Judgement

Appeal (No. 123 of 1926) by special leave from a decree of the High Court in its appellate jurisdiction (February 8, 1926), affirming a decree of that Court in its original jurisdiction.

The appellants were a firm carrying on business in Calcutta. The respondents were a limited company whose registered office was in Bombay, carrying on business at Calcutta, Bombay, Rangoon, and elsewhere; in 1919 they had taken over, and had since continued, the business of Tata Sons & Co.

By a contract made in Calcutta in 1911 the appellants agreed to assist Tata Sons & Co. in securing constituents to purchase and/or sell grain in Rangoon, on constituents accounts, as common agents only; and that they would make good any undisputed claim which Tata Sons & Co. might lose owing to the failure or suspending payment of constituents; in consideration Tata Sons & Co. agreed to pay the appellants one-quarter of the commission they received.

In 1924 the respondents sued the appellants in the High Court at Rangoon to recover under the agreement the amount of two unsatisfied judgments which they had obtained against a Calcutta firm.

The High Court, on an ex parte application, granted leave under cl. 10 of the Charter to bring the suit. Under that clause the High Court has jurisdiction where a defendant does not reside or carry on business within the local limits of the jurisdiction, if the cause of action arises wholly, or, with leave of the Court, in part within those limits.

The appellants by their written statement objected that the rule did not give jurisdiction in the suit; that question was directed to be tried as a preliminary issue.

Chari J. overruled the objection, and his judgment was affirmed on appeal by Rutledge C. J. and Maung Ba J.

1927. March 29. Dunne K.C., and E. B. Raikes for the appellants. The only part of the cause of action which it can be suggested arose in Rangoon was failure to pay there. The High Court appears to have based its judgment on the English rule that a debtor must seek his creditor. That rule, however, does not apply in India, s. 49 of the Indian Contract Act, 1872, having been substituted for it Puttappa Manjaya v. Virabhadrappa.(7 Bom. L. Repr. 993.) The steps prescribed by that section were not taken to fix the place of payment.

[Lord Sumner referred to Dhunjisha Nusserwanji v. A. B. Fforde (( 1887) I. L. R. 11 B. 649.) and Motilal v. Surajmal.(( 1904) I. L. R. 30 B. 167.)]

Those decisions were earlier than the decision relied on and were each by a single judge; the second is commented on in Pollock & Mullas Indian Contract Act at p. 301. The recent judgment of the Privy Council in Bansilal Abirchand v. Ghulam Mahbub Khan (( 1925) L. R. 53 I. A. 58.) did not decide whether the English rule applies in India. Further the respondents registered office was at Bombay, and having regard to s. 72 of the Indian Companies Act, 1913, if any contract as to the place of payment was to be implied, it was to pay at Bombay.

Sir George Lowndes K.C. and Kenelm Preedy for the respondents were not called upon.

The judgment of their Lordships was delivered by

VISCOUNT SUMNER. This is an appeal by special leave from the High Court of Rangoon, which affirmed a decision of the Court below, overruling an objection to the jurisdiction taken by the appellants. It was imposed upon the parties, as a term of the special leave, that the pleadings between the parties, the judgments and the order of the Court in India should be the sole material for this argument. The appellants were sued in Rangoon by R. D. Tata & Co., Ld., who have a business branch there, for payment of sums of money, due upon the failure of constituents to satisfy debts due to Messrs. Tata, Sons & Co., which sums the defendants had undertaken to make good to them. Judgment had been obtained, and there was no dispute about the amounts or validity of these debts or about their being due from the original debtors, but Messrs. Jeetmull, who carry on business in Calcu