Skip to content


Firm Bilasrai Mannalal Vs. Frim Purshottam Dass Sanwaldass and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberCivil Revn. No. 362 of 1959
Judge
Reported inAIR1962Raj247
ActsCode of Civil Procedure (CPC) , 1908 - Sections 17 and 20
AppellantFirm Bilasrai Mannalal
RespondentFrim Purshottam Dass Sanwaldass and anr.
Appellant Advocate Hasti Mal, Adv.
Respondent Advocate V.P. Tyagi and; Sagar Mal, Advs.
DispositionRevision allowed
Cases ReferredFirm Chandanmal Fatehraj v. Hazarimal
Excerpt:
.....was made in the name of the defendant and the railway receipt was endorsed in favour of a bank at ratangarh. in the former case the cause of action is the failure of the agent to render accounts on demand. in the latter case it is the failure of the agent to pay the money due to the principal on demand. rajaballi, air 1935 mad 663 (fb), in which the learned chief justice, with whom the two other learned judges constituting the bench concurred, said :apart from this upon an examination of the documents another thing is perfectly clear and that is that whatever the relationship between the parties may in fact be, payment for the goods purchased by the plaintiff or on his behalf was to be made at tuticorin. they sent this receipt to the united commercial bank at delhi with the..........was made in the name of the defendant and the railway receipt was endorsed in favour of a bank at ratangarh. two hundis were sent with the railway receipt to the bank. one was for rs. 4,262/-which represented the price and other charges of the goods which were consigned and the other was for rs. 3,000/-.the bank was instructed to present these hundis to the plaintiff at ratangarh and in case they were honoured it was to endorse the railway receipt in favour of the plaintiff and to deliver it. the hundis were duly honoured by the plaintiff and the railway receipt was delivered. the objection of the plaintiff with regard to the price charged by the defendant was with regard to a sum of rs. 1-1-0 only. the defendant accepted the objection and credited the plaintiff with this sum......
Judgment:
ORDER

Jagat Narayan, J.

1. This is a plaintiff's revision application against an appellate order of the District Judge, Bikaner, confirming an order of the Civil Judge, Ratangarh, holding that he did not have jurisdiction to try the suit.

2. The plaintiff is a firm carrying on business at Ratangarh. The defendant is also a firm carrying on business at Kota. Banshi Dhar a partner of the plaintiff firm went to Kota on 17-7-53 and placed an order for the supply of 11 bags of Dhania, 32 bags of Mungphali, 40 bags of rice and 200 bags of Jowar with the defendant firm. These goods, with the exception of 200 bags of Jowar, were consigned by the defendant by rail to Ratangarh. The consignment was made in the name of the defendant and the railway receipt was endorsed in favour of a bank at Ratangarh. Two Hundis were sent with the railway receipt to the bank. One was for Rs. 4,262/-which represented the price and other charges of the goods which were consigned and the other was for Rs. 3,000/-.

The bank was instructed to present these Hundis to the plaintiff at Ratangarh and in case they were honoured it was to endorse the railway receipt in favour of the plaintiff and to deliver it. The Hundis were duly honoured by the plaintiff and the railway receipt was delivered. The objection of the plaintiff with regard to the price charged by the defendant was with regard to a sum of Rs. 1-1-0 only. The defendant accepted the objection and credited the plaintiff with this sum. One hundred fifty bags of Jowar were purchased by the defendant in the presence of Banshi Dhar, but they were not despatched. Fifty bags of Jowar were also purchased by the defendant after Banshi Dhar had left. These bags of Jowar were however not sent to Ratangarh for several days.

In the meantime the price of Jowar fell. The plaintiff sent instructions to the defendant to sell the Jowar. He instituted the present suit in the court of the Civil judge Ratangarh for the recovery of the balance due to him out of the sum of Rs. 3,001-1-0 lying to his credit with the defendant after allowing for losses incurred in the sale of Jowar which had been purchased by the defendant on his instructions. The suit was contested by the defendant inter alia on the ground that the court at Ratangarh had no jurisdiction to try it.

The question of jurisdiction was tried as a preliminary issue by the learned Civil Judge. It was decided in favour of the defendant on the ground that the relationship between the parties was that of principal and agent, that the goods were ordered by the plaintiff to be purchased by the defendant at Kota, that the amount was to be paid at Kota and that no part of the cause of action arose at Ratangarh. It was alleged by the plaintiff in the plaint that the goods and the railway receipt were to be delivered at Ratangarh, that payment was to be made there and that the railway receipt was actually delivered at Ratangarh and the payment was actually made there and so the court at Ratangarh had jurisdiction to try the suit. The evidence of the parties was recorded by the learned Civil Judge. He found that it had not been proved that a contract was entered into between the parties that the goods would be delivered at Ratangarh or that payment would be made there.

On these findings he decided the issue against the plaintiff. The learned District Judge on appeal followed the unreported decision of a learned single Judge of this Court in Civil Revn. No. 91 of 1956, (Firm Purshottam Dass Sanwal Das v. Chandmal Ruglal), D/- 14-11-1958 (Raj). He was of the opinion that the facts and circumstances of that case were similar to those of the present case. In that case also the defendant was Firm Purshottam Dass Sanwal Dass which is the defendant in the present case. The learned single Judge followed his own unreported earlier decision in Civil Revn. No. 155 of 1954, (Deoraj v. Kishna), D/- 31-10-1958 (Raj) and some other decisions in which it was held that a suit by a principal against a commission agent can only be instituted at the place where the latter carries on business. An analysis of the cases on which the decisions of the learned Single Judge are based goes to show that they proceed on three grounds:

(a) that the deletion of Explanation III to Section 17 of the Code of 1882 and the addition of the words 'wholly or in part' between the words 'the cause of action' and 'arises' in the present Code did not change the law so far as suits based on contract are concerned,

(b) that every suit by a principal against a commission agent is substantially a suit for rendition of accounts which can only be instituted at the place where the latter carries on business, and

(c) that to hold otherwise would cause great inconvenience to commission agents.

Taking ground (a) first the decision in the Jupiter General Insuranee Co. Ltd. v. Abdul Aziz, AIR 1924 Rang 2 may be regarded as the leading case representative of this view.

3. Section 17 of the Code of 1882 ran as follows: 'Subject to the limitations aforesaid, all other suits shall be instituted in a Court within the local limits, of whose jurisdiction

(a) the cause of action arises; or

(b) all the defendants, at the time of the commencement of the suit, actually and voluntarily reside, or carry on business, or personally work for gain; or

(c) any of the defendants, at the time of the commencement of the suit, actually and voluntarily resides, or carries on business, or personally works for gain:

Provided that either the leave of the court is given, or the defendants who do not reside, or carry on business or personally work for gain, as aforesaid, acquiesce in such institution'.

4. Sub-section (a) referred to the place where the cause of action arose. It was not clear whether it meant the entire cause of action or a part of it. Act No. 7 of 1888 added an explanation namely Explanation III to the section which ran as follows:

'In suits arising out of a contract the cause of action arises within the meaning of this Section at any of the following places, namely:

(i) the place where the contract was made;

(ii) the place where the contract was to be performed or performance thereof completed;

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

5. This explanation was added for the purpose of making it clear that suits arising out of contract could be instituted in the court within the local limits of which the cause of action arises either wholly or in part. Still, there was doubt as to whether this principle was applicable to other suits also which were not based on contract.

6. In Section 20 of the present Code the words 'wholly or in part' have been added in Clause (c) to make it plain that all suits may be instituted where the cause of action arises either wholly or in part and Explanation III of the old Code has been dropped.

7. In the above Rangoon case, AIR 1924 Rang 2 the learned Judges were of the opinion that in Explanation III to Section 17 of the Code of 1882 the expression 'cause of action' in relation to suits on contract was exhaustively defined, and the same meaning should be attached to it in Section 20(c) of the present Code even though the explanation occurring in the old Code has now been omitted.

8. The above view was expressly dissented from by a Division Bench of this Court in Abdul Gafoor v. Sensma ILR (1955) 5 Raj 269 : ((S) AIR 1955 Raj 53). The point which arose for determination in that case was whether an assignment would give cause of action to the Court where the assignment was made though otherwise that court would have no jurisdiction to entertain the suit with respect to the debt which was assigned. It was held that the expression 'cause of action' means all the bundle of facts which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court, that in case of an assignment of a debt the plaintiff will be bound to prove that the debt was assigned in his favour by the assignor and therefore the assignment is itself a part of the cause of action within the meaning of Section 20(c), C. P. C. according to which the suit can be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part arises and that therefore a court in whose territorial jurisdiction the assignment of debt has taken place, is competent by virtue of Section 20(c), C. P. C. to entertain and decide a suit by the assignee for the recovery of the debt. With regard to the case of AIR 1924 Rang 2, which came up for consideration it was observed that Section 20 should be read as it stands at present and it cannot be read as if Explanation III to Section 17 of the Code of 1882 which was omitted was still there.

9. In view of the above Division Bench decision of this Court the main ground on which the cases relied upon by the learned single Judge were based is no longer tenable so far as this Court is concerned.

10. Coming now to ground (b) the cause of action in a suit for rendition of accounts is different from the cause of action in a suit for recovery of money brought by the principal against the commission agent. In the former case the cause of action is the failure of the agent to render accounts on demand. In the latter case it is the failure of the agent to pay the money due to the principal on demand. Further in view of the decision of this Court in ILR (1955) 5 Raj 269 : ((S) AIR 1955 Raj 53), a suit against a commission agent can be brought at a place other than that where he carries on his business if the cause of action in part arises there within the meaning of Section 20(c), C. P. C.

11. The same view was expressed by two learned single Judges of the Punjab High Court in Parma Nand Ganesh Parshad v. Firm Jawahar Singh Tara Singh, AIR 1952 Punj 381 and Dwarka Dass v. Brijmohan, AIR 1956 Punj 111. In the former case Harnam Singh, J. observed that the Code is exhaustive on all matters specifically dealt with by it and the law on such matters must be ascertained only with reference to the provisions of the Code and the jurisdiction of the court must be gathered from Section 20 of it. He followed the decision of the Full Bench of the Madras High Court in Venkatachalam v. Rajaballi, AIR 1935 Mad 663 (FB), in which the learned Chief Justice, with whom the two other learned Judges constituting the Bench concurred, said :

'Apart from this upon an examination of the documents another thing is perfectly clear and that is that whatever the relationship between the parties may in fact be, payment for the goods purchased by the plaintiff or on his behalf was to be made at Tuticorin. If that is so, part of the cause of action arose within the jurisdiction of the Tuticorin District Munsif's Court.'

The above Madras Full Bench case was followed in AIR 1955 Punj 111. The plaintiffs in that case who were carrying on business in Delhi appointed the defendants who were carrying on business in Madras as their commission agents for the purchase of cloth remitting a sum of Rs. 10,000/- on 1-9-1947 and paying another sum of Rs. 2,000/- against a railway receipt on 1-10-1947. The defendants despatched the goods from Madras to Delhi and obtained a railway receipt in favour of themselves. They sent this receipt to the United Commercial Bank at Delhi with the direction that the receipt should be endorsed to the plaintiffs only after the latter had paid the price of the goods. The bank was to carry out the orders of the defendants and was not to endorse the receipt to the plaintiffs until and unless the price of the goods was paid. The defendants supplied goods to the value of Rs. 10,000/- and the plaintiffs brought a suit in Delhi for the recovery of Rs. 1716-8-0.

It was held that a part of the cause of action arose at Delhi and the court at Delhi had jurisdiction to decide the case. It was contended on behalf of the defendants that as the relationship between the parties to this litigation was that of principal and agent the present suit must be instituted at the place where the commission agent carries on his business. Reliance was placed on a decision of the same Court in Bhamboo Mal v. Ram Narain, AIR 1928 Lah 297. The learned Chief Justice observed:

'The provisions in regard to the place of trial are embodied in Section 20, Civil P. C. which declares that every suit shall be instituted either in a Court within the local limits of whose jurisdiction the defendant voluntarily resides, or carries on business, or personally works for gain, or in a Court within the local limits of whose jurisdiction the cause of action, wholly or in part, arises. The expression 'cause of action' means every fact which, if traversed, it would be necessary for the plaintiff to prove in order to support his right to the judgment of the Court. There can be little doubt that a part of the cause o! action in the present case arose at Delhi. The defendants despatched the goods from Madras to Delhi and obtained: a railway receipt in favour of themselves. They sent this receipt to the United Commercial Bank at Delhi with the direction that the receipt should be endorsed to the plaintiffs only after the latter had paid the price of the goods.. The bank was to carry out the orders of the defendants and was not to endorse the receipt to the plaintiffs until and unless the price of the goods was paid. It was an agent of the defendants and could in no sense be regarded as an agent of the plaintiffs.'

12. The only other remaining ground for the view taken in the cases relied upon by the learned single Judge is that to hold that suits against commission agents can be filed at places other than the one at which they carry on business would cause great inconvenience to them. In this connection I may refer to the observations made by the Division Bench in ILR (1955) 5 Raj 269 at p. 274 : ((S) AIR 1955 Raj 53 at p. 54), to the following effect:

'It cannot be denied that if the view expressed in Read v. Brown, (1888) 22 QBD 128 is followed some defendants in certain cases are likely to be put to inconvenience, but, in our opinion, the consideration of convenience or inconvenience should not come in the way of giving correct interpretation to the provisions of law.'

13. In the present case the plaintiff will have to prove the facts of the two payments made by him on two Hundiswhich were presented to him by the bank at Ratangarh before he will be entitled to the relief claimed in theplaint. The payments made by the plaintiff are part of the cause of action for the suit. This part of the causeof action arose at Ratangarh where the payments were made and the court at Ratangarh has jurisdiction to try the suit in view of the provision contained in Section 20(c), C. P. C.

14. It was argued on behalf of the respondent that as the commission charged by the bank for realising the money from the plaintiff and transmitting it to the defendant was ultimately recovered from the plaintiff the bank should be regarded as an agent of the latter and the payment should be deemed to have been made at Kota. Reliance was placed on the following observations made by their lordships of the Supreme Court in Commissioner of income-tax, Bombay South v. Messrs, Ogale Glass Works Ltd., AIR 1954 SC 429:

'There can be no doubt that as between the sender and the addressee it is the request of the addressee that the cheque be sent by post that makes the post office the agent of the addressee. After such request the addressee cannot be heard to say that the post office was not his agent and, therefore, the loss of the cheque in transit must fall on the sender on the specious plea that the sender having the very limited right to reclaim the cheque under the Post Office Act, 1898, the Post Office was his agent, when in fact there was no such reclamation. Of course, if there be no such request, express or implied, then the delivery of the letter or the cheque to the post office is delivery to the agent of the sender himself.'

15. The above observations are not applicable to the facts of the present case. Here the bank was throughout acting tinder the instructions of the defendant, the goods were consigned by the defendant to self and the railway receipt was endorsed in favour of the bank at Ratangarh and was sent with instructions that it should be endorsed in favour of the plaintiff if the Hundis which were sent along with the railway receipt were honoured by him. The Hundis were honoured by the plaintiff and the bank then endorsed the railway receipt in his favour and delivered it to him. As the bank was acting under the instructions of the defendant, it cannot be regarded as the agent of the plaintiff. The defendant trades for profit and all the expenses which he incurs in the transactions which he enters into with the plaintiff must ultimately be recovered from the latter. The mere fact that the bank charges were ultimately recovered from the plaintiff cannot therefore necessarily lead to the inference that the bank was the agent of the plaintiff.

To take an example, a contractor who gets the work of his principal executed through his own servants recovers all the payments made by him to them ultimately from the principal. That does not make the servants of the contractor the servants of the principal. I therefore hold that payment made by the plaintiff to the bank at Ratangarh cannot be regarded as payment made to the defendant at Kota. It was a payment made by the plaintiff to the agent of the defendant at Ratangarh. As I have already said above the plaintiff will have to prove this payment before he is entitled to the relief claimed in the plaint. This payment is thus a part of the cause of action for the suit. As the payment was made at Ratangarh the court at that place has jurisdiction to try the suit under Section 20(c), C. P. C.

16. Another aspect of the matter is that when the transactions about which the parties had entered into a contract at Kota had come to an end, the relationship of debtor and creditor was created between them in respect of the amount remaining due from one party to the other. In the absence of any agreement as to where that amount was payable the principle that the debtor must seek the creditor becomes applicable. In the present case according to the plaint allegation a sum of Rs. 1769-13-0 remained due to the plaintiff from the defendant as a result of the transactions which had taken place between the parties and the plaintiff was entitled to institute a suit to recover this sum in the court within whose jurisdiction he was residing. In this connection the decision of a Division Bench of this Court in Kishanlal v. Bhanwarlal, 1951 Raj LW 439 : (AIR 1952 Raj 81), and the decision in Firm Chandanmal Fatehraj v. Hazarimal, 1951 Raj LW 606 : (AIR 1962 Raj 122), in which it was followed, may be referred to.

17. I therefore allow the revision application, set aside the order of the learned District Judge returning the plaint for presentation to the proper court and direct the Civil Judge, Ratangarh, to try the suit in accordance with law.

18. In the circumstances of the case, I direct thatparties shall bear their own costs of this revision application.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //