HIRACHAND HIMATLAL MARWADI Vs. KASHINATH THAKURJI JADHAV

JUDGEMENT

(1.) THIS appeal arises out of an agreement for a mortgage. The plaintiff was one of the creditors of defendant No.1 for a substantial amount, and defendant No.1 is the proprietor of two cinema houses in Poona city, one of which is known as "Rainbow Talkies". On June 1, 1937, at a time when defendant No.1 was considerably indebted to the plaintiff, he executed two documents in favour of the plaintiff on the same day and registered them both. The first was a document giving the plaintiff the right to temporary possession of the cinema houses subject to certain obligations with respect to paying off the defendant's debts, and the other was an agreement to mortgage the cinema houses within three months. On July 9, 1937, defendant No, 3, another of the creditors, obtained a lease of the Rainbow Talkies from the defendant; and on July 16 defendant No.4 obtained a mortgage of the same property from the defendant. On August 11, 1937, an application in insolvency was made against the defendant by one Bhaurao Kokate. On the same day the defendant was adjudicated insolvent and receivers were appointed, now represented by defendants Nos. 2A and 2B in this suit. The plaintiff has sued for specific performance from the receivers of his agreement for a mortgage and also for a declaration of the priority of his agreement over the lease of defendant No.3 and the mortgage of defendant No.4. He won his suit on these three points, and defendant No.3 now comes in appeal. No one else has appealed, and the only parties to the appeal are the plaintiff-respondent and the appellant-defendant No.3.

(2.) BY way of a preliminary objection to the appeal, it was contended that the appeal was incompetent by reason of the receivers not being upon the record of the appeal. It is argued that the decree as between the plaintiff and the receivers must stand as they have not appealed, and that Rule 20 of Order XLI of the Civil Procedure Code applies to this case, so that the receivers, being "interested" in the result of the appeal, are proper, if not actually necessary, parties to it. It is also said that although the Court's powers in appeal are wide, it ought not to give a decree in favour of any party to the suit who has not been made a party to the appeal. The latter contention seems to be contrary to the provisions of Rule 33 of Order XLI. As to the first contention, even if the decree as between the plaintiff and the receivers is to stand, it does not follow that the receivers are necessary parties because they are interested in the result of the appeal. They are merely officers of the Court, and it is difficult to see what interest they have in the result. And even if the decree does stand as against them so that the plaintiff is entitled to get specific performance of his agreement for a mortgage, it does not follow that as between the plaintiff and defendant No.3 the plaintiff's mortgage will be given priority; and the priority which the trial Court has given to the plaintiff over defendant No.3 is the only objectionable feature of the lower Court's decree, so far as defendant No.3 is concerned.

(3.) ASSUMING however that it is open to defendant No.3 to take this point, we think that the receivers must be deemed to have waived their right to notice. On this point three cases were cited to us. In Manindra Chandra v. The Secretary of State (1907) 5 C.L.J. 148 it was held that the Secretary of State must be deemed to have waived his right to notice because objection to the suit on the ground of want of notice was not taken till three years from the beginning of the suit and after the plaintiff's case had been closed. In Bhola Nath Roy v. Secretary of State far India (1912) I.L.R. 40 Cal. 503 it was held that waiver was established because no issue as to the suit being defective for want of notice had been raised at all and no objection to the suit on that ground was taken until a very late stage just before the actual trial. It does not appear from the report whether any prejudice on the ground of limitation or otherwise had been actually caused to the plaintiff. But in Murarilal v. E.V. David (1924) I.L.R. 47 All. 291, where objection as to want of notice was not taken in the written statement but was taken before the trial and no prejudice had been caused by the delay to the plaintiff, it was held that the defendant could not be deemed to have waived his right to notice. One rule that seems to be deducible from these cases is that any prejudice to the plaintiff caused by the delay would result in the defendant being deemed to have waived his right to notice, even though delay, however long. would not necessarily by itself be a ground for holding that he had waived it. In the present case the objection was not taken at all until March 24, 1941, two years after the issues were first framed; and by that time the plaintiff's rights under the Specific Relief Act were barred. In view of these findings the question whether notice was or was not necessary in this particular case need not be considered.