JUDGMENT Ryves and Gukul Prasad, JJ.
1. The plaintiffs brought this suit in the Court of Small Causes at Kasganj to recover damages from the defendants, residents of Delhi, for an alleged breach of contract. The defence to the suit, for the purposes of this application, was that the court at Kasganj had no jurisdiction to try it, as no part of the cause of action accrued in Kasganj. The court held that it had no jurisdiction and ordered the plaint to be returned to the plaintiffs for presentation to the proper court. The plaintiffs come here in revision.
2. The admitted facts relevant to this part of the case are as follows. The plaintiffs are shop-keepers at Kasganj and the defendants are merchants in Delhi dealing in dyes among other things. There had been previous dealings between the parties, but these need not now be considered. On the 6th of November, 1918, the plaintiffs wrote a letter, which is on the record, from Kasganj, asking the defendants to send them four boxes of a particular dye. Nothing was said in the letter as to how the goods were to be sent. In the plaint, however, it is stated in paragraph 6, that the goods were to be sent by value payable parcel post, and there is no doubt that this was understood by both the parties. The goods were sent by value payable parcel post and the plaintiffs took delivery at Kasganj after paying their price plus commission and other charges. On opening the parcel, the plaintiffs alleged, the boxes contained clay and not the dyes they had ordered.
3. Having recited these facts, the court, instead of pausing to find what was the actual contract, discussed a number of rulings to discover what was the law. It is difficult to see how the court could derive any help from a perusal of text books or reported decisions at that stage. It had first to decide what were the facts. The result has been that the court has discussed many rulings which are quite irrelevant and has distinguished and refused to follow the only ruling which seems to us to be really in point. It has also relied on two other rulings, one of which refers to a suit of a totally different nature and both of which arc inapplicable to, what, in our opinion, are the facts of this case. Fortunately, we are able to find from the pleadings and the letter what the contract actually was, otherwise we should have had to send the case back for a finding, as we have had to do to-day in another somewhat similar case. Clearly, the defendants contracted to send four boxes of the dye ordered to Kasgapj and the goods were to be delivered to the plaintiffs at Kasganj on payment by the plaintiffs of their price. On this finding we have no hesitation in holding that a part, at least, of the cause of action accrued at Kasganj. Section 20 of the Code of Civil Procedure, Clause (c), lays down that every suit shall be instituted in a court within the local limits of whose jurisdiction the case of action, wholly or in part, arises." In order to discover what was meant by the words cause of action, wholly or in part, arises," it is instructive to turn to Section 17 of the old Code of Civil Procedure, Act XIV of 1882. In Explanation III to Section 17 it is enacted that " In suits arising out of contract, the cause of action arises within the meaning of this section at any of the following places, namely:
(i) the place where the contract was made;
(ii) the place where the contract was to be performed or performance thereof completed;
(iii) the place where in performance of the contract any money to which the suit relates was expressly or impliedly payable.
4. On our finding, the contract was made in Delhi, the place where the performance of the contract was completed by delivery of the goods was at Kasganj and the place where in performance of the contract the money was impliedly, it" not indeed expressly, payable was also Kasganj. Tim goods were delivered in Kasganj and they 'were paid for in Kasganj.
5. This is enough to conclude the matter, but we think that for the guidance of the court; below, especially as the point of view taken by that court has been elaborately argued by Dr. Tej Bahadur, we should express our opinion upon it.
6. Before doing so we should point out that the argument for the defendants is only relevant, if we were left in doubt as to the precise terms of the contract and had to infer them from the conduct of the parties, if, for instance, the value payable parcel system had not been contemplated and used for the delivery and payment of the goods and the goods had been sent by the ordinary post. The argument for the defendants is that the contract was concluded at Delhi and that once delivery was made by the defendants to the Post Office in Delhi, the defendants had done all that they had contracted to do, because the Post Office was the agent of the plaintiffs and delivery to the plaintiffs' agent was equivalent in law to delivery to the plaintiffs, especially as the plaintiffs themselves had asked the defendants to send the goods by value payable parcel post. As a matter of fact, as we have said above, there was no suggestion in the letter itself that the value payable parcel system was to be used, though it may be inferred, and in fact is admitted, that both the parties intended its use and did use it. The fallacy in this argument seems to be in the fact, that, when the goods were given to the Post Office at Delhi for despatch to Kasganj, they did not become the property of the plaintiffs and were not intended to become their property. They remained the defendants' property unless and until the plaintiffs paid their price to the Post Office in Kasganj, and to this extent at least, namely, for the purpose of receiving their price and then delivering the goods at Kasganj, the Post Office was the agent of the defendants or at least the common agent of both parties.
7. Reliance has been placed on some English rulings, which, however, do not seem to us of much help. They relate to another question, the time when and the place where a contract is completed by negotiations which have passed through the post. It may be conceded that the contract was concluded at Delhi, but we think that by that contract the defendants agreed to deliver the goods at Kasganj and receive payment there and that these were essential parts of the contract. The case of Ihanawala v. Shahzada Basudeo Singh (1908) 12 Oudh Cases. 17 has been strongly relied on, but the facts there were quite different. Mr. Chamier, as he then was, after quoting the terras of Explanation III to Section 17 of the old Code of Civil Procedure goes on to say: "It is quite clear from the terms on which the applicant does business, as stated in the catalogue sent by him to the respondent, that the contract was to be performed in Bombay. The respondent had to pay for the packing and for the freight and it was the duty of the applicant to deliver the goods to the railway authorities at Bombay for despatch to Rae Bareli, It is also clear that the price and the cost of packing and the freight were to be paid in Bombay by the respondent, therefore the only question is whether the contract was made in Rae Bareli or in Bombay." After discussing the correspondence between the parties in that case he went on to say--" I hold, therefore, that it was the respondent who offered to buy the applicant's goods and it was the applicant who accepted the offer. The acceptance was made and the contract completed in Bombay and therefore the Munsif of Rae Bareli has no jurisdiction to try this case."
8. The next case relied on was Salig Ram v. Chaha Mal (1911) I.L.R. 34 All. 49. That case, it seems to us, has been misunderstood. In the first place it was not a suit between two principals for damages for breach of a contract, but was one for compensation under Section 212 of the Indian Contract Act in respect of the direct consequences of the defendant's negligence and misconduct as alleged.
9. The defendant there was the agent of the plaintiff and it was his duty to purchase grain at Karachi, to place the goods on the rails at Karachi and to post the railway receipt to the plaintiff's address. As pointed out in the judgment in that case (and reported at the bottom of page 52) the learned Judges say--" It is quite clear that under Section 17 (a), read with Explanation III of Act XIV of 1882, the present suit would not have been within the jurisdiction of the Hathras Court. The contract was made at Karachi, where the plaintiff's offer was accepted. The performance of the contract had to be completed at Karachi and the money due was payable at Karachi. The defendant contracted to act as the plaintiff's agent at Karachi for the purpose of purchasing and despatching the goods and to do certain acts there also. His negligence or misconduct, if any, occurred there." The one case out of the many discussed by the court which seems really in point has been distinguished for reasons which do not appeal to us; that is, the case of Suraj Bhan v. Punjab Cotton Press Co. Ld. (1913) 18 Indian Cases, 130. In that case the goods were sent from Lahore to Delhi, but they were addressed to the consignors. The railway receipt was forwarded to a banking firm and was made over to the consignees on payment. The lower court distinguishes this case because the goods were despatched in the names of the consignors. It seems to us, however, that this is a distinction without a difference. In both the cases the goods remained the property of the consignors unless and until their price was paid. In both the cases the price had to be paid at the place of destination and in both cases the person who received the price was the agent of the consignors and the goods only passed to the consignees when the consignor's agent having received their price handed over the goods or their equivalent, the railway receipt, to the consignees. After all, Dr. Tej Bahadur's argument amounted to this: The Post Office throughout was the agent for the plaintiffs, and it being conceded that the contract was made at Delhi, the court at Delhi alone had jurisdiction. But in our opinion the system adopted by the parties was deliberately the value payable parcel system, and we think, as we have said, that the real contract, which was concluded at Delhi, was that the price of the goods would be paid by the plaintiffs at Kasganj and that the defendants agreed that the Post Office should deliver the goods to the plaintiff at Kasganj and receive payment for them there.
10. The result is, in our opinion, that the court below was wrong in returning the plaint. We accordingly set; aside that order and direct that court to receive the plaint and restore it to its original number and proceed with the case according to law. The costs of this application will abide the result.