Dixit, J. - (1.)(sic) revision petition by the Defendant arises out (sic) filed by the State of Madhya Bharat, as processor of the former Gwalior State, for the (sic) of Rs. 1,85,000/ - together with interest (sic).
(sic) Plaintiff's case was that on 27 -5 -1946 the (sic)ant borrowed from the Government of the (sic) Gwalior State Rs. 2,00,000/ - and executed (sic)note in favour of the Finance Member (sic) State or order"; that on the same date Defendant Sahani executed an agreement in of the Finance Member, Gwalior State statement he was taking a loan of Rs. 2 lacs from Gwalior State for purchasing some immovable (sic) in New Delhi and stipulating inter alia (sic) would mortgage the property to be pur(sic) him, free of any encumbrance in favour Gwalior State as security for the repayment (sic) amount of Rs. 2 lacs; that this amount be (sic) repaid by him in yearly instalments of (sic) the first instalment becoming due on 1 -1 -1948; that the loan will not carry any interest; and that in case the borrower did not execute a proper mortgage in favour of the creditor State within three months of the date of the agreement, the agreement would have no effect and the Gwalior State would be entitled to claim repayment of the loan on demand in accordance with the terms of the promissory note executed by the borrower.

The Plaintiff further stated that the Defendant Sahani did not at any time mortgage any property in favour of the Gwalior State; that after several reminders, the Defendant paid Rs. 15,000/ - to the Plaintiff on 28 -6 -1947 in part payment of the loan, and that thereafter the Defendant did not pay any amount despite repeated reminders to repay the balance of the amount of the loan due from him. The Plaintiff State averred that the loan amount was payable on demand at Gwalior and that the cause of action arose on 27 -5 -1946. On these allegations the Plaintiff claimed to recover Rs. 1,85,000/ - together with interest at the rate of Rs. 6/ - per cent, per annum from 27 -5 -1946.

(2.)ONE of the grounds on which the Defendant has contested the suit is that the Court of District Judge, Gwalior has no jurisdiction to try the suit because the Defendant resides and carries on business at Delhi and never undertook to pay the debt at Gwalior, and because the whole transaction took place at Delhi where the promissory note was executed and delivered to the Finance Member of the Gwalior State. The Additional District Judge held that as the pro -note did not specify the place where the payment was to be made, the English Common Law Rule that the debtor must seek the creditor would apply and, therefore, a part of the cause of action must be held to have arisen in Gwalior where the Plaintiff State "resided". He relied on a judgment of the Calcutta High Court in 'Tulsiman Bidi v. Abdul Latif' : AIR 1936 Cal 97 (A) and the decision of the Lahore High Court in 'Nanumal v. Firm Shibbamal Nandkishore', AIR 1939 Lah 18 (B).
The learned Judge also came to the conclusion that the Plaintiff's suit was essentially one for the recovery of the balance of the loan amount, independent of the promissory note; that the pronote was only an evidence of the loan or a collateral security; that, therefore, according to the rule that the debtor must seek the creditor the moneys were payable at Gwalior; that the burden of proving that the Court had no jurisdiction to try the suit lay on the Defendant and he had failed to prove that the payment of the loan was not made at Gwalior and that on the other hand, the evidence on record showed that the parties intended that the loan should be repaid at Gwalior. The Defendant has now come up in revision to this Court against the decision of the trial Court rejecting this objection as to the jurisdiction of the Court to try the suit.

When this petition first came up for hearing before my learned brother Chaturvedi J., it was contended on behalf of the applicant that the English Common Law rule that the debtor must find his creditor was not applicable to negotiable instruments; that even under that rule the creditor must be within the realm and that as at the time of the execution of the pro -note the Defendant resided in Delhi and the creditor in an Indian State, the Defendant was not bound to find and pay the creditor in Gwalior an Indian State. It was also urged that the Plaintiff's suit was on the basis of the promissory note and the trial Court was wrong in drawing the inference from the evidence on record that the Defendant was to pay any money at Gwalior. My learned brother thought that considering the importance of the points raised, the matter should be heard and disposed of toy a larger bench rather than by his sitting singly. Accordingly this Bench has been constituted by my Lord the Chief Justice for the hearing of this petition.

(3.)IT is common ground that the promissory note in suit was executed and delivered at Delhi And that it does not specify the place where it is payable. The main question raised by this revision petition is whether the Common Law rule that a debtor must seek his creditor is applicable in the case of a promissory note payable on demand.
Before expressing any opinion on this question, it is essential in the present case to reach a conclusion on the subsidiary point whether the Plaintiff's suit is on the basis of the promissory note or on the original consideration. Mr. Mehtab Singh learned Counsel for the applicant argued that the Plaintiff's suit was on the promissory note itself.

He pointed out that under Clause 4 of the agreement dated 27 -5 -1946, on the failure of the Defendant to execute a mortgage, the creditor was only entitled to "claim repayment of the loan on demand in accordance with the terms of the promissory note" and that, therefore, the Plaintiff could only sue on the promissory note; that according to the agreement no interest was payable on the loan amount but in the notice dated 19 -7 -1949 which was given to the Defendant by the Advocate -General of the State, the Defendant was called upon to repay the amount due from him with interest at the rate of Rs. 6/ - per cent, per annum "as chargeable on the promissory note"; that no rate of interest has been specified in the promissory note but in the plaint the Plaintiff has calculated interest at the same rate which has been provided by Section 80 of the Negotiable Instruments Act, 1881, in cases where no rate of interest is mentioned in the instrument, and that in para. 11 of the plaint the Plaintiff has given the date of the promissory note as the date on which the cause of action arose and not the date on which according to the agreement dated 27 -5 -1946, the Plaintiff became entitled to recover the amount of the loan on the default of the borrower to execute a mortgage in favour of the creditor. Learned Counsel for the applicant said that these circumstances indicated that it is on the promissory note only that the Plaintiff has based the suit.

The argument in reply of the learned Advocate -General was that the liability on the promissory note was secondary; that on the breach of the agreement dated 27 -5 -1946 the creditor could sue on the original consideration and that the circumstances pointed out by the learned Counsel for the applicant were by no means conclusive of the fact that the Plaintiff's suit was on the basis of the promissory note.

4a. In my opinion the finding of the trial Court that the Plaintiff's suit is on the original consideration and not on the promissory note is not correct. The learned trial Judge has not given any reason whatsoever in support of this conclusion. On a perusal of the plaint and the statements made in the trial Court on behalf of the Plaintiff, there can be no doubt that the suit as framed, is founded on the promissory note itself.

If, as is now contended on behalf of the Plaintiff, the suit had been on the consideration which gave rise to the promissory note, then one would have found in the plaint the terms of the contract of the loan. But the Plaintiff has not stated those terms in the plaint, which begins with a reference to the promissory note. No doubt, it has alleged in para. 3 of the plaint that according the agreement dated 27 -5 -46 the Finance Member of the Gwalior State was given the right to (sic) repayment of the loan on demand, in case (SIC) borrower defaulted in executing a mortgage wi(sic) the stipulated period of three months. But, in view, the right which was given by the argument was of recovering the loan amount "in(sic)cordance with the terms of the promissory (sic) and not of recovering the original consider independent of the promissory note.

Even assuming that under the agreement Plaintiff became entitled to sue on the original consideration when the Defendant applicant (sic) to execute the stipulated mortgage, the cause action for such a claim could arise only on expiry of the period of three months from date of the agreement. But the Plaintiff has where said in the plaint that the cause of act for the suit arose on the default of the applied to execute a mortgage within the agreed of three months from 27 -5 -1946. On the (sic) hand, it has been alleged that the cause of act arose on 27 -5 -1946. This is clearly the date which the promissory note was executed and (sic)vered to the Plaintiff. The agreement to month was also no doubt executed on 27 -5 -1946. But date of this agreement in no way furnishes cause of action for the suit and it is not the (sic) of the Plaintiff that it does.

Again it has not been made clear in plaint whether the interest claimed is original ground of any agreement or on the basis of (sic) or on the ground of usage. These circumstances when taken into consideration with the (sic) in the notice dated 19 -7 -1949 calling upon the applicant to repay the amount due from him with interest at Rs. 6/ - per cent. per annum as "chartable on the promissory note executed by him mistakably point to the conclusion that the (sic) of action as alleged is the promissory note (sic) In fact in the lower Court it was never the (sic) of the Plaintiff that the suit was on the oris(sic) consideration.

This is clear from an application which Deputy Government Advocate made the in Court on 6 -4 -1951. In this application the Plaintiff stated that the Defendant had not given a(sic) and categorical reply as regards the promissory note dated 27 -5 -1946 on which the suit was and that, therefore, the Defendant be exa(sic) orally and called upon to state whether he added or denied the execution of the pro -note this application the Plaintiff also requester Court to frame an issue with regard to in saying that inasmuch as the document (sic) was a negotiable instrument, therefore, under Negotiable Instruments Act the Plaintiff was added to get interest on the amount due in promissory note. In my opinion, in the fact these statements made on behalf of the place in the trial Court, he cannot now be allows that he is suing on the original consideration not on the promissory note. The content the learned Counsel for the applicant Plaintiff's suit is on the promissory note must, in my opinion, be accepted.

;