Himachal Pradesh High Court
Reserved On: 24.3.2026 vs Of on 7 May, 2026
2026:HHC:15098
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
RSA No. 485 of 2007
Reserved on: 24.3.2026
.
Date of Decision: 7.5.2026
Sunita Shandil ...Appellant
Versus
of
DAV College Committee & anr. ...Respondents
Coram
Hon'ble Mr Justice Rakesh Kainthla, Judge.
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Whether approved for reporting?1 Yes.
For the Appellant : Mr Ajay Kumar, Senior Advocate,
with Mr Rohit, Advocate.
For the Respondents : None.
Rakesh Kainthla, Judge
The present appeal is directed against the judgment
dated 13.8.2007, passed by learned District Judge (Forests),
Shimla, HP, (learned Appellate Court), vide which the judgment
and decree dated 22.11.2004, passed by learned Civil Judge
(Senior Division), Shimla, HP (learned Trial Court) were set
aside. (The parties shall hereinafter be referred to in the same
1
Whether reporters of Local Papers may be allowed to see the judgment? Yes.
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manner as they were arrayed before the learned Trial Court for
convenience).
.
2. Briefly stated, the facts giving rise to the present
appeal are that the plaintiff filed a civil suit before the learned
Trial Court for the recovery of ₹1,03,293/- along with interest at
the rate of 9% per annum. It was asserted that the plaintiff was
of
working as a Principal in DAV Centenary Public School, Rajgarh,
District Sirmour, HP. She got the school affiliated with CBSE. She
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was a member of the Local Management Committee (LMC) of
DAV Centenary Public School, Rajgarh. The Local Management
Committee resolved on 4.6.1998 to request the plaintiff to
advance a loan of ₹67,067/- to the school, which would be
returned in easy instalments before April, 1999. The plaintiff
deposited a sum of ₹67,067/- in the savings bank account of the
school on 4.6.1998. The defendants failed to pay the amount to
the plaintiff. She served a notice upon the defendants, but in
vain. Hence, the suit was filed to seek the relief mentioned
above.
3. The suit was opposed by filing a written statement
taking preliminary objection regarding lack of maintainability,
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cause of action and jurisdiction, the suit having not been
properly valued for Court fees and jurisdiction, the plaintiff
.
being estopped from filing the present suit by her act and
conduct, and the suit being barred by limitation. The contents of
the plaint were admitted to the extent that the plaintiff was
working as a Principal in DAV Centenary Public School, Rajgarh.
of
It was specifically denied that the Local Management Committee
had requested the plaintiff to advance a loan which was to be
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repaid in monthly instalments. It was asserted that the plaintiff
had concocted a false story to extract money from the
defendants. Hence, it was prayed that the suit be dismissed.
4. No replication was filed.
5. Learned Trial Court framed the following issues on
22.12.2001:-
1. Whether plaintiff is entitled to recover the suit amount as
alleged? OPP.
2. Whether this suit is not maintainable as alleged? OPD.
3. Whether this suit is time-barred? OPD.
4. Whether this Court has no jurisdiction? OPD.
5. Whether the plaintiff is estopped from filing this suit by
her act and conduct? OPD.
6. Whether the plaintiff has no cause of action? OPD.
7. Relief.
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6. The parties were called upon to produce the evidence,
and the plaintiff examined Ved Prakash (PW1), Vijay (PW2) and
.
herself (PW3). The defendants examined HC Sarkaik (DW1).
7. The learned Trial Court held that the statement of
account (Ex.PW2/A to Ex.PW2/F) shows that an amount of
₹67,067/- was deposited by the plaintiff in the account of
of
defendant No.2. The defendants failed to explain the deposit,
and the plaintiff’s version was to be accepted as correct, that the
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amount was deposited as a loan. There is no evidence of the
repayment of the loan. The office of the defendant is located at
Shimla, and the Courts at Shimla had territorial jurisdiction to
hear and entertain the present suit. Hence, the learned Trial
Court answered Issue No.1 in the affirmative, Issue Nos. 2 to 6 in
the negative and decreed the suit.
8. Being aggrieved by the judgment and the decree
passed by the learned Trial Court, the defendants filed an appeal,
which was decided by the learned District Judge (Forests),
Shimla (learned Appellate Court). Learned Appellate Court held
that the plaintiff had relied upon the carbon copy of the
resolution, which did not mention any amount, and was not
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sufficient to prove the plaintiff’s case. The loan was advanced at
Rajgarh and was to be repaid at Rajgarh. The Courts at Shimla
.
did not have the jurisdiction merely because a branch office of
the school is located at Shimla. Learned Trial Court erred in
decreeing the suit. Hence, the appeal filed by the defendants was
allowed, and the judgment and decree passed by the learned
of
Trial Court were set aside.
9. Being aggrieved by the judgment and decree passed
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by the learned Appellate Court, the plaintiff has filed the present
appeal, which was admitted on the following substantial
questions of law on 4.3.2008: –
1. Whether the findings of learned First Appellate Court
with respect to the point of territorial jurisdiction are aresult of complete misreading of pleadings, evidence and
the law as applicable to the facts of the case and
particularly documents Ex.PW1/A and Ex.PW2/A to
Ex.PW2/F and as such palpably erroneous and illegal, andif so to what effect?
2. Whether the First Appellate Court failed to formulate
proper points for determination, which has affected its
judgment and resulted into a miscarriage of justice to the
appellant?
3. Whether the learned First Appellate Court below has
grossly misrepresented and misappreciated the evidence
and the law as applicable to the facts of the case, and if so,
to what effect?
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10. I have heard Mr Ajay Kumar, learned Senior
Advocate, assisted by Mr Rohit, learned counsel for the
.
appellant/plaintiff. None appeared on behalf of the respondents
on 28.2.2026 and 24.3.2026, hence none could be heard on their
behalf.
11. Mr. Ajay Kumar, learned Senior Advocate for the
of
appellant/plaintiff, submitted that the learned Appellate Court
erred in reversing the well-reasoned judgment passed by the
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learned Trial Court. Learned Appellate Court relied upon the
carbon copy of the resolution, but failed to notice the statement
of account. The principle that the debtor follows the creditor
applies in civil law; the creditor was residing at Shimla, and the
Courts at Shimla had territorial jurisdiction to hear and
entertain the present suit. Learned Appellate Court erred in
holding that the Courts at Shimla had no jurisdiction. Hence, he
prayed that the present appeal be allowed and the judgment and
decree passed by the learned Appellate Court be set aside.
12. I have given a considerable thought to the
submissions made at the bar and have gone through the records
carefully.
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Substantial Question of Law No.1:
13. Learned Appellate Court held that the loan was
.
advanced at Rajgarh and the Courts at Shimla had no
jurisdiction. This conclusion ignored the principle that the
debtor must seek the creditor. It was laid down by the Full Bench
of the Madras High Court in Employees’ State Insurance
of
Corporation v. M. Haji Md. Ismail Sahib, 1959 SCC OnLine Mad 123,
that where no place is specified, the common law principle that
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the debtor must seek the creditor will apply. It was observed:
“The general common law rule is that where no place of
payment is specified, either expressly or by implication,the debtor must seek the creditor. Mahalaxmi Bank Ltd. v.
Chotanagpur, J. and C Assn.A.I.R. 1955 Cal. 413, Gopiram v.
Shankarrao 1950 Madh. B. 72. Ramachandra Tajmal v.
Mahanlal A.I.R. 1930 Nag. 207, Gokul Das v. Nathu A.I.R.
1926 All. 477, Drexal v. Drexal (1916) 1 Ch. 251, Megraj v.
Johnson A.I.R. 1915 Nag. 65. Yar Mahomed Khan v.
Amiruddin 20 I.C. 683. Raman Chettiar v. Gopalachari 31
Mad. 223, Motilal v. Surajmal 30 Bom. 167, Buttappa v.
Virabhadrappa 7 Bom. L.R. 993, Ball v. Antwerp London and
Brazil Lines (1891) 1 Q.B. 103.
It is laid down by Littleton J that the obligor of a bond,
conditioned for the payment of money on a particular
day, is bound to seek the obligee, if he be in England, and
on the set day to tender him the money. Otherwise, he
shall forfeit the bond: Cranley v. Hillery (1813) 105 E.R. 327.
The common law rule is a reasonable rule, and it is in
conformity with justice and equity because it recognises
the obligation of the debtor to pay his debt, and that
obligation can only be discharged by the debtor going to::: Downloaded on – 08/05/2026 14:49:02 :::CIS
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2026:HHC:15098his creditor and repaying the amount, and the common
law rule imposes this obligation only when there is no
express contract to the contrary: Bherumal v. Sakhavatmal
A.I.R. 1956 Bom. 111. The principle is that when a man.
agrees to do any particular thing, he must do all that is
necessary. If it is to pay money to A, on a particular day,
he must seek A; Seward v. Palmer (1815) 129 E.R. 390. S. 49of the Indian Contract Act does not preclude the
application of the rule of English Common Law that the
debtor must seek out his creditor and pay his debt whereof
the creditor happens to reside, unless there is an
arrangement to the contrary: M. Ramalinga Iyer v. T.K.
Jayalakshmi, AIR 1941 Mad. 695, K.S.P.L.A. Annamalai
Chetti v. Daw HninA.I.R. 1936 Rang. 251, Muhammad Esuff
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Rowther v. Hattem and Co. A.I.R. 1934 Mad. 581.”
14. A similar view was taken in S.P. Consolidated
Engineering Co. (P) Ltd. v. Union of India, 1965 SCC OnLine Cal 46:
AIR 1966 Cal 259, wherein it was observed at page 263:
“15. It is next contended that, in any event, the money is
payable at Calcutta, within the jurisdiction of this Court.
It is the plaintiff’s case that no place of payment is
indicated in the contract either expressly or by
implication. Therefore, the rule will apply that it is the
duty of the debtor to find out the creditor and make
payment at the creditor’s place of business, which, in the
instant case, is at 10-A, Vivekananda Avenue, within the
jurisdiction of this Court. I hold in favour of the plaintiff
that the registered office of the plaintiff is at 10-A,
Vivekananda Avenue, within the jurisdiction of this Court,
even though the plaintiff had a branch office at Bilaspur
during the continuance of the work and till the work
under the contract was completed. It seems to me that the
Railway Administration knew that the registered office of
the plaintiff is at Calcutta, if the rule above referred to
applies to the instant case, and it is held that no place of
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payment is expressly or impliedly provided in the
contract, then money must be held to be payable at
Calcutta, within the jurisdiction of this court. Direct
authority in support of this argument is the decision of
.
the Appeal Court in the case of State of Punjab v. A.K. Raha
(Engineers) Ltd., AIR 1964 Cal 418. In the cited case, the
contractor instituted a suit against the State of Punjab on
a contract exactly similar to the contract in the instant
case. After the works had been completed and the
contractor had wound up its office at the work site, which
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was outside the jurisdiction of the Court, a dispute arose
in respect to the contractor’s claim in the Final Bill. The
State of Punjab, having repudiated its liability, a suit was
filed in this court. The jurisdiction of this court was
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challenged on the ground that no part of the cause of
action arose within the jurisdiction of this Court. The
plaintiff contended that the State of Punjab was under an
obligation to pay the contractor’s debt at Calcutta, where
the plaintiff had its place of business, and hence a part of
the cause of action arose within the jurisdiction of this
Court. The obligation to pay at the plaintiff’s place of
business was contended to be founded on twofold
grounds. There being no place of payment expressly
indicated in the contract, the contractor’s due was
payable, by necessary implication, at the contractor’s
place of business, on the facts of the case. Alternatively,
the general rule will apply to the effect that where no
place of payment is specified in the contract, either
expressly or impliedly, the debtor must seek the creditor
and pay at the creditor’s place. The obligation to pay the
debt involves the obligation to find the creditor and to pay
him at the place where he is when the money is payable.
Bachawat, J., who delivered the judgment of the Appeal
Court, upheld both the contentions. He found that by
necessary implication the debt was payable at the
plaintiff’s place of business. He further held that if by
necessary implication the debt was not payable at the
plaintiff’s place of business, the above rule will apply, and
the money was payable at the plaintiff’s place of business.
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A number of decisions, both of English Courts and of
Indian Courts, were cited in support by learned Counsel
appealing for either party. Mr Sen, learned counsel
appealing for the Government, vigorously contested this
.
proposition and cited a number of authorities against the
applicability of the rule. The decisions relied on are both
English and Indian. It is contended that the rule is
outmoded and was applicable only in a society where
there were no big corporations, Banking Corporations or
Government carrying on business in a big way. In modern
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society, big corporations and Governments carrying on
business in a big way invariably have a pay office from
where payments are made to creditors. If so, then even if
the contract does not expressly indicate the place of
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payment, the Court may very well hold that by necessary
implication the place of payment is the place where the
Bank, Corporation or Government has its pay Office and
not the place where the creditor resides or carries on
business. If the Court can determine impliedly, though
not expressly, that the debt was payable at the debtor’s
place, then the rule ex hypothesi has no application. The
rule is inapplicable not because it is outmoded but
because the condition of its applicability does not exist.
The rule is only applicable when the place of payment is
not stated expressly or by implication in the contract, and
when the Court can find out from facts proved that the
debt was payable at the debtor’s place, there is no scope
or occasion to apply the rule. The rule is also held to be
inapplicable in case the creditor is not within the realm.
In such cases, the Court will construe a negative
intention. I consider the rule to be universal in its
application based, as it is, on justice and equity. It is
emphatically not a technical rule of English law, wrongly
made applicable to India. It is a beneficent rule, inflexible
and of universal application. It is not correct to consider
this rule to be nothing more than a presumption,
rebuttable by contrary evidence. If there is other evidence
to indicate the place where the parties intended that the
debt was payable, then the Court will hold that such place
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of payment has been indicated in the contract itself,
though not expressly, but by implication. It is only when
the Court is unable to do so that the occasion arises for
applying this rule. I am, therefore, unable, with respect to
.
agree with the reasoning given in some of the Punjab
decisions cited by Mr. Sen including the Full Bench
decision of the Punjab High Court in the case of Firm
Hiralal Girdhari Lal v. Baijnath Hardia Khatri, AIR 1960 Punj
450 (FB) I note that in the Punjab case none of the
Calcutta cases on the point has been cited and considered.
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In my judgment, once the Court finds that no place of
payment is expressly stated in the contract nor is it
possible to find such place of payment indicated in the
contract by necessary implication, on the relevant
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evidence on record, the Court must apply the rule, as a
rule of justice, equity and good conscience. There is no
scope for the application of the rule in cases where the
Court can find, on construction, a positive or a negative
intention as to the place of payment–positive intention
to pay not at the creditor’s place, as for example where
the debtor-bank or company, to the knowledge of all,
pays its debt to the creditors at its place of business or
negative intention when the creditor resides outside the
realm. In the last case, the Court will hold that by
necessary implication there was no obligation for the
debtor to find out the creditor outside the realm and in
consequence the debt is payable not at the creditor’s
residence or place of business but at the debtor’s. We
must keep in mind that the question becomes important
for the purpose of determining the jurisdiction of the
Court, and for such purpose, the residence or place of
business of a foreign creditor is irrelevant. In any event, it
is too late in the day to contend in this court that the rule
does not apply. There are decisions binding on this Court,
and it is not open to me to hold otherwise.”
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15. Andhra Pradesh High Court also took a similar view
in Mariamunnisa Begum v. Noor Mohammad Saheb, 1963 SCC
.
OnLine AP 181: (1965) 2 ALT 16 and observed at page 27:
“20. The learned Counsel for the respondent has relied
upon a Division Bench ruling of the Madras High Court in
Ramalinga Iyar v. Jayalakskmi. [(1941) I M.L.J. 784: AIR 1941
Mad 695.] This decision does not at all indicate that theof
English common law doctrine that a debtor should follow
his creditor and pay him does not apply to India. If
anything, the judgment of Leach, C.J., indicates the
contrary view. But the common law doctrine was not
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applied in Ramalinga Iyer v. Jsyalakshmi [(1941) I M.L.J.
784: AIR 1941 Mad 695.] because, as a matter of inferenceand interpretation of the contract and the circumstances
of that case, it was clear that the debtor was to deliver the
articles at a particular place different from where the suit
was laid. It is well established that the rule that the debtorshould seek out the creditor so as to pay him will apply
only where the contract does not specify the place of
performance or such a place cannot be implied from theterms of the contract or the circumstances of the case. If
the contract specifies that the debt is to be repaid or thegoods are to be re-delivered at a particular place, then the
rule that the debtor should seek the creditor cannot be
invoked. So also if, by implication, a certain place forrepayment or re-delivery can be predicated, the common
law rule cannot come into operation. Therefore, in
Ramalinga Iyer v. Jayalakahmi [(1941) I M.L.J. 784: AIR 1941
Mad 695.] their Lordships held that the goods were to be
re-delivered at a particular place as a matter of necessary
implication arising from the circumstances of the case,
and consequently the rule that the debtor should seek out
the creditor was not applied. It follows that Ramalinga
Iyer v. Jayalakshmi [(1941) I M.L.J. 784: AIR 1941 Mad 695.]
is not an authority for the proposition that the common
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2026:HHC:15098to a case like the present where the place for the return of
the jewels was not specified nor could it be inferred as a
matter of necessary implication from the circumstances
of the case. In such a case, the common law rule that the.
debtor should seek out the creditor will apply.
21. Halsbury, in volume VII, Page 1956, stated the position
as follows:
“Where no place for performance is specified either
expressly or by implication, from the nature and terms
of the contract and the surrounding circumstances,of
and the act is one which requires the presence of both
parties for completion, the general rule is that the
promissor must seek out the promisee and perform
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the contract wherever he may happen to be. This rule
applies not only to contracts for the payment of money
but to all promises for the performance of which theconcurrence of the promisee is necessary.”
22. The English rule has been thus stated by Bowen, L.J.,
in The Eider. [(1893) P. 119 (C.A.).]
“The general rule is that where no place of payment is
specified either expressly or by implication, the debtor
must seek his creditor. In Haldane v. Jaknson (1853) 8
EX. 689), it was held that a covenant for payment of
rent when no particular place of payment is mentioned
is analogous to a covenant to pay a sum of money in
gross on a day certain, in which case it is incumbent on
the covenator to seek out the person to be paid and pay
or tender him the money. In the judgment in that case,
the conclusion to the same effect, arrived at on the
authorities by Parke B. in Poele v. Tumdridge (1837) 2
M. & W. 223, is relied upon. Most of the cases are
collected in Fessard v. Mugnier (1865) 18 C.B.N.S. 286).”
23. A Division Bench of the Calcutta High Court has dealt
at length with the applicability of the common law
doctrine that a debtor should find his creditor and pay
him, in Jagadish Chandra Sikdar v. Smt. Santimoyee
Choudhuir [AIR 1961 Cal 321]. This decision has also
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reviewed the relevant case law on the subject. The several
authorities discussed there show that this rule is
applicable to this country also, although it cannot be
invoked in the case of negotiable instruments.
.
24. I have no doubt that in the instant case, the defendant
is in the position of a debtor and the plaintiff in the
position of a creditor. Therefore, the defendant, who had
been specifically called upon by the plaintiff, was bound
to deliver to her the hiba jewels or pay their price at the
place where she resided. The learned Counsel for the
of
respondent-defendant has conceded that so far as the
suit relates to Mahar, the Bapatla Court has jurisdiction. I
fail to see why, on principle, that Court should not have
jurisdiction in respect of the claim for jewels also. I
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therefore differ from the view of the trial Court and hold
that the Court of the Subordinate Judge, Bapatla, had
jurisdiction to try the suit in respect of the hiba jewels
also.
16. Delhi High Court also took a similar view in L.N.
Gupta v. Tara Mani, 1983 SCC OnLine Del 155 and observed:
“5. In England, in a situation of this kind, one of the basic
rules has been that the creditor should seek the debtor,worked out in practice, it means that the debtor should
make payment at the place where, at the relevant time,
the creditor lives, carries on business or works for gains,as the case may be. Mr Gopal Narain, for the respondent,
urged that this rule is as well applicable to the case under
consideration.
6. In 1481, in his Estates and Tenures, Sir Thomas
Littleton observed: “the feoffor is bound to seek the
feoffee, if he be then in any other place within the realm
of England”. According to Sheppard’s Touchstone, “when
an obligation is to pay a sum of money, do any like
transitory thing to the obligee on a day certain, but no
place is set down, it must be done to the person of the
obligee wheresoever he be, and for this purpose, the::: Downloaded on – 08/05/2026 14:49:02 :::CIS
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2026:HHC:15098obligor must at his peril seek out the obligee if he be intra
qua-tuor maria (infra regnum Angliae) but if he be not
within the kingdom, he is not bound to seek him, and yet
the condition is not broken. And if the thing to be done be.
either local, i.e. such a thing as must be done in or at a
place certain, as the making of a feo:7ment of land,
payment of rent or the like, in this case the thing must bedone at that very place and a tender of doing it in that
place is a sufficient performance of the condition.” The
simple reason for this is that the obligee has contracted toof
do so: Haldane v. Johnson, (1853) 8 Exch. 689. In 1844, in
Walton v. Mascall, (1841) 13 M. & W. 452, Parker B. said: “A
request for payment of a debt is quite immaterial, unless
the parties to the contract have stipulated that it shall be
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made; if they have not, the law requires no notice or
request but the debtor is bound to find out the creditorand pay him the debt when due.” “It behoveth him that
made that obligation to seek him to whom the obligation
is made, if he be in England.”: Fessard v. Mugaier (1865) 18
C.B. (N.S.) 286. In Robey & Co. v. The Snaefell Mining Co.
Ltd., (1888) 20 QBD 152, there was no definite agreement
as to where the money was to be paid. Stephen J. observed
that, since the debtors had to pay for the goods, it wastheir duty to send or bring the money to the creditors.
This, in practice, would impose little inconvenience onthe defendant. In Thorn v. City Rice Mills (1889) 40 Ch.D.
357, there were two places named. It was held that it was
for the person to whom payment is to be made to fix theplace at which he will be paid. Until he has selected the
place at which he will be paid, there can be no default. In
Thompson v. Palmer (1893) 2 QBD 80, there was no express
provision as to the place of payment. Lopes L.J. said that
we must draw the best inference we can from the terms of
the contract and, to some extent, from the surrounding
circumstances. The reasonable inference in the case was
that the payment was to be made in a place where the
plaintiff carried on business, and he would probably be
and could give a discharge for the money or where he
would have an agent who could. He rejected the::: Downloaded on – 08/05/2026 14:49:02 :::CIS
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2026:HHC:15098suggestion that the payment might be tendered at any
place and that the plaintiff would be bound to take it if so
tendered. In The Eider (1893) CA 119, there was no place
specified in the contract for payment. What then is the.
ordinary rule? Lord Esher M R. answered that the debtor
must follow his creditor, and must pay where the creditor
is. Bowen L.J. answered that the general rule is that whereno place of payment is specified either expressly or by
implication, the debtor must seek his creditor. “If no
certain place be appointed in the contract forof
performance, and it requires the presence of the
promisee, it must, in general, be made or tendered to
him, wherever he may be; subject to the condition in
some cases of his appointing a proper place.”: Leake on
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Contracts (1921 ed.). These are the dimensions of the rule.
7. Despite Soniram Jeet Mull v. R.D. Tata and Company Ltd.,
AIR 1 27 PC. 156, a controversy has been carried on
whether this principle is applicable in India. The contract
in that case did not say where the money was to be paid.
The Privy Council observed that the implication wasindisputable that they were to be paid at the place where
the respondent’s firm was. Such inference can justly be
drawn from the terms of the contract itself or from thenecessities of the case, involving in the obligation to pay
the creditor, the further obligation of rinding the creditorso as to pay him. A Full Bench decision in Firm Hira Lal
Girdhari Lal v. Baij Nath Hardial Khatri, AIR 1960 Punjab450, came to hold that in order to find whether the money
was agreed exoressly or impliedly to be paid within its
territorial jurisdiction, the court is entitled to take into
consideration the contract, its attending circumstances,
the creditor’s ordinary place of residence or business and
the course of dealings between the parties including all
the other factors relevant in a given case, but it cannot
assume jurisdiction solely on the basis of the English
common law rule that where there is no express
agreement that payment is to be made at a particular
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2026:HHC:15098applicable in India, as a matter of law, to determine the
forum where the suit is to be instituted. Manohar Oil Mills
v. Bhawamdin AIR 1971 All. 326, and Ram Subramaniam v.
Ranga Rathan, 1978 Ker. L.T. 906, have found that to the.
cases in which Section 49 of the Contract Act does not
apply, the common law doctrine applies ‘not as a rule of
law but as a rule of evidence’. I am in respectfulagreement with the statement, but partly. What is a rule
of evidence, if it is not a rule of law? 1, therefore, agree
that the common law rule should be invoked in such casesof
not merely as a rule to help locate the forum but as a part
of the law relating to contractual obligations where the
statute is silent on the matter. Avadh Behari J. has,
therefore, with his usual caution, concluded that we
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cannot totally exclude the application of this rule from
our law: National Building Contraction Corporation Ltd. v.
The Vydsa Bank Ltd., ILR. 1981, 1 Delhi 623. In State of
Punjab v. A.K. Raha (Engineers) Ltd., AIR 1964 Cal. 418, it
was observed:
“Where no place of payment is specified in the
contract either expressly or impliedly, the debtor
must seek the creditor; the obligation to pay the
debt involves the obligation to find the creditorand to pay him at the place where he is when the
money is payable.”
8. The position of law could not have been stated more
categorically than it was in S.P. Consolidated Engineering
Co. (P) Ltd. v. Union of India, AIR 1966 Cal. 259. The learned
Judge said:
“The English Common Law Rule that ‘a debtor
must seek the creditor’ is universal in its
application, since it is founded on justice and
equity. It is surely not a technical rule of English
law, wrongly made applicable to India. It is a
beneficial rule, inflexible and is of universal
application. The rule cannot be said to be nothing
more than a presumption rebuttable by contrary
evidence. When there is evidence to indicate the::: Downloaded on – 08/05/2026 14:49:02 :::CIS
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2026:HHC:15098place where the parties to a contract intended
that the debt was payable, then the court will
hold that such place of payment has been
indicated in the contract itself, though not.
expressly, but by implication. The occasion for
applying the rule, as a rule of justice, equity and
good conscience, would arise only when the courtfinds that no place of payment is expressly stated
in the contract nor is it possible to find such place
of payment indicated in the contract byof
necessary implication, on the relevant evidence
on record.”
9. Following Bharumal v. Sekhawatmal, AIR 1956 Bom. 111,
it was held in Shobasingh and Sons v. Saurashtra Iron
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Foundary and Steel Works (Pvt.) Ltd. AIR 1968 Guj. 276, that
the common law rule that the debtor should find the
creditor and pay the debts where the creditor resides,
applied in India in fit cases. I am in respectful agreement
with this reiteration.
10. But a further question still survives whether the rule is
applicable to promissory notes. Can a payee file a suit in
the place where he lives, carries on business or works for
gain, for recovery of money payable on demand but
without specifying the place of payment? Jivatlal
Purtapshi v. Lalbhai Fulchand Shah, AIR (29) 1942 Bom.
251, laid down that Section 49 of the Contract Act, 1872
and the common law rule that the creditor must seek out
his creditor in order to pay him, did not apply to
negotiable instruments. The moneys due under the
promissory note, being payable on demand; the natural
inference was that the money was payable at the place
where the demand was communicated to and received by
the debtor. In that case, the demand for payment was
made from Bombay by notice addressed to the debtor at
Ahmedabad. No reply was sent to that notice by the
debtor. It was held that the money was payable at
Ahmedabad, and the court at Bombay had no jurisdiction.
As per Sew Baran Saw v. Ram Charitra Dubey, AIR 1929 Cal.
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2026:HHC:15098
306, where the creditor recited in the assignment that the
money due on the promissory note assigned should be
paid at the place where the assignee resides, it cannot
give the assignee a right to sue on the promissory note in
.
the court of that place. In Manek Devji v. Rathanbai w/o
Khetu Devji, AIR (37) 1950 Kutch 66, the plaintiff brought a
suit in the Kutch court on a promissory note executed in
Bombay by the defendant, who was a resident of Bombay.
There was a recital in the pronote that the amount was
payable anywhere. It was held that the Kutch court had no
of
territorial jurisdiction to entertain the suit. Sailum
Eshwarayya v. Thakur Devi Singh, AIR 1953 Hyd. 289, laid
down that the common law rule does not apply to
promissory notes. J.N Sahni v. The State of Madhya Bharat,
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AIR 1954 M.B. 184, said that it does not apply to a
promissory note payable on demand and which is not
payable at a specified place. On the other hand, in Md
Ishaq Khan v. Muhamad Islam Ullah Khan, AIR 1951 Lah.
481, the plaintiff had executed a promissory note in U.P.
but had delivered the promissory note at Delhi to the
payee, who was a widow, living in Delhi, and she made
demands upon the defendant from Delhi, and it was held
that the Delhi court had jurisdiction to entertain the
claim.
17. In the present case, the plaintiff was residing at
Shimla, and the defendants were bound to pay money to her at
Shimla; hence, the Courts at Shimla had the jurisdiction, and the
learned Appellate Court erred in holding that the Courts at
Shimla had no jurisdiction to hear and entertain the present suit.
Hence, this substantial question of law is answered accordingly.
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2026:HHC:15098
Substantial Question of Law No.2:
18. The learned Appellate Court had framed a point for
.
determination whether the impugned judgment and decree
dated 27.11.2004 was legally sustainable. This point did not
affect the outcome of the appeal. Hence, this substantial
of
question of law is answered accordingly
Substantial Question of Law No.3:
19.
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The learned Appellate Court heavily relied upon the
carbon copy of the resolution (Ex.PW1/A) to hold that its original
was not proved on record. Learned Appellate Court failed to
notice the statement of account (Ex.PW2/A to Ex.PW2/B) in
which a deposit of ₹67,067/- was shown to have been made vide
cheque No.0832620. This amount was deposited by transfer
voucher (Ex.PW2/E). The cheque 0832620 (Ex.PW2/F) was
issued in the name of the Principal, DAV Centenary Public
School, Rajgarh, by the plaintiff. HC Sarkaik (DW1) admitted in
his cross-examination that DAV Centenary Public School,
Rajgarh, maintained an account in H.P. State Co-operative Bank,
Rajgarh, but he could not say that the amount was transferred
from the plaintiff’s account to the account of the school. It was
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2026:HHC:15098
rightly held by the learned Trial Court that the defendants did
not explain the deposit of the cheque; the plaintiff’s version was
.
to be accepted as correct that she had deposited the amount in
the defendants account as a loan. The defendants could not have
retained the loan taken from the plaintiff, and were bound to
return it. Therefore, the learned Trial Court had rightly decreed
of
the suit, and the learned Appellate Court erred in dismissing the
suit by relying upon the carbon copy of the resolution. Hence,
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the judgment passed by the learned Appellate Court failed to
consider the material evidence on record, which vitiated the
judgment rendered by it. Therefore, the substantial question of
law is answered accordingly.
Final order:
20. In view of the above, the present appeal is allowed,
and the judgment and decree passed by the learned Appellate
Court are ordered to be set aside, whereas the judgment and
decree passed by the learned Trial Court are ordered to be
restored.
21. Pending application(s), if any, also stand(s) disposed
of.
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22. Records of the learned Courts below be sent down
forthwith.
.
(Rakesh Kainthla)
Judge
7th May, 2026
(Chander)
of
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