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Misrimal v. Moda
Digest of the Revision Opinion — Bapna, J.
Factual and Procedural Background
The plaintiffs instituted a suit in the Munsif's court at Balotra claiming Rs. 400 as damages, alleging that plaintiffs Nos. 1–4 had entrusted a stack of hay to the defendant at Baitu under an agreement dated Posh Sudi 12 Smt. 1998. Plaintiffs further alleged that plaintiffs Nos. 5 and 6 purchased half the stack by a deed executed at Balotra (Baisakh Sudi 15 Smt. 2002). When the plaintiffs demanded delivery of the stack, the defendant allegedly failed to hand it over or pay its price, which the plaint described as "wrongful conversion."
The defendant contested the suit and pleaded that the Munsif at Balotra had no jurisdiction. The Munsif held that the suit was one in tort for wrongful conversion and thus fell under Section 19 of the Civil Procedure Code (CPC) and that the relevant locus (Baitu) was outside Balotra's jurisdiction; the Munsif ordered the plaint to be returned for presentation to the proper court (Munsif at Barmer). On appeal, the Civil Judge, Balotra, affirmed the Munsif's order. The plaintiffs sought revision from the High Court (before Bapna, J.).
Legal Issues Presented
- Whether the suit, as framed, is an action in tort for wrongful conversion (bringing Section 19 CPC into play) or a suit for damages for breach of contract (bringing Section 20 CPC into play).
- If the suit is contractual, whether the court at Balotra has jurisdiction under Section 20 CPC, particularly Clause (c), by reason of an assignment (or deed of sale of half the stack) executed at Balotra in favour of plaintiffs Nos. 5 and 6.
- Whether an assignment or transfer executed at a place where part of the cause of action is said to have arisen can confer jurisdiction on the court at that place, in the circumstances of this case.
Arguments of the Parties
Petitioners / Plaintiffs
- Contended that the suit was for damages for breach of contract (the defendant was a bailee who failed to deliver or pay as agreed) and not an action in tort for wrongful conversion.
- Argued that, in any event, part of the cause of action arose at Balotra because plaintiffs Nos. 5 and 6 obtained a deed assigning half the stack there, and relied on authorities holding that the place where an assignment was made could give the court jurisdiction.
Respondent / Defendant
- Pleaded lack of jurisdiction of the Munsif at Balotra and maintained that the suit as framed was in tort (wrongful conversion), thus invoking Section 19 CPC and jurisdiction where the wrongful conversion occurred (Baitu) or where the defendant resided or carried on business.
- The Munsif also held that the assignment of half the share was invalid for purposes of creating jurisdiction, treating it as a transfer of a tort claim.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Harnath Rai v. Churamani (A.I.R. 1934 Cal. 175) | The place of assignment of a debt was regarded as a place where part of the cause of action arose; observations by Ameer Ali J. about difficulty that an assignor could create jurisdiction at any place. | The court found the authority distinguishable on facts and noted Ameer Ali J.'s cautious observations; held it not controlling for the present case. |
| Dilbagh v. Walu Ram (A.I.R. 1933 Lah. 940) | Held that where an assignment of a promissory note took place at a place, the court at that place had jurisdiction to hear the suit on that note. | The court treated it as factually distinguishable and noted that the decision was upheld but that the revision in that matter was dismissed on another preliminary ground; not applied to this case. |
| Wadhumal v. Malik Noor Ahmed (A.I.R. 1933 Sind 179) | Relied on Reed v. Brown; held the place of assignment could be where a part of the cause of action arose and confer jurisdiction. | The court observed the case was not directly applicable and that the question whether assignment alone gives jurisdiction was not necessary to decide here. |
| Sess Chetan Das Matta v. Qutub Din Khan (I.L.R. 1948 I Cal. 122 at 127) | When leave to sue non-residents was granted under Letters Patent, matters of convenience and comparative expenses are material in deciding whether leave should be revoked. | The court cited it to show that considerations of convenience and comparative expense can be relevant when leave or jurisdiction by assignment is contested. |
| Reed v. Brown (22 Q.B.D. 128) | English authority that supported the view that assignment of a debt at a place may make that place one where a part of the cause of action arose. | The decision was discussed in connection with other Indian cases; the court noted the English ruling has been invoked but did not treat it as determinative for the present facts. |
| Jupiter General Insurance Co. Ltd. v. Abdul Aziz (1924 Rangoon 2) | Contains observations disapproving the reasoning that assignment alone will give jurisdiction at the place of assignment. | The court quoted it to show a contrary view and to support the conclusion that assignment alone does not necessarily confer jurisdiction in the factual matrix here. |
| Arthur Butler & Co. v. District Board, Gaya (A.I.R. 1947 Pat. 134) | Held that the tests in the omitted Explanation to Section 20 (place of contract, place of performance, place where money payable) remain good tests for determining cause of action location. | The court relied on this to state that the tests remain valid and to determine that the cause of action arose at the place of performance (Baitu) for the goods entrusted to the defendant. |
Court's Reasoning and Analysis
The court analyzed the plaint and the agreement (Ex. P-1) and concluded that the defendant's position was that of a bailee: the defendant had been given possession of a stack of hay to secure payment of a debt, agreed to keep and safeguard it, and to pay if it was spoiled. The plaint's allegation that the defendant "committed wrongful conversion" was characterized by the court as the plaintiffs' inference from the facts rather than the legal characterisation determining jurisdiction.
On that basis the court held that the claim was properly one for damages for breach of contract (non-delivery / failure to pay as agreed), not a tortious action for wrongful conversion. Consequently, jurisdictional questions had to be considered under Section 20 CPC (suits arising out of contract), not Section 19 CPC (torts).
Applying Section 20, the court examined the three conventional tests (place of contract, place of performance, place where money was payable) and observed: the goods were entrusted at Baitu and the alleged non-delivery occurred at Baitu; the defendant resided/carried on business at Baitu (outside Balotra). Therefore Clauses (a) and (b) of Section 20 did not aid the plaintiffs in instituting the suit at Balotra.
The petitioners' argument that Clause (c) could apply because the assignment of half the stack occurred at Balotra (thus creating a part cause of action there) was examined. The court reviewed the authorities relied upon by petitioner counsel but found them distinguishable on the facts:
- The cited cases mainly concerned assignments of debts/promissory notes and the resulting jurisdictional consequences; some observations in those cases expressed caution about permitting jurisdiction to be created solely by assignment.
- In the present case there was no assignment of any debt; plaintiffs Nos. 5 and 6 were vendees of half the stack of hay — a transfer of property — and the core operative events (entrustment and non-delivery) occurred at Baitu.
- The court held that the cause of action could not be split between plaintiffs so as to permit the suit to be maintained in Balotra when plaintiffs Nos. 1–4's cause of action arose entirely at Baitu.
Consequently, the court concluded that the entire cause of action for the suit lay at Baitu (Munsif, Barmer), making the Balotra court without jurisdiction. While the two lower courts reached this result by construing the suit as in tort under Section 19, the High Court agreed with the outcome but on different grounds — that the suit was contractual and governed by Section 20 and that the Balotra court lacked jurisdiction.
Holding and Implications
The revision is dismissed with costs.
Direct effect on the parties:
- The order of the Munsif (returning the plaint for presentation to the proper court) is sustained: the Balotra court had no jurisdiction to try the suit; the proper court is the Munsif at Barmer (Baitu being the place where the cause of action arose).
- The plaintiffs' attempt to found jurisdiction in Balotra by relying on an assignment or deed executed there in favour of plaintiffs Nos. 5 and 6 does not succeed on these facts.
Broader implications: The court expressly treated the cited authorities as distinguishable and refrained from laying down any new general rule that assignment of property or a share thereof will create jurisdiction at the place of assignment. The decision affirms the outcome reached by the lower courts but on the distinct ground that the suit is contractual and the cause of action arose at Baitu; it does not purport to establish a new precedent beyond the application to the facts before the court.
Bapna, J.:— This is a revision by the plaintiffs against an order of the Civil Judge, Balotra, dismissing an appeal against the order of the Munsif Balotra, directing return of the plaint for presentation to a proper court.
2. The petitioners filed a suit against the opposite party in the court of Munsif Balotra on the allegations that plaintiffs Nos. 1 to 4 had entrusted a certain stack of hay to the defendant on Posh Sudi 12 Smt. 1998 at Baitu under an agreement of that date and later on sold half share of that stack to plaintiffs Nos. 5 and 6 by executing deed at Balotra on Baisakh Sudi 15 Smt. 2002 and thereafter when the plaintiffs asked the defendant to hand back the stack of hay on Baisakh Sudi 15, Smt. 200, he failed to do so. Page: 434Plaintiffs claimed Rs. 400/- as damages on account of what they alleged to be the wrongful conversion of goods. The relevent portion of para 3 of the plaint on which the two courts have passed their order is as follows:—
“Where the plaintiffs demanded the stack of hay, the defendant neither complied with the terms of his agreement nor handed over the stack of hay and by this committed wrongful conversion for which the defendant is responsible to pay the current price of the goods to the plaintiffs which amounted to Rs. 400/.”
3. The English words ‘wrongful conversion’ are mentioned in that paragraph of the plaint which is otherewise in Hindi. The relevant portion of the agreement of Smt. 1998 Ex. P-1 referred to in the plaint is as follows:—
“This document executed by Moda of Baitu in favour of Pratap Mal, Misrimal, Kesrimal and Sohan Raj: whereas I have today given you one stack of hay towards payment of my debt. and it is lying to the west of my Dhani, it is (now) yours. But I shall keep watch over it and will cover it. If it is spoiled by rains or eaten away by animals I shall pay its price. I am responsible for it and if any damage occurs, I shall pay it.”
4. The defendant contested the suit and pleaded inter alia that the court of Munsif at Balotra where the suit had been institued had no jurisdiction to entertain it.
5. The learned Munsif accepted the defendant's plea on the ground that the suit as framed was one in torts for damages for wrongful conversion of property and could only be institued under sec. 19 of the Civil Procedure Code in the court which had jurisdiction either at the place where the wrongful conversion took place or where the defendant resided or carried on business or personally worked for gain. It was held that the village Baitu where the conversion took place or where the defendant: resided or carried on business or personally worked for gain was not within the jurisdiction of the Balotra court but was within the jurisdiction of the court of Munsif at Barmer. Learned Munsif also held that the assignment of half share alleged to have been made at Balotra was invalid and did not furnish any cause of action as it was a transfer of claim in torts. The learned Munsif ordered that the plaint be returned to the plaintiffs for presentation to the proper court.
6. In appeal it was argued that the suit was for damages for breach of the contract and not in torts, but the learned Civil Judge agreed with the opinion of the lower court and maintained the order of the lower court.
7. In this revision it was contended that the suit as framed was one for damages for breach of contract and it had been wrongly construed as one for damages for wrong done to movable property and that the place of suing should be determined with reference to sec. 20 of the Code of Civil Procedure. This contention is correct. The allegations in the plaint show that the defendant in payment of his debt. made over a stack of hay but as it could not be carried away by the plaintiffs, he agreed to keep it in his possession and to see that it was safe till the plaintiffs took its delivery. The position of the defendant was that of a bailee and the allegations in para 3 amounted to a statement that on demand the defendant neither handed back the stack of hay nor paid its price as agreed upon. The further statement that such action of the defendant smounted to wrongful conversion was only a notion of the plaintiffs and perhaps introduced to obtain sympathy of the court by imputing dishonest to the defendant. This was, however, the plaintiffs' own inference from facts and was irrelevant. The two court have erred in considering the suit to be one for damages for wrong done to movable property to which sec. 19 of the Code of Civil Procedure could apply. The suit was, as stated above, for damages for breach, of contract and the place of suing was to be determined with reference to the provisions of sec. 20 of the Civil Procedure Code.
8. The defendant admittedly resided or carried on business or personally worked for gain at Baitu outside the jurisdiction of Munsif at Balotra and Clauses (a) and (b) would not assist the plaintiffs. In considering the applicability of Clause (c), it may be observed that it was the case of the plaintiffs that the contract and its breach also took place at Baitu. It was, however, argued that the assignment of half share of the stack of grass was made at Balotra and this was a part of the cause of action in respect of the claim by the plaintiffs 5 and 6 under Clause (c) of sec. 20 of the Code and the suit could be instituted in the court at Balotra. Learned counsel for the petitioners relied on Harnath Rai v. Churamani (A.I.R 1934 Cal. 175), Dilbagh v. Walu Ram (A.I.R 1933 Lah. 940) and Wadhumal v. Malik Noor Ahmed (A.I.R 1933 Sind 179) for the proposition that a court having jurisdiction at the place where the assignment of any contract was made had jurisdiction to entertain the suit in respect of the said contract. The authorities are, however, distinguishable. In Harnath Rai's case, Ameer Ali J., while holding that the place of the assignment of the debt. was a place where part of the cause of action arose, observed that he did see difficulties in the present system under which an assignor could create jurisdiction in any place where the Civil Procedure Code applies but added that he did not think it was right for him to attempt to change that system. It may be pointed out that the observations were made in connection with the applicability of Clause (12) of the Letters Patent and whether the leave granted to sue on account of the arising of the part of the cause of action within the jurisdiction could be revoked on objection by the defendant. The difficulties stated above have been attempted to be removed by holding in various cases that in considering the question whether the leave granted ought to be revoked or not, the question of convenience was a material factor and that the nature of the suit must also be taken into consideration. The question of comperative expenses was also held to be a material factor Sess Chetan Das Matta v. Qutub Din Khan, (I.L.R 1948 I Cal. 122 at page 127). In that case both the drawer and the drawee of the promissory note were residing at Dera Ismail Khan where the promissory note was drawn. An assignment of the pro-note was made at Calcutta in favour of the plaintiff who obtained leave under Clause (12) of the Letters Patent to sue the non-resident defendants at Calcutta, and on application by defendants the leave was revoked. In Dilbagh Rai's case, the assignment was of a promissory note and the District Judge on appeal held that the court of the place where the assignment had taken place had jurisdiction to hear the suit. This view was upheld by Bhide J. although the revision was dismissed on another preliminary ground that the District Judge having jurisdiction to decide the appeal, no revision was maintainable even if the decision was erroneous. In Wadhumal's case reliance was placed on Reed v. Brown (22 Q.B.D 128) and the place of the assignment of the debt. was held to be the place where a part of the cause of action arose and the court of such place had jurisdiction to entertain the suit. In this case the second set of defendant lived within the jurisdiction of the court and an application for permission to sue the first set of defendants who were non-residents was granted by the Judicial Commissioner and as observed in the case, it was hardly necessary to deal with the question whether the suit could be instituted in a court within whose jurisdiction the deed of assignment of a debt. sued upon had been executed. Certain observations are, however, found in Jupiter General Insurance Company Ltd. v. Abdul Aziz (1924 Rangoon 2) which did not approve of the reasoning that assignment alone will give jurisdiction in the place where the assignment took place. After referring the be decision in Reed v. Brown, it was observed:
“The result of the adoption of that ruling in India would be that if A, a merchant in Rangoon owed B, another merchant in Rangoon, a debt. contracted in Rangoon and payable in Rangoon and if B assigned that debt. to C in Karachi, C1 could sue A in Karachi. Such a result would be entirely contrary to the intention of the framers of the Code of Civil Procedure and could not possibly have been contemplated by them”.
9. Since the present is not a suit for recovery of money on the basis of an assignment of any promissory note or a money debt, it is not necessary to express any opinion on the question of law which has been dealt with in the above cases and it may only be stated that they are not applicable on the facts of the present case. In the present case there is no assignment of any debt. and plaintiffs Nos. 5 and 6 are vendees of helf of the stack of hay which was entrusted to the care of the defendant at Baitu and was to be redelivered at that place. The entire cause of action, in our opinion, arose at Baitu where the goods were entrusted to Moda and where the non-delivery took place. In the present Civil Procedure Code there are only two Explanations to sec. 20. The previous Code had a third Explanation, which was to the following effect:—
“In suits arising out of contract cause of action arises within the meaning of this section at any of the following places—
(1) the place where the contract was made;
(2) the place where the contract was to be performed or performance thereof completed;
(3) the place where, in performance of the contract, any money to which the suit relates was expressly or impliedly payable.”
10. As observed in Arthur Butler & Co. v. District Board, Gaya (A.I.R 1947 Pat. 134), “the tests mentioned in that explanation are still good tests although the explanation has been omitted.” The plaintiffs have created another difficulty for themselves in so far as only half of the share in the stack of hay had been assigned to plaintiffs 5 and 6. As regards the plaintiffs 1 to 4, the entire cause of action according to any view of the matter are at Baitu and it is only in respect of plaintiffs Nos. 5 and 6, that an argument could be advanced that a part of the cause of action arose within the jurisdiction of Balotra court. The cause of action against the defendant could not be split in two and as the cause of action to plaintiffs 1 to 4 arose entirely at Baitu in any case, the whole suit could only be brought in a court having jurisdiction at Baitu and which was the court of Munsif, Barmer in this case.
11. As a result, we agree with the decision of the lower court although on different grounds that the court at Balotra had no jurisdiction and the order passed by that court for return of the plaint is correct. This revision fails and is dismissed with costs.
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