P L D 1956 Lahore 341 (PLP)

68. A promissory note, bill of exchange or cheque made, drawn or accepted payable at a specified place and not else where must, in order to charge any party thereto, be present ed for payment at that place.

69. A promissory note, or bill of exchange, made, drawn or accepted payable at a specified place must, in order to charge the maker or drawer thereof, be ' presented for pay ment at that place.

70. A promissory note or bill of exchange not made pay able 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." Sections 68 and 69 apply to cases where a place is specified for payment. In such cases, of course, the rule does not apply, but the point to consider is whether in cases covered by section 70, where there is no place specified for payment, there will still be any duty cast on the debtor to find his creditor. Section 70 provides that in cases where no place is specified for payment a promissory note or bill of exchange is to be presented at the residence of the maker, drawee or acceptor. This should mean that payment is to be made at the place of the maker, drawee or acceptor, and in any case, the appli cability of the rule that the debtor is to find his creditor is by such a provision sufficiently excluded. It would not be reasonable to assume that while the creditor is to present the instrument for payment he can leave immediately after presen tation and then it becomes the duty of the debtor to find him. Of course, it is possible to argue that section 70 applies only to cases where presentment is necessary and in cases where, as will appear from section 64, no presentment for payment. is necessary, the ordinary rule should apply. Presentment is unnecessary only in cases mentioned in the exception to section

64. That exception applies to a very limited category of cases and I do not think that while there is no duty cast on the maker, drawee etc. of a negotiable instrument to seek his creditor in ordinary cases, there should be a different rules for cases which fall within this exception. It can be urged with force that negotiability should itself negative the implication that the maker etc. of the instrument is to find the person l~ entitled to payment. A negotiable instrument not only embodies a contract, but also constitutes a chattel which passes from hand to hand and the person liable to pay may not even know who the holder in due course is. There is no English case in which the rule that debtor is to find the creditor was applied to a negotiable instrument. In Halsbury the rule as mentioned in Paragraph 275 of Volume VII (Second Edition) and footnote (e) to that Para graph would show that negotiable instruments are governed by their own rules. In Piyara Singh v. Bhagwan Dass there is a quotation from Daniel on Negotiable Instruments (Seventh Edition. p. 139) which runs:- "Where no place for payment is expressed in a note, the place of payment is understood to be where the maker resides; and if non be expressed in a bill, where the drawee resides is understood." In the obsence of a contract to the contrary the implica tion in the case of a negotiable instrument is that it is to be paid at the place of residence or business of the maker or acceptor and the rule that debtor is to find the creditor has no application. The second argument of learned counsel for the respon dent is based on section 49 of the Contract Act which runs as below:- "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 is urged by learned counsel that section 49 applies even to cases of negotiable instruments and that it will cover the present case. It is obvious that in respect of such promissory notes as mention no place for payment and the presentation of which is necessary, the applicability of section 49 is excluded by section 70 of the Negotiable Instruments Act, which neces sitates presentation at the place of business of the maker etc. Even in cases where presentment is not necessary section 49 will not apply, for, as I have already stated, the implication in the case of a negotiable instrument, if no place of payment be mentioned in the instrument, will be that payment was to be made at the place of residence or business of the maker or acceptor, and, as is clear from the judgment of their Lordships of the Privy Council in Soniram Jeetmull v. Tata & Co., section 49 does not cover cases where a place of performance has been fixed though only by implication. In some of the judgments quoted before me reliance has been placed on illustration (b) to section 20 of the Code of Civil Procedure. For convenience I may here quote section 20 Civil P. C. with the illustrations:- "Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdic tion- (a) the defendant, 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. Explanation 1.-Where a person has a permanent dwelling at one place and also a temporary residence at another place, he shall be deemed to reside at both places in respect of any cause of action arising at the place where he has such tempo rary residence. Explanation II.-A corporation shall be deemed to carry on business at its sole or principal office in British India or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place. Illustrations. (a) "A is a tradesman in Calcutta. B carries on business in Delhi. B, by his agent in Calcutta buys goods of A and requests A to deliver them to the East Indian Railway Company. A delivers the goods accordingly in Calcutta. A may sue B for the price of the goods either in Calcutta, where the cause of action has arisen, or in Delhi, where B carries on business. (b) A resides at Simla, B at Calcutta and C at Delhi. A, B and C being together at Benares, B and C make a joint promissory note payable on demand, and deliver it to A. A may sue B and C at Benares, 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." In these cases the fact that in illustration (b) it is not mentioned that A can sue at Simla has been relied upon for an inference that the legislature did not regard the Court within whose jurisdiction the creditor was living as having jurisdic tion to try a suit or recovery of the debt. I am, with all respect, unable to agree. The reason why a suit lies at the place where the creditor resides is because of the necessary implication in a contract (which specifies no place of payment that the performance shall be at the place where the promise is. The Civil P. C., has provided that a suit can be lodged where a contract is to be performed but it is not for the Civil P. C., to provide where a contract shall be performed or what will be inference as to intention of parties with respect to the place of performance. These are matters within the scope of the lave of contract or the law of evidence. It may be argued that in omitting to refer to Simla, the place of residence of the creditor, in illustration (b), the legislature was assuming that the contract was not to be performed there. In the first place, even if the legislature did assume this that would not affect the law. The legislature cannot, by an assumption in an illustration in a statute dealing with one subject, which assumption relates to another subject, change the law, for it can alter the law only by its enactment. If according to the law relating to contract the debtor was bound to pay the loan at Simla, or if consistently with the law of evidence an inference that the loan was to be paid at Simla, was permissible a suit could be filed at Simla in spite of an assumption by the legislature to the contrary. But really there is no good reason for assuming that the legislature was making any such assumption. Illustration (b) is intended only to explain where a suit can be filed in case the defendants reside at more than one place and is not concerned with the correctness of the rule that debtor is to find his creditor. If I were to accept the argument that by omitting to refer to the place of residence of the creditor in illustration (b), the legislature was making its intention clear as to the non-maintainability of the suit at the creditor's place of residence, it would mean that we are altogether rejecting the rule as to debtor seeking his creditor I do not think that in illustration (b) the legislature was dealing particularly with the case of negotiable instruments though the reference is to a promissory note. A promissory note need not be a negotiable instrument at all. As provided in section 13 of the Negotiable Instruments Act it is only when the promissory note is payable to bearer or order that it is negotiable. The section does say that unless otherwise provided a promissory note shall be payable to order but there is no bar to a promissory note providing that it shall be payable only to a named person. There is no reason to suppose that in illustration (b) the legislature was referring only to a negotiable promissory note and it can hardly be contended that the rule that debtor is to find his creditor is not to be accepted even in the case of ordinary debts. As I read the judgment of their Lordships of the Privy Council in Soniram Jeetmull v. Tata & Co., their Lordships have accepted the rule. I may quote the following passage which occurs at page 157:- "The point, at first sight, appears to be exceedingly short. It is quite true the contract does not say where Messrs. Jeetmull are to pay, but it does say, by an implication which is indisputable, that they are to pay Messrs. Tata Sons & Company, and it follows that they must pay where that firm is. Hence one would think that, upon the face of this contract, not indeed in express terms, but by the clearest implication, payment is to be made in Rangoon. In respect of the whole of this business it is not disputed that the business transactions, out of which the outstanding debts arose, took place in Rangoon, and for this purpose the branch of Messrs. Tata Sons & Company there were the Messrs. Tata Sons & Company concerned. It was objected, however, in the High Court of Rangoon, that this con stituted an importation of a technical rule of the English Common Law into the jurisprudence of India, namely, the rule that the debtor must seek out the creditor. The simple answer to that would have been that, on the contrary it was a mere implication of the meaning of the parties." Their Lordships quoted with implied approval the words of Tyabji J, in Motilal Pratabchand v. Surajmal doharmal (I L R 30 Born. 167), saying that if no place of payment was fixed the debtor was to seek the creditor. When it was urged that section 49 of the Contract Act excluded the operation of the rule their Lordships said:- "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." So far as this High Court is concerned the applicability of the rule to ordinary cases has never been doubted. I may refer to two recent cases the Australasia Bank Ltd. v. Messrs. National Imperial Foundary arid another (L D 1952 Lah. 45) and Mst. Fazlan Bibi v. Muhammad Azam (P L D 1952 Lah. 227where the rule has been accepted and applied. In Raman Chettiyar v. Gopalachari (L R 31 Mad. 223) section 49 was not applied to the case of a promissory note payable on demand on the ground that section 49 covered only cases where the promise was to be performed without application by the promisee and in the case of such a promissory note payment had to be made only on a demand. With all respect, I am unable to agree that in the case of a promissory note payable "on demand" there is no obligation on the promisor to pay till a demand has been made. The words "on demand" are technical words of English Law which, paradoxical though ii may seem, only mean without demand. The object of saying that a promissory note is payable on demand is only that payment is not to be withheld till a particular date as is the case with promissory notes payable on a specified date. Abundant English and Indian authority can be found in support of what I am stating and the conclusion is strengthened by reference to section 19 of the Negotiable Instruments Act and Articles 59 and 73 of the Limitation Act. In Norton v. Ellam (46 P R 646 (649)) Barjn Parke had observed: "It is quite clear that a promissory note, payable on demand, is a present debt, and is payable without any demand, and the statute begins to run from the date of it." In Capp v. Lancaster (W 8 E R7945) and Rurnball v. Ball (88 E R616), it has been held that it is not necessary to allege a demand in a suit on a note payable on demand. In Ram Chunder Ghosaul v. Juggut monmohiney Dabee (I L R 4 Cal. 283), Sir Richard Garth said: "Where a man promises to pay a sum of money on demand, which it is his duty to pay whether a demand be made or not, then the money becomes payable at once and no demand is necessary before suing him for it." In Perumal Ayyun v. Alagirisami Bhaggava thar and others (I L R 20 Mad. 245) and Tirumalanadham Surayya v. Tirumal anadham Bapirazu and others (A I R 1916 Mad. 486), it was held that the words "on demand" are technical words of English law which mean F immediately or forthwith. According to section 19 of the l Negotiable Instruments Act a promissory note not payable on a specified date is payable on demand. According to Article 59 of the Limitation Act limitation for money lent under an agreement that it shall be payable on demand starts when the loan is made and not when a demand is made. Article 73 provides that limitation for promissory notes payable on demand begins from the date of the note. It would be no defence to a suit on a promissory note to say that a demand had not been made and the absence of demand would not prevent the running of interest on the loan. As I have stated already, and as also appears from section 19 of the Negotiable Instruments Act, by the use of the words "on demand" the intention is only to make it clear that payment is not deferred till any particular date and in any case the law assumes a demand for payment of the debt having been made as soon as the debt comes into existence. The question whether section 49 is applicable to a promissory note payable on demand was considered by Beaumont C. J., in Jivatlal Purtapshi and others v. Lalbhai Fulchand Shah (A I R 1942 Bom. 251), and it was held that the words "on demand" which only mean immediately or at sight do not take the case out of the purview of section

49. My attention has been drawn to Nanu Mal v. Firm Shibba Mal Nand Kishore and others (A I R 1939 Lah. 18), wherein Bhide J., raised in the case of a promissory note a presumption that it was payable at the residence of the creditor. The question whether debts embodied in negotiable instruments are to be distin guished while considering the application of the rule that debtor is to seek his creditor was not discussed and the judgment is not of any help in deciding the question before me. It has not been pressed before me that there is no failure of justice within the meaning of section 21 of the Code of Civil Procedure. In any case I will presume prejudice from the circumstances. The defendant resides at Lahore where the promissory note was executed. His defence is that it repre sents part of the capital invested by the plaintiff as partner for the running of an ice factory. I hold that the Rawalpindi Court did not possess territorial jurisdiction to hear the suit. I accept this revision petition and remand the case to the trial Court for proceeding under O. VII, rule 10 of the Code of Civil Procedure. There is no order as to costs. A. H. Petition accepted.