Find a Lawyer

Civil Revision No. 294 of 1961, decided on 2nd February 1967.

S. 20 (c)‑(Place of suing) (Suit for middleman's commission)‑Evidence not showing where contract was entered into‑No place of payment stipulated --Forum for suit may be determined by Common Law rule, viz. debtor must seek out his creditor‑Rule applicable in Pakistan‑Exemptions to application of rule.

Where there was nothing in the evidence with the help of which the place where the contract was entered into could be determined and no place of payment had been stipulated in regard to the commission earned by the plaintiff for the supply of coal to the defendant from Government collieries:

Held that the rule of Comman Law that the debtor must seek the creditor and pay him where he is, was applicable to all contracts, barring, of course, negotiable instruments, unless the terms of the contract themselves explicitly or by implication provide to the contrary or the creditor lives or is residing outside the realm. This being the rule it was for the defendant to have proved that his case fell under an exception.

The rule requires that in the absence of contract to the contrary a debtor is, bound to seek his creditor and to pay him where he is. This rule is applicable in Pakistan.

Mst. Fazlan Bibi v. Muhammad Azam P L D 1952 Lah. 227; Sh. Imam Ali v. Ch. Muhammad Shafi P L D 1956 Lah. 341, Rein v. Stein (1892) 1 Q B 753 and Fowler v. Midland Electric Corporation (19)" 1 Ch. 656 ref.

Mian Fazle Elahi for Petitioner.

H. A.Taib for Respondent.

Date of hearing: 11th January 1967.

The plaintiff applicant filed a suit for the recovery of Rs. 626‑7‑0 in the Court of the Senior Civil Judge, Lahore, against the defendant‑respondent. It was alleged in the plaint that the plaintiff was engaged in the trade of coal as a middleman between the purchasers and the owners of collieries. Coal was supplied on the basis of permits granted by the Government to intending purchasers. Permit No. 622 dated the 19th of June 1951 was granted to the respondent authorising him to purchase coal from the Government Mines Sharigh (Baluchistan) through the plaintiff. The former booked an order for 18 Tons and 14 Cwt. of coal for the latter at the rate of Rs. 32 per ton. It was alleged that the entire quantity of coal was supplied to and received by the respondent at Lyallpur.

2. The plaint went on to assert that the plaintiff was entitled to a commission of Rs. 28‑0‑6 at the rate of Rs. 1‑8‑0 per ton according to the rate fixed by the Government. It was alleged that the plaintiff had paid the entire sum of Rs. 598‑6‑6 to the Government and was, therefore, entitled to realise a sum of Rs. 598‑6‑6‑h Rs. 28‑0‑6=Rs. 626‑7‑0 from the defendant.

3. The suit was contested on various grounds by the defendant including the plea of lack of territorial jurisdiction.

4. The learned Civil Judge framed the following issues:

(1) Whether the Civil Courts at Lahore have the jurisdiction to try the suit

(2) Whether the plaintiff is entitled to recover the sum of Rs. 626‑7‑0 from the defendant as the price of coal and commission charges in respect of permit No. 622, dated 19‑6‑57

(3) Relief.

5. Since he found issue No. 1 against the plaintiff he found it unnecessary to give his findings on the second issue. As a result he ordered on the 19th of March 1960 that the plaint be returned for presentation to the proper Court.

6. An appeal against it met with no different fate at the hands of the learned District Judge.

Hence this Revision application.,

7. The sole question on which arguments were addressed before me is whether the cause of section or a part of it had arisen at Lahore so as to confer jurisdiction on the Civil Courts here to entertain and try the suit out of which this revision has arisen.

8. There is nothing in the evidence with the help of which the place where the contract was entered' into could be deter mined. The location where the contract was executed can, therefore, not furnish the situs of the forum in the present case.

9. The next criterion could have been the place where the contract was to be performed. There no doubt that the coal was to be delivered at Lyalipur as has been alleged in the plaint. The place of delivery of the goods sold would not clothe the Lahore Courts with jurisdiction. Over the present suit as it is restricted to recovery of the price.

10. No place of payment has been proved to have been stipulated at the time of contract.

11. Now, therefore, the only basis for finding out whether the Lahore Court can try the suit is to determine if in the circumstances of the present case the plaintiff was entitled to receive the commission and price of the coal from the defendant at Lahore.

12. The rule of Common Law requires that in the absence of contract to the contrary a debtor is bound to seek his creditor and to pay him where he is. The fact that this rule is applicable to Pakistan also is borne out by more than one decision of superior Courts of this Sub‑continent including the Privy Council. It was applied by S. A. Rehman, J. (as he then was in Mst. Fazlan Bibi v. Muhammad Azam (P L D 1952 Lab. 227) which arose out of a suit for dissolution of marriage on the ground of non‑maintenance. The suit had been filed by the wife at a place other than that where the defendant resided and where the marriage took place. It was held by his Lordship that the rule of English Law was attracted to the facts of the case and the Courts within the jurisdiction of which the plaintiff resided could entertain and dispose of a suit like the one out of which that appeal had arisen.

13. In still another case Sh. Imam Ali v. Ch. Muhammad Shafi (P L D 1956 Lab. 341), B. Z. Kaikaus, J. (as he then was) observed --

"This is how acceptance of the rule grants jurisdiction to the Civil Courts to entertain a suit at the place where the creditor resides. As regards the extent to which the rule is to be accepted, I may state that it is really a matter of inference as to intention of parties or as to the necessary implication of an agreement to pay. As their Lordship of the Privy Council have explained in Soniram Jeetmull v. Tata & Co. if a person says he will pay money to another, it will ordinarily mean that he would pay where the latter is. However, the circumstances of a particular case may negative any such intention or implication, and the rule is not one of universal application."

14. The learned District Judge also referred to this rule and was misled by the last observation that it was not "a rule of universal application". By making the aforesaid observation, the learned Judge, who decided Sh. Imam Ali v. Ch. Muhammad Shafi, only meant that the application of the rule could be ousted if there was a contract to the contrary or if the contract was such as could not admit of its application. In fact, in the very next paragraph by observing that‑

"In the present case there are no special circumstances for departing from the rule except the fact that the document sued upon is a negotiable instruments,"

his Lordship made the aforesaid observation very clear. In other words, the rule is applicable unless there are special circumstances for departing from it.

15. The learned District Judge fell in error when he con strued the observation referred to above to support an entirely contrary conclusion.

16. This rule of Common Law was referred to by Lord Justice Kay in the judgment of the Court of Appeal in Rein v. Stein ((1892) 1 Q B 753), thus‑

"Prima facie in commercial transactions, when cash is to be paid by one person to another, that means it is to be paid at the place where the person who is to receive the money resides or carries on business."

Similarly, in Fowler v. Midland Electric Corporation ((1917) 1 Ch. 656 at p. 661) Lord Justice Warrington expressed himself as follows:

"Their only answer is that there is something peculiar about the contract between them and the debenture holder which renders it incumbent on the Court to hold that the ordinary common law rule as to the duty of the debtor to find out his creditor and pay him is not to apply. I altogether repudiate any such suggestion. The covenant is an ordinary convenant to pay, and, unless it contains some special provisions "in terms excluding the Common Law obligation as between debtor and creditor, I do not think the Court ought to recognize any such exclusion or to countenance the idea for a moment that there should be such an exclusion of the common law right."

The same rule has been amplified and enunciated by Chitty in his classic on Contracts, Twentieth Edition, at page 189. While dealing with the mode of performance of contracts he has stated that‑

"the rule of law is that the person who is to be discharged from his liability upon a contract by the performance of a certain act is impliedly bound to do or cause to be done the act which is to discharge him. Thus, if a party has to pay a sum of money, a mere readiness to pay is insufficient, but in order to exonerate himself from liability he is bound to go to the party who is entitled to receive the money and to pay or tender the same to him, unless he has deliberately absented himself."

17. The rule of Common Law that the debtor must seek the creditor and pay him where he is, is applicable to all contracts, barring, of course, negotiable instruments, unless the terms "of the contract itself explicitly or by implication provide to the contrary or the creditor lives or is residing outside the realm. This being the rule it was for the respondent to have proved that his case fell under an exception. There is nothing on the record which could justify the exclusion of the rule on the facts of the present case.

18. I, therefore, accept this Revision, set aside the impugned order and remand the case to the trial Court for proceeding with it and determining the other issues in accordance with law. The costs of this revision shall be costs in the cause.

A. H. Petition accepted.

Find a Lawyer Near You

Dealing with a matter like this? Connect with a verified advocate in your city — free on SJP Lawyers Directory.