KANHAIYALAL JHANWAR Vs. PANDIT SHIRALI AND CO

JUDGEMENT

(1.) In this suit there are three defendants but only one of them, namely, defendant 3, appeared to contest the claim. The other two defendants filed their written statements but did not appear at the hearing. The substantial contest is whether the plaintiff or defendant 3 is entitled to a prior charge over certain shares belonging to defendant 2.

(2.) The plaintiff alleges that on 1-8-1946, defendant 1, Pandit Shirali & Co., executed a promissory note for Rs. -37,500/- payable to him on demand and defendant 2, Hemmad, guaranteed the due payment of the promissory note and as security for the guarantee, in or about November 1947, pledged to the plaintiff certain shares held by him in the Orient Movietone Corporation Ltd., which is defendant 3 in this suit. The plaintiff claims the amount of the promissory note against the debtor and the guarantor and also the enforcement of the pledge by the guarantor. He has proved the promissory note and the guarantee and is, therefore, entitled to the money decree claimed against Pandit Shirali & Co. and Hemmad.

(3.) The difficulty arises with regard to the other part of the plaintiff's claim, namely, his enforcement of the pledge. This claim is opposed by defendant 3, the Orient Movietone Corporation Ltd. I will call this defendant, the defendant company. It says that it has a prior charge over the shares. This question of priority was the principal point argued in this case.