- (1.)FACTS . -Premchand Roychand and Sons (plaintiffs) were share -brokers and members of the Native Share and Stock Brokers' Association in Bombay. One Moti Lall (defendant) was a share -broker in Delhi. There were communications between the plaintiffs and the defendant beginning from 6 -9 -1946, in regard to the purchase by the defendant of 110 shares and they culminated in an agreement for sale by the plaintiffs to the defendant of 110 shares at the rate of Rs. 310 per share on 4 -10 -1946. The transfer books of the company were to be closed on 17 -10 -1946, and the defendant was obviously desirous that the shares purchased by him should be transferred to the names of his purchasers before the transfer books were thus closed, so that there would be no difficulty in the matter of the purchasers acquiring the bonus shares which were about to be issued by the company. He therefore addressed on 4 -10 -1946, a letter to the plaintiffs asking them to send the share certificates and the transfer forma immediately to him to enable his purchasers to get the shares transferred to their several names by the 15th idem. He stated that in that event he would be retiring the draft drawn by the plaintiffs against the shares promptly. He proceeded to state however that if those shares were not delivered to him in time, his purchasers would accept delivery of the same along with the bonus shares. The plaintiffs replied on 8 -10 -1946, intimating to the defendant that he should arrange to have the shares transferred to his purchasers' names before the closing of the transfer books of the company so that there would be no question of refunding the dividend and delivering the bonus shares to the purchasers in case of non -registration of the shares in time. The plaintiffs had sold these shares to the defendant as if they were their own shares though in fact they were shares belonging to Sir Kikabhai Premchand Trust Funds. These shares were deposited for safe custody with the Bank of India, Ltd., and on 8 -10 -1946, the plaintiffs sent instructions to the Bank of India, Ltd., to hand over these shares to the National Bank of India, Ltd., through whom they drew a draft on the defendant for the price thereof. The National Bank of India, Ltd., drew the relative draft on 10 -10 -1946, and these shares did not reach Delhi till about 14 -10 -1946, with the result that the defendant found it difficult to have the shares transferred to the names of his purchasers before the transfer books of the company were closed and to retire the draft which had been drawn by the plaintiffs on him for the price thereof. Communications were exchanged between the plaintiffs and the defendant in the course of which the plaintiffs insisted upon the defendant taking delivery of the shares and retiring the draft immediately. The defendant, however, kept on suggesting to the plaintiffs that the plaintiffs should draw upon him a draft for the price of the shares after receipt of the bonus shares and his purchasers would in that event accept delivery of both the main and the bonus shares and he would arrange to retire the draft. The plaintiffs, however, would have nothing to do with that suggestion and the only thing which they had to say in their communications dated 17 -10 -1946, and 18 -10 -1946, was that the draft which they had drawn against the defendant should be retired immediately, that they would send the bonus shares and the dividend on receipt thereof from the company, and that if the draft was not retired, they would sell the shares at the best rate available in the market. The same position was reiterated on 21 -10 -1946, also. The plaintiffs, however, on the same day made an alternative suggestion to the defendant that if the defendant was not agreeable to adopt that course the plaintiffs would ask the bank to return the draft and draw again when the bonus shares were ready, but that they would charge the defendant interest at the rate of 6 per cent. till delivery was taken by him. This was the stand taken up by them consistently throughout the correspondence which followed. Their letter dated 21 -11 -1946, also reiterated their demand for interest in the said alternative event, and as a matter of fact in the statement of account which they furnished to the defendant along with their attorneys' letter dated 19 -5 -1947, they in fact included interest at 6 per cent. per annum on the price of these shares from 15 -10 -1946, up to 15 -5 -1947. The defendant did not send any reply to the communication which had been addressed by the plaintiffs to him on 21 -10 -1946, but persisted in the attitude which he had taken up that it would only be on the receipt of the main shares and the bonus shares by him that he would retire the draft which the plaintiffs were to draw upon him for the price thereof. These were the respective stands taken up by both the parties from and after 21 -10 -1946. The communications which were exchanged between the parties in November 1946, December 1946 and the later dates did not make any difference to the position. Even though the plaintiffs in November 1946 and December 1946 stated that they would draw upon the defendant for the full price of the shares as against the main shares and the bonus shares which would be delivered by them after the bonus shares were received, they really meant to include in the full price the interest at 6 per cent. which they had intimated earlier they would charge the defendant. As a matter of fact the defendant protested against the plaintiffs claiming interest in this manner in his letter dated 10 -12 -1946, where he stated:
"but I do not know why you are so bent and insist to demand full coat for half shares or draw for such shares along with right shares when received from the company and demand any interest from me;"
In the correspondence that followed the plaintiffs sat on the fence, did not refer to this notice of the defendant in the matter of the interest which they sought to charge and simply reiterated that they would draw upon the defendant for the full cost after the bonus shares were received and they sent the main shares and the bonus shares for the purpose of delivery to him. This was the considered attitude of the plaintiffs in the matter of the alternative suggestion which had been made by the defendant that if the shares were not delivered to him in time to enable his purchasers to have the same transferred to their names in the company's books, the main shares as well as the bonus shares should be sent by the plaintiffs to him after the bonus shares were received. The further communications between the parties did not bring about any satisfactory result and the plaintiffs after notice given to the defendant in that behalf sold these 220 shares consisting of the 110 main shares and 110 bonus shares on 14 -6 -1947. This resale of the 220 shares resulted in a deficit and the plaintiffs sought to recover the amount of this deficit from the defendant by filing the present suit against him. [His Lordship, after stating facts, proceeded:] Before I proceed to discuss the merits of the case, I shall first deal with what could have been urged as a preliminary objection or could have been asked to be tried as a preliminary issue, viz., whether this Court has jurisdiction to entertain this suit The contention of the defendant in this behalf has been that he was residing in and carrying on business in Delhi that the contract was made by the acceptance by him of the offer of the plaintiffs in Delhi, that the performance of the contract was to be made and was in fact offered by the plaintiffs to him in Delhi, that the breach of the contract, if any, took place in Delhi and that therefore the whole cause of action having arisen in Delhi, this Court has no jurisdiction to try this suit in spite of the leave under Clause 12, Letters Patent having been granted. It is clear on the correspondence which has been put in before me that the offer to sell the 110 shares, though communicated by the plaintiffs by their telegram dated 3 -10 -1946, was received by the defendant in Delhi and he accepted the said offer by his telegram dated 4 -10 -1946, in Delhi. There is also no doubt that the performance of the contract offered by the plaintiffs to the defendant at Delhi by sending the share certificates together with the relative transfer forms and also the draft to the defendant was in Delhi. The breach, if any, by the defendant also took place in Delhi, because he refused to retire the draft in Delhi. Nothing further happened and there was no question of any part of the cause of action having arisen in Bombay.
(2.)COUNSEL for the plaintiffs, however, argued that this was a case not under the Civil Procedure Code, but under clause 12, Letters Patent, and what the Court had got to consider was not where the contract was made but whether a part of the cause of action had in fact arisen in Bombay. He contended that even though ordinarily a contract could be said to have been made in the place where the offer was accepted, there was a difference which obtained when you came to consider whether a part of the cause of action in a suit on contract did arise within jurisdiction. He relied upon the observations of Fulton J., in Dobson and Barlow v. Bengal Spinning and Weaving Co., 21 Bom. 126 where the learned Judge observed (p. 134):
"But if the making of the contract be part of the cause of action, it appears to follow that the act of concurrence of either party which is essential to the contract is itself a part of the cause of action, for without such act of concurrence the contract cannot come into existence."
Relying upon these observations he contended that the offer which was an act of concurrence on the part of the plaintiffs and without which the contract could not have been made in Delhi by the acceptance by the defendant there, had certainly been sent by the plaintiffs from Bombay, and that, therefore, a part of the cause of action had certainly arisen within jurisdiction. This being a decision of a Judge of co -ordinate jurisdiction, I would have been bound to follow the same provided, however, that it considered the various aspects of the question and was really a decision on the point which is at issue before me. It is well -known that the general observations which are to be found in the various authorities have got to be construed with reference to the facts and circumstances of the cases in which they have been made. The case before Fulton J., was a case where the agreement which was the subject -matter of the suit was signed in Bombay by the party whose act of concurrence was considered by the learned Judge as investing this Court with jurisdiction. In such a case there could not be the slightest doubt that whether the matter was looked at from the point of view of the cause of action having arisen within jurisdiction or from the point of view of the contract being made within jurisdiction there was not the slightest difficulty on the point. These remarks of Fulton J., therefore should be understood as having regard to the facts and circumstances of the particular case, and I am quite sure that the learned Judge there did not intend to make any general observations of the nature which have been relied upon by counsel for the plaintiffs. As a matter of fact this decision of Fulton J., was delivered in 1896 and there have been later authorities both in England and India which are contrary to the position enunciated so broadly by Fulton J., in that judgment. In Clarke Brothers v Knowles, (1918) 1 K. B. 128 (87 l. J. K. B. 189) it was held by Lush J. that where a contract was made by offer and acceptance sent through the post between parties residing in different county Court districts, the posting of the offer is not part of the cause of action within the meaning of the section, the words in Section 74 County Courts Act, 1888, being that every action or matter might be commenced by leave of the Judge or Registrar in the Court in the district of which the cause of action or claim wholly or in part arose. Lawrence J. observed at p. 132 (in the same case):
"It was contended by the defendant that the posting of the offer did not constitute part of the cause of action, and that the registrar ought not to have granted the leave asked for. I agree that the posting of the offer was no part of the cause of action. The making of an offer is part of the cause of action, but an offer is made where it is received, and that in this case was at Croydon. I think, therefore, that there was no jurisdiction in the West Hartlepool County Court to deal with the case."

The case in Dobson and Barlow v. Bengal Spinning and Weaving Co., 21 Bom 126 was followed by the Calcutta High Court in Engineering Supplies Ltd. v. Dhandhania and Co., 58 Cal. 539 : (a. I. R. (18) 1931 Cal. 659). That was a decision of the appeal Court at Calcutta consisting of Rankin C. J. and C. C. Ghose J. and the learned Chief Justice there observed (p. 546):

"We have to ask ourselves whether something, which the plaintiff is obliged to prove as a fact in order that his case may succeed, is a thing which took place within Calcutta. If it is, it seems to me to be no answer to say that what took place in Calcutta was not by itself a contract and it seems to me to be wrong to introduce notions, which depend upon the view that a contract, which was In fact made by people at different places, was made in the place where the last assent was given. Strictly a contract is not a fact but an obligation which may result from a series of facts."
Then the learned Chief Justice proceeded to rely upon the observations of Fulton J. in Dobson and Barlow's case, (21 Bom. 126) and agreed with the same. This decision, however, has not been followed by various High Courts in India. In Ahmad Bux v. Fazal Karim i. l. R. (1940) Mad. 195 : (a. I. R. (27) 1940 Mad. 49) Ratan Lal v. Harcharan Lal, i. l. R. (1947) all. 44 : (a. I. R. (34) 1947 all. 337) and Pokhar Mal v. Khanewal Oil Mills, a. I. R. (32) 1945 Lah. 260 : (221 I. C. 594), Engineering Supplies Ltd.'s case, (58 Cal. 539 a. i. R. (18) 1931 Cal. 659), was specifically referred to and was not followed. The ratio which was adopted in these judgments was the same as I have enunciated astaken from Clarke Brothers' case, (1918 -1 K. B. 128 : 87 l. J. K. B. 189). Pokhar Mal v. Khanewal Oil Mills, (A. i. R. (32) 1945 Lal 260 : 221 I. C. 594), also reiterated the same principle and there is no doubt in my mind that the true principle is that even though an offer may have emanated from a place within jurisdiction, it cannot be said to have been made until that offer has been received by the party to whom it has been made. If the party to whom the offer is thus communicated resides or carries on business outside jurisdiction, the offer cannot be said to have been made within jurisdiction. In my opinion, therefore, it cannot be stated that even though the offer in this case had been communicated by telegram by the plaintiffs from Bombay to the defendant in Delhi it can be said to have been made in Bombay, and it cannot be stated that therefore any part of the cause of action has arisen within jurisdiction. An attempt was further made by counsel for the plaintiffs to rely upon the decision of Patanjali Sastri J. in In re Perianna Mudali, a. i. R. (29) 1942 Mad. 31: (43 Cr. L. J. 361). It was, however, pointed out by counsel for the defendant that this case was overruled by a decision of the Madras High Court in Manilal v. Venkatachalapathy, i. l. R. (1944) Mad. 95 : (a. i. R. (30) 1943 Mad. 471).
(3.)I have therefore come to the conclusion that no part of the cause of action arose in Bombay, and even with leave under Clause 12, Letters Patent, which the plaintiffs obtained from this Court this Court has no jurisdiction to entertain this suit against the defendant, the defendant having all along resided and carried on business in Delhi, the contract having been made in Delhi by reason of the acceptance of the offer by his telegram dated 4 -10 -1946, in Delhi, and the breach thereof as I will state hereafter having also taken place in Delhi. The fact that the plaintiffs attempted to sell and did sell these shares in Bombay on 14 -6 -1947, is a matter of no consequence The resale also was as I will state hereafter not binding on the defendant and it would not afford to the plaintiffs any cause of action which they could ventilate against the defendant in this Court. [The rest of the judgment is not material for purposes of reporting - Ed.] Appeal dismissed.