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A.K. Raha (Engineers) Ltd. Vs. State of Punjab - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata High Court
Decided On
Case NumberSuit No. 1231 of 1951
Judge
Reported inAIR1961Cal166
ActsCode of Civil Procedure (CPC) , 1908 - Sections 20 and 80 - Order 6, Rule 2 - Order 14, Rule 1
AppellantA.K. Raha (Engineers) Ltd.
RespondentState of Punjab
Cases ReferredChittaranjan v. Barhoo Mahto
Excerpt:
- .....place of payment must be deemed to be the place where the creditor resides and the court at that place has jurisdiction to entertain the suit on the promissory note. that this common law rule applies to india has also been recognised in a decision of this court in the case of sm. tulsimani bibi v. abdul latif : air1936cal97 , in the decisions of the bombay high court in the case of dhunji shah v. a. b. forde, ilr 11 bom. 649 at p. 650, in the case of motilal v. surajmal, ilr 30 bom. 167, in a decision of the madras high court in the case of ramlinga iyer v. joyalakshmi : air1941mad695 and in the decision of the rangoon high court in the case of annamalai chettyar v. daw hnin u, air 1936 rang 251. in the absence of any agreed place of payment, it must be held that the common law rule.....
Judgment:

P.C. Mallick, J.

1. This is a suit by a contractor for works done. The plaintiff was employed for the construction of a broad gauge tunnel on the Bhakra Nangal Canal Railways belonging to the defendant. On. 1-3-1949, the work was completed. In the course of work, the plaintiff from time to time submitted running bills and received some payments. It is alleged that improper deductions amounting to Rs. 31.949/12/- were made from the running bills. The final bill submitted after construction works were completed is for Rs. 3,61,918/11/-. In terms of the contract the plaintiff had to furnish a security deposit of Rs. 25,000/-. The present suit has been instituted for the recovery of the said three sums, alternatively for an enquiry as to the amount due and payable to the plaintiff. The suit has been instituted after obtaining leave under Clause 12 of the Letters Patent on the averment that part of the cause of action arose within the jurisdiction of the Court. It is pleaded that notice under Section 80 of the Code of Civil Procedure has been served. It has not, however, been pleaded that it was sent from Calcutta within the jurisdiction of this Court.

2. In the written statement the claim is disputed except with respect to the sum of Rs. 11,582-1/-. This sum of Rs. 11,582/1/- admitted to be due and payable has been deposited in Court. The validity of the notice under Section 80 has been denied, but not the receipt of the notice. It is pleaded that no part of the cause of action arose within the jurisdiction of this Court and in consequence this Court has no jurisdiction and the leave granted should be revoked.

3. At the trial the parties dispensed with the formal proof of the documents included in the Brief of Documents and the Brief of Documents has been marked as an exhibit by consent. No oral evidence has been tendered by either party.

4. It is agreed that the only issue to be tried now is whether this Court has jurisdiction to entertain the suit. The learned Counsel appearing for the defendant did not urge that notice under Section 80 of the Code of Civil Procedure is invalid, though the point has been taken in the written statement. Learned Counsel appearing for the plaintiff concedes that having regard to the dispute raised as to the quantum of the plaintiffs claim, the plaintiff will ask for the alternative relief claimed in the plaint. The disputes now before me for adjudication, therefore, are:

(i) whether any part of the cause of action arose within the jurisdiction of this Court and (ii) whether leave granted should be revoked.

5. The contract in the instant case is one between the Province of Punjab in pre-partitioned India and a private party and had to comply with the formalities laid down in the Government of India Act. The contract in suit is evidenced by the acceptance of a tender submitted by the plaintiff to the defendant outside jurisdiction. The formalities required by law have been, complied with. Submission of the tender and acceptance thereof took place n the Province of Punjab. But, argues Mr. R, C. Deb, learned counsel appearing for the plaintiff, that in the instant case there are the facts to be noted presently which show that the making of the contract was not wholly within the Province of Punjab. Firstly, the plaintiff was expressly invited to submit a tender and a copy of the tender was sent to it at their Calcutta Office with a request to submit it for acceptance. This, in my judgment, does not constitute any part of the cause of action. Secondly, the tender submitted by the plaintiff contained a covering letter dated 26-11-1947. Paragraph of the covering letter reads as follows:

'We undertake to complete the works within. 9 months commencing from 10 days of our receiving the intimation of your acceptance of our tender at our Head Office at Calcutta'.

This tender submitted by the plaintiff containing the above terms was accepted. The defendant communicated the acceptance of the tender to the plaintiff at the plaintiff's Calcutta Office by an express telegram addressed by the Superintending Engineer, Bhakra Civil Circle to the plaintiff's office at Calcutta and by a subsequent letter confirming the telegram. It appears from an inter-departmental letter dated 13-12-1947 from the office of the Chief Engineer, Irrigation Works, Punjab to the Superintending Engineer, 1st Bhakra Civil Circle that the acceptance of tender was made on 13-12-.1947, that is, sometime before the communication of acceptance at Calcutta was made in the month of January next. Mr. Deb submitted that it must be held that a part of the cause of action in respect of the making of the contract took place within the jurisdiction of this Court. He argues that it is after the communication of acceptance that both parties become bound. Till such communication one of the parties could resile. The contract is, therefore, complete only when the acceptance is communicated to the plaintiff at Calcutta. He relies on a decision of the Madras High Court in the case of Sepulchre Brothers v. Khushal-das Jagjivan, AIR 1942 Mad 13, in which Patanjali Sastri, J. in a well-considered judgment laid down the following proposition:

'Although an acceptance of offer is complete as against the proposer as soon as the letter containing it is posted, it is a continuing act until it reaches the person to whom it is communicated and thus can be taken to be made also at the place where it is received. Consequently when an offer is made and accepted through post, a part of the cause of action arises where the letter accepting the offer is posted and a part where it is delivered'.

On the authority of this decision, Mr. Deb submitted that acceptance is a continuing act until it reaches the person to whom it is communicated and that the cause of action arises partly where the letter of acceptance is posted and partly where it is delivered. The law as laid down by Patanjali Sastri, J., relates to a contract concluded by correspondence. The instant case, however, is not a contract concluded by correspondence. It is a contract for which there is a statutory provision and certainly cannot be equated to ordinary contracts entered into between private parties by correspondence. In the case of contracts by correspondence between private parties, till communication of acceptance the contract may not be final, but not so in the case of Government contracts of the class we are considering. In such cases the contract is complete by acceptance of tender and communication of acceptance is not necessary. The Madras decision is, therefore, distinguishable. Mr. Deb has pointed out that in the instant case the contract expressly provides that acceptance must be communicated to the plaintiff at its Calcutta office and in computing the period of completion the date relevant is the date at which the acceptance is communicated to the Calcutta office. The provision in the contract, however, has hardly anything to do with the making of the contract. It may have some relevance to the period of performance and if the case made in the plaint involves this question as to whether the contract was performed within time, then it would be a material fact relevant on the question of performance of the contract. In my judgment, the clause as to communication of acceptance at the Calcutta office cannot be considered to be one of the bundle of essential facts to be proved in establishing the making of the contract. The plaintiff, however, has claimed payment in this suit on the averment that it 'carried out the works in accordance with the contract' including the terms that the construction was to be completed within 9 months from the date of the communication of acceptance at its Calcutta office. Without the proof of this fact, the plaintiff would not be entitled to a decree. This clause and its compliance is, therefore, an essential fact to be proved and in consequence is a part of the cause of action in the instant case. It seems to me that on this basis it can be held in the instant case that the clause as to communication of acceptance at the Calcutta office is a part of the cause of action. I would, however, prefer not to base my decision and invoke jurisdiction on this ground.

6. It has next been argued by Mr. Deb that in the instant case there is no provision in the contract as to the place of payment of the final bill after construction has been completed. Mr. B. K. Ghosh, learned counsel for the defendant, conceded that there is no express provision in the contract to that effect. But he argued with force that impliedly it was payable at the place of work at Punjab outside the jurisdiction of this Court. The construction work was done in Punjab and the money due must impliedly be payable by the Punjab Government at one of its Treasuries in Punjab, According to contract and prevailing practice, there would be running bills and a final bill. It stands to reason that during the period of construction the running bills would be payable at the place of work. It may well be that such payments of the running bills were to be made at the place of work. These facts, in Mr. Ghosh's submission, lead to the inevitable inference that the final bill including the security deposit was impliedly payable at the place of work outside the jurisdiction of this Court. In my judgment, however, the payment of the running bills and the final bill cannot be treated on the same footing so far as the place of payment is concerned. The parties might be taken to have agreed to receive payments of the running bills at the place where the works were being done and where the contractor would have to maintain an establishment for its works. But after the works are completed, the contractor is no longer expected to maintain an establishment only for the purpose of receiving payment. There cannot, therefore, be any necessary implication that in such cases the contractor would be taken to have agreed to receive the payment of the final bill at Punjab. I hold that in the instant case the final bill including the refund of the security deposit was not payable, either expressly or impliedly, at the place of works outside the jurisdiction of this Court. It follows that there was no provision, either expressly or by implication, that the money was payable at any place. There being no place of payment agreed to I in the contract. Mr. Deb contends that the money has become payable at the plaintiff's Calcutta office either under Section 49 of the Indian Contract Act or in accordance with the common law rule that the debtor must seek the creditor and make payment at the creditor's place. In order that the place of payment would be at the Calcutta office under Section 49 of the Indian Contract Act, the plaintiff would have to ask the defendant in clear terms to make payment at its Calcutta office. In the instant case, however, though there are several letters demanding payment at Calcutta, none of the letters clearly indicates that payment is required to be made at the plaintiffs office at Calcutta. It is, therefore, doubtful whether Mr. Deb can take advantage of the provisions of Section 49 of the Indian Contract Act in support of the argument that the plaintiffs dues had become payable in the Calcutta office of the plaintiff.

7. The other ground, however, taken by Mr. Deb has substance. It has been held by Lort-Williams, J. in the case of Srilal Singhania v. Anantlal, AIR 1940 Cal. 443, that in the case of a promissory note payable on demand but silent as to the place of payment, the common law rule applies and it being necessary for the debtor to seek out his creditor and pay him at his residence, in the absence of any agreed place of payment, the place of payment must be deemed to be the place where the creditor resides and the court at that place has jurisdiction to entertain the suit on the promissory note. That this common law rule applies to India has also been recognised in a decision of this Court in the case of Sm. Tulsimani Bibi v. Abdul Latif : AIR1936Cal97 , in the decisions of the Bombay High Court in the case of Dhunji Shah v. A. B. Forde, ILR 11 Bom. 649 at p. 650, in the case of Motilal v. Surajmal, ILR 30 Bom. 167, in a decision of the Madras High Court in the case of Ramlinga Iyer v. Joyalakshmi : AIR1941Mad695 and in the decision of the Rangoon High Court in the case of Annamalai Chettyar v. Daw Hnin U, AIR 1936 Rang 251. In the absence of any agreed place of payment, it must be held that the common law rule applies and the plaintiff's dues are payable at the plaintiff's Calcutta office. This Court has, in consequence, jurisdiction to entertain the suit, provided previous leave under Clause 12 of the Letters Patent has been obtained. In the instant case previous leave under Clause 12 of the Letters Patent has been obtained.

8. Mr. Deb also relies on the fact that notice under Section 80 of the Code of Civil Procedure was sent in the present case from Calcutta within jurisdiction and this notice is a part of the cause of action to institute a suit. After the Full Bench decision of this Court which held that notice under Section 77 of the Railways Act constitutes no part of the cause of action, it is being doubted whether notice under Section 80 of the Code of Civil Procedure is a part of the cause of action, so as to invoke jurisdiction of the Court. J. P. Mitter, J., has expressed his opinion in a case that it is not, H. K. Bose, J. and Bachawat, J., on the other hand, have held that it is a part of the cause of action. I myself on a previous occasion have expressed my preference for the view expressed by H. K. Bose, J. and Bachawat, J. The point is awaiting decision by the Full Bench of this Court. Mr. B. K. Ghose has submitted that the point has not been taken in the plaint that notice under Section 80 has been served from Calcutta and that this is a part of the cause of action. Mr. Deb, however, has cited a decision of this Court in the case of Fink v. Buldeo Dass, ILR 26 Cal 715 in which Stanley, J., held that even in the absence of the case being made in the plaint, evidence should be allowed to prove that the Court has jurisdiction and if necessary the plaint may be amended. In the instant case, though the copy notice under Section 80 of the Code of Civil Procedure suggests that it was sent from Calcutta, no amendment of the plaint was either asked for or granted. The point involves a determination of the question of fact and a party should not be allowed to lead evidence on a material fact without proper pleadings. I would, therefore, uphold the objection of Mr. Ghose and disallow Mr. Deb from invoking jurisdiction of this Court, on the ground that notice under Section 80 of the Code of Civil Procedure was sent from Calcutta.

9. For reasons stated above, I hold that part of the cause of action in this suit has arisen within the jurisdiction of this Court and this suit having been instituted after obtaining leave under Clause 12 of the Letters Patent this Court is competent in law to entertain the suit.

10. Mr. Ghosh has contended that leave granted should be revoked in the circumstances of this case. He argues that the balance of convenience is against the determination of this suit by this Court. The works were done in Punjab, most of the witnesses are expected to be from Punjab, so also most of the documents. There is much to be said in favour of this contention of Mr. Ghosh and if an application for revocation of leave was made immediately after the summons was served on the defendant, I might have revoked the leave, But no such application was made. The suit has been allowed to proceed uptil hearing and all steps including discovery and inspection of voluminous documents have been completed and the plaintiff has been made to incur heavy costs. It would not be proper to exercise discretion to revoke leave at this stage and compel the plaintiff to institute a suit in Punjab. It is important to note that the suit was instituted on March 15, 1951 and we are in the second half of 1959. Reference may be made on this point to the observation of the Supreme Court in the case of Chittaranjan v. Barhoo Mahto, : AIR1953SC472 , in which under similar circumstances their Lordships of the Supreme Court held that grave injustice would result if the Court was to hold that 'forum convenient' was not Calcutta but Bihar and to revoke the leave on that ground. In the circumstances of the instant case, I will not be justified in revoking the leave granted under Clause 12 of the Letters Patent to institute the suit in this Court. .

11. It should be noted that the case of revocation of leave has not been properly pleaded in paragraph 17 of the written statement which reads as follows:

'The defendant submits that inasmuch as no part of the cause of action arose within the jurisdiction of this Hon'ble Court, this suit cannot be tried by this Hon'ble Court and that the leave granted under Clause 12 of the Letters Patent should be revoked'.

The point taken is that no part of the cause of action having arisen within the jurisdiction of this Court, the plaintiff was not entitled to ask for leave under Clause 12 of the Letters Patent and that the Court had no power to grant it. It is on this basis that it has been prayed that the leave should be revoked. The Court is not asked to revoke leave on the ground that the Court had power to grant leave in the instant ease, but should not have grantee? it On the ground that the balance of convenience was against the suit being tried in this Court. On the present pleadings, Mr. Ghosh is not entitled to argue that leave should be revoked on the ground of balance of convenience. The leave granted, in any judgment, cannot be and ought not to be revoked.

12. In the result, I direct an enquiry as to theamount of the plaintiff's claim as made out in paragraphs 6, 7 and 8 of the plaint. Costs reserved.Certified for two Counsel. Let this Reference betreated as an urgent Reference. Let the decree bedrawn up expeditiously.


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