B.N. Banerjee, J.
1. This rule is directed against an order passed by the Third Bench of the City Civil Court, Calcutta, deciding an issue as to territorial jurisdiction of the Court against the defendant
2. The defendant, Jagdish Chandra Sikdar and his sister Nanibala Kundu used to carry on business in partnership at Cuttack, under the name and style of Messrs. Graduate Friends. Jagdish Chandra's daughter was married to the plaintiffs son. Dispute arose between the parties above named, inter alia, over certain sums of money payable to the plaintiff out of the partnership business. The disputes were referred to arbitration and under the Award the plaintiff became entitled to receive a sum of Rs. 2500/- by way of principal and interest.
3. According to the plaintiff, the defendant Jagdish Chandra Sikdar executed a promissory note for a sum of Rs. 2300/- in favour of the plaintiff, on October 1, 1936. The said promissory note, the plaintiff alleged, was executed in Calcutta within the jurisdiction of the City Civil Court. The defendant did not pay the amount due under the promissory note and thereupon the plaintiff, Santimoyee Devi, instituted a suit in the City Civil Court against him claiming a sum of Rs. 3012-5-9, inclusive of principal and interest due on the promissory note. The defendant contested the suit and his defence, inter alia, was:-
(a) the adjustment between the parties was made at the residence of Sri L. K. Das Gupta, Advocate, at Cuttack.
(b) The writing in question, alleged to be a promissory note, was also executed at the house of the said L. K. Das Gupta at Cuttack and not in Calcutta, as untruly alleged.
(c) the defendant resides and carries on business at Cuttack and as such no part of the cause of action arose in Calcutta or within the jurisdiction of the City Civil Court, Calcutta. On the pleadings there was a preliminary issue raised, namely:- 'Has the court jurisdiction to try this suit?'
4. On the evidence the court below came to the following conclusions:-
(a) 'I am satisfied that the adjustment on the basis of accounting was really done at Cuttack by the Arbitrator and that the present disputed document was also executed at Cuttack.'
(b) 'It is also admitted that the defendant resides and carries on business at Cuttack.'
(c) 'The contents of the document satisfy the definition of promissory note, as given in Section 4 of the Negotiable Instruments Act.'
5. Before the trial court it was contended that when there was no place of payment mentioned in the document, the English Common Law rule, that the debtor must seek out the creditor and pay him, enabled the plaintiff, who was herself resident of Calcutta, to bring a suit on the document in Calcutta. Relying on a decision of this Court reported in Srilal Singham'a v. Anantalal Mandal : AIR1940Cal443 , the trial court answered the issue as to jurisdiction in the affirmative, though not without reluctance.
6. The observation in : AIR1940Cal443 relied on by the court below is set out hereinbelow:-
'It was decided in the case of Tulsiman Bibi v. Abdul Latif Miya : AIR1936Cal97 that: 'A suit on a contract can be instituted in the court which has territorial jurisdiction over the place where the contract has to be performed and that the place of performance must be taken to be the place where the plaintiff is residing on the principle that when the creditor is residing in the realm, the debtor must follow the creditor and pay him, unless there is a different contract between them, and that Section 49 of the Indian Contract Act does not get rid of inferences that should justly be drawn from the terms of the contract itself and the necessities of the case involving in the obligation to pay the creditor the further obligation of finding the creditor so as to pay.'
The learned Judge, R. C. Mitter, J., who decided that case, relied upon a judgment of Lord Sumner in the case of Soniram Jeetmull v. R. D. Tata and Co. Ltd. arid certain observations made by that learned Judge throwing some doubts on the observations of Sir Lawrence Jenkins, C. J. in the case of Puttappa v. Virabhadrappa, 7 Bom LR 993, the opinion of Sir Lawrence Jenkins being that the provision under Section 49 of the Indian Contract Act to the effect that where no place is fixed for the performance of the contract it is the duty of the promisor to apply to the promisee to appoint a reasonable place for performance and performance at that place overrides the rule of the Common Law that the debtor must seek out his creditor and pay. In Lord Sumner's opinion this was not the effect of that section, and R. C. Mitter, J. agreed with that view and I see no reason to disagree with him.
In the Case decided by R. C. Mitter, J. the promise was to be performed without application by the promisee, and therefore, prima facie Section 49 of the Contract Act applied, in accordance with the terms of that section. In the present case, on the contrary, the promise is to be performed on demand, and therefore, Section 49 has no application. That was decided in the case of Raman Chettiyar v. Gopalachari, ILR 31 Mad 223 at p. 228, if any decision was necessary in view of the clear words of the section. It follows that Section 49 having no application to the present case, a fortiori, the Common Law rule applies, and it being necessary for the debtor to seek out his creditor and pay him, in the absence of any agreed place for payment, the place for payment in the present case was Calcutta.'
7-8. The propriety of the decision by the Court below is being disputed before us at the instance of the defendant.
9. Mr. Pankaj Coomar Ghosh, learned Advocate for the defendant petitioner, Contended before us that Section 49 of the Indian Contract Act did not apply to negotiable instruments. Therefore, that court only has jurisdiction to entertain a suit on promissory note where the maker of the promissory note resided or where the promissory note was executed by the maker.
10. In support of his proposition Mr. Ghosh relied on the following decisions: namely, ILR 31 Mad 223, Gopikisan Sheonarain v. Jeetmal Govardhandas, AIR 1935 Nag 144, Dalsukh Nathmal Finn Kamptee v. Motilal Balchand, AIR 1938 Nag 262, Audinarayana Rao Naidu v. Lakshminarayana Rao, AIR 1940 Mad 588, Jivatlal Purtapshi v. Lalbhai Fulchand, AIR 1942 Bom 251, Piyara Singh v. Bhagwan Das, AIR 1951 Punj 33, Sailum Eshwarayya v. Devi Singh, AIR 1953 Hyd 289 (FB), J. N. Sahni v. State of Madhya Bharat, AIR 1954 Madh B 184 (FB).
11. It is necessary for us to examine the aforesaid decisions so as to find out how far they are in conflict with the decision of this court, relied upon by the court below, and also three other decisions of this Court to which we shall refer hereinafter. We shall have further to find whether the conflict, if any, is capable of resolution and if not which view should be taken as the correct view.
12. In the case reported in ILR 31 Mad 223 (supra) there was a promissory note, payable on demand, executed at Tanjore by the defendant, who was a resident of that place, but no place was fixed expressly or impliedly for payment; the creditor was a resident at Kumbakonam and he as plaintiff instituted a suit for the money due on the promissory note in the Kumbakonam Court. The question arose whether the trial court had jurisdiction. The procedure Code which applied was the Civil Procedure Code of 1882. Under Section 17, Explanation III of that Code one of the places at which the cause of action arose, within the meaning of the section, was the place where, in performance of the contract, any money to which the suit related was expressly or impliedly payable. White, C. J. and Miller, J. held, in that case, that the rule of general law, that where a contract was silent as to the place of payment, it was the duty of the debtor to seek out his creditor and pay him, would not control the express provision of Section 17 Explanation III of the Code of Civil Procedure of 1882 and should not be applied in determining where, for the purposes of the section, the cause of action arose. Their Lordships further held that the place where the cause of action arose under Section 17 Explanation III was the place where the money was payable expressly or impliedly under the contract itself and not under any general rule of law; Section 49 of the Contract Act would not govern a case like this, 'for here the money was payable on demand and not, 'without application by the promisee'.'
13. The next case we need consider is the case in AIR 1935 Nag 144 (Supra) in which Subhedar A. J. C. observed as follows:-
'Under Section 70, Negotiable Instruments Act (26 of 1881) a promissory note or Bill of Exchange not made payable as mentioned in Sections 68 and 69 must be presented for payment at the place of business (if any) or at the usual residence, of the maker, drawee or acceptor thereof, as the case may be. When the Legislature itself has declared that payment due under a promissory note, in the absence of a contract to the contrary is ordinarily to be made at the usual place of business of the maker or at his residence, it is clear that on the finding given by the lower court the plaintiff could not file the present suit to recover the amount due under the promissory note at any place other than the one where the defendant admittedly resides,'
14. In AIR 1938 Nag 262 (Supra) Vivian Bose J. reiterated the same view in the following language:-
'It is clear that the ordinary rule under which the debtor must seek his creditor does not apply in the case of a negotiable instrument.'
15. In the case reported in AIR 1940 Mad 588 (Supra) Vardacharaiar J. refused to apply the doctrine 'debtor must seek his creditor' in a suit for account by a principal against his agent, but did not express any definite opinion as to whether the doctrine would apply in a suit between a creditor and debtor. The relevant portion of his judgment is set out below:-
'Mr. Jagannadha Das, the learned counsel for the petitioner, has mainly relied on the decision of the Judicial Committee in I am not able to accept his interpretation of that judgment. It is difficult to read that decision as laying down that as a rule of law, the principle that the debtor is bound to seek out his creditor and pay his debt is applicable in this country, even for the purpose of determining the local jurisdiction of particular Court. Their Lordships have taken care to indicate at the end of the judgment that their decision was based upon the inference drawn from the terms of the Contract itself or from the necessities of the case. In an earlier part of the judgment, they referred to the fact that the business transactions Out of which the outstanding debts arose in that case took place in Rangoon, where a branch of the plaintiff's firm was situate, and from this circumstance and from the nature of the contract, they seem to have drawn the inference that the parties must have intended by necessary implication that the moneys were to be paid in Rangoon. Even assuming that the English rule either in terms or by analogy could be applied in this country I am unable to extend it to a case like the present, which did not arise out of the relationship of debtor and creditor. Where the contract itself is one of loan, it might be possible to presume that payment must have been intended to be made at the creditor's place. But here the Contract was one of agency and it is not deputed that though the principal was resident at Chicacole, the agent who was a resident of Coconada was to attend to business to be done at Coconada.'
16. In AIR 1942 Bom 251 (Supra) Beaumont C.. J. and Somjee, J. followed the authority in ILR 31 Mad 223 and dissented from the view expressed by Lort Williams J. in : AIR1940Cal443 (Supra) in the following language:-
'Now, Section 49, Contract Act, provides that when a promise is to be performed without application by the promisee, and no place is fixed for the performance of it, it is the duty of the promisor to apply to the promisee to appoint a reasonable place for the performance of the promise, and to perform it at such place. It was held by the High Court of Madras in ILR 31 Mad 223 which was followed by Lort Williams J. in : AIR1940Cal443 that if the promissory note is payable on demand, that takes the case out of Section 49 because of the opening words 'when a promise is to be performed without application by the promisee'. I am not prepared to accept that view, because in my opinion, it is well settled law that a promissory note payable on demand does not imply that a demand must be made. The words 'on demand' only mean that the note is payable immediately, or at sight, and in my view, the words 'on demand' do not in themselves take the promissory note out of the terms of Section 49. As to the meaning of those words I need only refer to a decision of this Court in Ganpat v. Sopana 30 Bom LR 1 : (AIR 1928 Bom 35) (FB) and the cases there discussed. But it Seems to me very difficult to hold on the language of Section 49 that it applies at all to negotiable instruments. It deals with a contract between a promisor and a promisee, and of course, a negotiable instrument may be held by somebody who is not the promisee. If a negotiable instrument has been endorsed over, the holder is not a promisee, and in such a case it is difficult to see what would be the point of requesting the promisee to fix the place for performance, seeing that he has ceased to have any interest under the contract. In my view, Section 49 is one of those provisions of the Contract Act which have no application to matters governed by the law merchant, which is contained, for the most part, in the Negotiable Instruments Act. On that question. I follow the view expressed by the Madras High Court in Subba Narayana Vathiyar v. Ramaswami Aiyar, ILR 30 Mad 88 (FB). In the present case, the defendant did not ask the plaintiffs to fix a place for payment, but the question whether the section is applicable is relevant, because if it is, there would be force in the argument that the defendant ought not to be allowed to benefit by his failure to carry out a statutory duty. However, in my view, the section has no application.
That brings me to the really substantial question whether the common law rule, that a debtor must seek out his creditor in order to pay him, applies to negotiable instruments, and it seems curious that there is no binding authority upon that question. The only case which is directly in point to which we have been referred is the case in : AIR1940Cal443 in which Lort Williams J. held that the common law rule did apply to 'the case of a promissory note. In the case the promissory note did not specify any place of payment. It had not been made within the jurisdiction of the Calcutta Court, but the learned Judge held that the Calcutta Court would have jurisdiction to entertain a suit upon it, because at the time when the suit was instituted, the promisee, who had ceased to be the holder of the note, and who had therefore no interest in the proceedings, resided in Calcutta. That, to my mind, is not a very convincing reason for the application of the rule. As pointed out by B. J. Wadia J. in the judgment under appeal, it is very difficult to apply such a rule to the case of a negotiable instrument. The holder may be residing in any part of the country, and the debtor may have no notion where he is, or where to seek him. Where presentment is necessary the difficulty is solved by the rules laid down in Sections 68-70, Negotiable Instruments Act, the latter section, which is the residuary section, providing that a promissory note must be presented for payment at the place of business (it any), Or at the usual residence, of the maker thereof. No doubt, under the exception to Section 64, where a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge the maker thereof, so that presentment in this case was not necessary in order to charge the defendant. But Section 70 does give some indication as to the way in which the maker can be notified of the holder of the note for the time being. In my view, in the absence of any authority binding upon this Court, we ought to accept the view, which appealed to the learned Judge, that the Common law rule about place of payment does not apply to negotiable instruments, and that the plaintiff had no right to demand payment in Bombay.'
17. In AIR 1951 Punj 33 (Supra) Kapoor J. (agreeing with Harnam Singh J.) followed the Bombay view quoted above and observed as follows:--
'A review of these judgments leads me to the conclusions (1) that the technical rule of the debtor seeking the creditor is not applicable in India for the purpose of determining the local jurisdiction of the Courts because that would be engrafting something on to Section 20 Civil Procedure Code; (2) in the case of negotiable instruments the Negotiable Instruments Act itself gives indication that the rule would not be applicable because of the provisions contained in Sections 68, 69, 70, 78 and 81; and (3) the weight of authority is in favour of not applying this rule in the case of negotiable instruments, for even in cases where Indian Courts have applied this rule to ordinary debts this has mostly been used only as one of the factors to be taken into consideration for determining as to what is the place where the contract implies the performance to be made.'
18. The Full Bench decision in AIR I95S Hyd 289 (supra) made an elaborate examination of the English and Indian case laws on the point and came to the conclusion that the weight of authority was against the view that the common law rule of the debtor following the creditor, applied to promissory notes and further came to the conclusion that one must look to Section 20 of the Civil Procedure Code to determine the forum where a suit on a promissory note must be filed.
19. In the last case relied on by Mr. Ghosh, namely, the case reported in AIR 1954 Madh B 184 (FB) (Supra) Dixit J. observed:-
'It follows from what I have said above, that, in my judgment, the Common Law rule that the debtor must find out his creditor is not applicable to the case of a negotiable instrument and that a promissory note payable on demand, which does not specify the place of payment, is payable at the place where the maker of the promissory note resides Or carries on business. Indeed as pointed out by the learned Judges of Bombay High Court in AIR 1942 Bom 251 the applicability of the rule to negotiable instruments is beset with difficulty in that the holder may be residing in any part of the country and the debtor may have no notion where he is, or where to seek him.'
20. These are all the cases on which Mr. Ghosh relied in support of his contention.
21. Before we pass on to the Calcutta cases, we feel that it may be worth-while to notice a later decision by the Bombay High Court, Bharumal Udhomal v. Sakhawatmal Vashomal, : AIR1956Bom111 in which Chagla C. J. and Dixit J., dealing with a case of money lent and advanced observed as follows:.
'Now, apart from authorities, when we turn to Section 49 what is required is that the promisor has to apply to the promisee to appoint a reasonable place for the performance of the promise and the promisor has to perform his promise at such place. Therefore, strictly, Section 49 only comes into operation when there is an application by the promisor to the promisee.
In this case it is not suggested that the promisor made any application to the promisee for the performance of the contract in suit and therefore, strictly Section 49 would have no application. If Section 49 has no application then there is no reason why the common law rule should not apply in India. To the extent that any provision in the Contract Act militates against the common law rule, the common law rule must be deemed to have been displaced by the statutory provision contained in Section 49.
If there is no inconsistency between Section 49 and the common law rule, there is no reason to hold that in a case like this where there is a loan advanced by the creditor to the debtor, the contract makes no mention as to where the amount should be repaid and the debtor has made no application to the creditor asking him to fix the place of performance why the common law rule that the debtor should find out his creditor should not apply.
The common law rule is a reasonable rule and it is in conformity with justice and equity because it recognises the obligation of the debtor to pay his debt and that obligation can only be discharged by the debtor going to his creditor and repaying the amount and the common law rule imposes this obligation only when there is no express contract to the contrary.'
21-A. The above decision, although not one touching on promissory notes, accepts the common law rule that the 'debtor must seek the creditor' as a reasonable rule and a rule of justice and equity.
We have therefore, to examine whether there is anything in the Negotiable Instruments Act, which makes unreasonable the application of the said reasonable rule to suits for money due on negotiable instruments and whether different considerations of justice and equity should apply to such suits. We shall revert to the examination of this aspect of the matter after examination of the case laws of this High Court on the point.
21-B. The first decision of this Court that we need consider on this point, is a decision by R. C. Mitter, J., reported in : AIR1936Cal97 . That was a case of recovery of prompt clower and the plaintiff wife brought the suit not at the place where the defendant-husband resided but where she herself was resident. R. C. Mitter, J., held that the suit was maintainable at the Court, within the jurisdiction of which the plaintiff was resident, relying on the principle of English law that the debtor was to seek out the creditor and pay him. The reasons why his Lordship held in that way, we should better set out in his own language :-
'The only limitation to this principle of English Law is that the creditor must reside within the realm. Bansilal Abirchand v. Ghulam Mahbub Khan . The question is whether this principle is applicable in India. So far as I am aware the Courts of this country from early times have considered the said principle to be so applicable and there are decisions or observations of Judges of nearly all the High Courts. Biroh, J., recognised the applicability of the said rule in Bengal. Gopee Kisto Cossamee v. Nil Comul Banerjee, 22 Suth WR 79 at p. 85. Tyabji J., recognised its applicability in Bombay. Moti Lal v. Surajmal, ILR 30 Bom 167 at pp. 170-171. Mukherji, J., applied it in Gokul Dass v. Nathu, ILR 48 All 310 : (AIR 1928 All 477). White C. J. and Miller, J., would have applied it in Madras, but for Clause (3) of Expln. III to Section 16, Civil P. C. of 1882. That explanation reads as follows:-
'In suits arising out of contract the cause of action arises within the meaning of the section of any of the following places, namely:
(i) the place where the contract is made;
(ii) the place where the contract was to be performed, or the performance thereof completed;
(iii) the place, where, in performance of the contract any money to which the suit relates was expressly or impliedly payable.
It was held in that case that Clause (3) of the explanation meant that the money was payable according to the terms of the contract, which are expressed or can be inferred on a construction of the language or from the circumstances, and the presumption of law that the payment is to be made at the creditor's residence on which the cases proceed, in the absence of a contract, cannot be invoked. Explanation 3 has, however, been omitted from the Civil Procedure Code of 1908. The observations of Sir Lawrence Jenkins, C. J., in a later case which came up in Bombay, however, tend to show that Section 49, Contract Act is exhaustive and has modified the aforesaid rule of English Common Law , Lord Sumner, however, threw great doubts on the observations of Sir Lawrence Jenkins, C. J. add pointed out that in the case, where there is no place of performance fixed by agreement and the debtor does not apply to the creditor to fix a reasonable place for performance, there would be ho place for performance at all and the debtor would be enabled to better his position by himself being in default, that is by omitting to apply to the creditor for fixing the place of performance, where if he had so applied the reasonable Certainty is that the , place of performance would have been fixed at the creditor's place of residence. Lord Sumner finally said at p. 271 of the report (Ind app).: (at p. 158 of AIR) that:
'In this state of the authorities the noticed Tyabji, J.'s judgment in ILR 30 Bom 167) it is not possible to accede to the present contention that Section 49 Contract Act, gets rid of inferences, that should justly be drawn from the terms of the contract itself and the necessities of the case, involving in the obligation to pay the creditor the further obligation of finding the creditor so as to pay him.' As I understand, the judgment of Lord Sumner has disapproved of the observations of Sir Lawrence Jenkins C. J., in 7 Bom LR 993 and has approved of Tyabj'i J.'s observations at pp. 170-171 in ILR 30 Bom 167. Lord Sumner's judgment was considered by the Bombay High Court in the case of Champak Lal Mohan Lal v. Nectar Tea Co. ILR 57 Bom 306 : (AIR 1933 Bom 179) where Rangnekar, J., has put the same interpretation on it as I am putting upon it. In my judgment the point I have to consider has been settled by the judgment pronounced in and I am bound to give effect to Mr. Akram's contention. I hold that the Baraset Court has jurisdiction to entertain the plaintiff's suit.'
22. The next- case that we need consider is one by Lort Williams J., reported in : AIR1940Cal443 . This was a suit on a promissory note. Even in such a suit his Lordship applied the common law rule that the debtor must seek out the creditor and pay him, relying on the decision by R. C. Mitter J., (supra) and being of the opinion that inasmuch as Section 49 of the Contract, Act would not apply to a promissory note payable on demand, a fortiori the Common Law rule would apply. We have already set out hereinbefore the material portion from his Lordship's judgment and we need not repeat the same.
23. Another decision by this High Court which we need consider is a judgment by Bachawat J., reported in Mahaluxmi Bank Ltd. v. Chotanagpur Industrial and Commercial Association : AIR1955Cal413 . The case arose out of a suit for recovery of money due to the plaintiff Bank in respect of an over draft account, which the defendant had with the Ranchi Branch of the plaintiff. The suit was filed in the Original Jurisdiction of this Court and it was contended that the defendant must seek its Creditor and pay the plaintiff at its registered office at Calcutta. His Lordship negatived the contention and observed that the English Common Law rule that the debtor must seek the creditor and pay him should be applied with caution, in this country. He distinguished the decision by Lort Williams J. : AIR1940Cal443 (supra) on facts and observed:-
(a) 'The place of residence of its creditor on the date of the institution of the suit cannot be regarded as the place for payment where some other place for payment is fixed by the contract either expressly or by implication, see Sailendra Nath Mukherjee v. Ramsunder Ghosh, 16 Cal LJ 279 at p. 281, Riley v. Holland (William) and Sons Ltd., (1911) 1 KB 1029 at p. 1031. The Court cannot blindly apply the general rule and ignore the just implications to be drawn from the proved facts and circumstances of the case.
In : AIR1940Cal443 , when the promissory note was renewed the creditor who had his residence at Bhagalpur lived mostly at Calcutta and he told the debtor that payment might have to be made either at Calcutta or at Bhagalpur or at such other place where he happened to be living. Lort Williams J., held that the money was payable on demand and that at the material time when the money was payable the creditor was residing at Calcutta and that in the circumstances applying the general rule the place of payment was Calcutta. The facts of that case are entirely distinguishable.
In this case the overdraft account was opened, maintained and operated upon at the defendant's office at Ranchi. The loans were advanced at Ranchi and on the dates of the advances the plaintiff had a branch office and the defendant had its registered office at Ranchi. Each loan was re-payable without previous demand as soon as (sic) was made. The obligation to repay was in the eye of the law broken and the cause of action arose instantly on the loan. Norton v. Ellan, (1837) 2 M and W 461. Quite clearly the appointed place for repayment was Ranchi where the Creditor had its branch office and where the overdraft- account was maintained. As a matter of fact all repayments were made at Ranchi and were credited to the defendant in its overdraft account at Ranchi.'
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(b) 'The term as to repayment at Ranchi is implicit in the banking transaction of the loans on the overdraft account. The implication also arises from the Course of dealings between the parties.
The application of the general rule to the facts of this case also indicated Ranchi as the place for repayment. In applying the general rule regard must be had to the proper place at the time when the money is payable. On the several dates when the loans were repayable the defendant was under an obligation to seek the plaintiff at Ranchi where the plaintiff had its branch office and where the overdraft account was maintained. The breach of the obligation to repay took place at Ranchi. The subsequent closure of the Ranchi Office does not shift the venue of the Branch.
I, therefore, find that by clear implication the place of repayment according to contract is Ranchi and not Calcutta.
In my opinion no part of the cause of action arose within the jurisdiction of this Court and accordingly this court has no jurisdiction to try this suit.'
24. The last decision of this High Court, to which we desire to refer, is the one reported in Borakar Engineering and Foundry Works v. State of Bihar, : AIR1960Cal513 . In that case, a suit by the assessee for refund of sales tax paid by mistake was filed in the original jurisdiction of this Court. The payment was made by a cheque on a Calcutta Bank. A. N. Roy J. observed in that Case:-
'The third part of the cause of action, viz., the money being payable by the defendant to the plaintiff raises the applicability of the doctrine of debtor seeking the creditor. I see no reason why the plaintiff cannot invoke the applicability of the doctrine as part of the Cause of action.'
25. This is how the case laws on the point both of the other High Courts and of this High Court stand. It now remains for us to refer to two decisions by the Privy Council, before we pass on to recording our own reasons in this matter.
26. The case reported in was one in which money was borrowed by a resident in a native state from a resident in the British Cantonment of Secunderabad, the contract providing for repayment in the native state by instalments. The borrower having made default in paying the instalments, the lender sued for the balance in the Civil Court of Secunderabad, alleging that upon the default there arose an implied agreement to pay where the creditor resided. Their Lordships of the Privy Council negatived the contention with the following observation:-
(a) 'It is quite true that on failure of any instalment there is doubtless an implied promise toy him to repay the loan. But there is no implied promise to repay it at Secunderabad. Even by British law the duty of a debtor to find and pay his creditor is only imposed upon him when the Creditor is within the realm. And the plaintiff has not contended that if there be any such duty at all imposed by Indian law upon a debtor it extends in this respect further than in England. Accordingly so far as the principal debtor is concerned there is no obligation upon him, either express or implied, to make any payment to the plaintiff at Secundrabad. Nor so far is there any such obligation assumed by the surety.'
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(b) 'It follows that in their Lordships' judgment no part of the obligations either of the principal debtor or of the surety was to be discharged at Secunderabad. And no obligation was assumed there. No part of the plaintiffs cause of action accordingly arose within the local limits of the Court of the trial judge. He had no jurisdiction to entertain the suit.'
27. The other case decided by the Privy Council, which needs consideration by us, is the one reported in 54 Ind App 265 : (AIR 1927 PC 158). In that case the appellants, a firm carrying on business at Calcutta, were sued in Rangoon by the respondent, a Limited Company of Bombay, which had a business branch at Rangoon, for payment of sums of money due upon the failure of constituents to satisfy debts due to Messrs. Tata Sons and Co., which sums the defendant appellants had undertaken to make good to them. The point which came out for consideration of the Privy Council was whether the Rangoon Court had jurisdiction to try the suit. Their Lordships discussed some of the Indian case laws on the point and held that where there was an obligation to pay money and either from the term of the contract or from the necessities of the case, a further obligation was implied to find the creditor so as to pay him, Section 49 of the Indian Contract Act, as to the place of performance of the promise when no place was fixed, did not apply. We quote below a relevant extract from Viscount Sumner's Judgment:-
'Their Lordships do not think that in this state of the authorities it is possible to accede to the present contention that Section 49 of the Indian Contract Act gets rid of inferences, that should justly be drawn from the terms of the contract itself or from the necessities of the case, involving in the obligation to pay the creditor the further obligation of finding the creditor so as to pay him. The rule in Section 49 is one which it was intended should apply both to the delivery of goods and to the payment of money, to which obviously different considerations apply from those applying in a case like the present, where the question is one of jurisdiction, and their Lordships are satisfied that an intention is shown in the contract that payment should be made in Rangoon. 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.'
28. From the examination of the case laws on the point, it appears that no body, excepting Lort Williams J., has gone to the length of applying the English Common Law rule, namely, that the debtor must seek the creditor and pay him, to suits on negotiable instruments, for example, a promissory note, as in this case. There are weighty reasons why the English Common Law doctrine should not be imported to suits on negotiable instruments.
29. In the first place there is illustration (b) to Section 20 of the Civil Procedure Code, which gives important indication as to the place where a suit on a promissory note should be brought. Illustration (b) to Section 20 of the Code of Civil Procedure is to the following effect:-
'A resides at Simla, B at Calcutta and C at Delhi. A, B and C being together at Benaras, B and C make a joint promissory note payable on demand and deliver it to A. A may sue B and C at Benaras, where the cause of action arose. He may also sue them at Calcutta, where B resides, or at Delhi, where C resides; but in each of these cases, if the non-resident defendant objects, the suit cannot proceed without the leave of the Court.
30. It will appear from the illustration that such a suit may be brought where any one of the defendant resides, subject to the other defendant not objecting (where leave of the trial court may have to be taken) or may be filed at the place where the document was executed, that is to say where part of the cause of action arose. But the illustration does not say that such a suit may be filed where the creditor plaintiff resides.
31. Then again, the promissory note with which we are concerned was one payable 'on demand' and was not required to be presented. But even in such; a case Kapoor J., held in AIR 1951Punj 33 (supra) that it Was not permissible to invoke the English Common Law doctrine above-stated because the Negotiable Instruments Act itself offered indications to the contrary. We setout the relevant passage from his Lordship's judgment:-
'Under the Negotiable Instruments Act where presentment is necessary no difficulty arises as to the applicability of this rule because Section 64 solves the difficulty. Where a promissory note is in the body of it made payable at a particular place it must be presented for payment at that place in order to render the maker liable. In any other case presentment for payment is not necessary in order to render the maker liable. This is how in Ghania Lal v. Karam Chand, ILR 10 Lah 755 : (AIR 1929 Lah 240), Section 64 read with the exception has been interpreted by Sir Shadi Lal C. J., with whom Bhide J. agreed, but the subsequent sections of the Negotiable Instruments Act give some indication as to the way in which a maker can be notified of the holder of the note for the time being. Sections 68 and 69 deal with presentment for payment of a negotiable instrument payable at a specified place. Section 70 deals with presentment where no exclusive place is specified. It is as follows:-
'A promissory note or bill of exchange not made payable as mentioned in Sections 68 and 69 must be presented for payment at the place of business (if any), or at the usual residence, of the maker, drawee or acceptor thereof, as the case may be.' Section 71 of the Act deals with presentment when maker has no known place of business or residence. Other sections of the Negotiable Instruments Act which are of some importance in order to determine whether the English rule applies or not are Sections 78 and 81, Section 78 provides for the person to whom payment is to be made and Section 81 says:-
'Any person liable to pay, and called upon by the holder thereof to pay, the amount due on a promissory note, bill of exchange or cheque is before payment entitled to have it shown, and is on payment entitled to have it delivered up, to him, or, if the instrument is lost or cannot be produced to be indemnified against any further claim thereon, against him.' These sections will indicate that want of presentment may not affect the liability of a maker of a note to pay, yet the holder who may or may not be the original promisee can have payment made to him if he, under Section 70 or Section 71 of the Act, makes the presentment and under Section 81 shows the note to the maker and on payment delivers it to him. As I read the effect of these sections my opinion is that they exclude the applicability of the rule that the debtor should seek the creditor in the case of negotiable instruments.'
32. Lastly, a promissory note is a transferable instrument. The holder or the holder in due course may be residing in any part of the country. The debtor may not have any idea as to who is entitled to payment, when the money becomes payable and as such may not be able to seek him. To import the English Common Law doctrine that the debtor must seek the creditor and pay him may work real hardship on the debtor in such Cases.
33. For the reasons given above we feel it may not be safe to import the English Common Law doctrine that the debtor must seek the creditor and pay him, in suits for recovery of money due on negotiable instruments. In : AIR1940Cal443 (supra) Mr. Justice Lort-Williams may have gone too far if his Lordship meant to lay down that in all suits for recovery of money due on promissory note, the plaintiff was at liberty to file a suit where he himself resided. But in the background of the facts of the case his Lordship had to decide, his judgment was certainly unexceptionable and this was pointed out by Bachawat J., in : AIR1955Cal413 (supra).
34. So far as the decision by A. N. Boy J. (reported in : AIR1960Cal513 is concerned, His Lordship was not dealing with a suit on promissory note. There is nothing in his judgment to indicate that the doctrine 'debtor must seek the creditor' applies also to suite on Negotiable Instruments. As we read the judgment the observation by His Lordship, hereinbefore quoted, was made in the context of the case that he was going to decide and was not intended as statement of a general proposition of law, covering all sorts of suit, including suits on negotiable instruments. In our reading, the aforesaid decision does not conflict with the view that we have taken in this case.
35. We, therefore, are of the opinion that thecourt below was in error in assuming jurisdictionto try the suit in the circumstances of the case. Cut-tack is certainly one of the places where the suitmay be filed, because at that place the promissorynote was executed. But no part of the cause ofaction arose within the jurisdiction of the City CivilCourt, Calcutta and the plaintiff had no right tofile her suit there. However reasonable the English Common Law rule may be and whatever maybe the principle of justice behind the rule, aspointed out by Chagla, C. J., in : AIR1956Bom111 (Supra), we are not prepared to import thatdoctrine in suits for recovery of money due on promissory note, for the reasons we have alreadystated.
36. The Rule is accordingly made absolute but we do not make any order as to costs.