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1961 Supreme(Ker) 146
Judges : M.S.MENON,S.VELU PILLAI
Prabhakara Kamath - Appellant
Versus
C.M.Patel - Respondent
Case No : C. M. A. No. 16 of 1960
Decided On : 07/19/1961
Advocates Appeared :
M. U. Isaac; For Appellant K. Kutti Krishna Menon; V. Balakrishna Eradi; For Respondents 1 & 2
The technical rule of the debtor seeking the creditor is not applicable in India for determining the local jurisdiction of the courts, and the place of making the contract, breach, and payment is crucial in determining the forum for the suit.
Headnote:
Jurisdiction - Civil Procedure Code - Interpretation of S.20 - Jurisdiction based on cause of action - Place of making the contract, breach, and payment outside jurisdiction - Debtor seeking creditor rule not applicable in determining jurisdiction
Fact of the Case:
The plaintiff filed a suit in the Subordinate Judge of Cochin, claiming jurisdiction based on S.20 (c) of the Code of Civil Procedure, 1908, as the cause of action arose within the court's jurisdiction. The lower court found that the place of making the contract, breach, and payment were all outside its jurisdiction.
Finding of the Court:
The court held that the technical rule of the debtor seeking the creditor is not applicable in India for determining the local jurisdiction of the courts. It cited precedents from Punjab and Madras High Courts to support this interpretation.
Issues: The main issue was whether the court had jurisdiction to try the suit based on the cause of action arising within its jurisdiction, as per S.20 (c) of the Civil Procedure Code.
Ratio Decidendi: The court interpreted S.20 of the Civil Procedure Code and held that the place of making the contract, breach, and payment outside the court's jurisdiction meant that no part of the cause of action arose within its jurisdiction. It also emphasized that the rule of debtor seeking the creditor is not applicable in determining the forum for the suit.
Final Decision: The court dismissed the appeal, affirming the lower court's decision that it had no jurisdiction to try the suit. The appellant was ordered to pay the costs of the respondents.
1. he plaintiff in O.S. No. 80 of 1958 of the Court of the Subordinate Judge of Cochin is the appellant before us. The Subordinate Judge after discussing the questions involved in Para.3 and 4 of his judgment said:
"I find that this court has no jurisdiction to try the suit. The plaint is, therefore, ordered to be returned to be presented to the court in which the suit should have been instituted."
2. It is admitted that none of the defendants - resides within the jurisdiction of the trial court, and so the only way the plaintiff can sustain the suit before the Subordinate Judge is by invoking S.20 (c) of the Code of Civil Procedure, 1908, and by establishing that the cause of action for the suit, wholly or in part, arose within the jurisdiction of the court.
3. The lower court held - we think correctly - that the place of making the contract, the place of its breach or non-performance and the place where money was payable under the contract, were all outside the jurisdiction of the court, and that no part of the cause of action arose within its jurisdiction. It was suggested to us that the correspondence which led to the contract, as far as the plaintiff was concerned, was from Mattancherry and that the said fact will give jurisdiction to the court of the Subordinate Judge of Cochin. We must say that we are unable to appreciate this contention.
4. The next and more interesting contention was that a debtor owes a duty to seek his creditor, that on the basis of that rule the suit amount was payable in Mattancherry where the plaintiff resides, and that the lower court has hence got the necessary jurisdiction to entertain the suit. In AIR. 1951 Punjab 33 Kapur, J., surveyed the decided cases on the subject and said:
"The technical rule of the debtor seeking the creditor is not applicable in India for the purpose of determining the local jurisdiction of the Courts because that would be engrafting something on to S.20, Civil P.C."
5. In AIR 1955 Punjab 128 Khosla, J., extracted the above passage and said:
"S. 20, Civil Procedure Code, lays down the rules for determining the forum in which action should be brought and the common-law rule of England with regard to this matter does not apply in this country. That a debtor must seek a creditor for payment is no doubt true in this country too, but not for the purpose of determining the forum where the suit is to be instituted. The Privy Council decision in AIR. 1927 P.C.156 does not deal with the application of this rule to S.20, Civil P. C.
The decision in AIR. 1955 Punjab 128 was approved by a Full Bench of the Punjab High Court in AIR. 1960 Punjab 450.
6. In AIR. 1957 Madras 201 Ramaswami, J. dealt with the matter as follows:
"Under the Common Law in England, the general rule, in the absence of a contract to the contrary, is that the debtor is bound to find the creditor for making the payment, i. e., the place of payment is the place where the creditor resides. In 1LR. 31 Madras 223 this Court held that the said Common Law rule did not control the express provisions in Explanation III to S.20, C. P. C. and that the place of payment in order to give jurisdiction must be where the money is payable expressly or impliedly under the contract itself and not under any general rule of law.
"Though this decision was under the old Code, this Court has again expressed the same view in AIR. 1946 Madras 300; wherein it has been pointed out that there has been a pronounced disinclination on the part of the Indian Courts to apply to this country unreservedly the English Common Law that a debtor should find and pay his creditor and that generally speaking the place of payment has to be determined independently of any such general maxim with reference to the terms of the contract, the circumstances attending on it, the necessities of the case and having regard also to the statutory provision contained in the Code of Civil Procedure and in S.49 of the Contract Act."
7. We are in respectful agreement
