when this Court laid the proposition of law in 1996 An.W.R. 282 and 1969 An.W.R. 222 to the effect that Assignment would constitute a part of the cause of action and the Court within whose jurisdiction the assignment took place would have jurisdiction to entertain the suit, the appellate Court should have held that the trial Court has got territorial jurisdiction to try the suit. = Section 70 of the Negotiable Instruments Act is not a specific provision which can over-ride the provisions contained in Section 20 CPC. Section 70 of N.I. Act does not lay down the place where the suit has to be filed. More over, it does not deal with the case of assignment which has been held to constitute a part of the cause of action. It will thus be clear that where the right of the plaintiff depends upon the assignment of a promissory note in his favour, the assignment would constitute part of the cause of action and the Court within whose jurisdiction the assignment took place, would have jurisdiction to entertain the suit on the promissory note. Accordingly, we hold that the Court at Tenali has jurisdiction to try the suit in question.

HONBLE SRI JUSTICE SURESH KUMAR KAIT AND HONBLE SRI JUSTICE N. BALAYOGI               

C.R.P.No.3700 of 2006

05-09-2017

Malisetti Subba Rao. ..Petitioner
       
Kanneti Siva Parvathi Devi..Respondent 

For Petitioner :Sri N. Sreerama Murthy, Advocate.

For Respondent: None appeared. 

<Gist:

>Head Note:


?  CITATIONS:

1.AIR 2011 SC 421 
2.1966 An.W.R. 282 
3.1969 An.W.R. 222 
4. 2004(5) ALD 57

HONBLE SRI JUSTICE SURESH KUMAR KAIT       
&
HONBLE SRI JUSTICE N. BALAYOGI     

C.R.P.No. 3700 of 2006

O R D E R:- (Per Honble Sri Justice Suresh Kumar Kait)

     This Civil Revision Petition is filed to challenge the
decree and order dated 19.04.2006 made in C.M.A.No. 12 of
2005 by the Additional Senior Civil Judge, Tenali by
confirming the order dated 12.04.2005 made in C.R.F.No.
12208 of 2004 on the file of I Additional Junior Civil Judge,
Tenali for returning the plaint for presentation in proper
Court.

2.      We have heard the learned counsel for the petitioner.

3.      The learned counsel for the petitioner submits that
when this Court laid the proposition of law in 1996 An.W.R.
282 and 1969 An.W.R. 222 to the effect that Assignment
would constitute a part of the cause of action and the Court
within whose jurisdiction the assignment took place would
have jurisdiction to entertain the suit, the appellate Court
should have held that the trial Court has got territorial
jurisdiction to try the suit.

4.      The learned counsel for the petitioner further submits
that both the Courts below gravely erred in relying on
decisions cited 2004(2) L.S. 510 = 2004(5) ALD 57 and in
negating the contention of the petitioner-plaintiff to the
effect that the trial Court at Tenali has got territorial
jurisdiction to entertain the suit pursuant to the assignment
deed.  Accordingly, the Courts below should have held that
the aforesaid decision is not applicable to the facts of the
case and the trial Court at Tenali has territorial jurisdiction
to try the suit.

5.      It is pertinent to mention here that in the instant
petition the respondent has refused to receive the notice
sent to him, as such, it is deemed that notice is served on
him under law.

6.      It is further pertinent to mention here that when the
present Civil Revision Petition was listed on 08.02.2012
before the learned Single Judge, the said Court passed the
following order:-
A perusal of the order of the lower appellate Court would show
that divergent views were expressed by this Court on the aspect
of jurisdiction in such cases.  While the learned single Judges in
the Judgments in Chittaruvu Radhakrishnamurthy (1966 An.W.R. 
282) and P.S.Kothandarama Gupta v. Sidamsetty Vasant Kumar   
(1969 An.W.R. 222) have taken the view that the transferee can
institute the suit in the Court within whose jurisdiction the
endorsement of transfer was made, another learned single
Judge in S.S.V.Prasad v. Y. Suresh Kumar [2004(2) L.S. 510] has
taken a contra view.  In my opinion, in view of these conflicting
views and to have an authoritative pronouncement on this
aspect, it is appropriate that the issue is decided by a Division
Bench.  The case is accordingly referred to the Division Bench.
        The Registry shall place the papers before the Honourable
Chief Justice for appropriate orders in this regard.

Accordingly, this matter is placed before this Court.

7.      In case of Safiya Bee v. Mohd. Vajahath Hussain  the
Supreme Court has held as under:
The learned Judges were not right in overruling the statement
of the law by a Co-ordinate Bench of equal strength.  It is an
accepted rule or principle that the statement of the law by a
Bench is considered binding on a Bench of the same or lesser
number of Judges.  In case of doubt or disagreement about the
decision of the earlier Bench, the well accepted and desirable
practice is that the later Bench would refer the case to a larger
Bench.


8.      The brief facts of the case are that the petitioner-
plaintiff filed the plaint and the same was returned for want
of jurisdiction by the Junior Civil Judges Court, Tenali.  Being
aggrieved, he filed C.M.A.No. 12 of 2005 and the same was
dismissed vide order dated 19.04.2006.
       
9.      The trial Court returned the plaint on the ground that
the respondent is the resident of Amudalapalli,
R/o.Komaravolu village, Nizampatnam Mandal and the 
promissory note was executed in favour of one Malisetty
Raghava Rao of Nizampatnam Mandal.  Even though the wife 
of the original promisee assigned the promissory note herein
in favour of the plaintiff at Tenali to collect and enjoy the
amount due under the promissory note, the trial Court,
relying upon the ruling 2004(2) L.S. 510 in Mr.S.S.V.Prasad V.
Y. Suresh Kumar and other, held that the Court at Tenali
cannot have jurisdiction on the strength of the alleged
assignment of the promissory note at Tenali and ordered to
return the plaint to be represented in proper Court having
jurisdiction.
       
10.     Being aggrieved, the petitioner-plaintiff preferred
C.M.A. urging in the grounds that the word assignment
itself means that it is for consideration and not for collection
and it is not a restrictive assignment.  The wording in the
assignment deed regarding the assignment is as follows:



English Version:

You have to collect and enjoy.  This Promissory Note Debt
Assignment Deed is written on my consent.

11.     In Chittaruvu Radhakrishna Murthy v. Bollapalli
Chandrasekhara Rao [1966 An.W.R. 282], it is held as
follows:
Where the rights of the plaintiff depends upon the assignment
of a promissory note in his favour the assignment would
constitute part of the cause of action and the Court within
whose jurisdiction the assignment took place would have
jurisdiction to entertain the suit on the promissory note though
it was executed at place where the original parties to it were
residing and over which place a different Court had
jurisdiction:.

In that ruling, it is held :

        According to Section 20(c) C.P.C., it cannot be in doubt
that a suit can be instituted in a Court within the local limits of
whose jurisdiction the cause of action has arisen either wholly
or in part.  It is no doubt true that the promissory note was
executed at Guntur and that the original parties to the
promissory note were also residents of Guntur.  It cannot
however be forgotten that the transfer of the suit promissory
note has taken place at Vijayawada.  Not only the endorsement
was made at Vijayawada but the assignment also took place 
there.  The question therefore which arises is whether such a
transfer provides a cause of action in part at Vijayawada.  I
have no doubt that the endorsement of the suit promissory note
and the assignment of it does give rise to a part of the cause of
action at Vijayawada where admittedly the endorsement and
the assignment have taken place.  The endorsement and the
assignment would therefore provide in part a cause of action

12.     In the ruling reported in 1969 An.W.R. 222 in
P.S.Kothandarama Gupta v. Sidamsetty Vasant Kumar, it is 
reiterated that;
Assignment would constitute a part of the cause of action and
the Court within whose jurisdiction the assignment took place
would have jurisdiction to entertain the suit.  Section 70 of the
N.I.Act is not a specific provision which can override the
provisions contained in Section 20 CPC.  Section 70 of the Act
does not lay down the place where the suit has to be filed.
Further, it does not deal with the case of assignment which has
been held to constitute a part of the cause of action.
Therefore, the Court has jurisdiction to entertain the suit.

Both the rulings i.e. 1966 An.W.R. 282 and 1969 An.W.R. 222
cited above are considered in part 22 of the ruling 2004(2)
L.S. 510, wherein held that;
Most of the decisions touching on the subject turned on the
meaning assigned to the expression cause of action from a
reading of the observation of Lord Esher, referred to above.  It
is evident that way-back in the year 1889, there was a strong
claim from deviation from what was observed in COOKE V. GILI.
The question as to whether the endorsements or the
assignments, as the case may be, in those cases were made 
with the participation or knowledge of the makers of the
promissory notes, or the original debtors, is not clear.   The
hardship caused to the makers of promissory notes, in being
sued at a place unrelated to the making of the promissory note,
was taken note of by the Calcutta High Court in Harnatharai
Binjraj V. Churamoni Shah (AIR 1934 Calcutta 175) and it was
observed therein as follows:
It might have been more satisfactory if the rule were
otherwise i.e. that an assignee in taking an assignment of
a debt should take such assignment with only such right
of suing as the assignor had and could sue where the
assignor could sue and nowhere else.  I do see difficulties
in the present system under which an assignor can create
jurisdiction in any place where the Civil Procedure Code
applies but I do not think it would be right for me to
attempt to change it.

13.     In case of Ch. Radhakrishna Murthy v. B.
Chandrasekhara Rao  this Court held as under:
It will thus be clear that where the right of the plaintiff depends
upon the assignment of a promissory note in his favour the
assignment would constitute part of the cause of action and the
Court within whose jurisdiction the assignment took place
would have jurisdiction to entertain the suit on the promissory
note.  The lower Court, therefore, was obviously wrong in
stating that Section 20(c), as stated above, applies.  In the view
which I have taken it is not necessary to consider in this case
whether the common law principle that the debtor must seek
the creditor applies to a negotiable document or not.
Consequently, the case cited in the judgment of the Court
below, S.Eshwarayya v. Devi Singh, need not be considered.
That case decides that the principle that the debtor must seek
the creditor does not apply to a negotiable document.  Since I
have held that a part of the cause of action because of transfer
arose at Vijayawada, it is unnecessary to consider that principle
in this case.  In any case, the lower Court was wrong in
dismissing the suit.  Even assuming the Court at Vijayawada had
no jurisdiction, the Court ought to have returned the plaint for
its presentation to the proper Court.  The suit could not be
dismissed on that ground.
        For the reasons stated above, I would allow this revision
petition and remit the case to the Subordinate Judges Court at
Vijayawada for the disposal of the suit on merits.  The costs of
this revision will depend upon the result of the suit.

14.     In another case of P.S.Kothandarama Gupta v.
S.Vasant Kumar  this Court observed as under:
What constitutes cause of action has been the subject
matter of numerous cases, the leading case is Read v. Brown,
which has been frequently referred to in various cases of this
Court.  It has been held therein that the assignment would
constitute a part of the cause of action and the Court within
whose jurisdiction the assignment took place would have
jurisdiction to entertain the suit.
        The learned counsel for the petitioner contends that as
per Section 70 of the Negotiable Instruments Act, the suit is not
entertainable by the Court at Hyderabad.  Section 70 of the
Negotiable Instruments Act reads as hereunder:-
A promissory note or bill of exchange not made payable
as mentioned in Sections 68 and 69, must be presented
for payment at the place of business (if any), or at the
usual residence of the maker, drawee or accepter
thereof, as the case may be.
With reference to the Section it is urged that it is a specific
provision which over-rides the provisions contained in Section
20 CPC.  I am not inclined to accept this argument.  Section 70
of the N.I.Act does not lay down the place where the suit has to
be filed.  Further, it does not deal with the case of assignment
which has been held to constitute a part of the cause of action.
I think, the lower Court was justified in holding that it had
jurisdiction to entertain the suit.  The revision is accordingly
dismissed with costs.

15.     In addition to above, this Court, in the case of
Mr.S.S.V.Prasad v. Mr.Y.Suresh Kumar & Anr. , observed as 
under:
Therefore, it is held that the holder in due course of a
negotiable instrument can present a suit to recover the amount
covered by it, only in a Court within whose territorial
jurisdiction the defendants therein reside or carry on business,
or in a Court within whose territorial jurisdiction, the place at
which such negotiable instrument, can be presented, under
Sections 68 to 70 of the N.I.Act is situated.


16.     According to Section 20 (c) C.P.C., it cannot be
disputed that a suit can be instituted in a Court within the
local limits of whose jurisdiction the cause of action has
arisen either wholly or in part.  It is not in dispute that the
respondent/defendant is the resident of Amudalapalli of
Nizampatnam Mandal and promissory note was executed in   
favour of one Malisetty Raghava Rao of Nizampatnam Mandal. 
Even though the wife of original promisee assigned the
promissory note in question in favour of the
appellant/plaintiff at Tenali to collect and enjoy the amount
due under the promissory note, the question therefore, which
arises is, whether such a transfer provides a cause of action
in part at Tenali.
       
17.     As decided in the case of P.S.Kothandarama Gupta 
(supra 3), the assignment would constitute a part of the
cause of action and the Court within whose jurisdiction the
assignment took place, would have jurisdiction to entertain
the suit.

18.     Section 70 of the Negotiable Instruments Act is not a
specific provision which can over-ride the provisions contained
in Section 20 CPC.  Section 70 of N.I. Act does not lay down
the place where the suit has to be filed.  More over, it does
not deal with the case of assignment which has been held to
constitute a part of the cause of action.  It will thus be clear
that where the right of the plaintiff depends upon the
assignment of a promissory note in his favour, the assignment
would constitute part of the cause of action and the Court
within whose jurisdiction the assignment took place, would
have jurisdiction to entertain the suit on the promissory note.
       
19.     In view of above discussion and the legal position, we
are of the considered view that the learned Court has gravely
erred in relying on the decision in the case of S.S.V.Prasad v.
Y.Suresh Kumar (supra 4).

20.     Accordingly, we hold that the Court at Tenali has
jurisdiction to try the suit in question.  Consequently, the
decree and decretal order dated 19.04.2006 made in
C.M.A.No.12 of 2005 passed by the Additional Senior Civil
Judge, Tenali, confirming the order dated 12.04.2005 made
in C.F.R.No.12208 of 2004 passed by I-Additional Junior Civil
Judge, Tenali for returning the plaint for presenting in proper
Court, is hereby set aside.  Accordingly, the petitioner is at
liberty to present the suit before the Court at Tenali, upon
which, the said Court is directed to try the suit after giving
proper opportunity to both the parties.

21.     Revision petition is accordingly allowed.  No order as to
costs.
     Pending miscellaneous applications, if any, shall stand
closed.
_____________________   
SURESH KUMAR KAIT, J   
_____________ 
N. BALAYOGI, J 
5th September, 2017

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