HIGH COURT OF CALCUTTA
P. C. Mallick
A. K. RAHA (ENGINEERS) LTD. - Appellant
Versus
STATE OF PUNJAB - Respondent
Suit 1231 Of 1951
Decided On : AUGUST 7, 1959
JURISDICTION - CONTRACT - PLACE OF PAYMENT - IMPLIED PAYMENT - COMMON LAW RULE - NOTICE UNDER SECTION 80 OF THE CODE OF CIVIL PROCEDURE - CAUSE OF ACTION - LEAVE UNDER CLAUSE 12 OF THE LETTERS PATENT - REVOCATION OF LEAVE - BALANCE OF CONVENIENCE - PLEADING - COURT'S DISCRETION.
Fact of the Case:
Plaintiff, a contractor, sued the defendant, the Province of Punjab, for works done in the construction of a broad gauge tunnel on the Bhakra Nangal Canal Railways. The plaintiff claimed payment of the final bill, including the refund of the security deposit, as well as compensation for improper deductions made from the running bills. The defendant admitted liability for a portion of the claim and deposited the amount in court. The plaintiff obtained leave under Clause 12 of the Letters Patent to institute the suit in the Calcutta High Court, arguing that part of the cause of action arose within the jurisdiction of the court.
Finding of the Court:
The court held that part of the cause of action arose within the jurisdiction of the Calcutta High Court, as the final bill, including the refund of the security deposit, was not payable at any specific place and, therefore, became payable at the plaintiff's Calcutta office under the common law rule that the debtor must seek out the creditor and make payment at the creditor's place. The court also held that the notice under Section 80 of the Code of Civil Procedure was not a part of the cause of action and could not be relied upon to invoke the jurisdiction of the court.
Issues: 1. Whether any part of the cause of action arose within the jurisdiction of the Calcutta High Court? 2. Whether leave granted under Clause 12 of the Letters Patent should be revoked?
Ratio Decidendi: 1. The court held that the final bill, including the refund of the security deposit, was not payable at any specific place and, therefore, became payable at the plaintiff's Calcutta office under the common law rule that the debtor must seek out the creditor and make payment at the creditor's place. This rule applies in the absence of an agreed place of payment and is recognized in Indian law. 2. The court held that the notice under Section 80 of the Code of Civil Procedure was not a part of the cause of action and could not be relied upon to invoke the jurisdiction of the court. The court noted that there was a conflict of opinions on this issue among the judges of the Calcutta High Court and that the matter was pending before a Full Bench.
Final Decision: The court held that it had jurisdiction to entertain the suit and directed an enquiry as to the amount of the plaintiff's claim. The court declined to revoke the leave granted under Clause 12 of the Letters Patent, considering the advanced stage of the proceedings and the balance of convenience.
( 1 ) THIS is a suit by a contractor for works done. The plaintiff was employed for the construction of a broad gauge tunnel on the Bhakra Nangal Canal Railways belonging to the defendant. On. 1-3-1949, the work was completed. In the course of work, the plaintiff from time to time submitted running bills and received some payments. It is alleged that improper deductions amounting to Rs. 31. 949/12/- were made from the running bills. The final bill submitted after construction works were completed is for Rs. 3,61,918/11/ -. In terms of the contract the plaintiff had to furnish a security deposit of Rs. 25,000/ -. The present suit has been instituted for the recovery of the said three sums, alternatively for an enquiry as to the amount due and payable to the plaintiff. The suit has been instituted after obtaining leave under Clause 12 of the Letters Patent on the averment that part of the cause of action arose within the jurisdiction of the Court. It is pleaded that notice under Section 80 of the Code of Civil Procedure has been served. It has not, however, been pleaded that it was sent from Calcutta within the jurisdiction of this Court.
( 2 ) IN the written statement the claim is disputed except with respect to the sum of Rs. 11,582-1/ -. This sum of Rs. 11,582/1/- admitted to be due and payable has been deposited in Court. The validity of the notice under Section 80 has been denied, but not the receipt of the notice. It is pleaded that no part of the cause of action arose within the jurisdiction of this Court and in consequence this Court has no jurisdiction and the leave granted should be revoked.
( 3 ) AT the trial the parties dispensed with the formal proof of the documents included in the Brief of Documents and the Brief of Documents has been marked as an exhibit by consent. No oral evidence has been tendered by either party.
( 4 ) IT is agreed that the only issue to be tried now is whether this Court has jurisdiction to entertain the suit. The learned Counsel appearing for the defendant did not urge that notice under Section 80 of the Code of Civil Procedure is invalid, though the point has been taken in the written statement. Learned Counsel appearing for the plaintiff concedes that having regard to the dispute raised as to the quantum of the plaintiffs claim, the plaintiff will ask for the alternative relief claimed in the plaint. The disputes now before me for adjudication, therefore, are: (i) whether any part of the cause of action arose within the jurisdiction of this Court and (ii) whether leave granted should be revoked.
( 5 ) THE contract in the instant case is one between the Province of Punjab in pre-partitioned India and a private party and had to comply with the formalities laid down in the Government of India Act. The contract in suit is evidenced by the acceptance of a tender submitted by the plaintiff to the defendant outside jurisdiction. The formalities required by law have been, complied with. Submission of the tender and acceptance thereof took place n the Province of Punjab. But, argues Mr. R, C. Deb, learned counsel appearing for the plaintiff, that in the instant case there are the facts to be noted presently which show that the making of the contract was not wholly within the Province of Punjab. Firstly, the plaintiff was expressly invited to submit a tender and a copy of the tender was sent to it at their Calcutta Office with a request to submit it for acceptance. This, in my judgment, does not constitute any part of the cause of action. Secondly, the tender submitted by the plaintiff contained a covering letter dated 26-11-1947. Paragraph of the covering letter reads as follows:"we undertake to complete the works within. 9 months commencing from 10 days of our receiving the intimation of your acceptance of our tender at our Head Office at Calcutta". This tender submitted by the plaintiff containing the above terms was accepted. The defendant communicated the acceptance of t
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