BANK OF INDIA, LTD Vs. RUSTOM FAKIRJI COWASJEE
LAWS(BOM)-1954-7-20
HIGH COURT OF BOMBAY
Decided on July 05,1954

Bank Of India, Ltd Appellant
VERSUS
Rustom Fakirji Cowasjee Respondents


Referred Judgements :-

HUNOOMANPERSAUD PANDAY V. MUSSUMAT BABOOEE M. KOONWEREE [REFERRED TO]
RYAKUMAR NARAYAN RAMGOPAL SINGH V. RAM DUTT CHOWDHRY [REFERRED TO]
PUBLIC WORKS COMMSISSIONER V. HOULDER BROTHERS AND CO.,LIMITED [REFERRED TO]
NAJIBULLA MULLA V. NUSIR MISTRY [REFERRED TO]
KISHAN LAL V. GANGA BAM [REFERRED TO]
MEENAKSHI GINNING AND PRESSING CO. V. MYLE SREERAMULU NAIDU [REFERRED TO]
MANOHAR LAL V. RATAN LAL [REFERRED TO]
NATHAN LAL V. DURGA DAS [REFERRED TO]
JANARDHAN V. ANANT [REFERRED TO]
DAU BHAIROPRASAD V. JUGAL PRASAD [REFERRED TO]
GANGA PRASAD V. RATANCHARID [REFERRED TO]
NARAIN BASS V. MURLI DHAR [REFERRED TO]
JAWAHIR MAL V. INDOMATI [REFERRED TO]
MOHD. HAYAT KHAN V. KHAIR DIN [REFERRED TO]
SUBRAMANIAN V. BATCHA ROWLHER [REFERRED TO]
FIRM MUNI LAL V. KALATN SINGH [REFERRED TO]
RANGAMPUDI MALLIAH VS. MUTTA VENKATESWARLU [REFERRED TO]
MOHINI DEBI VS. PURNA SASHI GUPTA [REFERRED TO]



Cited Judgements :-

M/S KASHYAP'S VS. BATA INDIA LTD. [LAWS(DLH)-2013-7-73] [REFERRED TO]
RADHA THIAGARAJAN VS. SOUTH INDIAN BANK LTD [LAWS(KER)-1984-12-23] [REFERRED TO]
UNION OF INDIA VS. NARAYAN CHANDRA CHAKRABORTY [LAWS(CAL)-1981-9-38] [REFERRED TO]
R . ARUMUGASAMY MANAGING DIRECTOR VS. THE AUTHORISED OFFICER UNITED BANK OF INDIA [LAWS(MAD)-2017-4-183] [REFERRED TO]
V. RANGAREDDY (DIED) AND RAGHAVAMMA VS. RAGHUNATMAL BANK LTD. [LAWS(APH)-1959-4-44] [REFERRED TO]


JUDGEMENT

DESAI J. - (1.)HIS Lordship, after stating the facts and the contentions of the parties, proceeded.] A number of issues were raised on behalf of the defendant. Although none of them have been given up, it is clear that the case of estoppel pleaded in the original written statement has lost its importance since the defendant has not been examined and there is no evidence on which that plea can be seriously supported. The principal questions that arise for my determination are those relating to jurisdiction, consequences of non -presentment of the promissory note for payment and the question whether the defendant has been discharged from his liability as guarantor by any act or omission or conduct of the plaintiffs bank.
(2.)IT was argued that a part of the plaintiffs' cause of action in this suit arose out side the jurisdiction of this Court, and since no leave had been obtained under Clause XII of the Letters Patent for filing this suit, this Court has no jurisdiction to entertain and try this suit. It was stressed that the promissory note and the continuity letter were signed by the defendant, not in Bombay but at Delhi, and that fact constituted a part of the cause of action of the plaintiffs bank. This argument was on the assumption that the suit was founded simply on these two documents and was a suit to hold the defendant liable simply as the maker of the promissory note. Now, as I have already observed, the suit is to enforce a claim against the defendant as a surety. The contract of guarantee -which is always a tripartite agreement -took place when along with the airline company's letter of June 5, 1947, a copy of the resolution, the promissory note, and the continuity letter were handed over to the plaintiffs bank. This was in Bombay. Moreover, all these documents purport to have been executed or made in Bombay. This is not a suit on a promissory note simpliciter. The position, in my opinion, is different in a transaction of guarantee. I a promissory note and a continuity letter are given as security by way of guarantee for repayment of a loan to a third party as part of the tripartite agreement, the contract of guarantee takes place where the guarantor gives his promise to perform the obligation or discharge the liability of the third person in case a default is made. The question that the Court puts to itself in such a case is : Where did the defendant (guarantor) agree with the plaintiff (creditor) to perform the promise or discharge the liability of the third party (principal debtor)? On the evidence before me it is clear that the defendant handed over the promissory note to Vijay singh Govindji at Delhi and constituted him his agent to hand over the promissory note and the continuity letter to the airline company who after endorsing these documents handed over the same to the plaintiffs bank in Bombay. Therefore, in any view of the matter, the defendant's promise of guarantee to the plaintiffs bank to discharge the liability of the airline company was made in Bombay and not at Delhi. It is the place where this promise was made that can be said to be the place where that part of the plaintiffs' cause of action arose. So much for the place where the promise of guarantee was made. Indisputably the place of performance of the entire contract was Bombay. For all these reasons I am unable to accept the contention that a part of the plaintiffs' cause of action in suit had arisen outside the jurisdiction of this Court.
Learned counsel for the plaintiffs bank has argued the question of jurisdiction from a different aspect of the case; presumably because he wanted to urge the plaintiffs' case on the footing of the contract of guarantee and also alternatively on the footing that the suit was not against a surety but on a negotiable instrument by an endorsee of the promissory note against the maker of the instrument. The argument was that the defendant had signed the promissory note and the continuity letter knowing that they purported on the face of them to have been executed in Bombay. It was submitted that it was open to the parties to date a promissory note at a place different from that at which it is actually made, if, for any purpose of theirs, they consider it necessary to do so. In support of this argument reliance was placed on a decision of the Madras High Court in Meenakshi Ginning and Pressing Co. v. Myle Sreeramulu Naidu I.L.R (1904) Mad. 19. In that case a promissory note drawn on behalf of the company was signed by the secretaries and treasurers and dated at Bellary, The note was then sent to Tirumanglam where the agents of the company countersigned it and affixed the seal of the company on the promissory note. From that place it was sent by post to the Official Assignee who received it in Madras. In a suit brought to recover the amount of the promissory note in the Court at Bellary the plea was taken on behalf of the defendants that the promissory note had in fact been made not at Bellary but at Tirumanglam and that no part of the cause of action had arisen in Bellary. In rejecting this plea it was observed by Sir Subramaniam Iyer Offg. CJ. (p. 21):.nor are the parties precluded from dating the note at a place different from that at winch it is actually made, if for any purpose of theirs, they consider it necessary to do so. Where, therefore, a negotiable note, as in, the present instance, is dated with reference to a specified place and the justice of the case does not necessitate a different conclusion, the parties should be presumed to have agreed to that place being taken to be the place of the contract.

(3.)REFERENCE was made in the judgment to an earlier decision of the same Court where a similar view had been expressed. Reference was also made in the judgment of the learned Chief Justice to two other decisions as supporting the principle that 'a contract is binding on the promisor in the sense in which he intended, at the time of making it, that it should be received by the promises.' It was argued by Mr. Kolah on behalf of the defendant that the Madras decision only lays down that when a promissory note purports to have been made at a particular place only a presumption arises that it was made at that place, which presumption it was said can be rebutted by evidence showing that it was in fact made at some other place. I do not agree that this is the ratio decidendi of the Madras decision. The decision goes much further than that and lays down the proposition that a contract is binding on the promisor in the sense in which he intended at the time of making it that it should be received by the promises. I am in respectful agreement with this view expressed by Sir Subramaniam Iyer. I do not, however, intend to be understood to say that it is open to the parties to a contract, which is being executed by both of them in one place, to say that the contract shall be deemed to have been made in some other place; for that may well have the effect of an attempt to confer jurisdiction on some other Court which it otherwise would not have. But no such question arises in the present case. So, even if this is to be regarded as a case in which the cause of action was the promissory note, the whole cause of action was in Bombay and the plea of absence of jurisdiction must fail.


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