K.B. 66, 75 Clause 12 of the Letters Patent defines the limits of the original jurisdiction of this Court, and reading the clause, apart from authority, it seems to me clear that in a case in which the cause of action has arisen in part only within the local limits of the original jurisdiction, it is a condition precedent to the maintenance of the suit that the leave of the Court should have been first obtained. The condition of obtaining leave is an essential qualification of the suit. This, I. think, has been the general view of High Courts in India, see, e.g., the judgments of Sir Richard Couch in Hadjee Ismail Hadjee Hubbeeb v. Hadjee Mahomed Hadjee Joosub (1874) 13 Bong. L.R. 91 of Sir Basil Scott in Abdul Kadir v. Doolanbibi I.L.R. (1913) Bom. 563 :15 Bom. L.R. 672 of Mr. Justice Telang in Rampurtab Samruthroy v. Premsukh Chandamal I.L.R. (1890) Bom. 93 and of a special bench of the Calcutta High Court in Laliteshwar Singh v. Rameshwar Singh I.L.R. (1807) Cal. 619 But Mr. Setalvad has referred us to the case of King v. Secretary of State for India I.L.R. (1908) Cal. 394 in which Mr. Justice Fletcher held that the objection that leave had not been obtained under Clause 12 of the Letters Patent was an objection which the parties might waive. The learned Judge in his judgment says that the case is covered by the authority of Moore v.Gamgee 1880) 25 Q.B.D. 244 which was a decision upon the English County Courts Act With all respect to the learned Judge it is inaccurate to say that a decision on the English County Courts Act can be a direct authority upon the construction of Clause 12 of the Letters Patent which is worded quite differently. The most that the English case can do is to assist by way of analogy. In Alderson v. Palliser (1901) 2 K.B. 833 the Court of Appeal in England explained Moore v. Gamgee on the ground that what was said to be waived in that case was a mere, matter of procedure. But the Court itself in Alderson v. Palliser arrived at a conclusion which seems inconsistent with the grounds of the decision in Moore v.Gamgee as was pointed out by Lord Justice Bankes in Smythe v. Wiles, supra, at p 76. King v. Secretary of State for India has been followed by Mr. Justice Madgavkar inShamchandra Rampratap v. Bhikamchand : (1929)31BOMLR1002 , and it was followed in Rangoon in Mohamed Siddiq v. Mohamed Ahmed I.L.R. (1928) Ran. 680 but the question does not appear to have come before a Court of Appeal in BritishIndia.

6. In my judgment the words of Clause 12 of the Letters Patent are quite clear and make the obtaining of leave a condition precedent to the entertainment by this Court of a suit in which the cause of action arises in part outside the jurisdiction, and the condition is not one which it is competent for a Court to ignore or for the parties to waive. I think, therefore, that we ought not to follow the case of King v. Secretary of State for India and we should treat Shamchandra v. Bhikamchand as overruled upon this point. The hardship pointed out by Mr. Justice Fletcher in King v. Secretary of State for India, that if the obtaining of leave cannot be waived a defendant may take the point at any time even up to judgment, is one which cannot affect our judgment and which should not arise in practice. As pointed out by Lord Justice Davey in Farquharson v. Morgan (1894) 1 Q.B. 552 it is the duty of every Judge to ask himself, when he is invited to exercise a limited statutory jurisdiction, whether the case falls within the defined ambit of the statute and it is his duty to decline to make an order as Judge, if and so far as the matter is outside the jurisdiction. The Court, therefore, is bound to take the point of want of jurisdiction at whatever stage that point may be brought to its attention, and usually the plaint will not be received unless leave has been obtained. I should add that I am satisfied that Section 21 of the Civil Procedure Code has no application to this case.

7. Mr. Setalvad's next point is that in point of fact the whole cause of action arose within the jurisdiction of this Court and that paragraph 7 of the plaint was inserted ex abundanti cautela. It appears from the evidence that the plaintiffs from Bombay sent to the defendants in Gaziabad a letter stating the terms on which the plaintiffs were prepared to do business, and it further appears that at one stage in the proceedings the defendants objected that the plaintiffs were charging too high a commission and one of the partners in the plaintiff firm who happened to be in Gaziabad arranged with the defendants to charge a lower rate. The course of business was that the defendants by letter or telegram sent orders to the plaintiffs in respect of forward business in wheat and linseed, and the plaintiffs carried out those orders in Bombay. It was argued by Mr. Coltman on behalf of the respondents that the letter written by theplaintiffs to the defendants stating the terms on which they were willing to do business was an offer to act as agents, which offer was accepted by the subsequent orders given by the defendants, and that the contracts were accordingly made in Gaziabad. I do not take that view of the matter. I think that the letter written by the plaintiffs was simply an intimation as to the terms on which they were prepared to do business, and that no contract of any sort was made at Gaziabad, The defendants did not bind themselves to give the plaintiffs any business, nor did the plaintiffs bind themselves to accept any business which was offered. The only contract between the parties consisted in each case of the instructions given by the defendants to the plaintiffs in Bombay, which instructions the plaintiffs accepted by carrying them out, and the money sued for is the balance due on these various contracts. In my opinion the contracts were all made in Bombay, they were to be carried out in Bombay, and according to the evidence all payments under them have been made in Bombay. I think, therefore, that the whole cause of action arose in Bombay and none the less be because in proving the terms of the contract it might be necessary to give evidence of some facts occurring outside Bombay. This view seems to me to be in accordance with the view of the Court of Appeal of Allahabad inTika Ram v. Daulat Ram I.L.R. (1924) All. 465 and of this Court in Nandlal v. Kisanlal (1828) 30 Bom. L.R. 1391

8. Before coming to the facts in the case there are two points to be mentioned in connection with the rejection of evidence. In the Court below counsel on behalf of the plaintiffs tendered a certified copy of a judgment of the Court of the Munsiff at Gaziabad in at case in which the plaintiffs were not parties. The contention was that the judgment was admissible under Section 13 of the Indian Evidence Act, but the learned Judge rejected it and expressed the view that the right claimed in this action was not such a right as is referred to in that section. The cases on the subject were not brought to the attention of the learned Judge, and I doubt whether his view could be maintained in face of the decision of this Court in Govindji v. Chhotalal (1900) 2 Bom. L.R. 651 However, as we were of opinion that the judgment if relevant was not of any weight since it appeared to be based on evidence not before this Court, the question of its admissibility was not pressed by Mr. Coltman.

9. Counsel for the plaintiffs in the Court below also desired to put in evidence certified copies of an income-tax return alleged to have been made by Anupsing, and of an assessment made upon the firm of Narandas Shriram. The learned Judge rejected these documents holding that as the originals could not be given in evidence under Section 54 of the Indian Income-tax Act it was not competent to produce certified copies. I think the documents were rightly rejected, but I do not wish to be understood as saying that because the income-tax officer is precluded from producing the original documents, no secondary evidence of their contents can be given. I think that proper secondary evidence may be given, but in this case the only evidence tendered consisted of so-called certified copies. In the case of the return for income-tax it appears to me that this is not a public document or a public record of a private document within Section 74 of the Indian Evidence Act, and, therefore, Section 65 does not apply. In the case of the assessment this may be a public document, but in view of the strong language of Section 54 of the Indian Income-tax Act and the penalty imposed by Section 54 (2) I think that neither the assessee nor any one else is entitled to obtain a certified copy of the assessment under Section 76 of the Indian Evidence Act, and it is only certified copies so obtained which are made admissible under Section 77. In the case of neither document was any attempt made to prove the copy as a true copy.

10. With regard to the facts of the case I propose to deal with them shortly as my learned brotherRangnekar will deal with them in detail. The learned Judge analysed the evidence, and he expressed the view that each piece of evidence is insufficient to establish the partnership claimed by the plaintiffs. In my opinion the cumulative effect of the evidence is to show that there was a partnership between the suit firm and the firm of Anupsing Batumal. At any rate there is sufficient evidence of the partnership to require defendants Nos. 3 and 5 to go into the witness box and deny it, a course which they did not adopt.

11. But whether there was a partnership or not, I think it is quite clear that there was a holding out of such a partnership, and that is one of the issues raised in the Court below on which the learn, ed Judge has not dwelt in his judgment. [His Lordship then discussed the documentary evidence relied on by the plaintiffs and proceeded :]

12. That being so, I think we must allow the appeal with costs. Therefore there will be a decree for the plaintiffs in terms of prayers (b) and (c) of the plaint Costs include costs reserved.

Rangnekar, J.

1. The suit in which the appeal arises was brought by the plaintiffs who are brokers and Pakka Adatiascarrying on business in Bombay against five persons as partners it the firm of Narandas Shriram at Gaziabad in the District of Meerut. After the institution of the suit it was discovered that the original defendant No. 2 Anupsing Thakeraidas was dead at the time the suit was filed, and thereafter proceedings were taken to bring the present defendant No. 2, his minor son, on record in his place. It also appears that defendant No. 5 was added subsequently as a party defendant to the suit. The plaintiffs' case was that the partners in the suit firm of Messrs. Narandas Shriram were the firm of Anupsing Batnmal and defendants Nos. 1 and 4, and that the firm of Anupsing Batumal consisted of defendants Nos. 3 and 5 and the deceased father of the present defendant No. 2. The plaintiffs also alleged that even if the firm of Anupsing Batumal was not a partner in the suit firm, that firm and the partners in that firm held themselves out to be partners in the suit firm. Defendants Nos. 1 and 4 did not contest the plaintiffs' claim. Defendants Nos. 2, 3 and 5 admitted that the firm of Anupsing Batumal consisted of defendants Nos. S and 5 and the deceased father of defendant No. 2, but denied that that firm was a partner in the firm of Naraudas Shriram or that any partners in it held themselves out as partners in the firm of Messrs. Narandas Shriram. Mr. Justice Blackwell held that the plaintiffs had failed to establish the case of partnership against the defendants excepting defendants Nos. 1 and 4 who did not contest the plaintiffs' claim, and the question is whether the finding arrived at by the learned Judge is correct. [His Lordship discussed the evidence and observed :]

2. The cumulative effect of all this evidence is to establish certainly a prima facie case that the firm of Anupsiag Batumal was a partner in the firm of Narandas Shriram. In any event I have no doubt that the alternative case made out by the plaintiffs that the firm of Anupsing Batumal held themselves out as partners in the suit firm is established by the evidence to which I have briefly referred. Although, therefore, the original burden of proving the partnership and the case of holding out was on the plaintiffs, that burden was discharged after this evidence was recorded. Even taking themost favourable view which has found acceptance with the learned Judge that Anupsing was acting as an agent on behalf of the suit firm, the evidence which I have summarised certainly demanded an explanation from the defendants, and that evidence, if unexplained or unrepudiated, would result in the establishment of the case made out by the plaintiffs. Even assuming that the evidence was consistent with their story, it was clearly incumbent on the defendants to explain it and prove the case of agency or friendship or joint ventures. This they have not done. No evidence on their behalf has been led nor defendants Nos. 3 and 5 have ventured to step into thewitness box. This being the position, I am clearly of opinion that the plaintiffs must succeed. It may be stated that though the finding on the issue of 'holding out' is against the plaintiffs, the question does not seem to have been discussed in the judgment.

3. Mr. Coltman has referred to one or two points which he says show that the plaintiffs' case is not true. The first of these is that admittedly there were independent transactions effected by these two firms. As to that it is a common experience that where there are two firms one of whom is a partner in the other, the accounts of the subsidiary firm and those of the principal one are kept distinct from each other and transactions are often effected independently of each other.

4. The second point which Mr. Coltman makes is that a decree for a large amount was obtained by the firm of Anupsing Batumal against the suit firm. The decree is not produced, and it appears that it was passed ex parte and that defendant No. 1 has taken steps to have it set aside,

5. I now proceed to deal with some points of law which arise on this appeal. The first is with regard to the rejection of certain evidence by the learned Judge, The first document rejected was a certified copy of a judgment of the Munsiff of Gaziabad Court in a suit brought by a creditor of the firm of Narandas Shriram in which some of the defendants in this suit were sought to be made liable as partners of the firm of Narandas Shriram. It was held in that suit that the present defendant No. 5 was a partner in the suit firm. The judgment was rejected by the learned Judge as the plaintiffs were not parties to the Gaziabad suit. With respect to the learned Judge the judgment was admissible under Section 13 of the Indian Evidence Act. In a somewhat similar case judgments not interpartes were held to be relevant and admissible by Sir Lawrence Jenkins following, an earlier judgment of this Court (see Govindji v. Chhotalal (1900) 2 Bom. L.R. 651 A judgment not inter partes is admissible as relevant evidence under Section 13 of the Indian Evidence Act, and I am unable to distinguish the judgment tendered here from the judgments held to be admissible in Govindji v. Chhotalal, and in my opinion the judgment ought to have been admitted. Of course a judgment not interpartes is not conclusive of the fact which it decides, but it is difficult to see how it can be excluded as being entirely irrelevant.

6. The second document which has been rejected by the learned Judge is a true copy of an income-tax return alleged to have been made by Anupsing on behalf of the firm of NarandasShriram and a copy of the assessment order made by the income-tax officer upon the firm. Both the documents were objected to under Section 54 of the Indian Income-tax Act, 1922, and the objection was upheld by the learned Judge. That section, after stating inter alia that returns made by an assessee and any record of an assessment proceeding-which would seem to include an order of assessment made by the income-tax authority-are to be treated as confidential, goes on to state that notwithstanding anything contained in the Indian Evidence Act, 1872, no Court is entitled to require any public servant to produce before it any such return or record of proceeding or to give evidence before it in respect thereof. It will be seen that what is prohibited is the production by a public servant of returns of assessees or record of assessment proceedings. The intention seems to me to be to protect the asses-see from any disclosure of his affairs and this provision seems to have been made in his interests. As far as I can see, there is nothing in the terms of the Act prohibiting an assessee from giving secondary evidence of the contents of the return made by him or on his behalf or of the assessment order made upon him or his firm on that return, where such secondary evidence would be admissible under the Indian Evidence Act. Having regard to the terms of Section 54 of the Indian Income-tax Act and the intention of the legislature underlying it, speaking for myself, I see no objection to such secondary evidence being given when relevant.

7. The question then is whether the true copies tendered on behalf of the plaintiffs and produced by defendant No. 1, one of the assessees, should have been admitted as secondary evidence. In the first place it may be pointed out that there is no provision in the Indian Income-tax Act for furnishing such copies. Sub-section (2) seems to prohibit an officer from giving copies. The copies tendered, however, are certified as true copies by the income-tax officer, and the only question is whether they are proper secondary evidence.

8. Mr. Setalvad says that the documents of which these are copies are public documents. It is difficult to see how a return made by an assessee is a public document within the meaning of Section 74 of the Indian Evidence Act. The assessment order prima facie would be a public document, but in my opinion it is not sue a public document as would fall within the class of public documents of which a certified copy can be given under Section 76. Section 76 lays down that a public officer having the custody of a public document which a person has a right to inspect shall give him a certified copy of it on payment of legal fees, etc. Now, assuming that both the documents in this case were public documents, can it be said that the assessee had the right to inspect the original documents in the custody of the income-tax officer and is the latter bound to give certified copies thereof to the assessee on demand Having regard to the terms of Section 54 of the Indian Income-tax Act the answer, it seems to me, must be in the negative. The words ' right to inspect ' in Section 76 of the Indian Evidence Act exclude all such documents as a Government officer has a right to refuse to show on the ground of State policy or privilege, etc.

9. Mr. Setalvad next argues that if the documents were not public documents they would be private documents, and he is entitled to give secondary evidence under Clauses (a) and (c) of Section 65 of the Indian Evidence Act. But his misfortune is that no attempt was made in the lower Court to give proper secondary evidence of these documents at all. What happened is clear from the notes of the learned Judge. The learned Counsel for the plaintiffs wanted to question the first defendant who was in the witness box with regard to these copies, The learned Judge held that these copies were not admissible in evidence as secondary evidence, and the matter was there dropped. If, for instance, the learned Counsel relying on the provisions of Section 65, Sub-clause (a) or (c), and Section 63, Sub-clause (5), or even Sub-clause (3), had attempted to give proper secondary evidence, the position might have been different. But that was not done. I think, therefore, that the true copies were rightly excluded, although with the utmost respect I do not agree with the reasons given for such exclusion.

10. I also agree that the third document consisting of the affidavit made by the managing clerk of the defendant's attorneys was properly excluded.

11. The next important question is whether the Court had jurisdiction to try the suit against defendants Nos. 2 and 5. This is raised by issue No. 7 and it arises in this way. When the suit was instituted, the plaintiffs obtained leave under Clause 12 of the Letters Patent on the allegation, as stated in paragraph 7 of the plaint, that a material part of the cause of action had arisen in Bombay. When, however, the present defendants Nos. 2 and 5 were added as party defendants, the plaintiffs did not obtain fresh leave under Clause 12 of the Letters Patent. The respondents on these facts raised an issue that as fresh leave was not obtained when defendants Nos. 2 and 5 were added, the Court had no jurisdiction, Now, the force of an order granting leave is exhausted when the suit is filed, and where a defendant, who does not reside within the jurisdiction, is added after the institution of the suit, fresh leave must be obtained at the time of the application to add him as a party, if the cause of action has arisen in part only within the jurisdiction: see Rampratab Samrathrai v. Foolibai and Goolibai I.L.R. (1896) Bom. 767 In answer to issue No. 7 raised by the defendants the plaintiffs raised an issue to the effect whether defendants Nos. 2 and 5 had waived their objections as to jurisdiction and had acquiescedtherein.

12. Mr. Justice Blackwell held that as fresh leave was not obtained when the defendants were added, the Court had no jurisdiction to entertain the suit against them. On the question of waiver what happened was that in the course of his argument the learned Counsel for the plaintiffs admitted that as the result of his consideration of the authorities he was not in a position to sustain the issue. Upon that the learned Judge recorded a finding on the issue that it was abandoned. Now, this was an admission of counsel on a question of law and clearly would not be binding on the client. We, therefore, allowed Mr. Setalvad to argue the question as to waiver.

13. Mr. Setalvad says that on the facts of this case the whole cause of action arose in Bombay, and that leave was obtained merely as a matter of caution, and that being so, when defendants Nos. 2 and 5 were newly added, it was not incumbent upon the plaintiffs to obtain fresh leave. There is some slight discrepancy in the evidence as to how the parties came together and how the firm of Narandas Shriram employed the plaintiffs as their commission agents in Bombay. Ramniranjan, a partner in the plaintiff firm, was examined and he stated that he sent a letter to the defendants stating the terms on which the plaintiffs did business, and that one of the terms was that moneys payable by either party to the other were payable in Bombay. The defendants raised no objection to the terms, and they thereafter sent instructions from Gaziabad by letters and telegrams for putting through various transactions in wheat and linseed in Bombay. Defendant No. 1 who was examined on behalf of the plaintiffs on the other hand stated that he had first written to the plaintiffs enquiring their terms of business to which the plaintiffs replied by sending their terms of business to the defendants and business was sent thereafter to the plaintiffs in Bombay. It is not disputed that theplaintiffs acted throughout as brokers and Pakka Adatias for the defendants in Bombay. Mr. Goldman argues that the evidence shows that the letter sent by the plaintiffs containing their terms of business was received by the defendants at Gaziabad and that instructions for the business which followed thereafter were seat to the plaintiffs from Gaziabad and therefore part of the cause of action arose in Gaziabad, In my opinion it makes not the slightest difference whether the plaintiffs wrote in the first instance a letter to the defendants containing their usual terms of business or whether they sent their usual terms of busainess in answer to an inquiry from the suit firm from Gaziabad, It seems to me that when a merchant or commission agent sends his quotations or terms of business to other people it is merely an intimation on his part of his readiness to transact business with them on those terms. It is clear that on the mere passing of the letters between the parties a contract as such did not coma into existence between the parties. It is conceded, and rightly, that the letters left the parties free and that plaintiffs were free to decline to do any business or carry out any transactions and that the defendants were not bound to send any business to the plaintiffs. I think, therefore, the contractual relationship between the parties came into existence only when instructions were sent which were carried out or put through by the plaintiffs in Bombay, in other words, when orders were sent and accepted by the plaintiffs in Bombay. Now, in the case of a contract we had in the old Code of 1882 a statutory rule as to the place where a cause of action in relation to a contract arises. It was contained in Explanation 3 to Section 20, and although that Explanation no longer finds a place in the present Civil Procedure Code, the authorities show that it contains a correct statement of law which is followed by the Courts. According to that Explanation, in suits arising out of contract the cause of action arises in any of the following places: (1) where the contract is made; (2) where the contract is to be performed; and (3) the place where in performance of the contract any moneys to which the suit relates are expressly or impliedly payable. On the facts, therefore, I am clear in my mind that the contract of agency was made in Bombay when the orders and instructions sent by the defendants were put through by the plaintiffs as their commission agents in Bombay. It is clear that the contract was to be carried out in Bombay. Then it is in evidence, which is not challenged, that according to the terms contained in the first letter of the plaintiffs the moneys due by either party in respect of their business dealings were payable in Bombay and the accounts were to be rendered in Bombay. That being the position, I think the whole cause of action must be deemed to have arisen in Bombay. In my opinion, in the case of a commission agency business the cause of action arises at the place where the contract of agency business is made or at the place where the moneys due are to be paid. Both these conditions are present in this case.

14. Mr. Coltman relies upon Motilal v. Surajmal I.L.R. (1904) Bom. 167 :6 Bom. L.R. 1038 a case often cited in these Courts, Dealing with the question of jurisdiction Mr. Justice Tyabji first defined the expression 'cause of action ' in these words at p. 169 :-

The expression cause of action means the bundle of facto, which it is necessary for theplaintiff to prove before he can succeed in his suit. Not irrelevant, immaterial facts, but material facts without which the plaintiff must fail.

15. Then after discussing the evidence the learned Judge at p. 172 observed as follows:-

I come to the conclusion, therefore, that part of the cause of action which necessitated the defendant's rendering the accounts to the plaintiff and his sending money to the plaintiff are material parts of the cause of action and occurred within the jurisdiction of this Court.

16. In my opinion the head-note in the above case is not correct and goes beyond the judgment read as a whole, and I see nothing in the case which conflicts with the view I am taking in this case.

17. One question remains and it is raised by the issue as to waiver. Mr. Setalvad says that the granting of leave under Clause 12 is a mere matter of procedure and that as the defendants appeared and pleaded to the suit without protest they have waived their objection to want of jurisdiction. In support of his argument he relies on King v. Secretary of State for India I.L.R. (1908) Cal.394 and Shamchandra Rampratap v. Bhikamchand : (1929)31BOMLR1002 .

18. Now, in considering this question it is essential to keep in mind the distinction which exists between a mere irregularity and a nullity,-a distinction which it is not always easy to define. In Chitty's Archbold'a Practice, 14th Edn., at p. 445 it is said :-

Where the proceeding adopted is that prescribed by the practice of the Court, and the error is merely in the manner of taking it, such an error is an irregularity, and may be waived by the laches or subsequent acts of the opposite party; but where the proceeding itself is altogether unwarranted, and different from that which, if any, ought to have been taken, then the proceeding in general is a nullity, and cannot be waived by any act of the party against whom it has been taken.

19. In Smythe v. Wiles (1921) 2 K.B. 66 Atkin L.J. dealing with this question observed as follows (p. 79):-

The distinction between a defect which causes the proceedings to be null and void and a defect which is merely an irregularity is well established; an irregularity can be waived; a nullity cannot.

20. In Halsbury's Laws of England, Vol. IX, Article 11, p. 13, the following observations occur:-

Where by reason of any such limitation [imposed upon the authority of a Court] a court is without jurisdiction to entertain any particular action or matter, neither the acquiescence nor the express consent of the parties can confer jurisdiction upon the court nor can consent give a court jurisdiction if a condition which goes to the jurisdiction has not been performed or fulfilled.' Mere irregularity, however, in the exercise of jurisdiction where jurisdiction exists is altogether a different matter and it is only in such a case that the parties are estopped from objecting to the jurisdiction of the Court upon the grounds of defects in the initial procedure, which, if objected to at the time, would have led to the dismissal of the suit.

21. The question then is whether the granting of leave under Clause 12 is a condition precedent going to the root of the jurisdiction of the Court or a mere matter of procedure capable of being waived by conduct or agreement of the parties.

22. Clause 12 of the Letters Patent provides that the High Court of Judicature at Bombay in the exercise of its ordinary original civil jurisdiction shall be empowered to receive, try and determine suits of every description, if in the case of suits for land (omitting unnecessary words) the land is situate, or in all other cases, if the cause of action shall have arisen either wholly, or in case the leave of the Court shall have been first obtained, in part, within the local limits of the ordinary original civil jurisdiction of the High Court. The rest of the clause is not material. The words 'empowered to receive' seem to me to be important and the meaning is that the Court on the ordinary original civil jurisdiction has no jurisdiction even to receive a plaint where a part of the cause of action only shall have arisen within the local limits of its jurisdiction unless leave of the Court shall have been first obtained.

23. As far back as 1868 the Madras High Court dealing with this question held that the leave under this clause is a condition precedent to jurisdiction(DeSouza v. Coles (1868) 3 M.H.C.R. 384 The same view was taken by the Calcutta High Court in 1874 in Hadjee Ismail Hadjee Hubbeeb v. Hadjee Mahomed HadjeeJoosub (1874) 13 Beng. L.R. 91 and by Telang J. in Rampartab Samruthroy v. Premsukh Chandamal I.L.R. (1890) Bom. 93 In the last mentioned case Mr. Justice Telang held that the leave under Clause 12 affords the very foundation of the jurisdiction and hence it must be obtained before the institution of the suit -an opinion in which I respectfully agree and which has been consistently followed in our Courts.

24. Mr. Setalvad relies on Shamchandra v. Bhikamchand. In that case leave had been obtained against all the defendants at the time of the institution of the suit. At that time, however, defendant No. 3 was dead. Subsequently the two sons of the original defendant No. 3 were added as defendants Nos. 3 A and 3B, but no fresh leave was obtained against them. Relying on Rampurtab Samruthroy v. Premsukh Chandamal Mr. Justice Madgavkar held, I think with respect, correctly, that fresh leave should have been obtained in respect of defendants Nos. 3A and 3B. Having done that the learned Judge proceeded to consider the plea raised by the plaintiffs that there had been a waiver, and held that the objection had been waived by those defendants. His reasoning, as far as I can see, is (1) that the question as to the want of leave was not raised by the defendants by their written statement, (2) Therefore, Section 21 of the Civil Procedure Code applied. (3) That the objection as to want of leave is an objection which could be waived by the party concerned as held by Fletcher, J. in King v. Secretary of State for India following Moore v. Gamgee.

25. With the utmost respect to the learned Judge I am unable to agree. If the leave under Clause 12 is a condition precedent and to use the words of Telang J. affords the very foundation of the Court's jurisdiction, then the fact that the plea was not raised by the written statement seems to be immaterial. In the absence of leave where necessary the judgment of the Court would be a nullity, and I think it is the duty of the Court to consider the point whenever raised even if it is not noticed by the Court itself in the first instance. In this view it is not necessary to refer to Section 21 of the Civil Procedure Code, but, speaking for myself, I think, having regard to the wording of that section and the position it occupies in the Civil Procedure Code, I am inclined to hold that it was not intended to apply to the High Court in its ordinary original civil jurisdiction.

26. This brings me now to King v. Secretary of State for India in which Fletcher, J. following Moore v. Gamgee held that the objection that the leave under Clause 12 of the Letters Patent had not been obtained may be waived by the defendant. Now, Moore v. Gamgee was decided upon the construction of Section 74 of the County Courts Act, 1883, the wording of which is quite different from that of Clause 12 of the Letters Patent. In my opinion, therefore, that decision can hardly be a proper guide for construing the somewhat wide terms of Clause 12 of the Letters Patent.

27. Moore v. Gamgee was considered in Alderson v. Palliser (1901) 2 K.B. 833 and in it Vaughan Williams L.J. observed at p. 837 as follows:-

With regard to Moore v. Gamgee, I say nothing as to whether the facts justified the conclusion at which the Court arrived; but it is clear that Cave J. ' decided the case on the ground that what was said to be waived was mere matter of procedure.

28. Then, in Smythe v. Wiles (1921) 2 K.B. 66 Bankes L.J. with reference to Moore v.Gamgee observed at p. 76 as follows:-

Moore v. Gamgee is referred to in Alderson v. Palliser, and commented on but not overruled, though it would seem that the Court of Appeal in that case took an entirely different view from the one expresed by Cave J.

29. With respect, therefore, I do not agree with the view taken by Fletcher, J. in King v. Secretary of State followed by Madgavkar, J. inShamchandra v. Bhikamchand. I agree that Shamchandra v. Bhikamchand should be treated as overruled on this point.

30. In the result I think the appeal must be allowed with costs.


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