1969 Supreme(Ker) 195
Judges : P.SUBRAMONIAN POTI
BHARATHI AMMA AND ANOTHER - Appellant
Versus
S.A.ABDUL AZEES - Respondent
Case No : C. R. P. No. 1613 of 1968 from O. S. No. 68 of 1968,
Decided On : 11/14/1969
Advocates Appeared :
C. K. Viswanatha Iyer; For Petitioner T. L. Viswanatha Iyer; For Respondent No.1
The endorsement of a promissory note gives rise to a part of the cause of action at the place of endorsement, providing jurisdiction to that court.
Headnote:
JURISDICTION - PROMISSORY NOTE - S.20 (c) OF THE CODE OF CIVIL PROCEDURE - Every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.
Fact of the Case:
The Subordinate Judge of Palghat found jurisdiction in that court to entertain the suit based on the contention that the endorsement of a promissory note would give jurisdiction to the court within whose jurisdiction such endorsement was made.
Finding of the Court:
The court found that the endorsement of a promissory note gives rise to a part of the cause of action at the place where the endorsement or assignment has taken place, and therefore, the court within that jurisdiction has the competence to entertain the suit.
Issues: The issues raised included whether the cause of action for a suit on a negotiable instrument arises at the place of endorsement and whether the plaintiff needs to prove consideration for the endorsement.
Ratio Decidendi: The court relied on the definition of 'cause of action' as every fact necessary to be proved to support the plaintiff's right to judgment, and held that the endorsement of a promissory note gives rise to a part of the cause of action at the place of endorsement, providing jurisdiction to that court.
Final Decision: The revision petition was dismissed, affirming the jurisdiction of the court within whose jurisdiction the endorsement of the promissory note took place.
1. The Subordinate Judge of Palghat by the order challenged in this revision found jurisdiction in that court to entertain the suit. This finding was entered on issue 5 in the suit which was framed on the contention of defendants 1 and 2 that no part of the cause of action arose within that territorial jurisdiction of that court. The suit was on a promissory note executed by the defendants at Kasargode in the Cannanore District where the defendants are said to be permanently residing. The plaintiff obtained an endorsement of the promissory note from the third defendant, and is suing as the holder of the promissory note. The endorsement is said to have been made in favour of the plaintiff at Kavilpad amsom which is within the jurisdiction of the Subordinate Judg's Court of Palghat. The question that was raised was whether the endorsement or assignment of a promissory note would give jurisdiction to the court within whose jurisdiction such endorsement or assignment was made. That was decided in favour of the plaintiff and in the revision the order passed by the learned judge is challenged.
2. Two contentions have been raised before me by learned counsel for the petitioner Sri. C.K. Viswanatha Iyer. The first of these is that when there is an endorsement of a negotiable instrument cause of action for suit on the negotiable instrument does not arise at the place of endorsement. The other question that is argued before me is that even if the cause of action would so arise it is necessary for the plaintiff to show not only that the promissory note has been endorsed or assigned but that it was for consideration and in the present case no evidence has been adduced by the plaintiff to show that the endorsement is supported by consideration.
3. The learned counsel rests his contention that cause of action would not arise wholly or partly at the place where a promissory note is endorsed on the reasoning that if such was the case it will be open to the holder of a promissory note to file a suit anywhere by taking endorsement within the jurisdiction of any court. This, according to counsel, would be a quite unreasonable position and therefore when, in S.20 (c) of the Code of Civil Procedure, it is provided that every suit shall be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part arises it will have to be taken that the endorsement of a promissory note will not give rise to cause of action partly or wholly.
4. In Read v. Brown (22 Q. B. Division 128) Lord Easher, M. R. quoting the definition of the term'cause of action' in an earlier case in Cooke v. Gill (Law Rep. 8 C. P, 107, at p. 116) defined'cause of action' as follows: "Every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved." Lopes, L. J. agreeing with Lord Esher, M. R. said that "it includes every fact which it would be necessary to prove, if traversed, in order to enable a plaintiff to sustain his action." This definition of cause of action' in Read v. Brown has been relied on by Indian courts to understand the scope of S.20 (c) of the Code of Civil Procedure. Though the Rangoon and Rajasthan High Courts have taken a different view as to the scope of S.20 (c) of the Code of Civil Procedure, all other courts have taken the uniform view that the place where a negotiable instrument is endorsed is one where a part of the cause of action arises within the meaning of that section In Manepalli Mangamma v. Manepalli Sathiraju (31 M.L. J. 816) the Madras High Court noticed the strong current of authority in India accepting the definition of 'cause of action' in Read v. Brown and felt no doubt that they must also follow the definition. Applying this definition, the Madras High Court held that the assignment in plai