Criterion Publicity Private Ltd. vs Golden Plastics

V. Balasubrahmanyan, J.—This is an appeal from an order of the XII Assistant Judge, City Civil Court, Madras, returning a plaint for

presentation before a proper Court.

The plaintiff in question is a private limited company having its Head Office at Madras and carrying on business as advertising consultants. The

defendants are partners of a firm having their business at Bombay. According to the plaint averments, the plaintiff agreed to do some advertisement

hoardings for the defendants at Bombay for consideration. The plaintiff did in fact perform its part of the contract by putting up hoardings in

Bombay. The defendants made some payments, but there was a balance payable under four bills issued by the plaintiff for reimbursement of

expenses incurred by the plaintiff for and on behalf of the defendants and also for the plaintiff''s remuneration for doing the hoarding jobs. The suit

was laid for recovery of Rs. 13,566-18, representing the unpaid bills.

The suit was resisted by the defendants on more than one ground, but their principal objection was that no part of the cause of action accrued in

Madras and hence the suit did not lie in the City Civil Court, Madras.

The learned XII Assistant Judge tried this issue as to jurisdiction as a preliminary Issue. At the conclusion of the inquiry, he agreed with the

defendants and held that no part of the cause of action arose within the limits of the jurisdiction of the City Civil Court, Madras. Following this

determination, the learned judge ordered the plaint to be returned for presentation to the proper Court.

The plaintiff has appealed to this Court, Mr. V. Narayanaswami, the plaintiff''s learned Counsel, submitted that a part at least of the cause of

action must be held to have arisen in Madras, He referred to the plaintiff''s pleadings as well as the evidence adduced at the trial.

Mr. Ram Mohan, learned Counsel for the defendants, however, reiterated that the entire cause of action for this suit had accrued only in

Bombay.

There was some discussion at the bar as to the precise nature of this suit. According to Mr. Narayanaswami, the suit was one by an agent

against his principal for money due on accounts. This is, more or less the description given by the XII Assistant Judge in his judgment. Mr. Ram

Mohan, however submitted that this suit cannot be regarded as a suit on accounts stated, but is only a money suit, pure and simple.

It seems to me that the discussion about the nature of the suit, in the sense of giving it an appropriate label,'' is not worth while having regard to

the context of the present inquiry, which is to find where precisely the cause of actionaccrued or arose. The nature of the suit, or even the form of

action, is one thing; the cause of action for the suit is quite another. The two things should not be mixed up : Vide the observations of Diplock, L.J.,

in Letang v. Cooper (1965) 1 Q.B. 232 : (1964) 3 W.L.R. 573 : (1964) 2 All. E.R. 929 . The nature of the suit may be ascertained or determined

by looking at the kind of reliefs asked for in the suit. The cause of action, however, is made up of a number of facts which are necessary to be

pleaded and which, if established, would enable the plaintiff to obtain from the Court a remedy against the defendant. It is easy to see that upon the

same cause of action, or fact-situation, different remedies may be available to a plaintiff. The question in this case, therefore, is not whether this is a

money suit or a suit for accounts. The question is : where did the cause of action for the suit arise?

The learned XII Assistant Judge held that the entire cause of action had accrued in Bombay. He came to that conclusion, because, on the

evidence, he found two things : (i) that the contract between the parties was concluded at Bombay, and (ii) that the performance of the contract by

the plaintiff was also at Bombay.

One may question the learned Judge''s conclusion on the issue as to jurisdiction, but one must, on the evidence on record, accept his findings of

fact on the two points, namely, place of performance. The contract between the parties in this case was not in writing. But the plaintiff''s own

accountant admitted in the witness-box that the contract was concluded at Bombay. The evidence of the General Manager of the defendants was

also to the same effect. At the material time, the plaintiff had a branch at Bombay, and on the evidence on record, it is, I think, a proper conclusion

to hold that the contract was orally concluded at Bombay.

As for the place of performance of the contract, the evidence is stronger still. Indeed there is not dispute that the plaintiff undertook to put up

the advertisement hoardings only at Bombay. The plaint averments say so. The plaintiff''s accountant gave evidence to the very same effect in the

witness box.

According to Mr. Ram Mohan, these findings must conclude the issue as to jurisdiction against the plaintiff. He said that it would be quite out

of place under the law to file a suit at Madras for enforcing payment under a contract when neither the place of formation of the contract nor the

place of performance of the contract was Madras. Mr. Narayanaswami, however, urged that this reasoning, which found favour with the Court

below, is faulty, for it misses one vital element, or component, in the bundle of facts which make up the cause of action in this case. He said that the

plaintiff had very clearly pleaded in the plaint that under the terms of the contract the place of payment to the plaintiff was to be at Madras. This

fact, which, according to him, was amply established by the evidence at the trial, had to that extent at least, accrued in Madras. Learned Counsel

complained this aspect of the cause of action in this case, which was raised by the plaintiff both in pleading and in proof, had been completely

overlooked by the court below.

I think the criticism of Mr. Narayanaswami is justified. For I find no discussion of this aspect in the judgment of the learned judge. I must also

agree with the learned Counsel''s other submission that the place where the money is payable would also tend to fix, in part at least, the place

where the cause of action accrues. Section 20 of the Code of Civil Procedure, 1908 enacts cause of action as one of the determining factors in

fixing the jurisdiction of trial courts. But this section, as it stands, does not say, in so many words, that the cause of action in suits for recovery of

money or in suits based on contracts must be held to arise in part at least at the place where the money was payable or agreed to be paid. All that

the section says is, somewhat broadly, that a suit may be filed in a Court within whose jurisdiction the cause of action arises in whole or in part. In

the previous Code of 1882, which the Code of 1908 replaced, a similar provision relating to the cause of action for suits was treated a little, more

elaborately. Section 17 of the Code, more or less corresponding to Section 20 of the present one, elucidated the provision in an explanatory

clause. Explanation III to that section made {particular reference to suits upon contracts, land laid down that the cause of action in such (suits may

be held to arise either at the place J where the contract is concluded, or at the place where the parties have agreed to perform it or at the place

where money is payable in performance of the contract. Although there is no similar explanatory provision u/s 20 of the present Code, courts have

tended to accept the principle behind the old explanation. See, for example, the decision of Yahya Ali, J., is Galley and Co. Vs. Dathi China

Appalaswami Naidu, .

It may however be observed that what the Explanation in the old Code said, the principle of which is still regarded as valid, can be regarded as

exhaustive of the various places where cause of action may be said to arise even in suits upon contracts. It is quite conceivable that parts of the

cause of action may arise in places other than those mentioned in the Explanation. At any rate, under the format of Section 20 of the present Code,

which enacts the provision, as I said, in very broad terms, it must be a question for decision in every case to find out if the individual facts pleaded

and proved therein bring the cause of action within the local limits of the court in which the suit is instituted. It was, in this sense, and without

reference to the guidelines mentioned in the old Code of 1882, that a Full Bench of this Court proceeded to determine the place of accrual of the

cause of action in a case reported as K.E.P.V. Venkatachalam Pillai Vs. Rajaballi M. Sajun, . The suit in question before the Full Bench was a suit

on a contract for sale of goods. The plaintiff was the purchaser. The defendant was carrying on business in Rangoon. The plaintiff instituted the suit

in the District Munsif''s Court, Tuticorin. The relief claimed was payment of damages for short-fall in delivery as well as for sub-standard supply.

There was some question in that suit as to whether the defendant was the seller of the goods or whether he was merely a commission agent. But,

on the evidence, it was plain that the parties had agreed that payment for the goods should be made by the plaintiff at Tuticorin Dealing with this

aspect of the case. Beasley, C.J. speaking for the Full Bench, observed as under:

...whatever the relationship between the parties may in fact be, payment for the goods purchased by the plaintiff or on his behalf was to be made at

Tuticorin. If that is so, part of the cause of action arose within the jurisdiction of the Tuticorin District Munsif''s Court.

On principle as well as on authority, therefore I am satisfied that the plaintiff in this case was entitled to file the suit at Madras on the ground, if on

no other that under the contract between the parties the consideration was payable to the plaintiff at Madras. Learned Counsel for the defendants,

however, submitted that since the court below had not pertinently addressed itself to this aspect of the cause of action, the matter may be sent

back to it for further consideration. I do not feel the need for taking such a course, for, on the materials on record the matter can be as, indeed, it

has been, dealt within this very appeal.

Mr. Narayanaswami invited my attention to the documentary evidence in the case to show that payment for the hoarding jobs to be performed

at Bombay had nevertheless to be made by the defendants only at Madras. He relied on the bills issued by the plaintiff to the defendents. These

bills had been referred to in the plaint and marked at the trial as exhibits. The bills are in printed form. At the foot of every bill are to be found

printed certain terms and conditions. Clause 3 is in the following terms:

All claims and disputes arising out of this bill are to be settled and moneys payable under such settlement, paid in Madras....

Mr. Narayanaswami also drew my attention to the oral evidence in the case. The plaintiff''s accountant, adverting to this aspect of the course of

dealings between the parties, testified that the plaintiffs head office at Madras prepared the bills and sent them to the defendants. Statements of

account were also similarly prepared and sent from Madras. The accountant''s further evidence was that the defendant made the payments of the

bills at Madras and not at Bombay, excepting on some occasions. The general manager of the defendants admitted that some cheques were sent

by them to Madras, although he insisted that payments were generally made only to the plaintiff''s Bombay branch. As to what was the agreement

between the parties as to the place where the remuneration for the plaintiff was to be paid, the defendants'' manager did mot give a direct answer.

All he said was that there was nothing in writing to show that the payment should be made in the plaintiff''s branch office at Bombay. When his

attention was pertinently drawn to the plaintiff''s bills and the conditions they contained, the defendants'' manager gave conflicting answers, thus:

I am aware of the terms and conditions of the bill. I am not aware of the terms of the bill.

In this state of evidence, it seems to me to be reasonable to regard the foot-notes in the plaintiff''s printed bills as providing more or less

contemporaneous records in writing of the terms of the contract relating to the place of payment.

Mr. Ram Mohan urged that the evidence in the case only showed that some payments were made at Bombay and some payments were made

at Madras. He urged that since all payments were accepted by the plaintiff, the proper inference was that the place of payment was a matter of

indifference to the parties. I cannot accept this argument. For fixing the place where part of the cause of action arises in such a case as this, what is

required is to fix the place where money is payable, not where it is paid actually. For the dispute in the suit, quite naturally, is not about money

paid, but about money which remains unpaid, although payable. Hence, evidence as to the places of actual payment cannot be an unerring

indication as to the relevant term in the contract.

Mr. Ram Mohan then urged that the Court should not take note of the conditions printed in the plaintiff''s bills as conclusive, or even as

indicative, of the terms of the contract between the parties relating to the place of payment. He pointed out that bills happen to be issued, not at the

time of the formation of the contract, but at the time of, or even subsequent to, the performance of the terms of the contract. He further submitted

that, in any case, there was no evidence on record to show that the conditions in the plaintiff''s bills were accepted by the defendants. Learned

Counsel, accordingly, urged that the printed condition in the bills fixing the place of payment cannot be regarded as part of the binding contract

between the parties.

I must reject these arguments as unsound. The foot notes carried by the bills are not to be regarded as themselves containing the terms of the

contract as respects the place of payment. On the contrary, they are, and are being relied on by the plaintiff, only as furnishing a near-

contemporaneous evidence in writing as to what the parties had agreed between themselves even at the time of conclusion of the contract. It is

common ground that the plaintiff and the defendants did not draw up the terms of the contract in writing. The whole thing was based on oral

understanding. Evidence as to what were the terms of the oral contract need not always or necessarily be oral. There can be evidence in writing of

oral contracts, as often happens when one party sends to the other a written record, or memorandum, of what was earlier orally agreed between

them. The footnotes in the plaintiff''s bills haw precisely this role and no more. It is worthwhile mentioning that the defendants did not ever raise any

protest against the conditions printed in the bills.

Mr. Ram Mohan then submitted that Madras cannot be regarded as the place of payment of the bills, even if one were to go by the language

of the foot-note contained therein. According to learned Counsel, the words ""all claims and disputes arising out of these bills are to be settled and

moneys payable under such settlement, paid at Madras"", are only applicable to a post-settlement payment following a dispute and a settlement of

the dispute between the parties. In my view, the words do not lend themselves to this interpretation alone. The clause refers not only to disputes

and settlements and payments under settlements, but also to claims arising out of bills and even to admitted non-payment of bills. The expression

settled"" is used in a generic sense to cover both claims and disputes. As I read the condition, an undisputed claim and a claim before any dispute

has arisen with reference to it have also to be paid only at Madras.

Mr. Ram Mohan referred me to two reported cases on the basis of which he urged me to uphold the decision of the City Civil Court in this

case. The first reported case is that of a learned single Judge of the Andhra Pradesh High Court in C. Satyanarayana and Others Vs.

Kanumarlapudi Lakshmi Narasimham, . The view expressed by the learned Judge was that the words written on a letterhead, ""subject to Madras

jurisdiction cannot become part of a contract, unless there was evidence to show that it was agreed to by the other party. I respectfully agree with

this approach to the printed condition in a letter-head, if it were put forward as constituting, the contract, all by itself. But I do not regard the

printed condition in the plaintiff''s bills in the present case as something which, by its own force, determines conclusively the place of payment. I rely

on the printed condition rather as a subsequent piece of evidence near enough in point of time to the conclusion of the contract to show that it was

that the parties had, even in the first instance, agreed between themselves as to the place of payment.

The other case referred to by Mr. Ram Mohan is Tika Ram v. Daulat Ram I.L.R.(1924) All. 465, a decision of a Division Bench of the

Allahabad High Court. In that case a suit was filed in the Court of the Subordinate Judge of Budaun for recovery of moneys alleged to be due from

the defendant on accounts. The defendant was a resident of Bombay, The Court held that, unless the contract clearly indicates the contrary,

payment by an agent of this kind must necessarily be done at the place where all the business is transacted. More than the actual decision in the

case, what obviously impelled Mr. Ram Mohan to cite the decision was the following ulterance by the learned Judges:

It illustrates the importance of questions of this character which arise, and it also illustrates the necessity of the courts being somet what careful in

applying the law so as no-to impose an unreasonable and unanticipated burden upon commercial men, of being dragged from their place of

business to defend suits, 800 miles away in parts of the world with which they have no concern whatever.

Learned Counsel submitted that this passage, is applied to the present case, would vividly characterise the predicament of the defendants in this

suit. I am unable to subscribe to this argument of inconvenience. The place of suing is governed in our country by Section 20 of the Code of Civil

Procedure. In the face of its provisions, observations such as those found expressed by the Division Bench of the Allahabad. High Court, with

respect, seem to me to smack of maudlin sentimentality. If parties residing or carrying on their avocations in different parts of the country find it

worth their while to transact business with each other notwithstanding the distanances which separate them, they must be prepared to be ''dragged''

into distant Courts, if that is the right expression to use, when disputes arise which they cannot settle by mutual agreement. To have one''s law

Court at one''s door-steps is not a practicable, or even a desirable, goal in the administration of Civil justice. If, by applying the relevant principles

u/s 20 of the Code, it is found in a given suit, that part of the cause of action accrues within the jurisdiction of a given Court, the fact that either the

one or the other party or, for that matter, both of them, live or carry on business elsewhere can have no relevance to the Court''s undoubted

jurisdiction to proceed to trial.

Rejecting, thus, all the objections raised by the defendant, I hold that the City Civil Court has jurisdiction to entertain and try the plaintiff s suit,

because a part of the cause of action has accrued at Madras. The order passed by the learned XII Assistant City Civil Judge to the contrary is

erroneous. The appeal is allowed and the order of the learned Judge is set aside. The City Civil Court is directed to take back the plaint on its file

and proceed to try the rest of the issues in the suit on merits. The defendants will pay the plaintiff''s costs in this appeal.