Jurisdiction by place of payment depends on express or implied agreement; debtor-must-seek-creditor is not an independent rule in India.
The Rajasthan HC explained that the common-law rule that a debtor must seek the creditor is not an independent basis for jurisdiction in India; it applies only where no express or implied agreement fixes the place of payment or performance. Section 20(c) of the Code of Civil Procedure governs jurisdiction where the cause of action arises, and the place of performance may form part of that cause of action. Section 49 of the Contract Act only operates when no place is fixed. On the facts, repayment was impliedly fixed at Meerut, so the asserted basis for Bharatpur jurisdiction failed and the plaint return was left undisturbed.
Issues: Whether the suit was properly instituted at Bharatpur on the footing that the place of payment or performance was Sibi, and whether the common-law rule that the debtor must seek the creditor could be applied to confer jurisdiction.
Analysis: The Court held that the technical common-law rule should not be applied in India as an independent rule for fixing jurisdiction, and that it can operate only where no express or implied agreement fixes the place of performance or payment. Section 20(c) of the Code of Civil Procedure permits suit where the cause of action arises, and the place of performance may be a material element of cause of action. Section 49 of the Indian Contract Act merely regulates performance where no place is fixed and does not prevent the place of payment from being fixed by agreement or necessary implication. On the facts, the lower appellate court's finding that repayment was to be made at Meerut, supported by the surrounding circumstances and the contract condition, was accepted.
Conclusion: The rule that the debtor must seek the creditor could not be invoked, as the place of payment was impliedly fixed at Meerut, and Bharatpur was not shown to be the proper forum on that basis.
Final Conclusion: The revision failed because jurisdiction could not be sustained on the asserted basis of payment at Sibi, and the order returning the plaint was left undisturbed.
Ratio Decidendi: The debtor-must-seek-creditor rule is not an independent rule of jurisdiction in India and applies only in the absence of an express or implied agreement fixing the place of performance or payment.
TaxTMI 
AI Drafter ✕
TaxTMI 
