Citation Codes

Equivalent Citations

citation codes

Case Number

C.R.P No. 2271 of 1939.

Attorney(S)

Mr. N. Rajagopala Ayyangar for the Petitioners.
Mr. Kasturi Seshagiri Rao for the Respondent.

Judges

Patanjali Sastri, J.

Acts

Section 20 Clause (c) of the Code of Civil Procedure.
Order 11, Rule 1 (e) of the Rules

See more information ...

Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

This civil revision petition challenges the jurisdiction of the Court below to entertain a suit for damages for breach of contract. The plaintiff, a merchant trading at Bezwada, sued for non-delivery of specified perforated steel sheets. The defendants, business representatives in Bombay of a Belgian steel manufacturer, denied that any part of the cause of action arose at Bezwada and pleaded want of jurisdiction.

By consent the question of jurisdiction was tried as a preliminary issue; the letters (including an indent form and a telegram) constituting the contract negotiations were included in the record. The District Munsif held that the indent form sent by the defendants, completed and posted by the plaintiff at Bezwada, constituted acceptance and that the contract was therefore concluded at Bezwada. The District Munsif also considered that jurisdiction lay because the goods were ultimately to be received at Bezwada via Madras.

The defendants preferred this civil revision petition against the finding for the plaintiff on jurisdiction.

Legal Issues Presented

Whether the Court below (the District Munsif's Court at Bezwada) had jurisdiction to entertain the suit — specifically, whether a part of the cause of action arose at Bezwada.
Whether the contract was concluded at Bezwada (by the plaintiff's completion and posting of the indent form) or at Bombay (by the defendants' telegram accepting the plaintiff's order), and the consequences of that conclusion for jurisdiction.
Whether the receipt by the offeror of an acceptance (here the plaintiff's receipt at Bezwada of the defendants' telegram) constitutes a part of the cause of action for purposes of conferring jurisdiction under Section 20(c) of the Code of Civil Procedure.
Whether the c.i.f. terms and shipping arrangements in the correspondence affect the place of delivery and hence the situs of part of the cause of action (i.e., whether delivery place is Bombay or Madras rather than Bezwada).

Arguments of the Parties

Petitioner's (Defendants') Arguments — Mr. Rajagopala Aiyangar

The plaintiff's return of the indent form, duly completed and signed, was merely a customary formality imposed by the defendants and did not constitute acceptance; it was not the act that concluded the contract.
The real acceptance was the defendants' telegram from Bombay accepting the plaintiff's order at the quoted price; therefore the contract was concluded at Bombay.
Correspondence showed the contract was on c.i.f. terms with shipping documents deliverable against payment at Bombay and unloading at Madras, so the place of delivery (and thus the relevant situs for jurisdiction) must be either Bombay or Madras and not Bezwada.
Counsel further argued that the analogy between receipt of an offer and receipt of an acceptance was weak because, while an offer must be received before it can be accepted, acceptance is complete when posted (relying on established posting-rule authorities).
He also argued that the decision in Venkata Reddi v. Nataraja Setti (1924) should not be followed because it conflicts with later Divisional Bench decisions in National Insurance Co. Ltd. v. Seethammal (1933) and Ahmad Bux v. Fazal Karim (1940).

Respondent's (Plaintiff's) Arguments — Mr. Seshagiri Rao

Respondent's counsel did not attempt to contradict the petitioner's factual contentions about posting or c.i.f. terms; instead he supported the District Munsif's decision on jurisdiction by contending that, if the telegram is treated as the acceptance, the receipt of that telegram by the plaintiff at Bezwada is a part of the cause of action and therefore the District Munsif had jurisdiction under Section 20 Clause (c) of the Code of Civil Procedure.
In support of that proposition he cited the decision of Ramesam J. in Venkata Reddi v. Nataraja Setti (1924) 46 M.L.J. 371 to the effect that receipt of acceptance when the contract was complete could be treated as part of the cause of action.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Venkata Reddi v. Nataraja Setti (1924) 46 M.L.J. 371	Held (Ramesam, J.) that receipt of an acceptance may be part of the cause of action; receipt of acceptance when the contract is complete is part of the contract, analogous to receipt of the offer.	Cited by respondent's counsel to support jurisdiction; discussed by the Court and considered in light of subsequent Divisional Bench decisions.
Clarke Brothers v. Knowles (1918) 1 K.B. 128	Referenced in contrast; the lower court's decision was distinguished because in Clarke Brothers it did not appear any letter of acceptance was received at the specified place (West Hartlepool).	Used by the Court (through the lower Court's reasoning) to explain why Clarke Brothers did not control the facts of the present case.
Kamisetti Subbiah v. Katha Venkataswamy (1903) I.L.R. 27 Mad. 355	Referenced; in that case no attempt had been made to support the judgment on the ground that a letter of acceptance was received at the relevant place (Kurnool).	Distinguished on the factual basis that receipt of acceptance was not argued in that case.
Evans v. Nicholson (1875) 32 L.T. (N.S.) 778	Established the proposition that an acceptance (or a statement of account) is a continuing act until it reaches the person to whom it is communicated and thus may be treated as made where received; applied to jurisdictional questions based on where part of the cause of action arose.	Adopted by the Court as authoritative support for treating the receipt at Bezwada of the defendants' telegram as constituting a part of the cause of action which arose at Bezwada.
Adams v. Lindsell (1818) 1 B. & Ald. 681; 106 E.R. 250	Authority for the posting rule: contract is complete when acceptance is posted.	Referred to as part of the line of authorities establishing that acceptance is complete on posting, but the Court relied on Evans to hold that acceptance may also be regarded as made when received.
Duncan v. Topham (1849) 8 C.B. 225; 137 E.R. 495	Another authority cited for the posting rule (acceptance effective when posted).	Referred to in the discussion distinguishing the narrow holding that acceptance is effective on posting from the broader question whether acceptance is a continuing act until received.
The Imperial Land Company of Marseilles (Harris' Case) (1872) L.R. 7 Ch. Ap. 587	Cited among cases establishing posting-rule principles.	Used to show background authorities on when acceptance is complete; Court relied on Evans for the proposition that acceptance may also be regarded as made on receipt.
Halsbury (Hals.), Vol. 8, p. 191 (treatise citation)	Treatise authority cited for the proposition that where an offer is made and accepted by post, a part of the cause of action arises where the letter accepting the offer is posted and a part where it is delivered.	Used to support the conclusion that part of the cause of action arose at Bezwada when the telegram accepting the order was received there.
Cowan v. O'Connor (1888) 20 Q.B.D. 640	Held that a contract of agency was made in the city where telegraphic communications were exchanged; example of a case consistent with treating the contract as made where the telegram was received.	Considered by the Court and held not inconsistent with Evans v. Nicholson once the different aspects (contract made at sender's place vs. recipient's place) are acknowledged.
Holland v. Bennett (1902) 1 K.B. 867	Held that where an employer posted a dismissal letter abroad, the breach occurred when the letter was posted and the English Court had no jurisdiction under the cited Order and Rule; demonstrates different factual and procedural context.	Distinguished by the Court on facts and on the ground that the rule under which jurisdiction was claimed in Holland v. Bennett differed from the principles applied here; not treated as conflicting with Evans v. Nicholson.
National Insurance Company Ltd., Calcutta v. Seethammal (1933) 65 M.L.J. 455	Divisional Bench decision; in that matter the cause of action was held not to arise in part within the Original Civil Jurisdiction of the Court despite communications being received at Madras.	Referred to by the petitioner's counsel as a later authority apparently inconsistent with Venkata Reddi; the Court observed that the decisioners had not been shown Ramesam J.'s decision and that no point had been made about receipt being part of the cause of action in those cases.
Ahmad Bux v. Fazal Karim (1940) 1 M.L.J. 676 : I.L.R. (1940) Mad. 195	Divisional Bench decision similarly holding the cause of action did not arise in part within the Original Civil Jurisdiction of the Court in the facts before it.	Referred to by petitioner as conflicting with Venkata Reddi; the Court noted that Ramesam J.'s decision did not appear to have been brought to the attention of those Bench decisions and that no point had been made about receipt being part of the cause.

Court's Reasoning and Analysis

The Court began by identifying that the sole contested question was jurisdiction. It reviewed the factual record: correspondence between parties, an indent form, and a telegram accepting the order. The District Munsif had treated the indent form, completed and posted by the plaintiff at Bezwada, as the acceptance concluding the contract at Bezwada; he also thought jurisdiction proper because the goods were ultimately to be received at Bezwada via Madras.

The Court then considered the petitioner's contention that the contract was concluded by the defendants' telegram from Bombay and that, as the contract was on c.i.f. terms with shipping documents to be delivered at Bombay and unloading at Madras, jurisdiction could not be founded on Bezwada. The respondent's counsel relied on the proposition that receipt of the acceptance at Bezwada would be part of the cause of action under Section 20(c) of the Code of Civil Procedure and relied on Ramesam J.'s decision in Venkata Reddi v. Nataraja Setti.

The Court examined authorities concerning the posting rule (that acceptance is complete when posted) and the line of cases including Adams v. Lindsell, Duncan v. Topham and others. It identified Evans v. Nicholson as authority for the separate — and broader — proposition that an acceptance (or a statement of account) is a continuing act until it reaches the person to whom it is communicated and may therefore be taken to be made at the place where it is received. The Court quoted and relied on the reasoning in Evans v. Nicholson (including the opinions of Lord Coleridge C.J., Lindley J. and Archibald J.) to show that although acceptance is effective on posting as between parties, it is nonetheless also an act which may be regarded as made where received.

The Court considered authorities cited by the petitioner (Cowan v. O'Connor and Holland v. Bennett) and explained why they did not conflict with Evans v. Nicholson or the conclusion the Court intended to reach: Cowan was consistent once the multiple possible situs of contract-making were acknowledged; Holland v. Bennett involved different facts and a different procedural rule and therefore did not oppose the Evans principle.

The Court noted the petitioner's submission that Ramesam J.'s decision in Venkata Reddi conflicted with later Divisional Bench decisions (National Insurance Co. v. Seethammal and Ahmad Bux v. Fazal Karim) but observed that in those later cases no point had been made about receipt of acceptance being part of the cause of action and that Ramesam J.'s decision had not apparently been brought to the attention of the Divisional Benches.

On the basis of Evans v. Nicholson and the treatise authority (Halsbury) recognizing that where an offer is made and accepted by post a part of the cause of action arises where the letter accepting the offer is posted and a part where it is delivered, the Court concluded that a part of the cause of action in the present case must be taken to have arisen at Bezwada when the defendant's telegram accepting the plaintiff's order was received there.

Holding and Implications

Holding: The Court held that the District Munsif's Court at Bezwada was competent to try the suit. The Court therefore dismissed the civil revision petition and awarded costs against the petitioner.

REVISION PETITION DISMISSED

Implications:

Direct effect on the parties: The finding of the Court below that it had jurisdiction is affirmed and the revision petition is dismissed with costs.
On broader law: The Court's decision rests on established authorities — in particular Evans v. Nicholson and the recognition in legal commentary that acceptance by post can be treated as operative both when posted and when received — and applies these principles to hold that receipt of an acceptance may constitute a part of the cause of action for jurisdictional purposes. The opinion does not purport to lay down a novel rule of law beyond applying these precedents to the facts before it.

Note: This summary contains only information expressly present in the provided opinion and does not add or infer facts or holdings beyond that text.

Show full summary ...

Sepulchre Brothers, Proprietors, The Belgium East India Trading And Engineering Company, Bombay v. Sait Khushal Das Jagjivan Das Mehta, Trading In The Name Of Messrs. J. Khushal Das & Co. Bezwada

1. The only question argued in this civil revision petition relates to the jurisdiction of the Court below to entertain the suit. The issue has been found for the plaintiff and the defendant has preferred this revision petition.

2. The suit was for damages for breach of contract for delivery of certain perforated steel Sheets according to specification to the plaintiff who is a merchant trading at Bezwada. The defendants who are carrying on business at Bombay are the representatives of a Belgian firm of steel manufacturers. The plaintiff averred that the defendants broke the contract by failing to deliver the goods and they sued in the District Munsif's Court at Bezwada alleging that their cause of action arose in part at Bezwada. The defendants pleaded inter alia that the Court had no jurisdiction to entertain the suit as no part of the cause of action arose at Bezwada. The issue was tried by consent of parties as a preliminary issue and the letters by means of which the contract was concluded have been included in the record. The lower Court took the view that the indent form which the defendants finally sent to the plaintiff to be duly completed and returned after the specifications and quotations had been exchanged must be taken to be the offer and the plaintiff's posting it duly signed and completed was the acceptance and that therefore the contract was concluded at Bezwada. The learned District Munsif was further of opinion that the Court had jurisdiction as the goods were to be received finally at Bezwada via Madras.

3. Mr. Rajagopala Aiyangar, the learned Counsel for the petitioner, urged that the view taken by the learned District Munsif was unsustainable. He contended that the plaintiff's return of the indent form duly completed and signed was merely a customary formality which the defendants required their customers to observe in such cases, and that the contract was really concluded by the defendants' telegram from Bombay accepting the plaintiff's order for the goods at the price quoted by the defendants. Mr. Rajagopala Aiyangar further submitted that the correspondence showed that the contract was on c.i.f., terms and that the shipping documents were to be delivered against payment at Bombay, while the harbour at which the goods were to be unloaded was Madras. The place of delivery, he therefore argued must be taken to be either Bombay or Madras and not Bezwada. The respondent's learned Counsel Mr. Seshagiri Rao did not attempt to repel these contentions but sought to support the decision of the Court below on the ground that if the telegram was to be treated as the acceptance, its receipt by the plaintiff was a part of the cause of action and as this was admittedly at Bezwada, the Court below had jurisdiction to entertain the suit under Section 20 Clause (c) of the Code of Civil Procedure. The decision of Ramesam, J. in Venkata Reddi v. Nataraja Setti (1924) 46 M.L.J. 371, was cited in support of this contention. After referring to the decisions holding that in suits arising out of contracts a part of the cause of action must be deemed to arise where the letter containing the offer was received, the learned Judge held that the receipt of acceptance when the contract was complete was a part of the contract "there being no reason why acceptance should be in a worse position than offer". The learned Judge distinguished the case of Clarke Brothers v. Knowles (1918) 1 K.B. 128, by pointing out that it did not appear from the affidavit on which the application was based that any letter of acceptance was received at West Hartlepool and the case in Kamisetti Subbiah v. Katha Venkataswamy (1903) I.L.R. 27 Mad. 355, by observing that no attempt was made there to support the judgment under appeal on the ground that the letter of acceptance was received in Kurnool.

4. Mr. Rajagopala Aiyangar urged that this decision should not be accepted as sound because it was opposed to the two later cases decided by Divisional Benches of this Court and reported in, The National Insurance Company Limited, Calcutta v. Seethammal (1933) 65 M.L.J. 455, and Ahmad Bux v. Fazal Karim (1940) 1 M.L.J. 676 : I.L.R. (1940) Mad. 195, in both of which the decision should have been the other way if Venkata Reddy v. Nataraja Setti (1924) 46 M.L.J. 371, were to be regarded as good law. In both these cases which arose out of suits filed on the Original Side of this Court, it appears no doubt from the statement of facts that the communication of acceptance was received at Madras. But it is to be observed that no point was made of such receipt as being part of the cause of action and the decision of Ramesam, J., referred to above does not appear to have been brought to the notice of the learned Judges who held that the cause of action in each case did not arise in part within the Original Civil Jurisdiction of this Court.

5. It was also argued that there was no real analogy between the receipt of an offer and the receipt of an acceptance; for, while the former was an essential step in the making of a contract as there could be no acceptance unless the offer was received, the receipt of acceptance was not necessary to complete the contract which was concluded as soon as the letter of acceptance was posted as settled by a long course of decisions. The argument is not without force and I should have hesitated to follow the decision of Ramesam, J., if there was nothing more to support it than the analogy of the receipt of an offer on which apparently it was based. But there is authority for the view that although an acceptance is complete as against the proposer as soon as the letter containing it is posted, it is a continuing act until it reaches the person to whom it is communicated and may thus be taken to be made also at the place where it is received. This was the view taken in Evans v. Nicholson (1875) 32 L.T. (N.S.) 778, which arose out of a motion for a writ of prohibition to the Mayor's Court on the ground that it had no jurisdiction to entertain an action for money due on an account stated as the whole cause of action did not arise within the city of London. The defendant in that case received out of the city some goods which he had ordered from the plaintiff and in answer to a letter requesting payment of the price wrote that he would remit the amount as requested as soon as possible. This letter was posted at the defendant's place of residence out of the city and was received by the plaintiff at his place of business in the city. It was argued on the analogy of cases relating to acceptance of an offer that the account must be deemed to have been stated out of the city where the defendant's letter was posted but the Court held that although a statement of an account was analogous to the acceptance of a contract and it was settled law that a contract was concluded as soon as the acceptance was posted, the statement, like the acceptance, was a continuous act until it reached the person to whom it was communicated and that therefore the defendant's letter was an account stated to the plaintiff at the place where the latter received it namely, the city of London. Lord Coleridge, C. J., observed at page 780:

It has been pointed out, indeed, and with perfect truth, that the cases referred to have stopped at this point with laying down as law that a contract is complete when its terms are accepted; and that the acceptor need not wait till the other party receives his letter notifying his acceptance. But, then, that was all that it was necessary to decide in all those cases. Adams v. Lindsell (1818) 1 B. & Aid. 681 : 106 E.R. 250, Duncan v. Topham (1849) 8 C.B. 225 : 137 E.R. 495, and The Imperial Land Company of Marseilles (Harris' Case) (1872) L.R. 7 Ch. Ap. 587, and the Courts there needed not to go on and say whether the acceptance was a continuous act; still, all the reasoning in the cases upon which the judgments are founded, though the judgments themselves are confined to the points necessary to be decided, is applicable to the further proposition which we are now considering, namely, that the acceptance continues to be an act done by the person accepting in a uniform and unbroken course of dealing until it reaches the other person to whom it is notified. And, in my opinion, although when he sends it off by post it is made then as against him, it is nonetheless made also when it reaches the mind of the offerer by reason of its having also been made before- This leads me to be unable to distinguish an acceptance so explained from a statement of an account; and so, to apply the proposition to the facts in this' case, I should say that although an account was undoubtedly stated at Copthorne, wherever that may be, it was nonetheless stated again when the letter containing the admission was received in the city.

6. Lindley and Archibald, JJ., expressed a similar opinion. Denman, J., while agreeing that an account must be deemed to be stated where the person to whom it was addressed received the statement, doubted the applicability of the analogy of the posting of the letter of acceptance concluding a contract, to the case of an account stated. He added however:

But I do agree, that, if the letter speaks at the moment it is posted, it is in the nature of a continuous statement, and speaks also at the moment when it is received.

7. It will thus be seen that though the point actually decided related to an account stated, the decision was based on general principles applicable to all contracts and this has been recognised in Hals. Vol. 8, page 191 where this decision among others is cited as an authority for the proposition that where an offer is made and accepted through post, a part of the cause of action arises where the letter accepting the offer is posted and a part where it is delivered. In this view, a part of the cause of action in the present case must be taken to have arisen at Bezwada where the defendant's telegram accepting the plaintiff's order was received by the plaintiff.

8. Mr. Rajagopala Aiyangar cited two English cases, namely, Cowan v. O'Connor (1888) 20 Q.B.D. 640, and Holland v. Bennett (1902) 1 K.B. 867, as being in conflict with Evans v. Nicholson (1875) 32 L.T. (N.S.) 778, referred to above. In the former an order to make certain bets was transmitted by postal telegraph by the plaintiff residing outside the city of London to the defendant within the city, who telegraphed that the order had been carried out, and it was held that the contract of agency was made in the city and that the action was properly laid in the Lord Mayor's Court as the whole cause of action arose within the jurisdiction of the city. This, however, does not conflict with the view adumbrated in Evans v. Nicholson (1875) 32 L.T. (N.S.) 778, for, as already observed, all that was held in the latter case was that an acceptance must also be deemed to have been made where the offerer received it. The fact, therefore, that the contract of agency could also be deemed to have been made at the plaintiff's place of residence without the city of London did not militate against the exercise of jurisdiction by the Lord Mavor's Court within whose jurisdiction the contract was concluded by the despatch of the defendant's telegram notifying the carrying out of the plaintiff's order.

9. The case of Holland v. Bennett (1902) 1 K.B. 867, related to an alleged wrongful dismissal of the plaintiff who was employed in England by a letter posted by his employer the defendant who was residing abroad. It was held that there was a complete breach of the contract when the letter giving notice of dismissal was posted abroad and that the English Court had no jurisdiction to entertain the action under Order 11, Rule 1 (e) of the Rules of the Supreme Court which authorised service out of the $ jurisdiction of a writ of summons in cases, inter alia where the action was "in respect of a breach committed within the jurisdiction of a contract wherever made." The facts were entirely different and the provision under which the case was decided did not make the exercise of jurisdiction by the Court depend upon the arising of the cause of action wholly or in part within the jurisdiction. I cannot therefore regard the case as being in conflict with Evans v. Nicholson (1875) 32 L.T. (N.S.) 778.

10. For the reasons indicated, I hold that the Court below is competent to try the suit and accordingly I dismiss the civil revision petition with costs.

Sepulchre Brothers, ... v. Sait Khushal Das Jag...