P L D 1952 Lahore 45 (PLP)

S. A. RAHMAN, J.‑The Australasia Bank, Limited, Lahore, brought a suit for recovery of Rs. 2,833‑4‑0 by way of principal and interest, with future interest at 7 per cent. per annum with monthly rests, from the National Imperial Foundry, G. T. Road, Batala, through Zia‑ud‑Din who was now resident at Okara in the Montgomery District. The sum was due on a cash credit account allowed by the plaintiff bank to be opened at its Batala Branch for the benefit of the defendant, before the partition of India. After Partition, the Batala Branch of the Bank was closed and the defendant also migrated to Pakistan and settled at Okara. It appears that originally the parties intended that the debt should be discharged at Batala. By way of security, the defendant had executed an agreement of hypothecation of his movable property in the Foundry at Batala, and collateral security was also given in the shape of a' promissory note executed by him. The Bank, however, had its registered office in Lahore. The trial Court held that it had no jurisdiction to entertain the' suit as the place of per formance of the contract was Batala. The plaintiff has challenged the order of the trial Court by this revision petition. It appears to be common ground between the parties that originally their intention was that payment would be made at the Batala Branch of the plaintiff Bank. An attempt was made on the part of the plaintiff Bank to suggest in the trial Court that after the partition the defendant had agreed to make pay ment to the plaintiff Bank at Lahore. This was asserted by Muhammad Khan, Manager of the Batala Branch of the plaintiff Bank, as P. W. 1, but as defendant Zia-ud‑Din flatly denied this, and there was no other corroboration of Muhammad Khan's statement on the point, I agree with the trial Court that this novation of contract cannot be accepted as correct. The argument that the general principle should be applied to the effect that the debtor should seek his creditor, did not find favour with the trial Court on the ground that section 49 of the Contract Act. did not apply to the case as Batala had been expressly agreed upon as the place of payment. This section lays down that when a promise is to be performed without application by the promisee, and no place is fixed for the per formance 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. Presumably if the plaintiff had been asked to fix a reasonable place for the per formance of the obligation involved in the changed conditions following the partition, it would have fixed Lahore as the place for payment. The learned Senior Sub‑Judge also remarked that the plaintiff had initiated proceedings for the recovery of the debt due to it in India by an application to the Custodian, East Punjab, and consequently it could not be said that there was no remedy left to the Bank in India which now included Batala. It is conceded on behalf of the Bank that an application was sent to the Custodian, East Punjab, for admitting the Bank's claim against the property hypothecated with it by the defendant at Batala. No further steps have yet been taken in pursuance of that application and the claim of the Bank has not yet been admitted by the Custodian, East Punjab. The option would lie with the Bank in these circumstances to give up the idea of realising its. claim from the hypothecated property and to pursue its remedy in personam against the defendant who is now residing in Pakistan. The mere fact that a petition had been sent to the East Punjab Custodian asking for registration of a claim against the hypothecated property, cannot debar the plaintiff from suing the defendant personally in Pakistan. The learned Senior Sub‑Judge has taken the view that the plaintiff could only bring this suit personally against the defendant in the Courts of Montgomery District, Okara being a part of that District. In this connection, reliance has been placed on behalf of the defendant‑respondent on sec tion 20 of the Civil Procedure Code. This section provides that subject to certain limitations which are not material in the present case, every suit shall be instituted in a Court within the local limits of whose jurisdiction‑(a) the defen dant, or each of the defendants where there are more than one, at the time of the 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 the 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. It is undoubtedly correct that the plaintiff Bank could have sued the defendant in the Mont gomery Courts by virtue of the section. The question however is whether no other alternative was open to the Bank. It is contended, on behalf of the Bank, that clause (c) of this section could be invoked by it in support of the jurisdiction of the Lahore Courts. The argument is that Batala is no longer available to the parties for the discharge of the personal obli gation of the defendant in respect of the debt due to the plain tiff, as none of the parties is resident there, and consequently the case should be deemed to be on par with one where no place of payment is fixed. It is contended that the general rule should therefore be applied that the debtor should seek the creditor within the realm. If this argument can be sustained, then obviously the place of payment would be Lahore where a part of the cause of action would then arise in case of failure to pay. No authority, directly in point, has been 'cited before me on this question by either party. Learned counsel for res pondent has cited Chuni Lai v. Chhaturbhoy (A I R 1932 Born. 206‑D.) in which it was held that the locality of a debt is the place of residence of the debtor. That only shows the debtor can be sued at a place where he resides but does not touch the question whether he can be sued elsewhere or not. The case is one of first impression. In my opinion, Batala is no longer available to the parties as the locus solutions because both parties have shifted from Batala. In the altered circumstances due to the partition of the country, it must be held that the contemplated place of payment is no longer within practical reach of the parties. It would be too much to say that both parties should now arrange to go to Batala ex pressly for the purpose of discharging the obligation there, after arranging for permits to visit India. It is extremely doubtful if such permits would be issued to the parties for the purpose in question. There is also a restriction on the amount of money that one can take from Pakistan into India, under the Exchange Regulations. By force of circumstances, therefore, the position seems to have developed into that of a case where no place of payment is fixed, as far as the parties resident in Pakistan are concerned, I do not, therefore, see why the general rule should not be applied in such a case that the debtor should seek his creditor to pay his debt, if the creditor happens to be within the realm. On this view, a part of the cause of action must be deemed to arise at Lahore where the payment had to be made in discharge of the personal obligation of the debtor. It is not contested before me that the Pakistan Court are vested with the jurisdiction to adjudicate on the dis putes between the parties in‑ respect of the personal obligation as both parties are resident within this Dominion. I, there fore, hold that clause (c) of section 20 of the Code of Civil Procedure is attracted to the case, and the Lahore Courts have jurisdiction to entertain the suit. I set aside the order passed by the learned trial Court and direct that the suit be enter tained and disposed of in accordance with law. The costs will abide the final event. The parties have been directed to appear before the trial Court on 19th November 1951. A. H. Revision accepted.