KODO MINERALS STEATITE MINE Vs. ROHTAS INDUSTRIESLTD

JUDGEMENT

(1.) This application is directed against an order of Mr. M. A. Rahman, 1st Additional Subordinate Judge of Sasaram, by which he held that the Sasaram Court had the jurisdiction to try Title Suit No. 7 of 1951 which is a suit for the recovery of Rs. 18,000.00 on account of an alleged breach of contract. The plaintiffs, Rohtas Industries Limited, are a Company incorporated under the Indian Companies Act, and they have got their head-office at Dalmianagav. The defendants have been described as Kodo Minerals Steatite Mine and Mill-owners, and they carry on their business in the Madhya Pradesh with their head-office at Katni. The plaintiffs placed order with the defendants for supply and delivery at Dalmianagar of 20 tons of soap-stone bricks and certain conditions were laid down with regard to the sale and the purchase. The case put forward by the plaintiffs was that they had advanced Rs. 5000.00 and that the agreement was that the goods would be inspected by an expert of the plaintiffs before being loaded into the wagon. The plaintiffs' engineer went to Katni Rupaund for the inspection of the soap-stone bricks which were ready for despatch at the Rupaund station on 1-3-1949, and the expert found the bricks mostly damaged and declared them unfit for use. When these facts were brought to the notice of the defendants they promised to replace the defective bricks, but in spite of the assurance given the goods were not changed and were insecuredly loaded in the wagon. There was no fresh inspection of the goods that were loaded into the wagon at Rupaund station, and when the goods reached Dalmianagar they were found to be worthless. The plaintiffs have alleged that besides the advance of Rs. 5000.00 they have paid another sum of Rs. 3000.00 to the defendants. The claim is for the recovery of Rs. 10,000.00 as compensation and Rs. 8000.00 which represents the amount of advance paid to the defendants in two instalments. (2) The defendants filed a written-statement contesting the claim on various pleas, and they also put forward the plea that the Sasaram Court had no jurisdiction to try the suit as no part of the cause of action had arisen within the jurisdiction of the Sasaram Court. The issue regarding jurisdiction was tried by the learned Subordinate Judge as a preliminary issue, and he came to the conclusion that the Court at Sasaram had the territorial jurisdiction to try the suit.

(2.) In my opinion, the conclusion arrived at by the learned Subordinate Judge is correct. According to Section 20, Civil P. C., a suit can be instituted in a Court within the local limits of whose jurisdiction the cause of action, wholly or in part, arises. As was pointed out by a Bench of this Court in -- 'Arthur Butler and Co., Ltd. v. District Board of Gaya', AIR 1947 Pat 134 (A) though, explanation III to section 20 which existed in the old Code has now been deleted, the tests which had been mentioned in that Explanation are still good tests. Explanation III was as follows : "In suits arising out of contract, the cause of action arises within the meaning of this section at any of the following places, namely: (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." According to Section 20 (c) as it stands now, suits may be instituted where the cause of action arises, wholly or in part, and the term "cause of action" is to be construed with reference rather to the substance than to the form of action. Cause of action is a bundle of essential facts which it is necessary for the plaintiff to prove before he can succeed in the suit. Jt refers entirely to the grounds set forth in the plaint as the cause of action, or, in other words, to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour. The Judicial Committee in --' Mohammad Khalil Khan v. Mahbub Ali Mian', AIR 1949 PC 78 (B) explained what "cause of action" means, & the following quotation from their Lordships' judgment would I think, be useful in this present litigation : "The cause of action means every fact which will be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment. 'Read v. Brown', (1889) 22 Q B D 128 at p. 131 (C). If the evidence to support the two claims is different, then the causes of action are also different in -- 'Brunsden v. Humphrey', (1885) 14 Q B D 141 (D). The causes of action in the two suits may be considered to be the same if in substance they are identical. '(1885) 14 Q B D 141 (D)'. The cause of action has no relation whatever to the defence that may be set up by the defendant, nor does it depend on the character of the relief prayed for by the plaintiff. It refers 'to the media upon which the plaintiff asks the Court to arrive at a conclusion in his favour'. 'Mt. Chand Kour v. Par-tab Singh', 15 ind App 156 at p. 157 (PC) (E). This observation was made by Lord Watson in a case under Section 43 of the Act of 1882 (corresponding to Order 2, Rule 2), where plaintiff made various claims in the same suit." It cannot be doubted that in a suit for damages for breach of contract the cause of action consists in the making of the contract and of its breach, and consequently such a suit may be filed at the place where the contract was made or at the p'ace where it should have been performed but for the breach which had occurred. In this case one of the agreements was that the goods would be inspected and accepted by the expert deputed by the plaintiffs before being loaded into the wagon, and the case which the plaintiffs are seeking to make out is that when an inspection was made at Rupaund station the expert deputed by the plain- tiffs found the soap stone bricks mostly damaged and patched up. According to the case stated by the plaintiffs the bricks were altogether unfit for being used in the furnace. The defendants were informed about the condition of the bricks, and on being informed they promised to replace all the defective bricks. In spite of such a promise the same worthless goods were loaded in the wagon without giving an opportunity to the plaintiffs' expert to inspect them again. When the goods arrived at Dalmianagar it was detected that the same useless bricks had been loaded and therefore the plaintiffs are justified in contending in this case that the breach of contract occurred at Dalmianagar where it was discovered that the goods required and for which there had been the contract had not really been sent to Dalmianagar. This by itself is sufficient to give the Sasaram Court the jurisdiction to try the suit.

(3.) Moreover, admittedly, an advance of Rs. 5000.00 had been made by the plaintiffs, and one of the essential conditions was that an advance of Rs. 5000.00 would be made before the work was taken up. In a letter dated 6-10-1948 which was sent by the defendants to the plaintiffs it was stated as follows :