Territorial jurisdiction in contract refund suits may lie where the contract was made or performance was intended to occur.
Territorial jurisdiction in a contract refund suit may lie where the contract was made or where performance was intended to occur, because cause of action can arise wholly or in part at either place under Section 20 CPC. Where no place of performance is fixed, performance may be referable to the creditor's place under Section 49 of the Contract Act. On those principles, the District Munsif's Court at Tiruvarur was treated as competent to try the suit for refund of the advance, and the plaintiff's entitlement to recover the advance with interest followed from the finding that delivery of goods had been rightly refused as contrary to instructions.
Issues: (i) Whether the District Munsif's Court at Tiruvarur had jurisdiction to try the suit for refund of the advance; (ii) whether the plaintiff was entitled to recover the advance with interest.
Issue (i): Whether the District Munsif's Court at Tiruvarur had jurisdiction to try the suit for refund of the advance.
Analysis: The contract was concluded when the acceptance was posted at Vijayapuram, and the place of contract was therefore within the territorial limits relied on by the plaintiff. The performance of the contract was also intended to take place at the plaintiff's place of business within the Tiruvarur jurisdiction. In suits arising out of contract, the cause of action may arise at the place where the contract is made or where it is to be performed, and Section 20 of the Code of Civil Procedure permits institution of the suit where the cause of action wholly or in part arises. The place of performance could also be supported by Section 49 of the Indian Contract Act, under which performance is referable to the creditor's place where no place is fixed.
Conclusion: The District Munsif's Court at Tiruvarur had jurisdiction to try the suit.
Issue (ii): Whether the plaintiff was entitled to recover the advance with interest.
Analysis: The court below had already found that the plaintiff was rightly entitled to refuse delivery of the goods sent contrary to instructions. Once jurisdiction was held to exist, the plaintiff's claim for return of the advance followed on the footing already accepted below, together with interest from the date of suit.
Conclusion: The plaintiff was entitled to recover the Rs. 50 with interest at 6 per cent from the date of suit and costs throughout.
Final Conclusion: The revision succeeded, the order of the court below was set aside, and the plaintiff obtained a decree for refund of the advance with interest and costs.
Ratio Decidendi: In contract suits, territorial jurisdiction lies where the contract was made or where its performance was intended to take place, and a court within that local limit may entertain the suit under the rule that cause of action may arise wholly or in part there.
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