(Prayer: Petition (disposed of on 24-2-1943) under S. 115 of Act V of 1908 praying the High Court to revise the order of the Court of the Subordinate Judge of Madura dated 10th April, 1942 and made in O.S. No. 73 of 1941.)

(8-2-1943).

By Ex. P-1, dated 7th September 1940, the plaintiff, a resident of Madura, made an offer to the defendants, merchants residing in Bombay, to purchase 200 pounds of naphthalene at Rs. 12-8-0 a pound. By Ex. P-2, dated 9th September 1940, the defendants replied with a counter offer to supply the goods at Rs. 13 a pound. By Ex. P. 3, dated 13th September 1940, the plaintiff made an offer to take 500 pounds at the rate quoted by the defendants. By Ex. P-5 dated 14th September 1940 the defendants accepted the offer. There was some other correspondence with which we are not concerned. A preliminary point raised in the Court below was whether the Subordinate Judge of Madura had jurisdiction to entertain the plaintiffs suit for a breach of contract arising out of the failure of the defendants to send the goods promised. The Subordinate Judge held that he had jurisdiction. This revision petition has been filed against that decision.

Many similar cases have come before this Court; and until Ramesam, J. questioned the correctness of them in Venkata Reddi v. Nataraja Setty (46 M.L.J. 371 = 19 L.W. 499) it was a well recognised principle that where an offer is sent from a place A to a person in place B and accepted there then the whole cause of action arises at B and no suit would lie at A; because the offer is made only at the place B and the acceptance is completed as soon as the merchant at B posts his letter. Some of the Madras decisions under the present Code of Civil Procedure in which it has been held that the whole cause of action arose at B, are Mylappa Chettiar v. Aga Mirza Mohamed Shirazee (37 M.L.J. 712), The National Insurance Co. Ltd. Calcutta v. Seethammal (65 M.L.J. 455 = 38 L.W. 504), Bengal Insurance and Real Property Co. Ltd. v. Velayammal (I.L.R. 1937 Mad. 990 = 45 L.W. 616) and Ahmed Bux v. Fazal Karim (I.L.R. 1940 Mad. 195 = 50 L.W. 597) although the last mentioned decision only deals expressly with the question of the place of offer; but it is implicit in that decision that the acceptance took place there also. In Venkatareddi v. Nataraja Setti (46 M.L.J. 371 = 19 L.W. 499) Ramesam, J. expressed an opinion that as the place of receipt of the offer is the place where the offer is made, so by an analogous reasoning the place where the acceptance is made would be where it is communicated or acknowledged. Ramesam, J. distinguished two English cases which seemed to come to a contrary conclusion, and he doubted the correctness of Mylappa Chettiar v. Aga Mirza Mohamed Shirazee (37 M.L.J. 712) and Kamisetti Subbiah v. Katha Venkataswami (27 Mad. 355), the latter decision being under the old Code. He however gave an alternative reason why in that case the cause of action arose in the place from which the offer was sent; and so the opinion expressed with regard to the place of acceptance was an obiter dictum . Patanjali Sastri, J. in Sepulchre Bros. v. Kushal Das (1941) 2 M.L.J. 481 = 54 L.W. 345) considered the question more fully and felt that if there had been no other case in which it had been held that the acceptance spoke on the date of receipt of the letter of acceptance, he would feel himself unable to follow Ramesam, J. Patanjali Sastri, J. found support, however, in Evans v. Nicholson (1875) 32 L.T. (N.S.) 778), an English decision of 1875, which followed older cases in which it was held that although the letter of acceptance speaks the moment it is posted, the act of acceptance is a continuous one and speaks also at the moment when it is received.

I feel that as the Bench decisions quoted above have dealt with the very point that is raised in this case, I cannot give a decision contrary to that expressed in them. On the other hand, I feel that this matter deserves consideration by a Bench, because until Patanjali Sastri, J. gave his decision in Sepulchre Bros. v. Khushal Das (1941) 2 M.L.J. 481 = 54 L.W. 345), it was the established law in this presidency (and elsewhere in India also) that the suit should be laid only in the Court that has jurisdiction over the place B, where the acceptor receives and accepts the offer. Even if I agreed with Patanjali Sastri J. I should feel that some greater authority was necessary for such an important change in law and practice.

Mr. Venkatachariar has contended that despite the fact that the contract was completed by the letter or telegram from Bombay to the plaintiff, yet in view of the fact that a formal document of contract described as a sale note (Ex. P-6) was drawn up and signed by the plaintiff, it must be considered that the contract was completed at Madura where the plaintiff signed it. As the contract had already been completed, it seems to me immaterial that for convenience the parties should subsequently embody the terms of the contract in a single document and sign it.

I therefore direct that the papers be placed before the Chief Justice for consideration whether this Civil Revision Petition should not be decided by a Bench.

(This petition coming on for hearing, in pursuance of the aforesaid Order, the Court delivered the following):

Judgment

Alfred Henry Lionel Leach, C.J.



1. The petitioners ask the Court to revise, in the exercise of the powers conferred upon it by Section 115, Civil Procedure Code, an order of the Subordinate Judge of Madura holding that the Court had jurisdiction to entertain a suit filed by the respondent.

2. The respondent is a merchant carrying on business in Madura. The petitioners are merchants carrying on business in Bombay. On the 7th September, 1940, the respondent wrote to the petitioners offering to purchase 200 pounds of naphthalene at the price of Rs. 12-8-0 per pound. On the 9th September, 1940, the petitioners replied making a counter offer. They were willing to supply the goods at the price of Rs. 13 a pound. By a letter dated 13th September, 1940, the respondent offered to buy 500 pounds of naphthalene at the rate quoted by the petitioners. This offer was accepted by the petitioners in a letter dated 14th September, 1940, and posted in Bombay.



3. The Subordinate Judge held that he had jurisdiction to entertain the suit as in his view part of the cause of action arose in Madura. He regarded the receipt of the letter in Madura from the petitioners as being part of the cause of action. This opinion is opposed to at least five Bench decisions of this Court, two of which were quoted to him. He rejected them because of the observations of Patanjali Sastri, J., in a recent case, Sepulchre Bros. v. Kushala Das (1941) 2 M.L.J. 481 : I.L.R. (1942) Mad. 24 [LQ/MadHC/1941/222]

3. The present petition came in the first instance before Horwill, J., who referred it to a Bench for decision.

4. A contract is made at the place where the offer is accepted. In accordance with English authorities this Court has held that an offer when accepted by post is accepted at the place where the letter of acceptance is posted and therefore the cause of action arises there. See Mylappa Chetliar v. Aga Mirza Mohamed Shirazee (1919) 37 M.L.J. 712, The National Insurance Co., Ltd., Calcutta v. Seethammal (1933) 65 M.L.J. 455, Bengal Insurance and Real Properly Co., Ltd. v. Velayammal I.L.R. (1937) Mad. 990, Ahmed Bux v. Fazal Karim (1940) 1 M.L.J. 676 : I.L.R. (1940) Mad. 195 and Pachayammal v. Hindustan Co-operative Insurance Co., Ltd., Madras (1940) 2 M.L.J. 688 : I.L.R. (1941) Mad. 109. All these cases were decided by Division Benches.

5. In Venkatareddi v. Nataraja Setti (1924) 46 M.L.J. 371, Ramesam, J., sitting alone expressed the opinion that the receipt of acceptance when the contract is complete is part of the cause of action because he considered that there was no reason why an acceptance should be in a worse position than an offer. The case did not call for a decision on this question, and the observations can only be regarded as obiter. In Sepulchre Bros. v. Kushal Das (1941) 2 M.L.J. 481 : (1942) Mad. 242 [LQ/MadHC/1941/198] Patanjali Sastri, J., accepted the dictum of Ramesam, J., notwithstanding that the decisions of this Court in the National Insurance Co., Ltd., Calcutta v. Seethammal (1933) 65 M.L.J. 455 and Ahmed Bux v. Fazal Karim (1940) 1 M.L.J. 676 : I.L.R. (1940) Mad. 195, were quoted to him and were binding on him. He brushed them aside on the ground that the learned Judges who had decided them had not considered this aspect and because in his opinion support for the dictum of Ramesam, J., was to be found in the English case of Evans v. Nicholson (1875) 32 L.T. (N.S.) 778. A Judge has, of course, always the right of expressing his own opinion and indicating that he is not in agreement with an authority binding on him, but he is nevertheless in duty bound to follow it, as the Full Bench of this Court which decided Seshamma v. Narasimha Rao (1940) 1 M.L.J. 676 : I.L.R. (1940) Mad. 195, had occasion to point out. The fact that a Judge thinks that some argument has been overlooked in a judgment binding on him is no reason for refusing to follow it. The result of Patanjali Sastri, J., refusing to follow the cases of this Court which bound him has led the Subordinate Judge into the erroneous belief that his judgment represents the law as laid down by this Court. So far as this Court is concerned the law has been stated in the five Bench decisions to which we have referred. The judgments there are binding on us as they were binding on Patanjali Sastri, J., and we must follow them.

6. The petition will be allowed with costs. This means that the plaint will be returned to the plaintiff for presentation to the proper Court. The question of the costs before the Subordinate Judge will be decided by him.