P L D 2017 Balochistan 11 (PLP)

NAEEM AKHTAR AFGHAN, J.

This judgment disposes of Civil Revision No.133/2015, filed by the petitioner (defendant) against the order dated 22nd April 2015 (hereinafter "the impugned order") passed by the learned Senior Civil Judge-III Quetta (hereinafter "the trial Court"), whereby the application filed by the petitioner under Order VII, Rule 10, C.P.C. read with sections 20, 151 C.P.C. and all enabling provisions of C.P.C. for return of the plaint to the respondent (plaintiff) for presentation before the proper forum, has been dismissed.

2. Facts of the case are that the respondent filed suit for recovery of outstanding amount of Rs.52,00,000/- (Rupees Fifty Two Lakhs) and losses of Rupees Ten Million (total 15.2 million) against the petitioner before the Court of learned Senior Civil Judge-III, Quetta.

3. According to contents of the plaint, on the basis of agreement dated 04.03.2014 arrived at between the parties it was agreed that the respondent will supply 2500 tons of coal to the petitioner specification and nature whereof was to be determined on the basis of 500 tons average basis; that Rs.11800/- per ton was agreed to be paid by the petitioner to the respondent within two weeks of receipt of the coal; that the agreement was duly signed by the parties with certain conditions of dispatch etc; that approximately 2200 tons coal was provided by the respondent to the petitioner; that remaining 300 tons of coal is available with the respondent and is ready to be dispatched on receiving the total amount; that so far the petitioner has paid sum of Rs.2,26,000,00/- to the respondent while sum of Rs.52,00,000/- has been withheld by the petitioner without any lawful justification causing heavy losses to the respondent as the respondent had already contracted several mines owners and has paid them the advance amount for supply of coal, which has been forfeited by them; that due to ill conduct of the petitioner, apart from Rs.52,00,000/-, the respondent has also suffered loss of Rupees Ten Million approximately. The following prayer was made in the suit: "a) Directing the defendants to make payment of amount of plaintiff Rs.52,00,000/- (Rupees fifty two lacs) and loss amount ten (10) million Rupees total 15.2 million Rupees in lump sum. b) Any other relief which may deem fit and proper in the circumstances of the case may also be awarded."

3. After receiving notice, instead of filing written statement, the petitioner filed an application under Order VII, Rule 10, C.P.C. read with sections 20 and 151, C.P.C. with all enabling provisions of C.P.C. for return of the plaint to the respondent for presenting the same before the proper forum. It has been contended in the application by the petitioner that the petitioner corporation is based in Islamabad and has its head office at 18-B, Kaghan Road, F-8 Markaz, Islamabad wherefrom the petitioner runs its operations; that the respondent has wrongly instituted the suit before learned Senior Civil Judge-III, Quetta as the petitioner does not carry on any business in Quetta nor has any sub/branch office at Quetta; that if any wrong has allegedly been done to the respondent, the same has been done (without conceding) at Islamabad and not at Quetta; that all the correspondence including the legal notice was sent to the head office of the petitioner at Islamabad by the respondent; that the relief has been claimed from the petitioner during business at Islamabad; that address in the plaint for service upon the petitioner has also been given of Islamabad; that according to second explanation to section 20, C.P.C., the Court at Islamabad has the jurisdiction for trial; that the material fact for determining territorial jurisdiction of the trial Court is the place of carrying on the business of the petitioner.

4. The said application was contested by the respondent by filing reply. It was contended by the respondent that application has been filed with mala fide and ulterior motive to linger on the matter; that cause of action has accrued to the respondent against the petitioner at Quetta, therefore, the Court of Senior Civil Judge-III, Quetta has the jurisdiction for trial; that the controversy between the parties relates to question of fact which requires evidence; that though the petitioner carries on his business at Islamabad, but he contacted the respondent at Quetta and executed the agreement dated 04.03.2014 in pursuance whereof the respondent supplied 2200 tons of coal to the petitioner at Islamabad from Quetta as per specified terms; that the petitioner has paid Rs.2,26,000,00/- to the respondent at Quetta vide payment advices, therefore, the Court of civil jurisdiction at Quetta is competent to try the suit.

5. After hearing arguments of learned counsel for the parties the trial Court has dismissed the application vide impugned order, against which the instant petition has been filed by the petitioner.

6. Learned counsel for the petitioner stated that the petitioner has its head office at Islamabad and has no branch or sub office at Quetta; that no cause of action has accrued to the respondent at Quetta against the petitioner; that the payment for dispatched coal was made by the petitioner to the respondent from Islamabad and in such circumstances the suit should have been filed by the respondent at Islamabad. While relying upon section 20, C.P.C., learned counsel for the petitioner stated that the plaint should be returned to the respondent for presenting the same before the Court of competent jurisdiction at Islamabad. Learned counsel has relied upon the case of Rahmania Trading Co. v. Eagle Star Insurance Co., Ltd., PLD 1960 SC 202 and the case of REGISTERED FIRM SHEIKHAN INDUSTRIES v. WEST PAKISTAN INDUSTRIAL DEVELOPMENT CORPORATION PLD 1976 Quetta 94.

7. Learned counsel for the respondent while relying upon sections 19 and 20(c) C.P.C. and on the basis of accrual of cause of action to the respondent at Quetta stated that the trial Court has rightly dismissed the application filed by the petitioner as the Court of civil jurisdiction at Quetta was competent to proceed with the trial. Learned counsel has relied upon the case of Abdur Rahim Baig v. Abdul Haq PLD 1994 Karachi 388.

8. Heard the learned counsel and perused the available record. Perusal of the impugned order passed by the trial Court reveals that after reproducing the contents of the plaint, the contents of the application under Order VII, Rule 10, C.P.C., the reply thereof and sections 18 and 19, C.P.C., the trial Court has dismissed the application in the following words: "Furthermore, the following Illustrations would more help the Court to reach at just decision regarding the instant application filed by the applicant/ defendant as well as to negate the claim of applicant/defendant regarding return of plaint, which is essential to be mentioned as below: "(a) A residing in [Karachi], beats B in [Quetta], B may sue A either in [Quetta] or in [Karachi]."

8. So, application under Order VII, Rule 10, C.P.C. for return of the plaint to the plaintiff for presentation the same before the proper/appropriate .forum, is hereby dismissed, as such, this Court has got jurisdiction to entertain upon the instant matter filed by the plaintiff against the defendant for recovery certain amounts which could only be ascertain by adducing evidence from either side. Application disposed of accordingly."

9. The documents annexed with the petition reveal of an e-mail dated 4th March 2014 of the petitioner from Islamabad to the respondent at Quetta on 16:00 hours with subject "Viable coal offer" which reads as follows: "Dear Kashif As discussed please find attached the terms and conditions for the supply of local coal for your review and comments if any, once we agreed I will send you the formal Terms and conditions for signing. " (underlining is mine.) From the above it reveals that the parties had entered into a contract for sale and purchase of coal through correspondence via e-mail and fax. The offer of the petitioner to purchase 2500 tons of coal @ Rs.11800/- per ton was e-mailed to the respondent at Quetta by the petitioner from Islamabad. The annexed documents further reveal that the offer of the petitioner from Islamabad was accepted by the respondent at Quetta and the said acceptance was conveyed by the respondent from Quetta to the petitioner at Islamabad via e-mail of the same date i.e. 4th March 2014 at 5:58 p.m. The annexed documents also reveal of Purchase Order (PO) dated 12th March 2014 of 2500 tons of coal which was faxed by the petitioner from Islamabad to the respondent at Quetta. The same was also annexed with general instructions. Copy of the bank statement annexed with the petition reveals that the agreed price of the coal, dispatched by the respondent from Quetta to the factory of the petitioner at Kalar Kahar, was used to be deposited by the petitioner in UBL account of the respondent at Hali Road Quetta online from Islamabad.

10. Since there was a contract (by correspondence) between the parties for sale/purchase of coal therefore, section 4 of the Contract Act, 1872 being relevant in the instant case is reproduced herein below: "

4. Communication when complete.--The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. The communication of an acceptance is complete, as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor; As against the acceptor, when it comes to the knowledge of the proposer. The communication of revocation is complete, as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge. With regard to accrual of cause of action to the respondent for filing suit for recovery of outstanding amount of Rs.52,00,000/- lakhs, section 20, C.P.C. being relevant is reproduced herein below: "

20. Other suits to be instituted where defendants reside or cause of action arises.

Subject to the limitations aforesaid, every suit shall be instituted in a Court within the local limits of whose jurisdiction-- (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 I

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 temporary residence. Explanation II.

A corporation shall be deemed to carry on business at its sole or principal office in [Pakistan] or, in respect of any cause of action arising at any place where it has also a subordinate office, at such place."

11. According to section 4 of the Contract Act, 1872 communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. Similarly, the communication of an acceptance is complete, as against the proposer, when it is put in a course of transmission to him, so as to be out of power of the acceptor. Where the proposal and acceptance are made by letters (e-mails in the instant case) the contract is made at the time when and the place where from the letter (e-mail in the instant case) of acceptance is posted/mailed. Acceptance of the offer by the offeree and intimation in respect of such acceptance to the offerer results in contract. A contract is made when the offer of one party is accepted by the other party. In the case of a contract by correspondence (as in the instant case), the contract is made not where acceptance is received but where the acceptance takes place. Hence the place of delivery of acceptance (Islamabad in the instant case) is irrelevant and it does not provide any cause of action. Thus in a suit based on a contract, the cause of action would consist of making the contract. Suit by reference to section 20(c), C.P.C. cannot be filed at the place where the letter of acceptance was delivered (i.e. Islamabad in the instant case) for delivery of letter of acceptance is not a part of the cause of action. An action, therefore, for breach of contract at the plaintiffs option can be brought at the place where the contract was made. Reference in this regard is made to the case of American Pipe Co. v. State of U.P., AIR 1983 CALCUTTA 186, wherein it has been held as follows: "In the instant case contract was by correspondence through post. Contract, in our opinion, takes place where the acceptance takes place. In the instant case the acceptance was posted at U.P. Thus, the contract was formed in U.P. ............. In the case of a breach of contract offer is no part of the cause of action. Receipt of acceptance in Calcutta within the jurisdiction, in our opinion, does not form part of the cause of action because according to the agreed mode of communication the contract was to be formed through post. An acceptance in the instant case was admittedly posted in U.P. The acceptance took place in the instant case as soon as it was posted at U P. Receipt of the same by the appellant in Calcutta within the jurisdiction does not form any part of the cause of action. For the reasons stated hereinbefore, we are of the opinion that no part of cause of action arose within jurisdiction and this Court has no jurisdiction to entertain and/or try this suit." Reference in this regard is also placed on the case of M/s. Progressive Construction Ltd. v. Bharat Hydro Power Corpn. Ltd., AIR 1996 DELHI 92 wherein it has been held as follows: "

19. It is thus clear that in view of section 4 of the Contract Act when offerer and offeree are not at one place and are exchanging the offer and acceptance through post then the contract would be deemed to have been entered into at the place where the offer was received and the acceptance was posted. The place of delivery of acceptance is irrelevant and does not provide any cause of action. Merely by placing reliance on the delivery of letter of acceptance of offer, suit by reference to section 20(c), C.P.C. cannot be filed at the place where the letter of acceptance was delivered for delivery of the letter on acceptance is not a part of the cause of action. 20. ....................................

21. From the abovesaid principles of law, applied to the case at hand, it is clear that the contract was complete when the letter of acceptance of tender was posted in Calcutta. The contract was entered into at Calcutta. The delivery of letter of acceptance at Delhi is wholly inconsequential. It does not provide accrual of cause of action or part thereof in Delhi." Similarly in the case of Businet International (Pvt.) Ltd. v. Aramex International (Pvt.) Ltd., 2001 CLC 104 Karachi it was held as follows: "I have heard learned counsel. In my view the scope of section 20 is very wide as it not only provides that the suit should be filed in the jurisdiction of the Court where the defendant actually resides, carries on business or voluntarily works for gain (which aspect of section 20 has only been addressed in the cases cited at the Bar) but subsection (c) also allows the plaintiff to file a suit where the cause of action accrues. Although it may be correct that the defendant Company never carried on any business in Pakistan within the meaning of Explanation II to section 20, it has to be considered whether in term of subsection (c) to section 20 of the C.P.C. any cause of action accrued to the plaintiff in Karachi. In this regard it would be seen that the term 'cause of action' has not been defined in the Code, however, it has been held in a number of cases decided by the Superior Courts that it consists of every fact if traversed it should be necessary for the plaintiff to prove in order to support his right to judgment and if not proved gives the defendant a right to judgment. In this regard the defendant's witness has stated in his deposition that the agreement between the parties Exh.4/2 which formed the basis of their business dealings was prepared by him at Dubai and then sent to the plaintiff Company at Karachi who after signing it had sent it back to Dubai whereafter he had affixed his signature to the same. In this connection it would be seen that the essentials of a binding and valid contract are an offer, its acceptance and consideration. It is not disputed by the defendant that there was a concluded contract between the parties viz Exh.4/2. Consequently in my opinion the dispatch of Exh.4/2 from Dubai would amount to an offer and its return by the plaintiff after execution thereof to the defendant at Dubai and affixation of its signature thereafter would be an acceptance by the defendant of such offer. In these circumstances I am quite clear in my mind that the contract between the parties was made at Karachi as it was accepted in this City by the plaintiff and accordingly this Court would have jurisdiction to entertain the suit as the cause of action for filing the same also accrued at Karachi to the plaintiff. In this regard reference can be made to I.T.O. Mardan v. Sanaullah Khan PLD 1976 SC 790 and Lahore Development Authority v. Sanbean Corporation PLD 1984 Lah. 430." In another case of BARODA OIL CAKES TRADERS v. PARSHOTTAM, AIR 1954 Bombay 491 it was held as follows: "The plaintiff sent a telegram from Baroda offering to purchase 200 tons of ground-nut cakes from the defendant who were resident of Kanpur. The defendants conveyed their acceptance to the plaintiff by telegram dispatched from Kanpur and the said acceptance reached the plaintiff at Baroda in due course. The delivery of the goods was to be given to the plaintiff at Khanna railway station and the plaintiff had to pay the money at Kanpur to the Guru Nanak Oil Mills, from whom the defendant-firm had purchased the goods for the plaintiff, or to the agent of the said mills at Kanpur. The defendants failed to give delivery of the goods. The plaintiff brought a suit in the Baroda Court against the defendants claiming damages for breach of contract. The principal defence to the suit was that the Baroda Court had no jurisdiction to try the suit as the contract was made at Kanpur, as its performance was to be at Kanpur and as the payment was also to be made at Kanpur and as the breach of the contract, if any, had also occurred at Kanpur. Held that no part of the cause of action arose in Baroda though the plaintiff had sent his offer from Baroda by telegram and though he received the acceptance from the defendants by telegram at Baroda. In the eyes of law the offer was made at Kanpur and the acceptance was likewise made at Kanpur, with the result that the whole of the contract was made at Kanpur. Consequently, the Baroda Court had no jurisdiction to entertain the suit."

12. With regard to accrual of cause of action to the respondent for filing suit claiming damages, section 19, C.P.C. being relevant is reproduced herein below: "

19. Suits for compensation for wrongs to person or movables.

Where a suit is for compensation for wrong done to the person or to movable property, if the wrong was done within the local limits of the jurisdiction of one Court and the defendant resides, or carries on business, or personally works for gain, within the local limits of the jurisdiction of another Court, the suit may be instituted at the option of the plaintiff in either of the said Courts." In the instant case it reveals that the price of the coal supplied by the respondent to lie petitioner was used to be deposited by the petitioner in UBL Account of the respondent at Hali Road Quetta online from Islamabad and when the disputed amount was not paid/deposited online in the Quetta account of the respondent, the suit was filed for recovery of the said amount as well as damages. In view of the cause of action accrued to the respondent for claiming damages, the suit has rightly been instituted by the respondent at Quetta in terms of section 19, C.P.C. Reference in this regard is made to the case of "Abdul Rahim Baig" relied upon by learned counsel for the respondent wherein it has been held as follows: "Taking up the element of cause of action in terms of section 19, C.P.C. as already seen, such too arose elsewhere and beyond the limits of the civil district of Karachi. In these circumstances, the suit was wrongly instituted here."

13. For the above reasons it is concluded that in view of Section 4 the Contract Act 1872 read with Sections 19 and 20(c) C.P.C. and in view of accrual of cause of action to the respondent at Quetta, the civil Court at Quetta has the jurisdiction to proceed with the suit filed by the respondent; that while rejecting the application of the petitioner under Order VII, Rule 10, C.P.C. for return of the plaint to the respondent, the trial Court has not committed any illegality or irregularity warranting interference by this Court in its revisional jurisdiction. The cases of "Rahmania Trading Company" and "REGISTERED FIRM SHEIKHAN INDUSTRIES" relied upon by learned counsel for the petitioner being distinguishable are not attracted in the facts and circumstances of the instant case. For the above reasons the petition is dismissed with no order as to cost. The earlier interim order dated 28th May, 2015 passed by this Court whereby the proceedings pending before the trial Court were suspended, stands recalled. The trial Court is directed to further proceed with the suit in accordance with law. SL/37/Bal. Revision dismissed.