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Vijaya Bank, Regional Office, Egmore, Madras Vs. Kiran and Co., Madras and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberC.R.P. No. 3879 of 1982
Judge
Reported inAIR1983Mad357
ActsCode of Civil Procedure (CPC), 1908 - Sections 20
AppellantVijaya Bank, Regional Office, Egmore, Madras
RespondentKiran and Co., Madras and anr.
Appellant AdvocateS. Sampath Kumar, ;A.P.S. Kasthuri Rangan, ;K.S.V. Prasad and ;S. Ramanarayanan, Advs.
Respondent AdvocateDharmachand Jain, Adv.
Cases ReferredKarur Vysia Bank Ltd. v. Ramachandra C.Oza
Excerpt:
.....would be applicable and the obtaining of the draft at madras would clearly and without doubt furnish part of the cause of action for the institution of the suit at madras within the meaning of s......acted negligently and against the instructions of the first respondent in that the proceeds of the draft obtained by the first respondent and intended to be paid to r. remeshkumar had been paid by the second respondent to rathilal rameshkumar, according to the first respondent, the second respondent was liable to make good the amounts to the first respondent. similarly, the first respondent stated that the payee under the draft r.rameshkumar did not authorise the petitioner to collect the proceeds of the draft and owing to its negligence and carelessness and in connivance with rathilal rameshkumar, the petitioner had opened a new account with the stolen draft from the second respondent branch at the bombay port intended for r.rameshkumar and had made available the proceeds to rathilal.....
Judgment:
ORDER

1. In this civil revision petition at the instance of the second defendant in O.S. No. 6931 of 1980, III Assistant Judge, City Civil Court at Madras where the suit had been instituted had jurisdiction to entertain the same. On 20-3-1980, the first respondent, which is a partnership firm, applied for and obtained from the Karnataka Bank, Madras, the second respondent herein, an account payee draft for a sum of Rs. 15344, payable to one R. Ramesh Kumar of Bombay, payable at the Bombay Port branch of the Karnataka Bank and sent it by post to the payee. The payee R. Ramesh Kumar, did not receive the draft sent to him by the first respondent and he had instructed the Bombay Port branch of the Karnataka Bank (the second respondent herein) to stop payment. In turn, on 28-3-1980, the first respondent instructed the second respondent to stop payment. In the reply sent by the second respondent on 9-4-1980, the second respondent informed the first respondent that the draft in question had been presented through the petitioner had honoured on 27-3-1980. Thereafter the first respondent went to Bombay and made enquiries which revealed that a new account was opened in the name of one Rathilal Rameshkumar with the petitioner's bank on 25-3-1980 and the draft had been presented and collected by the petitioner and further that Rathilal Rameshkumar had also withdrawn from that account on 1-4-1980 and 2-4-1980, two sums of Rupees 12,500/- and Rupees 2,500/- respectively leaving a negligible balance. The first respondent charged the second respondent Karnataka Bank with having acted negligently and against the instructions of the first respondent in that the proceeds of the draft obtained by the first respondent and intended to be paid to R. Remeshkumar had been paid by the second respondent to Rathilal Rameshkumar, According to the first respondent, the second respondent was liable to make good the amounts to the first respondent. Similarly, the first respondent stated that the payee under the draft R.Rameshkumar did not authorise the petitioner to collect the proceeds of the draft and owing to its negligence and carelessness and in connivance with Rathilal Rameshkumar, the petitioner had opened a new account with the stolen draft from the second respondent branch at the Bombay Port intended for R.Rameshkumar and had made available the proceeds to Rathilal Rameshkumar. The first respondent, therefore, laid the suit against the second respondent and the petitioner impleading them as defendants 1 and 2 and praying for a joint and several decrees for the recovery of the sum of Rs. 15344, being the amount lost by the first respondent and a further sum of Rs. 1,379.64 being the interest at 18 percent per annum from 20-3-1980.

2. In the written statement filed by the petitioner, amongst others, an objection was raised that the City Civil Court at Madras had no jurisdiction to try the suit as the entire cause of action arose only at Bombay and the court at Bombay alone had jurisdiction to try the suit.

3. In I.A. No. 14352 of 1982, the petitioner prayed that the issue relating to jurisdiction should be tried as a preliminary issue. The first respondent resisted this application by contending that part of the cause of action arose at Madras, and therefore, the suit was properly laid in the court of Madras, and that the application for trying the issue of jurisdiction as a preliminary issue was misconceived and unsustainable, as the trial of the suit had commenced earlier.

4. The learned III Assistant Judge, City Civil Court, Madras, who heard this application was of the view that the obtaining of the draft at Madras, which has given rise to the action in Madras within the meaning of Section 20(c) of the Civil P.C., and therefore, the suit was properly laid in Madras. In addition, the petitioner was held to have acquiesced in the institution of the suit against it at Madras and, therefore, no exception can be taken to that as provided in the second part of the proviso to Section 20(b) of the Civil P.C. In this view, the application filed by the petitioner was dismissed. It is the correctness of this order that is challenged in this civil revision petition.

5. The learned counsel for the petitioner strenuously contended that though it may be that it cannot be disputed that the draft in question was obtained in Madras, yet, the other acts which are claimed to have given the first respondent herein a right of action as against the petitioner had all taken place outside Madras, namely, in Bombay and, therefore, the Court at Madras has no jurisdiction to entertain the suit. On the other hand, the learned counsel for the first respondent would submit that in this case though it may be that the petitioner had collected the draft sent by the first respondent to R. Ramesh Kumar at Bombay from the Bombay Port branch of the second respondent, yet, the first respondent has to establish that the draft in question had been obtained and it was that draft which had been wrongfully paid out by the second respondent through the petitioner and, therefore, the whole thing had its origin in and stemmed from the draft obtained in Madras and that would give rise to part of the cause of action for the institution of the suit within the meaning of Sec. 20(c) of the Civil P.C. and, therefore, the suit was also properly laid at Madras. In this connection, the learned counsel for the first respondent would also place strong reliance upon the decision in Karur Vysia Bank Ltd v. Ramachandra C. Oza, : AIR1974Mad209 .

6. Before proceeding to consider these submissions, it would be necessary to refer to Section 20 of the Civil P.C., which runs as follows:-

'Subject to the limitations aforesaid, every suit shall be instituted in a court within the local limits of whose jurisdiction :-

(a) the defendant, or each of the defendants where there are more than one, at the time of commencement of the suit, actually and voluntarily resides or carries on business or personally works for gain; or

(b) any of the defendants, where there are more than one, at the time of commencement of the suit, actually and voluntarily resides, or carries on business or personally works for gain provided that in such case 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; or

(c) the cause of action, wholly or in part, arises.'

7. On the facts of this case, clause (a) which requires that the defendant or each of the defendants where there are more than one, should at the time of the commencement of the suit, either actually or voluntarily reside, or carry on business, or personally work for gain, within the limits of the jurisdiction of the Court where the suit is instituted is not attracted because only the second respondent carries on business in Madras and not the petitioner. Similarly, clause (b) applies to a case where there are more defendants than one any of whom should, at the time of the commencement of the suit, either actually and voluntarily reside or carry on business, or personally works for gain, within the local limits of the jurisdiction of the court where the suit is instituted provided that leave of court is obtained with reference to the defendants who are not actually and voluntarily residing, or carrying on business or personally working for gain within the local limits of the jurisdiction of the court where the suit is instituted or they acquiesce in the institution of the suit. Admittedly, in this case, only the second respondent carries on business in Madras and the petitioner does not carry on such business in Madras and no leave has been obtained by the first respondent to institute the suit against the petitioner. That perhaps was the reason why the court below has applied the latter part of the S. 20(b) apart fro S. 20(c) of the Civil P.C., to hold that the suit had been properly instituted at Madras as a result of the acquiescence and inaction of the petitioner with reference to the institution of the suit against it. Be that as it may, it is unnecessary in my view to consider the correctness of the order of the court below in the light of S. 20(a) and (b) of the Civil P.C. That leaves for consideration the S. 20(c) of the Civil P.C., and it has to be found out whether the cause of action in this suit had arisen partly or wholly within the local limits of the territorial jurisdiction of the City Civil Court at Madras.

8. The expression 'cause of action' has been the subject-matter of discussion and elucidation in several cases. Lord Esher in Read v. Brown, 1888 22 QBD 128, stated that the cause of action means-

'Every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.'

Fry L. J. observed in the same ruling-

'Everything which, if not proved, gives the defendant an immediate right to judgment must be part of the cause of action.'

Lord Watson in Mt. Chand Kour v. Pratap Singh, 1888 15 Ind App 156. observed-

'Now the cause of action has no relation whatever to the defence which may be set up by the defendant, nor does it depend upon the character of the relief prayed for by the plaintiff. It refers entirely to the grounds set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the court to arrive at a conclusion in his favour.'

In State if Madras v. C. P. Agencies, : AIR1960SC1309 , Das, C. J. referred with approval to the aforesaid observations.

9. Bearing in mind these considerations and applying them to the facts of the present case, before the first respondent can succeed in the suit instituted by it, it has to establish to the satisfaction of the court the following facts :-

(1) that the draft was issued to the first respondent by the second respondent branch at Madras in favour of R. Ramesh Kumar of Bombay payable at the Bombay Port branch of the second respondent;

(2) that the draft posted from Madras to the payee did not reach him and was not encashed by him;

(3) that the second respondent or the second respondent and the petitioner had collusively and fraudulently or even negligently acted in paying and collecting the proceeds of the draft having received it from Rathilal Ramesh Kumar, contrary to the instructions of the first respondent and crediting it to the account of Rathilal RameshKumar with the petitioner bank; and

(4) that the second respondent and the petitioner negligently failed to ascertain whether Rathilal Rameshkumar who had presented the draft, had a right to do so and collect the proceeds of the same as the payee thereof.

10. If the first respondent does not establish any of the foregoing, the petitioner and the second respondent would get a right to judgment and the suit instituted by the first respondent would have to be dismissed. In other words, everyone of the aforesaid aspects really form part of the cause of action. It may be that it may not be necessary for the first respondent to establish the obtaining of the draft at Madras as the action is essentially one for recovery of damages for wrongful payment. But even so, without establishing the obtaining of the draft, the first respondent cannot succeed, for the obtaining of the draft by the first respondent is really the media upon which the first respondent asks the court to arrive at a conclusion in his favour. Apart from this, in order to establish that the draft obtained by the first respondent had been either negligently or carelessly or even intentionally paid out by the second respondent and the petitioner, the first respondent has first to prove the fact that a draft was obtained; as otherwise, proof of wrongful payment of draft would not arise at all. Besides, the obtaining of the draft which really is the basis of the suit does not cease to be so merely because the petitioner or the second respondent may admit the fact that a draft was so obtained, as the draft which constitutes the cause of action in this case has really no relation to, but is totally independent of such defences as may be set up either by the petitioner or by the second respondent. The real test would be to ascertain those facts which would be necessary for the first respondent to prove, if traversed, in order to support his right to judgment. It may be that the petitioner or the second respondent may not traverse some of the facts which the first respondent may have to prove or establish. But the attitude of either the petitioner or the second respondent or the defence that may be raised by him has really no relevance on the question as to what constitutes the cause of action in respect of the claim made in the suit by the first respondent and the facts which have to be established or proved in support of the right of the first respondent to secure a decree from court.

11. It is seen from the plaint that the obtaining of the draft by the first respondent on the second respondent branch at Madras payable at the Bombay Port branch of the second respondent in favour of R.Ramesh Kumar is one of the vital facts relied upon and that part of the cause of action for the suit cannot in any manner be belittled by any defence that may be raised or even by an absence of dispute in that regard. The whole cause of action in this case stems from the draft which was obtained here and which was not encashed by the payee, but had been encashed by a totally different person through the help and assistance of the petitioner as well as the second respondent. The whole suit is based upon an infringement of the rights under the draft and such infringement has necessarily to be established before the relief can be granted and the right to complain about the impringement arose only on account of the obtaining of the draft at the place where it was obtained namely, Madras, and it is that place where the right is created, though the impingement of those rights might have taken place either in Madras or elsewhere. Under those circumstances, and on the facts of this case, the principle laid down in Messrs. the Karur Vysia Bank Ltd. v. Ramachandra C.Oza, : AIR1974Mad209 would be applicable and the obtaining of the draft at Madras would clearly and without doubt furnish part of the cause of action for the institution of the suit at Madras within the meaning of S. 20(c) of the civil P.C. The court below was quite correct when it held that the suit was properly laid by the first respondent in the court at Madras. There is no illegality or irregularity in the order of the court below. Consequently, the civil revision petition is dismissed with the costs of the first respondent.

12. Revision dismissed.


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