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Sreenivasa Pulvarising Industries Vs. Jai Glass and Chemicals Pvt. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberC.O. No. 3511 of 1983
Judge
Reported inAIR1985Cal74,88CWN1070
ActsCode of Civil Procedure (CPC) , 1908 - Section 20
AppellantSreenivasa Pulvarising Industries
RespondentJai Glass and Chemicals Pvt. Ltd.
Advocates:Samir Kumar Bhattacharya, Adv.
DispositionRevision dismissed
Cases Referred and Champaklal v. Nectar Tea Co.
Excerpt:
- .....that in relation to contract when the cause of action arises in part also at the place where the price is payable, the plaintiff is entitled to file the suit in the city civil court, calcutta within whose jurisdiction the price for the goods to be purchased under the contract was payable. correctness of the view taken by the learned judge is the subject matter of challenge before us in the present revisional application which is directed against the aforesaid order.5. mr. bhattacharya appearing in support of this revisional application has contended that when the defendant carries on business in andhra pradesh, when the contract was entered into at bangalore and when the goods are to be despatched to sodepur all beyond the territorial jurisdiction of the city civil court, the said.....
Judgment:

Anil K. Sen, J.

1. This revisional application at the instance of the defendant in a suit for recovery of damages for breach of a contract of sale of goods raises a short point as to whether such a suit can be entertained by a Court within whose territorial jurisdiction the price was payable.

2. The plaintiff company has its registered office at 10, Jackson Lane, Calcutta. On May 31, 1978, at Bangalore the plaintiff entered into a contract with the defendant carrying on business at Mandanapalle, Andhra Pradesh for purchase of 400 bags of Tamarind to be despatched to Sodepur for delivery. The contract further provided that the defendant would present through their banker, Indian Bank, Main Branch, Brabourne Road, Calcutta, the railway receipt with their bill for payment by the plaintiff. The defendant failed and neglected to despatch the goods. The plaintiff had to purchase the goods at a higher price and hence they filed the suit for recovery of damages suffered by them for the breach of the said contract by the defendant.

3. The suit, being Money Suit No. 271 of 1979 was filed at the City Civil Court, Calcutta, within the jurisdiction of which Court the offices of the plaintiff's banker and the defendant's banker, Indian Bank were situate. The defendant filed a written statement to contest the claim. On the pleadings of the parties a preliminary issue was raised as to whether the City Civil Court, Calcutta, had any territorial jurisdiction to entertain such a suit

4. By an order dt. September 14, 1983, the learned Judge, 4th Bench, City Civil Court, Calcutta, decided the issue in favour of the plaintiff. Relying on a single Bench decision of the Patna High Court in the case of Lakhpat Rai v. Chedi Ram : AIR1979Pat120 , it was held that in relation to contract when the cause of action arises in part also at the place where the price is payable, the plaintiff is entitled to file the suit in the City Civil Court, Calcutta within whose jurisdiction the price for the goods to be purchased under the contract was payable. Correctness of the view taken by the learned Judge is the subject matter of challenge before us in the present revisional application which is directed against the aforesaid order.

5. Mr. Bhattacharya appearing in support of this revisional application has contended that when the defendant carries on business in Andhra Pradesh, when the contract was entered into at Bangalore and when the goods are to be despatched to Sodepur all beyond the territorial jurisdiction of the City Civil Court, the said Court could not have the jurisdiction to entertain the suit for damages for breach of such a contract only because had the contract not been breached, the price would have been payable at Calcutta.

6. On a careful consideration of the legal position we have come to the conclusion that the learned Judge is right in his view and there is no merit in the contention of Mr. Bhattacharya. In a suit for damages for breach of contract the cause of action consists of the making of the contract and its breach. Such a suit can, therefore, be filed either at the place where the contract was made or at the place where it should have been performed and the breach occurred. In a contract of the nature now under consideration performance of the contract consists not only of delivery of the goods but also of payment of the price. Therefore, cause of action for a suit on breach of such a contract would arise not only where the goods were to be delivered but also where the price would be payable on such delivery. Title to the goods would not pass and the delivery too could not be taken until the price was paid in terms of the contract which was an integral part of the performance of the contract Judicial opinion on the point is uniform and is in favour of this view. Reference may be made to the case of Battapati v. Calcutta Glass and Silicate Works AIR 1949 Mad 145, Hanuman Prasad v. Nanjappa Chetty AIR 1949 Mad 858, Republic Medico Surgical Co. v. Union of India : AIR1980Kant168 .

7. Apart from the fact that such a conclusion is based on sound principles, it is quite implicit in Section 20(c) of the Code of Civil Procedure when we consider the evolution of the said provision. In Section 17 of the Code of 1882 (which corresponds to present Section 20) the term 'wholly or in part' was not there in Clause (c). In order to remove an ambiguity on the point as to whether a suit in respect of a contract can be filed in a Court within whose jurisdiction the cause of action arose in part but not in whole, the legislature introduced an amendment in 1888 when Explanation III was added to Section 17 on the following terms.

'Explanation III. In suits arising out of 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.'

8. The Code of 1908 amended Clause (c) of old Section 17 in making it clear that what was intended of suits arising out of contract was also intended for all suits and therefore, Section 20(c) was made to provide :

(c) where the cause of action, wholly or in part, arises'. Explanation III which was inserted in 1888 became unnecessary after the main clause was amended to incorporate what that explanation was intended to provide and was omitted. Though that explanation was so omitted, it is nevertheless a correct statement of what the law is (See Peoples Insurance Co. v. Benoy AIR 1943 Cal 199 and Champaklal v. Nectar Tea Co. AIR 1933 Bom 179).

9. Therefore, the law continues to remain the same and in a suit arising out of a contract, a part of the cause of action arises at the place where in performance of the contract any money to which the suit relates in payable.

10. For these reasons, we overrule the only contention put forward in support of this revisional application. The application fails and is dismissed. The order passed by the Court below is affirmed. There will be no order for costs.

Prabir Kumar Majumdar, J.

11. I agree.


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