Decided on November 23,1950

Firm Jagan Nath Kuthiala Arhti Appellant
Firm Khushi Ram Behari Lal Respondents


Kapur, J. - (1.) THIS is an appeal against an order of the learned Senior Subordinate Judge, Simla, returning the plaint for presentation to another Court. The suit was for recovery of Rs. 10,725 -6 -6 on the basis of breach of contract to supply goods ordered by the Plaintiffs and on the basis of a promise of the Defendants to refund Rs. 10,000 paid to them by the Plaintiffs and for interest. In para. 10 of the plaint, the transaction was based on three grounds: (a) that the cause of action arose at Simla where the goods were to be delivered to the Plaintiffs on payment of the balance of the price; (b) that after the Defendants repudiated the contract to supply goods to them, the relation between the Plaintiffs and Defendants became that of creditor and debtor, and under the law it was the duty of the Defendants to pay the money to the Plaintiffs at Simla; (c) that the Defendants also promised to send Rs. 10,000 to Simla.
(2.) THE learned Judge has held that the Court at Simla had no jurisdiction on the ground (1) that it had not been proved that the goods were to be delivered and paid for at Simla, (2) that the goods were "bought F.O.R." and that the freight was to be paid by the Plaintiffs and (3) that as the commission charges and freight had to be paid by the Plaintiffs and the Defendants were only commission agents no part of the cause of action arose at Simla. In appeal the first point taken by Mr. Roop Chand is that the railway receipt for the goods was to be sent to Simla and the price was also to be paid at Simla. The goods were ordered by a letter dated 16 -6 -1947 in which the Defendants were asked to purchase wheat and send it to Simla. It was stated there that a bill for the price should be drawn through a bank and that the bank charges would be paid by the Plaintiffs. In a letter dated 24 -6 -1947, P. 14, sent by the Defendants to the Plaintiffs it is stated that the railway receipt would be sent in the name of the Plaintiffs but the price should be paid in advance. In the letter P. 7 dated 21 -7 -1947 the Plaintiffs wrote to the Defendants that the goods should be sent to Simla and that they had already sent the money. In the next letter P. 17 dated the 25th July, the Defendants wrote back saying that the goods would be sent from Abbaspur and for the balance of the price of the goods a bill would be drawn. On 30th July the Defendants wrote to the Plaintiffs saying that wheat had been purchased and would be sent when its turn on the list of priority was reached, and it was also said that the despatch had been delayed as the priority was of the fourth class and things under first class permits were being despatched. Some other correspondence ensued which it is not necessary to refer to excepting the letter of 11 -8 -1947 Ex. P. 2 where the Defendants said that the goods could not be sent as the authorities had stopped export of wheat from Lyallpur that the goods would have to be sold to some mill there and that the Defendants could send the money by draft or cheque. To this the reply of the Plaintiffs was that the money should be sent by means of a draft and the permit should also be sent back. It may be pointed out here that a permit for the sending of the wheat had been sent by the Plaintiffs to the Defendants. Subsequently a Hundi was drawn for Rs. 10,000 on 19 -8 -1947, but that was never presented to the Defendants and was, therefore, never paid. On 22 -8 -1947 the Defendants wrote to the Plaintiffs that they should draw a Hundi for Rs. 10,000 on them and they could not send a draft as that would be lost in transit. The Plaintiffs went into the witness -box and said that there was an agreement that goods were to be delivered in Simla and the price was also to be paid in Simla. In cross -examination, however, he stated that the Defendants had to purchase the goods and charge commission and other expenses from the Plaintiffs. The contract was entered into by means of correspondence and there was revocation of the contract. It was also admitted by the Plaintiff in the witness -box that he was to pay the railway freight and bank commission.
(3.) IT is in these circumstances that I have to determine as to what was the nature of the contract between the parties and what was the relationship between them. The Defendants were a firm of commission agents. An order had been sent to them to purchase goods and they agreed to do so if the money was paid to them. Part of the money was paid and for the balance the Plaintiffs agreed to pay if a Hundi was drawn on them, they being responsible for bank charges. Rupees 10,000 was paid to the Defendants by the Plaintiffs by way of advance in relation to their purchasing and despatching of grain. The method of payment then was that instead of paying the whole of the amount at Lyallpur as was suggested in the letter of the Defendants dated 24 -6 -1947 (Ex. P. 14) part of the money was paid and part of the money was to be paid through a bank. In other words, instead of a man going from Simla to Lyallpur and handing over the money in cash money was paid partly in cash and partly was to be paid through a bank against Hundies drawn. This was nothing more than a method of payment. There is no direct evidence excepting the bald statement of the Plaintiff himself that the goods were to be delivered in Simla and the price was to be paid there. The course of correspondence which I have referred to above on the other hand shows that the price was to be paid in Lyallpur and the goods also were to be delivered in Lyallpur. In the same letter, Ex. P. 14 the Defendants said that the railway receipt would be sent in the name of Plaintiffs. In other words, after the goods had been purchased they would be handed over to the common carrier, the railway. The arrangement that goods were to be sent to the Plaintiffs through the railway and the railway receipt was to be in the name of the consignee was never altered at any stage. At no stage had the Defendants agreed that they would deliver the goods in Simla or received the payment in Simla. The fact that freight was to be paid by the Plaintiffs and bank commission was also to be paid by them showed that the delivery and the payment were both agreed to be made at Lyallpur. The Respondents have submitted in this Court that this was not a case of price which was to be paid against a railway receipt. The correspondence shows that this contention is well -founded.;

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