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S.M. Kadirsa Rawther Vs. K. Shanmugha Mudaliar - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKerala High Court
Decided On
Case NumberC.R.P. No. 1078 of 1959
Judge
Reported inAIR1960Ker188
ActsCode of Civil Procedure (CPC) , 1908 - Sections 20
AppellantS.M. Kadirsa Rawther
RespondentK. Shanmugha Mudaliar
Appellant Advocate T.C. Raghavan, Adv.
Respondent Advocate C.K. Viswanatha Iyer, Adv.
DispositionPetition dismissed
Cases ReferredGalley and Co. v. Appala Swami Naidu
Excerpt:
.....order of dismissal of suit on ground of lack of territorial jurisdiction - plaintiff dispatch goods to places where he expected to find buyers and then proceed to other place and effect sales - there was no promise on his part whether express or implied to pay money so as to attract section 49 - no infirmity in order passed by court below - petition liable to be dismissed. - - the trial court, finding that it had no territorial jurisdiction, ordered the return of the plaint for presentation to the proper court, and his appeal, from that order having failed, the plaintiff has come up in revision. where the promise is to pay money it may well bo assumed that the creditor will choose the place where he resides or carries on business. in any case, as pointed out in the privy..........agreement to sell took place there. they found that the practice of the plaintiff was to despatch goods to places where he expected to find buyers and then to proceed to the place and effect sales. with regard to neither of the two consignments in question was there any order placed by the defendant. the plaintiff booked the first consignment of his own accord and in his own name to nagapatam and then proceeded in person to the defendant's place of business in tiruvarur on 19-1-1954 and, handing over the railway receipt and other papers to the defendant for the purpose of clearance, effected delivery of the goods 'on. sale or return' taking an advance of rs. 500/-. on examination, the tamarind was found to be of inferior quality and by letter dated 22-1-1954 the defendant informed the.....
Judgment:
ORDER

P.T. Raman Nayar, J.

1. The plaintiff, a merchant of the Palghat District, sued in a Palghat court for the recovery of Rs. 1930.95 which he alleged was due for the price of two consignments of tamarind sold by him on 16-1-1954 and 23-1-1954 to the defendant, a merchant of the Tanjore District. The trial court, finding that it had no territorial jurisdiction, ordered the return of the plaint for presentation to the proper court, and his appeal, from that order having failed, the plaintiff has come up in revision.

2. To give jurisdiction to the Palghat Court, the plaint alleged that the contract of sale took place within the jurisdiction, of that court and that the moneys due by the defendant were payable there. If that were so, doubtless the Palghat court would have jurisdiction. But the concurrent findings of the courts below are otherwise. Both courts rejected the plaintiff's case that the order for the tamarind had been placed with him at his place of business in the Palghat District, in fact, that the agreement to sell took place there. They found that the practice of the plaintiff was to despatch goods to places where he expected to find buyers and then to proceed to the place and effect sales.

With regard to neither of the two consignments in question was there any order placed by the defendant. The plaintiff booked the first consignment of his own accord and in his own name to Nagapatam and then proceeded in person to the defendant's place of business in Tiruvarur on 19-1-1954 and, handing over the railway receipt and other papers to the defendant for the purpose of clearance, effected delivery of the goods 'on. sale or return' taking an advance of Rs. 500/-. On examination, the tamarind was found to be of inferior quality and by letter dated 22-1-1954 the defendant informed the plaintiff that he was not accepting the goods and that the plaintiff should take them back after repaying the advance and thefreight. On 23-1-1954 the plaintiff despatched the second consignment, again without any order and sent to the defendant the railway receipt along with an invoice.

The defendant returned the invoice and the railway receipt with a covering letter on 27-1-1954 stating that he did not want the goods and repeating that the first consignment had not been acceped by him and that the goods were being kept as the plaintiffs goods. To this letter the plaintiff's son sent a reply dated 29-1-1954 saying that the goods may be taken delivery of and kept as the plaintiff's goods to avoid demurrage and that the plaintiff would be going to Tiruvarur to settle matters in person. Therefore the defendant took delivery of the second consignment and stored it in his godown as the plaintiff's goods. The plaintiff neither took back the goods nor repaid the advance, and so the defendant (allegedly in pursuance of oral instructions from the plaintiff) sold a portion of the first consignment for Rs. 350/- and adjusted the sum towards the amount due to him.

3. Under Section 20(c) of the Civil Procedure Code a suit can be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part arises. So far as suits arising out of contract are concerned Explanation III to the corresponding section, Section 17 of the Code of 1882 said that the cause of action arises 'at any of the following places, namely:

1. The place where the contract was made;

2. The place where the contract was to be performed or performance thereof completed;

3. The place where in performance of the contract any money to which the suit relates was expressly or impliedly payable'.

In the present Code it was made clear by Section 20(c) that a suit of any kind could he instituted at a place where the cause of action wholly or in part arises, and Explanation III to Section 17 of the old Codewhich was confined to suits on contracts was omitted as unnecessary. Nevertheless as pointed out by Mulla (at page 121 of the 12th Edition of his Civil Procedure Code) the Explanation is a correct statement of what is still the law and it sets out the several places in which the whole or a part of thecause of action in a suit arising out of contract can possibly arise.

4. In view of the concurrent findings of thecourts below it is not pretended that Clauses (1) and (2) of the Explanation would apply to bring thecause of action within the jurisdiction of the Pal-ghat court, but it is argued On behalf of the plaintiff that clause (3) will apply to that effect. And it is said in support of this argument that the money to which the suit relates was payable to the plaintiff at his place on the English common law principle that the debtor is bound to seek the creditor and tender him the money due. Soniram Jeetmull v. R. D. Tata and Co. Ltd., AIR 1927 PC 156, and Ummer Koya v. Sri ParthasaratM Rice and Oil Mills, 1957 Ker LT 953 are relied upon, and, there can be little doubt that if the principle applied to make the money payable at the plaintiffs place, part of the cause of action would have arisen within the limits of the Palghat court so AS to give that court jurisdiction under Section 20(c) of the Code.

With the greatest respect I am unable to agree with the view taken in Section Niranjan Singh v. Jagjit Singh (S) AIR 1955 Punj 128 that although the common law rule of England that a debtor must seek a creditor for payment holds in this country too, it does not for the purpose of determining the forurn where the suit is to be instituted, or with the observation therein that the Privy Council decision Justreferred to does not deal with the application of this rule to Section 20 of the Civil Procedure Code. For, as I have already said, (if the money were payable, whether expressly or impliedly, at the creditor's place, part or the cause of action would have arisen there so as to attract Section 20(c) of the Code). And when the Privy Council adopted the English rule for the purpose of determining the forum of the suit their Lordships were obviously applying the rule to Section 20 of the Code even if they made no express reference to that section. Jn fact I am inclined to wonder whether the reference to Section 49 of the Indian Contract Act in the penultimate sentence, 'Accordingly, part of the contract was performable in Rangoon so as to satisfy Section 49 of the Indian Contract Act, and there was jurisdiction to entertain the suit,' is not really to Section 20 of the Civil Procedure Code.

5. On the findings of the courts below that there was no sale of the goods by the plaintiff to the defendant and consequently no obligation on the part of the defendant to pay the plaintiff their price, it looks as if a dismissal of the plaintiff have been its proper conclusion. But the issues dealing with the merits of the plaintiff's claim were not tried. Only the issue relating to jurisdiction was tried and we are now concerned only with that issue. Now, although it has not been so viewed in any of the decisions brought to my notice, it seems to me that the English common law rule of a debtor having to seek his creditor is no more than a particular application of the general principle embodied in Section 49 of the Indian Contract Act which as observed by the Privy Council in the case already mentioned, applies equally to the delivery of goods as to the payment of money.

The English rule is thus stated by Pollock and Mulla in their commentary on the Indian Contract Act (at page 324 of the 8th Edition): 'In the Common Law the rule as to money payments is that, if no place is named, the debtor is bound to find creditor, provided he is within the jurisdiction, but if the obligation is to deliver heavy or bulky goods he must procure the creditor to appoint a place to receive them' and they go onto say that Section 49 of the Indian Contract Act seems to lay down a reasonable rule for all cases without distinction. After all, as pointed out by Yahya Ali, J. in Galley and Co. v. Appala Swami Naidu, AIR 1946 Mad 300, and as indicated in the Privy Council decision already referred to, as a matter of plain reasoning, apart from the statutory provisions or judicial decisions bearing on the point, it may be premised that, if one person promises to do a thing for another without specifying either expressly or by implication where he will perform his promise, the obligation to perform it necessarily involves the obligation of seeking the promisee and finding out from him where, within reason, ifi should be performed.

Where the promise is to pay money it may well bo assumed that the creditor will choose the place where he resides or carries on business. That would be reasonable enough, and the English rule sets the limits of reasonableness by imposing on the debtor the duty of finding and paying his creditor only when the creditor is within the realm. In any case, as pointed out in the Privy Council decision, the promisor cannot better his position by neglecting Ms statutory duty of applying to the promisee to appoint a reasonable place for the performance of the promise and, where the promise is to pay money, it would appear that, in the absence of anything to the contrary, the promise implies also a promise to pay where the creditor resides or carries on business.

6. On a consideration of the language of Section 49 of the Indian Contract Act and of the several deci-sions bearing on the point, it seems to me that two conditions must exist to attract that section or its particular application in the form of the English common law rule of a debtor having to seek his creditor. The first is that there must be a promise, and the second that there must be no place fixed for its performance either expressly or by implication. The words 'no place, is fixed' appearing in the section do not exclude any inlerence the court may draw as to the intention of the parties from the nature and circumstances of the contract itself or from the necessities of the case. (See AIR 1927 PC 156 and AIR 1946 Mad 300), Where there is a place fixed that prevails, and the fixing need not be express. The court may infer from the circumstances what place, if any, the parties had in mind. The following statement of the English law in Halsbury (Third Edition Vol. 8 at page 168) under the heading, 'No place specified expressly or impliedly' is illuminating:

'Where no place is specified either expressly or by implication from the nature and terms of the contract and the surrounding circumstances and the act is one which requires the presence of both parties for completion, the general rule is that the promisor must seek out the promisee and perform the contract wherever he may happen to be,'

7. It seems to me that neither Section 49 of the Indian Contract Act, nor what to my mind is part thereof, namely, the English rule of the debtor seeking the creditor, can apply when the obligation to be discharged is not the obligation to fulfil a promise express or implied, but is different as, for example, liability arising out of breach of contract or out of tort or agency, though of course in those cases the situs of the cause of action or part thereof might give jurisdiction to a court other than the court within whose limits the defendant resides Or works for gain. Where the obligation is to pay money, the rule applies only when the relationship is strictly that of debtor and creditor.

In the present case, assuming what seems to be contrary to the findings entered by the courts below, that the delivery of the goods to the defendant imposed some pecuniary obligation on him; it seems clear that there was no promise on his part whether express or implied to pay the money so aa to attract Section 49 of the Indian Contract Act or the English rule. In both the Cases relied upon by the petitioner there was a promise to nay. In AIR 1927 PC 156 it was express, and in 1957 Ker LT 953 it was implied.

8. It has been argued that Section 70 of the Indian Contract Act is applicable to this case at least in respect of the portion of the goods admittedly sold by the defendant and that therefore a promise to pay their value should be implied, (I am by no means sure that the true principle underlying that section is an implied contract properly so called in the sense that there is an agreement though unexpressed so that the court has to infer it. It seems to be rather that by a fiction of law a contract is invented so that it would be more accurate to describe it as a constructive rather than an implied contract -- 'Of certain relations resembling those created by-contract' is the heading which the Indian Contract Act advisedly uses for the chapter in which thesection appears.

Here again, the finding seems to be that the defendant has not' had the benefit of goods, excepting that he realised part of the advance paid by him by sale of a portion of the goods. But-assuming that Section 70 of the Indian Contract Act applies to imply a promise, or even that there wasa sale by the plaintiff to the defendant at the latter's place of business, I should think that, when a seller takes goods to the buyer without any order from the latter and negotiates and effects a sale, it must be taken in the absence of anything to the contrary, that, from the very nature and circumstances of the transaction, the intention of the parties was that payment of the price should be made at the buyer's place.

9. In my view the courts below have rightly held that the Palghat court had no jurisdiction.

10. I dismiss the petition with costs.


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