STATE OF GONDAL Vs. GOVINDRAM SEKSARIA

JUDGEMENT

(1.) This is an appeal by defendant 1 against the judgment of Blagden J. dated 15 January 1943, whereby it was ordered that defendant 1 should pay to the plaintiffs upwards of Rs. 77,000. There is also a crossappeal by the plaintiffs against defendants 2 and 3, who are trustees and against whom the learned Judge dismissed the action. An objection as to the jurisdiction of this High Court to try this action was taken in the Court below, and has been raised by Sir Jamshedji Kanga in this Court also. It arises in this way. Defendant 1 is His Highness the Maharaja of Gondal, and under Section 86, Civil P.C., 1908, it is not competent to sue the Ruling Chief of an Indian State in this Court, unless the consent of the Crown Representative has been first obtained. Sub-section (1) of Section 86 is as follows: Any such Prince or Chief, and any ambassador or envoy of a foreign State, may, in the case of the Ruling Chief of an Indian State with the consent of the Crown Representative, certified by the signature of the Political Secretary, and in any other case with the consent of the Central Government, certified by the signature of a Secretary to that Government, but not without such consent, be sued in any competent Court. Sub-section (2) provides that such consent may be given in respect to a specified suit or to several specified suits, or with respect to all suits of any specified, class or classes, and may specify, in the case of any suit or class of suits, the Court in which the Prince may be sued. The certificate of consent obtained in this case is in this form: CONSENT OF THE CROWN REPRESENTATIVE. CERTIFICATE. This is to certify that in accordance with the provisions of Section 86 of the Civil P. C. 1908 (Act V of 1908) the Crown Representative consents to a suit being instituted in the High Court of Judicature at Bombay, by Mr. Govindram Seksaria and the Director and Managing Agent of Seksaria Cotton Mills Limited of Bombay, against His Highness the Maharaja of Gondal, in respect of the matters specified in the copy of the plaint attached hereto. The intended plaint is attached to the certificate, being in the precise form, except for the number of the suit, in which the plaint was ultimately sworn to. As appears from it, there are in fact two plaintiffs, Govindram Seksaria and the Seksaria Cotton Mills, Limited,: but it has been submitted by Sir Jamshedji Kanga for the Maharaja that as the certificate of consent was in favour of a suit by Govindram Seksaria and the director and managing agent of the company, no valid consent to the action as constituted by the personal plaintiff and the plaintiff company has been given, and accordingly this Court has no jurisdiction. In my judgment, there is no substance in this contention. In the first place, the certificate of consent has, as I have mentioned, a copy of the then intended plaint annexed, in which the parties are correctly described. Further, when the petition is examined on which the consent was given, it discloses who the petitioners are and also that it is the petitioners who are to be the plaintiffs, namely, Govindram Seksaria and the Seksaria Cotton Mills, Limited: see para. 25 of the petition which is as follows: That your petitioners desire to file a suit against inter alia the said Maharaja for recovery of the said amount in the High Court of Judicature at Bombay. From this it is clear that the Crown Representative not only had the precise nature of the intended suit before him but also the identity of the intended plaintiffs. Section 86 nowhere provides that the consent is to be given to a particular plaintiff. What Sub-section (2) provides is that consent is to be given to "a specified suit." In my judgment, the learned Judge in the Court below was right in holding that the requisite consent under the section had been given. Turning to the main issues between the parties. The dispute arises out of a contract for sale of two cotton mills together with their plant and machinery, and concerns a substantial sum in respect of arrears of municipal taxes due at the date of the contract in respect of the property sold. The facts are as follows: Defendants 2 and 3 are the trustees of a debenture trust deed dated 1 October 1926, and executed by Currimbhoy Mills Co., Ltd. At all material times defendant 1 the Maharaja, held all the issued debentures amounting in value to a sum of Rs. 20,00,000. The company having made default, the trustees on 1 October 1933, took possession of the properties comprised in the security. On 2 March, 1934, the company was ordered to be wound up compulsorily, but the liquidator never attempted to interfere with the possession of the trustees. In the events which had happened, the trustees had power to sell, and by Clause 7 of the trust deed they had to exercise that power, if requested so to do by a majority of the debenture-holders; such majority being in fact the Maharaja. This clause is important in view of what happened. On 24 July 1937, the trustees being still in possession, the solicitors to plaintiff 1 wrote to the Maharaja a letter which commenced as follows: Our client is informed that you are the mortgagee in possession of the freehold land admeasuring about 34,856 sq. yards the buildings, machinery and plant of the Mills, known as The Currimbhoy Mill and Mahomedbhoy Mill belonging to the Currimbhoy Mills Co., Ltd., (in Liqu.) being the holder of all the first mortgage debentures issued by the said company. Our client is further informed that as such mortgagee in possession you are willing to sell the said land, buildings, machinery and plant.

(2.) The letter proceeds to offer a price. Sub-paragraph (2) provides: "You are to make out a marketable title to the said premises." And sub-para. (3) is as follows: All rents, rates, taxes and outgoings are to be apportioned between you and our client as on the date of completion or possession as aforesaid. That letter was replied to on 5 August 1937, by the Dewan, Gondal State, as follows: At present the State is desirous to dispose of the Mills at price of Rs. 12,50,000 net as per terms and conditions detailed below. 1. The trustees for the sole debenture holder agree to transfer to the purchaser all the property and machinery lying in the same condition at present and generally described as block account of the Company and which is taken over by the trustees and given possession on their behalf to Messrs. W.H. Brady & Co., Ltd. 2. The purchaser will be required to pay the full amount of sale on giving delivery of possession of the mills and he will be considered owner for all practical purposes and may deal with the property in the best way suited to him. The trustees will endeavour to transfer the property as early as possible.

(3.) The trustees will not pay any brokerage to any party. 4 Any legal expenses in connection with the sale will be required to be borne by the purchaser. This offer should not be considered firm as the market is rapidly rising day by day unless it is accepted by the State as a result of an offer In writing from you with a cheque for 10 per cent, deposit. Your cheque No. H.T. 340535 dated 24 July 1937 on the Central Bank of India, Ltd., for Rupees 1,20,000 is returned herewith. Thereafter upwards of three weeks elapsed, and then plaintiff 1 himself in a letter addressed to the Maharaja personally and dated 1 September 1937, wrote as follows: With reference to our cheque No. H.T. 340590 dated 27 ultimo which was handed over to Mr. Asar on the same day, we are told by him that he had made inquiries into the matter and that if we accept the price of the above Mills of Rs. 12,50,000 and also the following four terms given to us by him, the business would be possible. 1. The trustees for the sole debenture holder agree to transfer to the purchaser all the properties and machinery lying in the same condition at present and generally described as block account of the company and which is taken over by the trustees and given possession on their behalf to Messrs. W.H. Brady & Co., Ltd., and which is mentioned in the printed list of Messrs. W.H. Brady & Co., Ltd., including all machinery in the Mills compound. 2. The purchaser will be required to pay the full amount of sale on giving delivery of possession of the mills and he will be considered sole owner for all practical purposes and may deal with the property in the best way suited to him. The trustees must endeavour to transfer the properties to the purchaser or in the name of his nominees as early as possible. 3. The trustees will not pay any brokerage to any party.