Mahesh Agarwal vs Jayshree Trading Company and Others

A.M. Bhattacharjee, J.—Being aggrieved by the order passed by the learned Additional District Judge directing the return of the plaints in two suits being Nos. 72 and 73 of 1980 between the same parties the plaintiff has filed these two appeals challenging the said order. This judgment shall govern both these appeals in both of which the only question involved is whether the learned Judge was right in ordering the return of the plaints in the two suits on the ground that as neither the defendants resided nor any part of the cause of action arose within the jurisdiction of the Courts in Sikkim the Court below had no jurisdiction to entertain the suits.

Whether a Court has jurisdiction to try a suit is generally to be determined on the evidence on record. But if such question is raised and pressed by the defendant before issues are framed and evidence is recorded then the court in deciding such questions has got to proceed on the basis of the allegations made in the plaint and on the assumption that those allegations are true in fact. In asking the Court to decide a question like this before issues are struck and the trial begins the defendant must be taken to have admitted though for the purpose of deciding that question only, that the allegations made by the plaintiff in the plaint are true modo et forma. As pointed out by the Privy Council in Kanhayalal v. National Bank of India Ltd. ILR (1913) Cal 598 at p. 609, in so doing the defendant no doubt reserves to himself the right to show that these allegations are wholly or partially false in the further stages of the action, if the question is decided against him. But if the question to raised at any earlier stage before framing of the issues and recording of evidence then for the determination of the question at that stage "everything contained in the plaint must be taken to be true as stated."

The case of the plaintiff appellant in both the suits is that the plaintiff sent a consignment of cardamom from Gangtok to the defendant at Delhi to be sold by the defendant as the Aratia or Commission Agent of the plaintiff and that though the defendants sold them and made some payment to the plaintiff same mare amount is still payable to the plaintiff by the defendants. The plaintiff has asserted in his plaint that, as per agreement between the, parties. The defendants were bound to submit the accounts and to send the sale-proceeds to the plaintiff at Dickchu (vide, paragraph 4 of the plaint in Suit No. 72) and at Gangtok (vide, paragraph 9 of the plaint in Suit No. 731. both admittedly to the jurisdiction of the Court below. If these allegations in the Plaint are to be accepted as true at this stage, then it is difficult to hold, as has been held by the learned trial Judge, that no part of" the cause'' of action arose within the jurisdiction of the trial Court.

The connotation of the expression "cause of action", though not defined in the Civil P.C. or in any other relevant enactment has been so many times repeated in multitudinous English and Indian decisions that the same has now become almost platitudinous. As pointed out by Sir Madhavan Nair in the Privy Council decision in AIR 1949 78 (Privy Council) , referred to with the approval by Chief Justice section R. Das in the Supreme Court decision in The State of Madras Vs. C.P. Agencies and Another, . the century-old dictum of Lord Esher in Read v. Brown 1888-22 QBD 128 to the effect that the expression means "every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court" and that of Lord Fry to the effect that "everything which, if not proved, gives the defendant an immediate right to judgment must be part of the cause of action" have become accepted as the standard definition of the expression "cause of action". It is obvious that "cause of action" must mean the cause or the ground for the action, i.e. the proceeding initiated and. therefore, it should cover every fact which furnishes or forms a part of the grounds for the proceeding concerned. In the cases at hand, cause of action for the two suits is alleged to be failure on the part of the defendants to pay the balance of the sale proceeds of the cardamom, and if such payment, according to the plaint was to be made at Dickchu and at Gangtok then the cause of action, i.e. the failure to pay obviously arose, at least in part at Dickchu and Gangtok within the jurisdiction of the trial Court.

The learned Judge, however, observed that in the absence of any written agreement or contract" it was not possible to accept that the defendants were bound to submit accounts and send the sale-proceeds to Dickchu and Gangtok. I am afraid that the learned Judge lumped too soon, made a wrong approach and came to a finding which was not only hasty and premature but was also wrong in view of the stage of, the suit and the state of materials then available to him. Law does not require such an agreement to be in writing. But even then, if after the evidence; was taken, the learned Judge, while trying the relevant issue, came to a finding on the evidence on record that in the absence of a written agreement it was difficult to accept the case of the plaintiff as to the liability of the defendants to submit accounts and to send the sale-proceeds to Dickchu and Gangtok and held accordingly that no part of the cause of action arose within the jurisdiction of his Court and ordered return of the plaints, that would have been a different matter and would have given rise to different considerations. But since issues were not framed and evidence was not recorded, the learned Judge, I am afraid, entirely misdirected himself in deciding at such an early stage without any evidence on record as to whether the case made out by the plaintiff as to the place of payment and submission, of accounts was acceptable or not. The Courts in Sikkim are still governed by the Civil P.C. 1908. as it stood in 1975, when Sikkim was incorporated in the Union of India as a component State and. therefore, are not governed by Order 14 thereof, as amended by the Amendment Act, 1976. Rule 2 whereof now man dates the Court to pronounce judgment on all the issues involved, not with standing. If that the case may be, disposed of on a preliminary issue, unless such an issue is of Law only and relates to the jurisdiction of the Court or to a legal bar to the suit and therefore, the learned Judge could have decided the question as to the territorial jurisdiction as a preliminary issue after giving the parties opportunity to lead evidence on the point. As pointed out by Shah J. in Fazlehussein Haiderbhoy Buxamusa and Others Vs. Yusufally Adamji and Others, if the jurisdiction of the Court depends upon the proof of a fact and the question as to the existence or otherwise of that fact is canvassed, the parties may lead evidence in support of the respective cases before the preliminary issue as to the jurisdiction of the Court is decided. But when the learned Judge proceeded to decide the question as to the territorial jurisdiction at a much earlier stage, he had to go by the allegations made in the plaint and could have returned them for, presentation to the proper Court only if he, after accepting the allegations made in the plaint to be true and without questioning their acceptability, could come to a finding that on the case made put in the plaint itself no part of the cause of action did or could arise within the jurisdiction of his Court. As held by a Full Bench of the Allahabad High Court in Mt. Ananti Vs. Chhannu and Others , at p. 198 at all earlier stages, the, question of jurisdiction is to fee, determined on the allegations made in the plaint and the allegations, made in the written statement cannot oust that jurisdiction unless and until the allegations of fact have been gone into tried judicially and found to be true and the plaintiff''s allegations have been found to be false And therefore, unless and until that stage arrives, the allegations made in the plaint are to be accepted to be true. To the same effect is the single Judge decision of the Allahabad High Court in Ishwar Din and Others Vs. Ch. Mohd. Ishaq and Another, where the Full Bench decision in Mr. Ananti v. Ghhanna (supra) has been relied on must note that though appearing for the respondents and, therefore, in support of the impugned order. Mr. Kharga has himself drawn my attention to this Allahabad High Court single Judge decision in Ishwar Din v. Mohd. Ishaq (supra) and has very fairly submitted that if that is the position in law then the impugned order cannot be sustained. As I have already indicated, that is and cannot but be the position in law and another Full Bench decision of the Allahabad High Court in D.N. Rege, Solicitor through Gopal Lal Mukhtaram Vs. Kazi Muhammad Haider and Another, also referred to in Ishwar Din v. Mohd. Ishaq and Anr. single Judge decision of the same High Court in Reserve Bank of India Vs. Ram Kumar Varshney, where the two earlier Full Bench decisions have been referred to are also clear authorities for this proposition. I do not think citation need be multiplied any further.

The appeals are therefore, allowed and the impugned order of the learned Additional District Judge directing the return of the plaints in the two suits, giving rise to these two appeal is set aside and the suits are sent back to the learned Judge for trial according to law. I have already indicated, but to allay the apprehension of Mr. Kharga I make it clear, that nothing in this judgment would prevent the respondents to prove at the appropriate stage of the trial that the relevant allegations made in the plaint accepted to be true at this stage only for the purpose of these appeals, are not true and the Court has, therefore or otherwise, no territorial jurisdiction to try the suits. No order as to costs.