Full Judgment
Tudball and Piggott, JJ.
1. The plaintiffs appellants are residents of Hathras in the Aligarh district where they deal in grain. The defendant is a commission agent doing business at Karachi. The former brought the present suit in the court of the Munsif at Hathras (it was subsequently transferred to the court of the Additional Munsif of Aligarh; on the following allegation of fact:--In the end of December, 1910, grain being very dear at Hathras, they inquired by telegram from the defendant the price at which juar was selling at Karachi. The defendant wired the rate on the 27th of December, 1910. On the 30th, December, 1910, they wired to him an order to purchase two waggon loads of juar at once and to despatch the same by rail to Hathras, They wired to him on the same day Rs. 600, and also sent him a hundi for Rs.
600. On the same date the defendant wired to say that he had purchased 500 maunds of juar. On the 2nd of January. 1911, the defendant wired to say that the goods had been despatched. They actually arrived at Hathras on the 12th of January. After receipt of the telegram of the 2nd of January the plaintiffs wrote to the defendant telling him to send the railway receipt and invoice to them by value payable post for the amount which might still be due to him. He, however, failed to send the railway receipt, but on the 16th of January he sent a post-card stating that he had sent it .P.P. for Rs. 310-7-0, and that they should pay this amount and take the receipt. No receipt arrived. (Here we may note that it had been duly sent V.P.P., but owing to some error either in the address or on the part of the post office had not been delivered.) Correspondence followed. The defendant ordered the railway authorities not to deliver the goods. (He had not then received payment of the balance due.) On the 25th of January the plaintiffs paid the amount to the defendant by handing it over to an agent of his at Delhi. The Railway officials at Hathras refused to deliver without the defendant's consent and further delay occurred and the goods were not delivered until February 8th. In the meantime the price of the grain at Hathras fell and the speculation resulted in a loss to the plaintiffs. This loss they ascribe to defendant's negligence and misconduct in
(1) not sending the railway receipt as ordered,
(2) in ordering the railway authorities at Karachi not to deliver the goods,
(3) in still delaying to order the delivery after the payment made on the 25th of January to his agent at Delhi.
2. Among other defences with which we have no concern, the defendant pleaded that the court at Aligarh had no jurisdiction to try the .suit. The first court held that it had and partly. decreed the claim. The lower appellate court held that the courts in Hathras had no jurisdiction and ordered the plaint to be returned for presentation in the proper court. Hence the present appeal.
3. The sole question for decision is, whether the cause of action in whole or an part arose at Hathras, vide Section 22(c) of the Code of Civil Procedure, which applies to the facts of the present case. The case is clearly one for compensation under Section 212 of the Contract Act in respect of the direct consequences of the defendants' neglect and misconduct as alleged. The latter was the appellants' agent, and it was his duty to purchase the grain at Karachi, to place it on the railway at Karachi, and despatch it to the plaintiff's address, and he was then directed to post the railway receipt and send it V.P.P. to the plaintiffs. When the trouble arose, it will be seen from the correspondence detailed in the first court's judgment that he ordered the railway authorities at Karachi not to deliver the goods as he had not received payment. Finally, after the money had been paid on the 25th of January, he was asked by letter to order the said railway, authority at Karachi to wire instructions to Hathras to make delivery. In this also he is said to have made delay.
4. It is thus quite clear that the defendant's neglect or misconduct or both, took place, if at all, at Karachi. In the course of the transaction he had nothing to do outside Karachi. He had not contracted to deliver at Hathras, but merely to place the goods on the rails at Karachi and to post the railway receipt there also. We fail to see that the cause of action, i.e., the defendant's alleged neglect or misconduct which resulted in loss, occurred anywhere else but at Karachi. It is urged that the resultant loss or damage occurred at Hathras, and that the negligence and misconduct plus the resultant loss constitute the whole cause of action, and that, therefore, the cause of action partly arose in Hathras.
5. It is quite clear that under Section 17(a), read with explanation III, of Act XIV of 1882, the present suit would not have been within the jurisdiction of the Hathras court. The contract was made at Karachi, where the plaintiff's offer was accepted. The performance of the contract had to be completed at Karachi and the money due was payable at Karachi. The defendant 'contracted to act as the plaintiff's agent at Karachi for the purpose of purchasing and dispatching the goods and to do certain acts there also. His negligence or misconduct, if any, occurred there.
6. The language of the Section has been altered in the present Act in that in place of the words 'The cause of action arises' and Explanation III of Section 17 the words 'The cause of action in whole or in part arises' have been substituted. This has not in our opinion altered the law as to what is the cause of action in suits arising out of contract. Explanation III of Section 17, Act XIV of 1882, though it does not appear in the present Act, is a correct statement of what the law still is and shows clearly the true meaning of the words 'cause of action' in the case of suits arising out of contracts.
7. In our opinion, therefore, the cause of action in the present suit arose wholly at Karachi and the lower appellate court's order was sound. We therefore dismiss the appeal with costs.