Piyara Singh vs Bhagwan Das

Harnam Singh, J.—The question which has been referred to this Bench for decision is:

Whether the common law rule that a debtor should seek his creditor is, applicable in the case of promissory notes and in particular promissory notes payable on demand?

Briefly summarised, the facts leading to this reference are that on 21-02-1947, Piara Singh deft. executed the promissory note in suit at Lahore where both parties resided. On the partition of the Punjab u/s 4, Indian Independence Act, 1947, parties have migrated to India and the pltf. is living at Moga Mandi in the Ferozepore District while the deft. is living at Delhi. On 14-06-1948, pltf. applied to sue in forma pauperis and filed his appln. in the Ct. of the Subordinate Judge 1st class at Moga. In those proceedings the deft. urged a preliminary objection that the Ct. had no jurisdiction to try the case. Relying on the common law rule that the debtor must seek the creditor the trial Ct. has found that the pltf. was entitled to sue at the place where he resided and the deft. has now come to this Ct. in revn. against that order.

In Section 20, Civil P.C. hereinafter referred to as the Code, is contained the statement of the law as to the forum in cases of personal actions. In plain English Section 20 enacts that the Ct. gets jurisdiction to try a case if the deft. resides or carries on business or personally works for gain within the local limits of its jurisdiction on the cause of action arises wholly or in part within such local limits.

Section 17, Civil P.C. 1882, corresponded to Section 20 of the present Code. In Section 17 of the old Code there was Expln. III which provided that in a suit arising out of a contact the cause of action arose within the meaning of the section at any of the following places namely: (a) the place where the contract was made; (b) the place where the contract was to be performed or performance thereof completed; and (c) the place where, in performance of the contract, any money to which the suit relates was expressly or impliedly payable. Indeed Expln. III was added to Section 17 of the Code to make it clear that a suit arising out of contract could be instituted in a Ct. within the local limits of whose jurisdiction the cause of action arose either wholly or in part. The Expln. gave rise to doubts whether other classes of suits could be instituted in a Ct. within the local limits of whose jurisdiction part only of the cause of action arose. In Section 20 of the Code it has now been enacted that all classes of suits can be instituted where the cause of action arises wholly or in part and Expln. III to Section 17 of the Code of 1882 has not been re-enacted in the Code of 1908. In Salig Ram v. Chuba Mal 34 ALL. 49 : (11 I.C. 712) and Sita Ram v. Ram Chandra, 26 P.R. 1918: AIR 1918 Lah. 52 it was held that although Expln. III to Section 17 of the Code of 1882 has not been re-enacted in the Code of 1908, the introduction of the words "wholly or in part" in Section 20(c) of the Code has left the existing law unaltered.

In considering the question referred to us for decision it has to be borne in mind that the Code is exhaustive on all matters specifically dealt with by it. In other words, the law on matters specifically dealt with by the Code must be ascertained only with reference to the provisions of the Code and the Cts cannot disregard or go outside the letter of the enactment according to its true constructions.

Before proceeding with the examination of the question referred to us for decision it is necessary to state the scope of the common law rule about the place of payment of debts. Para 275 of Halsbury''s Laws of England, vol. vii, reads:

Where no place for performance is specified either expressly or by implication from the nature and terms of the contract and the surrounding circumstances, and the act is one which requires the presence of both parties for completion, the general rule is that the promisor must seek out the promises and perform the contract wherever he may happen to be. This rule applies not only to contracts for the payment of money, but to all promises for the performance of which the concurrence of the promisee is necessary.

The counsel for the parties conceded in these proceedings that their researches did not succeed in finding any English case where the rule stated in para. 275 of Halsbury''s Laws of England, vol. VII, was applied to negotiable instruments.

In Thorn v. City Rice Mills (1880) 40 ch. D. 357 : 58 L.J. Ch. 297 North J. said:

The proposition made on the part of the pltf. is that it is the duty of the debtor who has to pay money at a fixed time to find his creditor, provided the latter be in England, and pay him. I do not assent to that statement of the law so broadly put.

Indeed, it appears from footnote (e) to para. 275 of Halsbury''s Laws of England Vol. VII, Second Edn. read with para. 954 of the same book, vol. II, that in England there are special rules on the point before us in regard to negotiable paper.

In Williston on Contracts, vol. VI para. 1812, the rule is stated in the following words:

''There are special rules in regard to negotiable paper, in regard to the transfer of chattels, and in regard to the payment of rent by a tenant of real estate, but apart from such special rules the general principle of common law is that the debtor must seek the creditor and make tender to him wherever he is found; and oven without reference to this principle the creditor''s place of residence at the time when the contract was made will often be deemed by fair implication of fact the place of performance contracted for.

In Daniel on Negotiable Instruments vol. I, Seventh Edn. p. 139, the rule is stated in the following terms:

Where no place of payment is expressed in a note, the place of payment is understood to be where the maker resides; and if none be expressed in a bill, where the drawee resides is understood.

From what I have said above, it follows that in England and America there are special rules on the point before us in regard to negotiable instruments.

In India the position was examined u/s 17 of the Code of 1882 in Raman Chettiyar v. Gopalachari, 31 Mad. 223 : 4 M.L.T. 97. In that case White C.J. said:

I think the Judge only had in mind the ordinary rule that a debtor should follow his creditor. I do not think this general rule can be relied on as controlling the express words of a statute prescribing the conditions which give a Ct. local jurisdiction. This view would seem to be in accordance with the principle of the decision of the House of Lords in Comber v. Leyland. The other view would involve the proposition that unless the contract or the circumstances in which the contract was made give rise to a contrary implication a creditor may sue in any Ct. within the local jurisdiction of which he happens to be when his right to sue arises. This seems to me to be quite inconsistent with the express provisions of Section 17.

11 As pointed out by White, C.J. in Raman Chettiar v. Gopalachari, 31 Mad. 223 : 4 M.L.T. 97, Illus. (b) to Section 17 of the Code of 1882 throws light on the intention of the Legislature. Illustration (b) appended to Section 20 of the Code is textually identical with illus. (b) to Section 17 of the Code of 1882. Illustration (b) reads as follows:

(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 deft. objects the suit cannot proceed without the leave of the Ct.

Illustration (b) indicates that the common law rule that a debtor must follow his creditor is not applicable to suits on promissory notes payable on demand. Indeed, if the pltf''s. place of residence gave rise to an implication as to the place where the money to which the suit relates was payable, A would be entitled to sue B and C at Simla in the circumstances mentioned in illus. (b).

Dealing with the statute law first, I am of the opinion that Illus. (b) to Section 20 shows that in India in a suit on a promissory note the residence of the pltf. is wholly immaterial in order to determine the place of suing. Raman Chettiar v. Gopalachari 31 Mad 223 : 4 M.L.T. 97 was decided on 21-1-1908, whereas the Code of 1908 came into force on 1-1-1909. In case the framers of the Code had intended that a pltf. in the absence of a contract to the contrary, should be allowed to sue at his place of residence to recover debts due to him in pursuance of contracts made elsewhere on promissory notes payable on demand, there is no apparent reason why they should not have availed themselves of an opportunity to express that intention in drafting Illus. (b) appended to Section 20 of the Code. In this connection reference may be made to Nadarajan Chettiar v. Chandrasekara 54 C.W.N. 878 (P.C.). In that case Sir John Beaumont said:

Where once certain words in an Act of Parliament have received a judicial construction in one of the Superior Cts, and the Legislature has repeated them without any alteration in a subsequent statute, I conceive that the Legislature must be taken to have used them according to the meaning which a Ct. of competent jurisdiction has given to them.

That being the position of law, we are bound to seek the jurisdiction of the Ct. in these proceedings within the provisions of Section 20 of the Code and applying the rule stated in Illus. (b) it seems to me that the common law rule about the place of payment of debts does not govern suits based on promissory notes payable on demand.

Under the Code of 1908, the question before us came up for consideration in a number of cases decided by the High Cts. in India. In Gopikisan Sheonarain v. Jethmal Govardhandas AIR 3935 Nag. 144 : 155 I.C. 953 Subhedar A.J.C. said:

It is contended on behalf of the deft, that the ordinary principle, laid down in AIR 1930 207 (Nagpur) that in the absence of any specific agreement as to the place where the payment of a debt is to be made, it is the duty of the debtor to make the payment where the creditor resides or where his place of business is, is not applicable to negotiable instruments. This contention is sound. u/s 70, Negotiable Instruments Act (26 [XXVI] of 1881) a promissory note or bill of exchange not made payable 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.

In plain English, Section 70 provides that where the maker, drawee or acceptor has a place of business, presentment of the promissory note or bill of exchange must take place at the place of business of the maker, drawee or acceptor and failing that the presentment may take place at the usual residence of the maker, drawee or acceptor thereof. Clearly, the Legislature itself has declared that payment due under a promissory note, in the absence of contract to the contrary, is ordinarily to be made at the usual place of business of the maker or at his residence, and that being so, I do not think that we are entitled to apply, the common law rule about the place of payment to promissory notes or bills of exchange.

In considering this very point in Dalsukh Nathmal Firm v. Motilal Balchand AIR 1938 Nag. 262 : ILR (1940) Nag. 502, Vivian Bose J. said:

Under Section 78 payment has to be made to the holder, but, on the other hand, u/s 81 the person liable has to be ''called upon by the holder to pay. He is also entitled to have the instrument shown to him before he need pay (unless it has been lost) and upon payment to have it delivered to him, or in the case of loss, to be indemnified. Therefore, it is clear that the ordinary rule under which the debtor must seek his creditor does not apply in the case of a negotiable instrument.

More recently this very point was examined in Jivatlal Pratapsi v. Lalbhai Fulchand ILR (1942) Bom. 620 : AIR 1942 Bom. 251. In that case Sir John Beaumont, C.J., (Somjee, J., concurring), said:

That brings me to the really substantial question whether the common law rule, that a debtor must seek out his creditor in order to pay him, applied to negotiable instruments, and it seems curious that there is no binding authority upon that question. The only case which is directly in point to which we have been referred is the case of Srilal Singhania Vs. Anant Lal Mondal, in which Mr. Justice Lort Williams held that the common law rule did apply to the case of a promissory note. In that case the promissory note did not specify any place of payment. It has not been made within the jurisdiction of the Calcutta Ct., but the learned Judge held that the Calcutta Ct. would have jurisdiction to entertain a suit upon it, because at the time when the suit was instituted the promises, who had ceased to be the hold or of the note, and who had, therefore, no interest in the proceedings, resided in Calcutta. That, to my mind, is not a very convincing reason for the application of the rule. As pointed out by B.J. Wadia J. in the judgment under appeal, it is very difficult to apply such a rule to the case of a negotiable instrument. The holder may be residing in any part of the country, and the debtor may have no notion where he is, or where to seek, him. Where presentment is necessary, the difficulty is solved by the rules laid down in Sections 68-70, Negotiable Instruments Act, the latter section, which is the residuary section, providing that a promissory note must be presented for payment at the place of business (if any), or at the usual residence, of the maker thereof. No doubt, under the exception to Section 64, where a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge the maker thereof, so that presentment in this case was not necessary in order to charge the deft. But Section 70 does give some indication as to the way in which the maker can be notified of the holder of the note for the time being. In my view, in the absence of any authority binding upon this Ct., we ought to accept the view, which appealed to the learned Judge that the common law rule about place of payment does not apply to negotiable instruments, and that the pltf. had no right to demand payment in Bombay.

The counsel for the reap. cites Nanu Mal v. Firm Shibba Mal Nand Kishore AIR 1939 Lah. 18 : 181 I.C. 396 and Srilal Singhania Vs. Anant Lal Mondal, for the proposition that the common law rule about the place of payment is applicable to negotiable instruments.

In Nanu Mal v. Firm Shibba Mal Nand Kishore AIR 1939 Lah. 18 : 181 I.C. 396 it was contended that the pronote was liable to be presented to the debtor at Ambala for payment in accordance with the provisions of Section 70, Negotiable Instruments Act, and therefore, it should be held that the payment was to be made at Ambala. In deciding that case Bhide, J., said:

The sole point which requires decision therefore, is whether in view of the provisions of Section 70, Negotiable Instruments Act, it should be held that the money due on the pronote was payable at Ambala. The learned Counsel for the pltf. has contended on the other hand that no presentment is necessary in the case of pronote when the suit is against the maker of the pronote.

In Nanu Mal v. Firm Shibba Mal Nand Kishore AIR 1939 Lah. 18 : 181 I.C. 896 the effect of Section 70, Negotiable Instruments Act, 1881, on the application of the common law rule requiring debtor to follow his creditor was not considered. Clearly, Nanu Mal v. Firm Shibba Mal Nand Kishore AIR 1939 Lah. 18 : 181 I.C. 896 does not examine the contentions raised in Gopikisan Sheo Narain v. Jethmal Goverdhandas AIR 1935 Nag. 144 : 155 I.C. 953 and Dalsukh Nathmal v. Motilal Balchand AIR 1938 Nag. 262 : ILR (1940) Nag. 602 , Srilal Singhania Vs. Anant Lal Mondal, was considered in Jivatlal Pratapsi v. Lalbhai Fulchand ILR (1942) Bom. 620 : AIR 1942 Bom. 25l and for reasons given in that judgment it was found that Srilal Singhania Vs. Anant Lal Mondal, does not lay down correct law on the point.

In India, the weight of authority is, therefore, for the view that the common law rule of the debtor following his creditor does not apply to promissory notes and on principle I see no justification to engraft an exception on the rule of law stated in Section 20 of the Code.

For the foregoing reasons, my answer to the question referred to us for decision is in the negative.

No other point arises in Civ. Revn. No. 366 of 1948.

21A. In the result, I allow the petn. for revn. set aside the judgment of the trial Ct. and remit the case to the trial Ct. for action under Rule 10 of Order 7, Civil P.C.

Pltf. reap. will pay the costs of the deft. petnr. in both the Cts.

Kapur, J.

I agree and because the point is of some importance I wish to give my reasons. The point which has been referred for decision of the D.B. by my Lord the Chief Justice is:

Whether the common law rule that a debtor should seek his creditor is applicable in the case of promissory notes and in particular notes payable on demand?

The facts which have given rise to this petn. are that Piara Singh executed a pronote for Rs. 2000 in favour of Bhagwan Dass on 27-2-1947. This pronote was executed at Lahore and no place of payment is mentioned in this note. After the partition both Bhagwan Das and Piara Singh came to what is now India and are displaced persons. Bhagwan Dass is residing at Moga and Piara Singh at Delhi. On 14-6-1948, Bhagwan Dass instituted a suit for the recovery of Rs. 2180 as principal and interest in the Ct. of the Subordinate Judge at Moga in the dist. of Perozepore. An objection was taken to the jurisdiction of the Ct., but the learned trial Judge held that the English common law rule that the debtor must seek the creditor applies and relying on a judgment of the Calcutta H.C. in Srilal Singhania Vs. Anant Lal Mondal, held that the suit could be tried at Moga where the pltf. resided and overruled the objection. Against this order the deft. Piara Singh has come up in revn. to this Ct. and the rule was issued on 31-12-1948, by Achbru Ram J.

The point for determination by the D.B. is whether the rule of English law that the debtor must seek the creditor and make tender to him wherever he is found, applies to negotiable instruments. It may be stated in the very first instance that it was admitted by both counsel that their researches did not succeed in finding any English case which directly applied this rule to negotiable instruments. In Laws of England vol. VII, at p. 195, para. 276 it is stated:

Where no place for performance is specified either expressly or by implication from the nature and terms of the contrast and the surrounding circumstances, and the act is one which requires the presence of both parties for completion, the general rule is that the promisor must seek out the promisee and perform the contract wherever he may happen to be. This rule applies not only to contracts for the payment of money but to all promises for the performance of which the concurrence of the promisee is necessary.

Note (e) under this quotation seems to show that the place of payment in the case of bills of exchange and promissory notes may be an exception to this rule.

It seems that the rule as to the debtor seeking the creditor exists in America but it does not apply to ''negotiable papers.'' The rule in that country as regards promissory notes has been thus stated in Daniel on Negotiable Instruments, vol. 1 para. 103 at p. 103:

Where no place of payment is expressed in the note the place of payment is understood to be where the maker resides, though at the time a note was given the payee resided and has continued to reside in Anr. state, the place of payment is where the maker resides when the debt was contracted and note was delivered.

In Williston on Contracts, vol. VI, p. 5138, para. 1812, a rule is stated in the following words:

There are special rules in regard to negotiable paper, in regard to the transfer of chattels, and in regard to the payment of rent by a tenant of real estate, but apart from such special rules the general principle of common law is that the debtor must seek the creditor and make tender to him wherever he is found; and even without reference to this principle, the creditor''s place of residence at the time when the contract was made will often be deemed by fair implication of fact the place of performance contracted for.

Even in England there are cases where some limitations were placed on the rule contended for by the pltf. In Thorn v. City Rice Mills, (1880) 40 Ch. D. 357 359 : 58 L.J. ch. 297 North J., observed as follows:

The proposition made on the part of the pltf. is that it is the duty of the debtor who has to pay money at a fixed time to find his creditor, provided the latter be in England, and pay him. I do not assent to that statement of the law so broadly put. If it were qualified by the exception I will mention, it would be right.

Whether this rule is of universal application in England in the case of ordinary debts does not seem to be of very great assistance to me in the present case, because I have to determine whether this rule applies to negotiable instruments. Not much assistance can therefore be derived from English sources. As I have said above, the American law'' seems to exclude the applicability of this rule to negotiable instruments.

Taking the law in India there are conflicting authorities, as to the applicability of this rule to negotiable instruments. But before I go to these authorities, I must refer to Section 20, Civil P.C. which determines the jurisdiction of the Cts. where suits can be filed. Section 20 is as follows:.

Subject to the limitations aforesaid, every suit shall be instituted in a Ct. within the local limits of whose jurisdiction:

(a) the deft. or each of the defts. 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 work for gain, or

(b) * * * *

(c) the-cause of action, wholly or in part, arises.

I need not quote Explns. 1 and 2, but Illus. (b) is of some importance which is;

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 deft, objects, the suit cannot proceed without the leave of the Ct.

As I read this section, a suit can be brought where the deft, or defts. reside or carry on business or where the cause of action, wholly or in part, arises. The pltf. would like me to engraft a fourth sub clause providing that in the case of debts suits can also be brought at the place where the pltf. resides. Now, the Civil P.C. is a complete Code by itself and must govern suits in regard to procedure. The preamble says "whereas it is expedient to consolidate and amend the laws relating to the procedure of the Cts. of civil judicature." This would show that the Code is complete by itself and therefore if the argument of the pltf. were sound an addition would have to be made which we are not entitled to make. In Rama Chettiar v. Gopalachari 31 Mad. 223 : 4 M.L.T. 97 a similar argument was raised before a D.B. of that Ct. and White C.J. observed when dealing with Section 17, Civil P.C. as it then existed and which corresponds to the present Section 20:

I think the Judge only had in mind the ordinary rule that a debtor should follow his creditor. I do not think this general rule can be relied on as controlling the express words of a statute prescribing the conditions which give a Ct. local jurisdiction. This view would seem to be in accordance with the principle of the decision of the House of Lords in Comber v. Leyand (1896) A.C. 624 : 67 L.J.Q.B. 884. The other view would involve the proposition that unless the contract or the circumstances in which the contract was made give rise to a contrary implication a creditor may sue in any Ct. within the local jurisdiction of which he happens to be when his right to sue arises. This seems to me to be quite inconsistent with the express provisions of Section 17. Illustration (b) to the section throws some light on the intention of the Legislature. If the pltf''s. place of residence give rise to an implication as to the place where the money to which the suit relates was payable, A would have been entitled to sue B and C at Simla.

Miller, J. who gave a concurring judgment observed at p. 227:

If the framers of the Code had intended that a pltf. should, in the absence of a contract to the contrary, be allowed to sue at his place of residence to recover debts due to him in pursuance of contracts made else-where, there is no apparent reason why they should not have said so; they had an excellent opportunity of making this clear in drafting illus. (b) to Section 17, and the fact that they did not avail themselves of that opportunity supports, I venture to think, the view which I take of the present case.

The Advocate for the pltf. resp. sought to distinguish this case by submitting that this case was decided on the old Act as it was and that because Expl. 3 has now been taken away this case is no longer any authority. I am unable to agree with this argument. Explanation 3 was as follows:

In suits arising out of contract, the cause of action arises within the meaning of this section at any of the following places, namely:

(1) the place where the contract was made;

(2) the place where the contract was to be performed or performance thereof completed;

(3) the place wherein performance of the contract any money to which the suit relates was expressly or impliedly payable.

In the present Code the words "wholly or in part" had been inserted after the words "cause of action" which make it clear that the suits may be instituted where the cause of action, wholly or in part, arises; see Salig Ram v. Chuba Mal 34 ALL. 49 : 11 I.C. 712. Explanation III has been omitted as no longer necessary, but it is nevertheless a correct statement of what is still the law: see Sita Ram v. Ram Chandra 26 P.R. 1918 : AIR 1918 Lah. 52 . The effect of the present condition of the Clause (c) of the section in substitution of the old Expln. III is to leave no room for doubt that all classes of suits can be instituted where the cause of action arises wholly or in part. The whole Bxpln. III has now been omitted but the cases decided thereunder are still good law in cases arising out of contract; see the cases which are given at p. 381 of Chitaley''s Code of Civil Procedure, vol. I, sub-Note 8. No doubt, R.C. Mitter J., in Tusliman Bibi Vs. Abdul Latif Mia, which was a case of recovery of prompt dower, has referred to the Madras case, Raman Chettiar v. Gopalachari 31 Mad. 223 : 4 M.L.T. 97. and has distinguished it by saying:

It was held in that case that el. (iii) of the explanation meant that the money was payable according to the terms of the contract, which are expressed or can be inferred on a construction of the language or from the circumstances'' and the presumption of law that the payment is to be made at the creditor''s residence, on which the cases proceed, in the absence of a contract, cannot be invoked. Explanation III has, however been omitted from the Civil P.C. of 1908.

As I have said before, the law has not been changed by the taking away of Expln. III of Section 17, because as I read it the words of Sub-clause (c) of Section 20 really incorporate, though in a clearer form, the law as it was contained in Expln. III of Section 17. At p. 119 of his Civil P.C., Sir Dinshah Mulla says:

The corresponding section of the Code of 1882 merely referred to the place where the cause of action arose. It was not clear whether this meant the whole cause of action or any part of the cause of action.... This explanation made it clear that in suits on contract? cause of action meant the whole or any part of the cause of action, but it was still not clear that it meant the same in other suits. In the present Code the words ''wholly or in part'' have been inserted after the words ''cause of action'' which make it plain that all suits may be instituted where the cause of action arises wholly or in part.

I am, therefore, unable to agree with the observation of R.C. Mitter J., that the deletion of Expln. III has really made any difference excepting that now it depends in each case upon the allegations in the plaint in support of the relief claimed as to what forum the pltf. will have to go to get relief.

The existence of illus. (b) in Section 20 shows that in India at least in a suit on a promissory note the residence of the pltf. is wholly immaterial in order to determine the place of suing. According to that illustration, the suit can be brought where the defts. reside or where the note was executed but nowhere is it stated that the place where the pltf. resides also gives jurisdiction. The Legislature must be presumed to know the interpretation which the Madras Ct. has put on the old Section 17 of the Code, and in spite of that the English rule of debtors seeking the creditor wherever he may be found, or giving to the pltf. the right to sue at a place where he resides has not been added and no such amendment incorporating this rule has been effected. See Nadarajan Chettiar v. Chandrasekhara 54 C.W.N. 878 (P.C.).

In Soniram Jeetmull v. R.D. Tata and Co. Ltd. 5 Rang. 451 : A.I.R 1927 P.C. 156 the rule of the debtor seeking the creditor was described by their Lordships of the P.C. at p. 454 as a technical rule" of the English Common Law, and it is doubtful whether a technical rule even though it happens to be of English Common Law can be imported into the jurisprudence of India and be engrafted as an additional ground giving jurisdiction to a Ct. to entertain a suit.

In a more recent Madras case, AIR 1927 156 (Privy Council) the applicability of Section 20, Civil P.C. to a suit for recovery of maintenance brought by the wife at a place where she was residing was discussed, and it was held that under this section the suit could not be brought as the cause of action did not arise even in part at Palghat where the wife was residing and neither of the defts. were residing or working there. The previous Madras case Raman Chettiyar v. Gopalachari 31 Mad. 228: 4 M.L.T. 97 was referred to on the point whether the rule that the debtor should seek out his creditor applied to India or not and it was held that that rule did not apply to India. This later Madras case will have to be referred to again in Anr. connection.

Under the Negotiable Instruments Act where presentment is necessary no difficulty arises as to the applicability of this rule because Section 64 solves the difficulty. Where a promissory-note is in the body of it made payable at a particular place it must be presented for pay mend at that place in order to render the maker liable. In any other case presentment for payment is not necessary in order to render the maker liable. This is how in Ghaniya Lal v. Karam Chand 10 Lah. 755 : AIR 1929 Lah. 240 Section 64 read with the exception has been interpreted by Sir Shadi Lal C.J., with whom Bhide J. agreed, but the subsequent sections of the Negotiable Instruments Act give some indication as to the way in which a maker can be notified of the holder of the note for the time being. Sections 68 and 69 deal with presentment for payment of a negotiable instrument payable at a specified place. Section 70 deals with presentment where no exclusive place is specified. It is as follows:

A promissory note or bill of exchange not made payable 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.

Section 71 of the Act deals with presentment when maker has no known place of business or residence. Other sections of the Negotiable Instruments Act which are of some importance in order to determine whether the English rule applies or not are Sections 78 and 81. Section 78 provides for the person to whom payment is to be made and Section 81 says:

Any person liable to pay, and called upon by the holder thereof to pay, the amount due on a promissory note, bill of exchange or cheque is before payment entitled to have it shown, and is on payment entitled to have it delivered up, to him, or, if the instrument is lost or cannot be produced to be indemnified against any further claim thereon against him.

These sections will indicate that want of presentment; may not affect the liability of a maker of a note to pay, yet the holder who may or may not be the original promisee can have payment made to him if he, u/s 70 or Section 71 of the Act, makes the presentment and u/s 81 shows the note to the maker and on payment delivers it to him. As I read the effect of these sections my opinion is that they exclude the applicability of the rule that the debtor should seek the creditor in the case of negotiable instruments. This was the view taken in two Nagpur cases Gopikisan v. Jethmal AIR (22) 1935 Nag, 144 : 155 I.C. 953, where Subhedar A.J.C, was of this opinion, and Dalsukh Nathmal v. Motilal Balchand AIR 1938 Nag. 262: ILR (1940) Nag. 502 where Vivian Bose J. said at p. 264:

Under Section 78 payment has to be made to the holder, but, on the other hand, u/s 81 the person liable has to be called upon by the holder to pay. He is also entitled to have the instrument shown to him before he need pay (unless it has been lost) and upon payment to have it delivered to him.... Therefore it is clear that the ordinary rule under which the debtor must seek his creditor does not apply in the case of a negotiable instrument.

In Nanu Mal v. Firm Shibba Mal, Nand Kishore AIR 1939 Lah. 18 : 181 I.C. 396 the argument of Section 70,. Negotiable Instruments Act, was raised before Bhide J. but it was disposed of in the following words:

The sole point which requires decision therefore is whether in view of the provisions of Section 70, Negotiable Instruments Act, it should be held that the money due on the pronote was payable at Ambala. The learned Counsel for the pltf. has contended on the other hand that no presentment is necessary in the case of pronote when the suit is against the maker of the pronote. This contention appears to be correct and is supported by the decision in Ghaniya Lal v. Karamchand, 10 Lah. 755 : (A.I.R. 1929 Lah. 240) the pronote in this case not being payable at a specified place.

There are only two more cases which directly deal with the applicability of the English rule to negotiable instruments, a Bombay case and a Calcutta case. In the former Jivatlal Pratabai v. Lalbhai Fulchand ILR (1942) Bom. 620: AIR 1942 Bom. 25l on a settlement of his accounts at Ahmedabad with the pltfs. who were carrying on business in Bombay the deft. executed and delivered a promissory note to the pltfs. at Ahmedabad. The pltf. demanded the payment of the sum in Bombay and then filed a suit with leave under Clause 12 of the Letters Patient alleging that the money was payable in Bombay. Wadia J., before whom the case was originally tried rejected the argument that under the old rule of English law of the debtor seeking the creditor did not apply to the case of negotiable instruments. The argument which appealed to the learned Judge was that a negotiable instrument is capable of passing from hand to hand, and if this rule of the Common law applied, it would follow that though a promissory note was passed in a particular place in favour of the promises, and there further negotiated, the last endorsee could demand payment from the maker in some out of the way place where he was and that it would be the duty of the maker to find him in that place in order to pay him. The learned Judge said: "I do not think that such a result is contemplated in respect of claims under negotiable instruments." The matter went up in appeal and Beaumont C.J., with whom Somjee J., agreed, also did not apply the English rule and at p. 635 said:

The holder may be residing in any part of the country, and the debtor may have no notion where he is, or where to seek him. Where presentment is necessary, the difficulty is solved by the rules laid down in Sections 68-70, Negotiable Instruments Act, the latter section, which is the residuary section, providing that a promissory note must be presented for payment at the place of business (if any), or at the usual residence, of the maker thereof. No doubt, under the exception to Section 64, where a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge the maker thereof, so that presentment in this case was not necessary in order to charge the deft. But Section 70 does give some indication as to the way in which the maker can be notified of the holder of the note for the time being.

The learned Chief Justice then agreed with the view of the trial Judge.

The Calcutta case was decided by Lort-Williams J., in Srilal Singhania Vs. Anant Lal Mondal, . There the promissory note was executed in favour of Jhunjhunwala and was endorsed by him in favour of the pltf., Srilal, but no place of payment was specified. It had not been made within the jurisdiction of the Calcutta H.C. but Lort-Williama J., held that the Calcutta Ct. would have jurisdiction. He relied on a single Judge judgment of R.C. Mitter J., in Tusliman Bibi Vs. Abdul Latif Mia, and then said:

In the present case, on the contrary, the promise is to be performed on demand, and therefore Section 49 has no application. That was decided in Raman Chettiar v. Gopalachari 31 Mad. 228 at p. 228; (4 M.L.T. 97).... It follows that Section 49 having no application to the present case, a fortiori, the Common law rule applies, and it being necessary for the debtor to seek out his creditor and pay him, in the absence of any agreed place for payment, the place for re-payment in the present case was Calcutta.

The provisions of the Negotiable Instruments Act which indicate the necessity of presentment to the maker and the showing of the note at his place of business and of delivering the note up to him was not brought to the learned Judge''s notice. Nor can I see how the place of residence of the original promisee Jhunjhunwala who was no longer the holder could give to the Ct. jurisdiction. The place of endorsement was not relied upon as giving jurisdiction to the Ct. I am, therefore, of the same opinion as my Lord the Chief Justice who made this reference and would prefer the view taken by the Bombay Ct. to that of the Calcutta Ct. and would hold that the English rule of debtor seeking the creditor does not apply to negotiable instruments.

Several other cases were cited by counsel which really deal with the applicability of this English rule to India in the case of ordinary money debts. It is really not necessary to deal with these cases at any very great length, but I may refer to them just very briefly. In Allahabad there are four cases which were brought to our notice. In Sri Narain Vs. Jagannath and Another, this rule was held to apply in the case of a deposit, and it was held that in an ordinary case, especially a case against a Bank or some trader who holds himself out as a person to receive deposits, it does not necessarily follow that a repayment of deposit is to be made at the place of business of the Bank. In the majority of such cases the intention of the parties is that the money should be paid to the depositor wherever he happens to be when he demands repayment. I am, however, not aware of any such rule which would apply to the case of deposits with bankers. In ordinary practice the bankers repay deposits at their own branch where the deposit has been made. Bangali Mal Vs. Firm Ganga Ram Asharfi Lal, was a case of a sale of goods which were to be despatched from Agra and delivery was to be taken at Budaun. The suit for price was brought at Agra and it was held that Agra Ct. would have jurisdiction as there was an implied agreement that the price would be paid at the place and residence of the seller. This case was followed in Gokul Das and Others Vs. Nathu but in this case it was held that there was no evidence to show that the borrowers and the lenders had agreed that repayment would be made only at the borrower''s place. Niamatullah J. in Bhagauti Shukul and Others Vs. Chandrika Prasad Kueri applied this rule in the case of a premium collected in respect of a lease, and it was held that the cause of action accrued at the 1951 Punjab/6 place where the pltf. resided as from the surrounding circumstances there was an implied promise to pay at that place. These cases in my opinion are not of very great assistance even with regard to the applicability of this rule to ordinary debts.

In Bombay Farran J. applied this rule in Dhunjisha Nusserwanji v. A.B. Forde 11 Bom. 649, but in that case the learned Judge held that it would be a fair inference to draw from the facts of the case and from the wording of the instrument that the parties intended that payment under it should be made at Surat. If in those circumstances the learned Judge also referred to English rule that would not import the rule into India. Tyabji J. in Motilal v. Surajmal 30 Bom. 167 : 6 Bom. L.R. 1038 applied this rule in a case where correspondence of the parties showed that the accounts were to be rendered at Bombay. In order to come to this conclusion the learned Judge took into consideration this rule of English law also. Faiz Tyabji J., in Nathubhai Ranchhod Vs. Chhabildas Dharamchand, again took this rule as one of the factors into consideration for holding that the contract had to be performed and money paid where the pltf. resided. I may point out, Sir Lawrence Jenkins in Puttappa v. Virabhadrappa 7 Bom. L.R. 993 held that the rule did not apply to India, but this opinion of Sir Lawrence Jenkins was not approved of by their Lordships of the P.C. in AIR 1927 156 (Privy Council)

In Calcutta in Tusliman Bibi Vs. Abdul Latif Mia, R.C. Mitter J. applied this rule to a case of recovery of prompt dower. It appears to me that the learned Judge felt himself bound by the observations of Lord Sumner in AIR 1927 156 (Privy Council) and for that reason applied the rule. I do not think that the P.C. have held in so many words that this rule applies to India and I will give my reasons a little later. The other Calcutta case which was a case of negotiable instruments, Srilal Singhania Vs. Anant Lal Mondal, I have already dealt with.

In the Punjab besides the judgment of Bhide J. which I have already discussed, Nanumal v. Firm Shibhamal Nand Kishore AIR 1939 Lah. 18 : 181 I.C. 396, there is a judgment of Tek Chand J. in Fazal Din v. Ghulam Mustafa 32 P.L.R. 737 : 131 I.C. 303 where the learned Judge observed that this rule applied to India and relied upon the P.C. judgment besides Anr. Lahore case Firm Hardial Sargopal v. Bathal Das Chhangan Lal 118 I.C. 898 : AIR 1929 Lah. 868. In this latter case, Addison J. held that ordinarily, if goods are purchased or money is borrowed, the payment for the goods or repayment of the money must be presumed to have been agreed to be made at the place of the residence of the seller or the lender as the case may be, but this was a case of sale of goods and it may be that in the case of sale of goods the ordinary presumption is that the price is to be paid to the seller at his place, but the question of payment of money to the lender was, if I may say so, merely obiter dictum. In an older Lahore case, Ram Chand v. John Partlett 75 P.R. 1909 : 3 I.C. 522 after referring to the rules of the S.C. and relying on Robey v. Snafell Mining Co (1888) 20 Q.B.D. 152 : (57 L.J. Q.B. 134) Shah Din J. observed:

It can hardly be disputed that the money thus due to the resp. was payable to him in England, for, according to English law, it is the duty of the debtor to seek out his creditor and pay him wherever he may be, in all cases, where no particular place is named for payment.

All that the learned Judge said was that that was the rule in England. The suit was brought on a judgment obtained in England by a Solicitor for moneys due to him for work done by the Solicitor in England for an Indian client. In that case no doubt the money would be payable in England and the rule may well apply. This case does not seem to be any authority for the proposition that the rule applies also to India.

In Madras two Ors. cases besides Raman Chettiar v. Gopalachari 31 Mad. 223: 4 M.L.T. 97 (supra) have been brought to our notice which deal with this matter. In Audinarayana Rao v. Lakshminarayana Rao AIR 1940 Mad. 588 : 193 I.C. 81 , Varadachariar J. in a case between a principal and agent held that the rule is not applicable to India for determining the local jurisdiction of particular Cts. In M. Ramalinga Iyer Vs. T.K. Jayalakshmi and Another, this rule was again held not to be applicable and the observations of Sommayya J. are important. He said at p. 697:

If the common law rule of England is to be invoked as a mere aid in finding out the place of performance of a contract I have no objection to its being so used and that is the way in which the Judicial Committee used it in Soniram Jeetmull''s case, 5 Rang. 451: AIR 1927 P.C. 156, but if it is argued that in every case of debtor and creditor, the rule is to be applied without considering either the terms of the contract or the circumstances attending on it or the necessities of the case I have no hesitation in rejecting the contention. The question whether the common law rule of England is to be applied to a country of vast distances as India has to be considered with care.

The opinion of Leach C.J. was the same.

This brings me to a consideration of judgment of their Lordships of the P.C. which was strongly pressed to our attention for the purpose of holding that the English rule applies to India: In this case AIR 1927 156 (Privy Council) the observations of Lord Viscount Sumner at p. 457 were as follows:

Their Lordships do not think that in this state of the authorities it is possible to accede to the present contention that Section 49, 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. 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.

Their Lordships referred to Motilal v. Surajmal 30 Bom. 167 : 6 Bom. L.R. 1038; Dhunjisha v. A.B. Fforde 11 Bom. 649 and Pultappa v. Virabharappa 7 Bom. L.R. 993. and then referred to the judgment of the Board in Bansilal Abirchand v. Ghulam Mahbub Khan, AIR 1925 PC 290 where the English rule was not applied for the creditor was in Secunderabad.

AIR 1927 156 (Privy Council) as I understand it means only this. In the first place the terms of the contract are to be looked at and if they do not help the Ct. must have regard to the necessities of the case in deciding whether the English rule-should apply. As was observed by Varadachariar J., in Koka Audinarayana Rao Naidu Vs. Bhavaraju Lakshminarayana Rao, it is difficult to read that decision AIR 1927 156 (Privy Council) as laying down that as a rule of law the principle that the debtor is bound to seek out his creditor and pay his debt is applicable in this country, even for the purpose of determining the local jurisdiction of particular Ct. Their Lordships have taken care to indicate at the end of the judgment that their decision was based upon the inference drawn from the terms of the contract itself or from the necessities of the case.

47A review of these judgments leads me to the conclusions (1), that the technical rule of the debtor seeking the creditor is not applicable in India for the purpose of determining the local jurisdiction of the Cts. because that would be engrafting something on to Section 20, Civil P.C.; (2) in the case of negotiable instruments the Negotiable Instruments Act itself gives indication that the rule would not be applicable because of the pro. visions contained in Sections 68, 69, 70, 78 and 81; and (3) the weight of authority is in favour of not applying this rule in the case of negotiable instruments, for even in cases where Indian Cts have applied this rule to ordinary debts this has mostly been used only as one of the factors to be taken into consideration for determining as to what is the place where the contract implies the performance to be made.

I would, therefore, answer that this rule is not applicable to negotiable instruments in India.

In the result, this petn. for revn. succeeds and must be allowed. The rule is made absolute. The petnr. will have his costs in both the Cts.