P L D 1963 (W (PLP)

Before considering the question whether the Sukkur Court had jurisdiction in respect of the claim before it, we would like to dispose of the objection of the appellant that as Haji Rahmatullah was impleaded as a party to the suit on the 14th of January 1957, the claim is barred by limitation. The plea of limitation was neither raised before the learned Subordinate Court nor in the grounds of appeal. The question of limitation raised is not purely a question of law but is a mixed question of law and fact. In these circumstances we are not inclined to allow this objection to be raised for the first time during the course of the hearing of the appeal and it is over‑ruled. The most important question for consideration in this appeal is whether the Sukkur Court had jurisdiction to entertain the suit in respect of the claim filed before it. Admittedly the business transacted by the appellant firm was that of clearing and forward ing agents. The relationship between the parties was that of agent and principal. The appellant firm admittedly did not reside at the material time within the jurisdiction of the Sukkur Court. It was urged before the learned Subordinate Judge on behalf of the respondents that a part of the cause of action arose within the jurisdiction of the said Court as the performance of the contract was to be made at Sukkur by delivery of the goods and the payment of the balance was to be made to the respondents at Sukkur. There is no written contract between the parties but reliance was placed on behalf of the respondents in the Subordi nate Court on section 49 of the Contract Act, which requires a promisor to apply to the promisee to appoint a place for the performance of the promise. According to the learned Subordinate Judge, if no place is expressly fixed in the contract or on an application by the promisee, in such cases the place of the per formance is to be determined with reference to the intention of the parties and in doing so the principle that a debtor must seek out his creditor and pay him wherever he resides applies. Applying these principles, the learned Subordinate Judge held that a part of the cause of action arose within the jurisdiction of the Sukkur Court since the goods were admittedly delivered at Sukkur and the balance of payment was to be made at Sukkur to the respond ents on their letter of demand of money; consequently he held that the Sukkur Court had jurisdiction to entertain and try the suit. Mr. Rao had seriously challenged before us the view taken by the learned Subordinate Judge that in a suit by a principal against an agent for the recovery of any amount due to him, the suit lies in a place where the principal carries on his business or resides on the maxim that a debtor must seek out his creditor to discharge his liabilities. The learned Subordinate Judge has not said so in so many words in the judgment under consideration, but after going through it there is no doubt that the finding of the learned Subordinate Judge that he had jurisdiction in the matter is based on the above‑mentioned common law principle. The‑ learned Subordinate Judge in arriving at this conclusion had relied on Motilal Pratabchand v. Surajmal Joharmal and another (I L R 30 Bom. 167); Soniram Jeetmull v. R. D. Tata and Co. Ltd. (I L R 5 Rang. 451 (P C)) ; Venkatachalam Pillai v. Rajaballi M. Sujun (A I R 1935 Mad. 663) ; K. S. P. L. A. Annamalai Chettyar v. Daw Hnin U and another (A I R 1936 Rang.' 251) ; Devidatt Ramniranjan das v. Shriram Narayandas (A I R 1932 Bom. 291) ; Champaklal Mohanlal v. The Nector Tea Co. (S L R (1933) 57 Bom. 306) ; Hemandas Thakurdas v. Devishah Din Dayal (6 S L R 181) and Tuljaram v. Wadhumal (A I R 1933 Sind 62), and has not accepted the contrary view expressed in Nandlal Rannalal Marwadi v. Kisanlal Chaturbhuj (112 1 C 734); Mahomed Haji Hamed v. Jute and Gunny Brokers Ltd. (33 B L R 1364) ; Tika Ram v. Daulat Ram (A I R 1924 All. 530) ; Koka Audinarayana Rao Naidu v. Bhavaraju Lakshminarayana Rao (1940 M L J 558) and Bhamboo Mal v. Ram Narain and others (A I R 1928 Lah. 297). The manner in which the rule that the debtor should seek, his creditor affects the jurisdiction of the Civil Courts is, to be spelled from section 20 of the Civil Procedure Code. This section lays down that a suit can be filed in a Court within whose jurisdiction the cause of action wholly or partly arises. The common law rule which enjoins upon the debtor to pay his creditor at the place where he resides in case of non‑performance creates a part of cause of action in the place where the creditor resides. But the question is whether this rule is of universal application and applies to the facts and circumstances of all cases. Undoubtedly it applies to the case of vendor and vendee. Thus if A purchases some goods from B and the seller supplies the goods on the basis of an order placed by A, under this principle the purchaser must pay at the place where the seller carries on the business or resides. Similarly, it will also apply to those classes of cases where the principal employs an agent and' there is a term in the contract that the agent will render the accounts at the place where the principal resides. But where a defendant is neither a servant of the principal nor there is any stipulation to render accounts or payment of debt, it is doubtful if this principle can be applied to such cases. It seems to us that much will depend in such cases on the terms of the contract and the necessities of the case. If the terms of the contract stipulate that the payment shall be made at the place of the principal or from the necessities of the case, a part of the cause of action has arisen in the place where the principal resides, such place will be one of the places where a suit would be filed. Unfortunately in this case there is no written contract. The appellant is not a resident of Sukkur; he does not carry on business at that place; there is no writing to show that the contract was entered into at Sukkur and there is no finding to this effect by the learned Subordinate Judge in favour of the respondents. The necessities of the case even do not lead to the inference that the contract was to be performed or amount found due was to be paid at the place of the principal. This is a simple case where the business of agency namely of clearing and forwarding was to he performed in Karachi. It is admitted at the Bar that the appellant firm cleared the goods of the respon dents at Karachi and forwarded them from Karachi. In the absence of any contract that the appellant or his firm would pay the amount due to the respondents at Sukkur it is difficult for us to hold that the Sukkur Court had jurisdiction in the matter. The t general rule is that a suit on accounts against a commission agent must be filed at the place where the commission agent carries on his own business and the contract is to be performed. This view is taken in Tika Rats: v. Daulat Rain: Bhatnboo Mal v. Ram )Varain and others ; Firm Ramditta Alai Sant Lal v. Firm Seth Jot Ram Kidar Nath (A I R 1940 Lah. 171) and Koka Audinarayana Rao Naidu v. Bhavaraju Lakshminarayana Rao. There is a lengthy discussion on this subject in A I R 1924 All.

530. Walsh, Ag. C. J. held in this case that the mere fact that the payments have been made by post and statements of account sent by post to the place of the nrincipal is not conclusive on the question of where payment ought under the contract to be made. In discussing the question whether the ordinary maxim that a debtor must find his creditor, and that if no express agreement is made as to the place of pay ment the debtor must pay the creditor where he can find him, the learned Judge observed that this oft‑quoted maxim is often misunderstood in the lower Courts. The learned Judge has also discussed the difference between three classes of contracts in relation to which this maxim may be discussed. In this connection he observed as under :‑ "There is a great difference between three classes of contract in relation to which this maxim may be discussed. There is the ordinary case of purchaser and vendor, to which of course it is, in the main, generally applicable. If a purchaser in Allahabad applies to a tradesman in Calcutta to sell him goods, the purchaser in Allahabad must pay the vendor in Calcutta unless some other arrangement is made. The second class is a class of principal and agent which may also colloquially be described as master and servant. It frequently happens that a large establishment dealing, say in carpets at Mirzapore, or cotton in Agra, or some other large commercial centre, has branch businesses presided over by managers who are in a sense agents. They are agents to pledge their principal credit ; they are agents in many of the respects contemplated by the Contract Act, and they are frequently paid by commission on results. But in such cases as those, it may often be that the place at which the agent or branch manager is, by his contract or unwritten understanding with his principal, bound to account and bound to pay and discharge his liabilities is the head place of business. But it is a very different matter in a case of this kind where the defendant is not a servant at all of the plaintiff, is totally independent of him, and is merely a contractor earning his living generally as a commission agent holding himself out to persons all over India, it may be, who are willing to seek and utilise his services in the markets of Bombay. In our view a totally different set of considerations applies to such persons. Unless the contract clearly indicates the contrary, an agent of this kind, who becomes a facto: entrusted with goods of his principal with wide powers, has no doubt, under the appropri ate section of the Contract Act, eventually to account to his principal but the accounting must necessarily be done at the place where all the business is transacted." The learned Subordinate Judge has not followed ‑this view and perhaps he has done so because in A I R 1936 Rang. 251 Dunkley, J. observed that this decision has been greatly modified by the decision of their Lordships of the Privy Council in (1927) I L R 5 Rang.

451. The learned Subordinate Judge seems to have been influenced very much by tile three judgments reported in 6 Sind Law Reporter 181 ; I L R 30 Bom. 167 and (1927) 1 L R 5 Rang.

451. In the Sind case the decision is based on section 49 of the Contract Act. It was a suit by a creditor in Karachi against the defendant a commission ;gent in the Punjab for money alleged to be due on an agreement entered into in the Punjab. No place was fixed for the performance. The Sind Court held that by filing the suit in Karachi the creditor has within the meaning of section 49 of the Contract Act fixed the place of performance at Karachi within the jurisdiction of the Karachi Courts. The principles underlying section 49 of the Contract Act have not been discussed at all and with great respect we do not find ourselves in agreement with the view expressed by the learned Judges in this case. So far as the decision in I L R 30 Bom. 167 is concerned, the learned Subordinate Judge appear to be under the impression that it was held in this case that the Bombay Court had jurisdiction because (1) instructions were sent to the defendants from Bombay, (2 j accounts were rendered to the plaintiff at Bombay and (3) demand was made from Bombay to the defendants at Phulgaon. This impression appears to be wrong because Tyabji, J. in this case came to a definite finding that ' the correspondence between the parties clearly leads me to the conclusion that the payment was to be made to Bombay and that the defendant in his letters promised to send hundis to the plaintiff in Bombay and to render accounts to the plaintiff in Bombay. Therefore the express contract so far as it can be gathered from these letters tends to show that the payment was to be in Bombay." The decision in that case was therefore based on a clear finding of fact and it was not in the least necessary to consider the further question of the debtor seeking the creditor. It is true that Tyabji J. further examined the legal position and observed that the Bombay Court had jurisdiction to try the case on the maxim that a debtor must find his creditor for the discharge of his debt. But his view was not followed by the appellate Court in the decision reported in Kedarmal v. Surajmal (9 Bom. L R 903). It was also dissented to in Mahomed Haji Hamed v. Jute and Gunny Brokers, Ltd. (A I R 1932 Bom. 42). The view that an agent being a debtor must seek out his creditor for payment of his dues did not also find favour in another Bombay case reported in 112 I C

734. The learned Subordinate Judge has observed that the view taken by Tyabji, J. is prevalent in the Bombay High Court and in this connection has relied on three decisions : A I R 1932 Bom. 291 ; (1933) 57 1 L R Bom. 306 and A I R 1935 Born.

283. But this impression is wrong. It will be noticed that in A I R 1932 Bom, 291 the decisions in A I R 1924 All. 530 and A I R 1928 Born. 548 ‑ 112 I C 734 were followed. This matter was finally decided on the finding of fact that the whole cause of action arose within the jurisdiction of the Bombay Courts. The learned Judges of the Bombay High Court rejected the main contention of the appellants that the contract was made at Gazibad. The plaintiff in that case had been employed by the defendant as brokers and pakka adatias and claimed certain amounts as balance due on the accounts. The course of business showed that the defendants by letter or telegram sent orders to the plaintiffs in respect of forward business in wheat and linseed and the plaintiffs carried out those orders in Bombay. Beaumont, C. J. on these facts came to the conclusion that the material part of the cause of action arose at Bombay and the Bombay Court had jurisdic tion in the matter. Rangnekar, J. observed at page 299 as under :‑ "In my opinion in the case of a commission agency business the cause of action arises at the place where the contract of agency business is made or at the place where the moneys due are to be paid. Both these conditions are present m this case." In I L R 57 Born. 306, the plaintiffs were employed as sole agents to canvass for the defendant in respect of tea and coffee business in six districts of the Bombay Presidency including Surat by a Madras firm. He deposited Rs. 500 towards the performance of the contract with the Madras firm. This contract was later on cancelled. The plaintiff claimed damages for the breach of the contract and sued for the recovery of the amount of Rs.

500. The suit was filed at Surat but objection was raised against the jurisdiction of the Surat Court. The learned Judges of the Bombay High Court held that there was little doubt that the contract was to be performed at Surat and Surat Court had jurisdiction to entertain the suit for damages. Further they treated the claim in respect of Rs. 500 as debt and held that under section 49 of the Contract Act its payment was to be made at Surat under the principle that the debtor should seek his creditor. 1n A I R 1935 Bom. 283 also a suit was filed for the reco very of Rs. 200 which was paid to the defendant through his agent in Surat. It was held in that case that a breach of the contract occurs in the place where it has to be performed. Consequently, when a suit is brought on the breach, the place of performance is a place where part of the cause of action arises. Since the suit was only for the recovery of loan it was held that debtor must find out his creditor and pay him at the place where he resides and on this view of the law it was further held that that payment of loan was to be made at Surat, where part of the cause of action arose and that the Surat Court had jurisdiction. Thus it will be noticed that in the Bombay cases it was not; held that as a general rule in suits b5 a principal against agents on accounts, the Court where the principal resides had jurisdiction to try such suits on the maxim that the debtor must seek his creditor. On the other hand this principle was applied only in those cases where the amount claimed being a fixed amount was treated as loan and has some semblance: of relationship of debtor and creditor. In A I R 1935 Mad. 663 (F B) on facts it was found that whatever the relationship between the parties may in fact be, payment for the goods purchased by the plaintiff was to be made at Tulcorn and so apart of cause of action arose within the jurisdiction of that Court. This case also does not support the view taken by the learned Subordinate Court. The leading case on the subject on which the Subordinate Court has relied is I L R (1927) 5 Rang

451. In that case by a contract made in Calcutta Messrs Soniram Jeetmull the appellants agreed to make good to Messrs Tata & Co. Ltd., the respondents, defaults in payments to them in respect of sales and purchases of grain in Rangoon, where the respondents had a business branch. By leave of the High Court at Rangoon the respondents sued the appellants in that Court for money due under the agreement on the allegation that apart of the cause of action had arisen in the jurisdiction of that Court. It was urged before the Judicial Committee that under section 49 of the Contract Act where no place was fixed by the contract or prior to the institution of the suit for the performance of the obligation of payment and no application has been made by the promisor to the promisee to appoint a reasonable place for the performance of the promise and there is no fixed place of payment, the technical rule of the English Common Law namely that the debtor must seek out the creditor cannot be imported into the jurisprudence of India. Their Lordships repelled this contention and observed as under "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 or 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. According ly 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." This decision is clearly distinguishable. In the earlier part of the judgment their Lordships clearly mentioned that the business transactions out of which the outstanding debts arose, took place in Rangoon and from this circumstance and the nature of the contract drew an inference that the par‑ties must have intended by necessary implication that the monies were to be paid in Rangoon Their Lordships further, while considering I LR 30 Born. 167; 11 Bom. 649 and 9 Bom. Law Reporter 903 cited before them, made a clear distinction in respect of those cases where the suit was to recover any balance that may be found due on taking accounts and observed that "the facts of that case differ from the facts such as the present". It will be noticed that the case before the Privy Council was not a case between principals and agents and had nothing to do with rendition or settlement of accounts. On the other hand it was a case against a party who had undertaken under an agreement to compensate the other party for defaults made in the payment of certain amounts due from his constituents. On these facts it was held that by necessary implication and from the necessities of the case an intention is shown in the contract that payment should be made in Rangoon. Thus this decision is not an authority for the proposition that the rule that the debtor must find out his creditor is of universal application. It only lays down that section 49 of the Contract Act does not get rid of the 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 or so as to pay him. The learned Subordinate Judge has also relied on the decision in A I R 1933 Sind

62. That was a case of simple loan and is distinguishable from the present case. The view taken in A I R 1936 ,]tang. 251, in view of the above discussion, is not sound. In view of the above discussion we are in respectful agreement with the view taken in A I R 1924 All. 530 ; 112 I C 734 ; A I R 1928 Lah. 297 ; A I R 1940 Lah. 171 and 1940 M L J

558. In conclusion it appears to us that the general rule that a suit for accounts against a commission agent must be filed at the place where the commission agent works or the contract is to be performed cannot be displaced merely on the allegation that the principal sent instructions to the agent from the place of his residence or the agent sent accounts to the principal or that the principal made demand from his place of residence on the agent. This general rule can only be displaced if there is a definite contract that the payment would be made to the principal at his place of residence or the settlement of accounts would take place at the place of the principal. The learned Subordinate Judge seems to be of the view that since the goods were to be sent from Karachi to Sukkur, the delivery of the goods was to be made at Sukkur. In Municipality of Pictou v. Geldert (1893 A C 524) it was held that the sending of goods from a place for sale abroad is not a material part of the cause of action. Now in the present case although the respondents claimed a definite amount from the appellant but truly speaking it was a suit by a principal against his agent for rendition of accounts. There is no allegation in the plaint that a part of the cause of i action arose within the jurisdiction of the Sukkur Court. The only allegation was that the Court had jurisdiction in the suit as the respondents reside within its jurisdiction, the balance of Rs. 6,954 was struck and the appellants had to pay the said amount to the respondents at Sukkur within the jurisdiction of the Subordinate Court. In the absence of any contract to pay the amount found due at Sukkur, or to spell any such intention from the necessities of the contract, it appears to us that the learned Subordinate Court had no jurisdiction to entertain this suit. But this objection is not fatal to the case of the respondents. Mr. Ali Athar, respondents' counsel, has referred us to section 21 of the Civil Procedure Code. It provides that an objection about the place of suing cannot be allowed by any appellate or revi sional Court unless such objection had been taken in the Court of first instance at the earliest possible opportunity and that there has been a consequent failure of justice. The appellant has not challenged the finding of the Subordinate Court that the amount claimed in the suit is due from him. In such event it is not possible for us to hold that there has been a failure of justice in this case. This is therefore not a fit case in which we should interfere merely on the ground that the Sukkur Court bad no jurisdiction to try the suit. In the result the appeal is dismissed with no order as to costs. K. M. A./A. H. Appeal dismissed.