Bharumal Udhomal And Others v. Sakhawatmal Veshomal And Others,

The plaintiffs filed this suit from which this appeal arises to recover a sum of Rs. 4,700 which they alleged they had lent and advanced to the defendants. The learned Principal Judge who tried this suit held on merits in favour of the plaintiffs. He held that the loan had been, proved and that the defendants were liable to repay that amount.

2. But he non-suited the plaintiffs on the ground that the City Civil Court in Bombay had no jurisdiction to try the suit and therefore he ordered that the plaint should be returned to the plaintiffs to be presented to the proper Court.

3. In this appeal the only point that has been argued has been one of jurisdiction. The defendants have not appeared. The question of jurisdiction arises on these facts. The plaintiffs and defendants are displaced persons from Pakistan and the loan was advanced by the plaintiffs to the defendants-in Pakistan.

4. At the date when the suit was filed, the plaintiffs were residing in Greater Bombay and the defendants were residing at Kolhapur, and the plaintiffs invoked the jurisdiction of the City Civil Court at Bombay on two allegations. One was that subsequent to the advancement of the loan the defendants had agreed to repay the money in Bombay, and the other ground was that apart from the agreement there was an obligation under common law upon the defendants to seek out their creditors, the plaintiffs, and to repay the amount, and as the plaintiffs were in Bombay the moneys had to be repaid in Bombay.

5. With regard to the first ground the Principal Judge disbelieved the evidence of the plaintiffs, and Mr. Ram Kirshna for the appellants has not troubled us with regard to that finding; he accepts that finding. But with regard to the second, the learned Principal Judge following a decision of this Court in — ‘Puttappa v. Virabhadrappa’, 7 Bom LR 993 (A), came to the conclusion that the common law rule that a debtor must seek out his creditor and repay the amount due to him where the creditor is does not apply here. He took the same view as in — ‘Puttappa v. Virabadrappa (A)’ that Section 49, Contract Act, did not make it possible for the Courts in India to apply the common law rule. It is necessary to examine the correctness of this decision.

6. Now, apart from authorities, when we turn to Section 49 what is required is that the promisor has to apply to the promisee to appoint a reasonable place for the performance of the promise and the promisor has to perform his promise at such place. Therefore, strictly, Section 49 only comes into operation when there is an application by the promisor to the promisee.

7. In this case it is not suggested that the promisor made any application to the promisee for the performance of the contract in suit and therefore strictly Section 49 would have no application. If Section 49 has no application then there is no reason why the common law rule should not apply in India. To the extent that any provision in the Contract Act militates against the common law rule, the common law rule must be deemed to have been displaced by the statutory provision contained in Section 49.

8. If there is no inconsistency between Section 49 and the common law rule, there is no reason to hold that in a case like this where there is a loan advanced by the creditor to the debtor, the contract makes no mention as to where the amount should be repaid and the debtor has made no application to the creditor asking him to fix the place of performance why the common law rule that the debtor should find out his creditor should not apply.

9. The common law rule is a reasonable rule and it is in conformity with justice and equity because it recognises the obligation of the debtor to pay his debt and that obligation can only be discharged by the debtor going to his creditor and repaying the amount, and the common law rule imposes this obligation only when there is no express contract to the contrary. But whatever our view of Section 49 may be, if the view taken by the Division Bench that the common law rule has been displaced by Section 49 we would be bound by it.

10. Now, let us see if that is the view taken by this Court. In — ‘Puttappa v. Virabhadrappa (A) Sir Lawrence Jenkins, C.J, and Russell, J. were dealing with a suit where the plaintiffs sued to recover the balance that may be found due on taking accounts with interest. Therefore, it was a suit for accounts and it was not a suit like the one we are dealing with where the plaintiffs claim a money decree on the allegation that a loan has been advanced by them to the defendants which loan has not been repaid.

11. Therefore it is in relation to this suit that Sir Lawrence-Jenkins, C.J happened to observe:

“We think, however, in India the rule as to the place of performance whether it be payment or any other mode of performance, is to be determined by Section 49 of the Contract Act………….”

and he rejects the argument which rested upon the assumption that the common law rule applies that the debtor must seek out his creditor. It is from these observations that the learned Principal Judge has come to the conclusion that in no case can the common law rule be made applicable in India and in all cases the rule of performance must be determined by the provisions of Section 49.

12. Now, the observations of a Judge, even though as eminent as Sir Lawrence Jenkins, should be read, understood and appreciated in the light of the facts the learned Chief Justice was called upon to determine, and in our opinion these observations must be confined to the peculiar nature of the suit which was a suit for accounts and they should not be extended to apply to a simple money suit of the nature before us.

13. The Privy Council in — ‘Soniram Jeetmull v. R.D Tata & Co. Ltd.’, AIR 1927 PC 156 (B), had to consider this judgment and, when we read the judgment of the Privy Council it seems clear that the Privy Council was not prepared to accept the view of Sir Lawrence Jenkins, C.J with respect, as correct.

14. The Privy Council pointed out that no authorities were cited before Sir Lawrence Jenkins and the Privy Council pointed out that there were two decisions of the Bombay High Court which had taken the contrary view which had not been brought to the attention of Sir Lawrence Jenkins viz the judgment of Mr. Justice Tyabji in — ‘Motilal v. Surajmal’, 30 Bom 167 (C), and the judgment of Mr. Justice Farran in — ‘Dhunjisha Nusserwanji v. A.B Forde’, 11 Bom 649 (D), where both the learned Judges have taken the view that the common law rule applies in India and have given effect to that rule.

15. The Privy Council at pp. 157-158 thought the submission that S. 49 replaced any rule of law with regard to the obligation of the debtor to seek out his creditor, a strange one. Finally at p. 158 alter considering the three Bombay authorities to which reference has been made, they wind up by saying:

“Their Lordships do not think that in this state of the authorities it is possible to accede to the present contention that section 49 of the Indian 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”.

16. Therefore it is clear that although the Privy Council was reluctant to say that the decision of the Division Bench of the Bombay High Court in 7 Bom LR 993 (A), was erroneous, the Privy Council was at pains to point out that there were two earlier judgments of the Bombay High Court which had taken a contrary view, and also the Privy Council was at pains to point out that the nature of the suit which Sir Lawrence Jenkins was considering was rather of a peculiar character.

17. Therefore it will be entirely wrong to suggest that the common law rule has not been given effect to by the Bombay High Court or that the judgment in — ‘Puttappa v. Virbhadrappa (A)’ has the effect of displacing that rule by the provisions of S. 49, Contract Act.

18. Mr. Ram Krishna has drawn our attention to two judgments of the Calcutta High Court in — “Tulsiman Bibi v. Abdul Latif AIR 1936 Cal 97 (E) and in — ‘Srilal Singhania v. Anant Lal’, AIR 1940 Cal 443 (F), where the Calcutta High Court has not fallowed the view taken by the Bombay High Court in 7 Bom LR 993 (A). But as we said before, if Sir Lawrence Jenkins C.J and Russel J. had taken the view that the common law rule does not apply in a case where the suit is to recover money, however much we might have disagreed with that opinion we would have been bound by it.

19. But as in this case we are in a position to distinguish the facts of this case from the facts before the Division Bench, we do not think it necessary to have that judgment reviewed by a Fuller Court, or fortunately is it necessary for us to differ from that judgment. We will leave the matter by distinguishing that judgment on the facts of that case and taking the view that judgment must be strictly confined to the facts found there.

20. The result is that on the facts of this case we must hold that the City Civil Court had jurisdiction to try the suit. The order passed by the learned Principal Judge that the plaint should be returned to the plaintiffs to be presented to the proper Court will be set aside. Since on the merits the learned Principal Judge has stated that if his view was wrong on the question of jurisdiction he would have passed the decree which he has set out in the record, we will pass that decree because there is no dispute that the learned Judge's judgment was right on the merits.

21. The decree therefore will be in favour of the plaintiffs for Rs. 4,000 and interest at 4 per cent on Rs. 4,000 from the date of the suit till judgment. The decree will be against defendant No. 1 and against defendants Nos. 3, 4 and 5 to the extent of their interests in the joint family property, and costs of the suit and interest on judgment at 4 per cent. The appellants will also have the costs of this appeal.

H.G.P

Order accordingly.