FERNANDO A.J.—Avichchy Chettiar v. Perera.
Present; Moseley J. and Fernando A.J.
AVICHCHY CHETTIAR v. PERERA.
56—D. C. Negombo, 9,776.
Appeal—Failure to add necessary parties as respondents—Exercise oj Supreme
Court's discretion—Civil Procedure Code, s. 770.
The plaintiff sued the first defendant-respondent to recover a certainsum of money by way of principal and interest due on a mortgage bondand joined the second and third defendants as parties, who held subse-quent incumbrances over the property mortgaged.
Judgment was entered in favour of the plaintiff for an amount lessthan that claimed by him and the plaintiff appealed, the first defendantalone being made respondent.
Held, that it could not have been obvious to the appellant that thesecond and third defendants were necessary parties to determine theamount payable to the first .defendant, although their rights would havebeen affected if the appeal was allowed; and that the Supreme Courtshould exercise its discretion under section 770 of the Civil ProcedureCode, and give leave to the appellant to add the second and thirddefendants as parties.
PPEAL from a judgment of the District Judge of Negombo.
L. A. Rajapakse, for plaintiff, appellant.
D. W. Fernando, for first defendant, respondent.
Cur. adv. vult.
December 15, 1937. Fernando A.J.—
Counsel for the respondent has taken the preliminary point that thisappeal is not properly constituted, inasmuch as the second and thirddefendants who are also necessary parties to this appeal have not beenmade respondents. The plaintiff appellant claimed a sum of Rs. 622.30as principal and interest due to him from the first defendant on a mortgagebond executed by him on April 26, 1929. In paragraph 3 of the plaint, hestated that the first defendant had paid a sum of Rs. 488.95 on the bond,and had thereafter failed to pay any sum to the plaintiff. The firstdefendant filed an affidavit in which he stated that he had paid Rs. 782.32on account of the bond, and not Rs. 488.95 as mentioned by the plaintiff.40/-9
FERNANDO A.J.—Avichchy Chettior v. Perera.
It will be noted that the bond provided for the payment of the principalsum of Rs. 300-10 with a further sum of Rs. 480.06 as interest fpr six yearsby 36 instalments, each of Rs. 35.56. The learned District Judge heldthat as the first defendant had paid 22 instalments up to June 22, 1933,the plaintiff was not entitled to anything more than the balance principaland interest due thereon from December 22, 1932, and entered judg-ment accordingly for Rs. 311.15 as balance principal and for interest upto December 22, 1932, on the rate stipulated in the bond, and thereafterinterest at the rate of 9 per cent, on the aggregate amount till paymentin full.
Now the second and third defendants were made parties to the actionbecause they held subsequent encumbrances over the mortgaged property.The second and 3rd defendants filed no answer and did not appear at thetrial. The decree that was entered ordered the first defendant to paythe sums fixed by the learned District Judge by certain instalments fixedby the Court, and that in default of payment of any instalments on thedue date an order to sell do issue in respect of the mortgaged property.
There is no reference in the decree to the second and third defendants,but as they have been made parties to the action in the District Court,it cannot be doubted that the second and third defendants are themselvesbound by the decree, and their rights on the encumbrances in their favourmust be subject to that decree. In this appeal, the plaintiff appellantcontends that he is entitled to have judgment entered for the sum prayedfor by him, and the second and third defendants will no doubt be affectedprejudicially if the appeal is allowed, inasmuch as their rights either tcpay the amount decreed to the plaintiff-appellant or to claim any balancethat may exist after the property is sold, and the plaintiff’s claim isrealized, will depend on the amount that is payable to the plaintiff.
It seems clear, therefore, that the second and third defendants werenecessary parties to the appeal, and that the appeal is not properlyconstituted inasmuch as they have not been made parties.
Counsel for the appellant argues that this is a matter in which we shouldadjourn the hearing of the appeal in terms of section 770 of the CivilProcedure Code, and that the second and third defendants should now bemade respondents to the appeal. The provisions of section 770 wereconsidered by a Bench of Four Judges in Ibrahim, v. Beebeeand Shaw J.in that case expressed his. opinion that an order adding parties undersection 770 was entirely discretionary. “ I should not myself be dis-posed ”, he adds, “ to amend the proceedings when the appeal is actuallybefore the Court for hearing, unless some good excuse was given for thenon-joinder, or unless it was not very apparent that the parties not joinedmight be affected by the appeal”. Wood-Renton C.J. agreed entirelywith the observations of'Shaw J. and stated that he was prepared to actunder section ^.770 in view of the possibility that the necessity of the firstdefendant being made a party respondent to that appeal may have beenoverlooked, inasmuch as the only question immediately involved waswhether or not the inquiry should proceed!’. Ennis J. thought thatthere were three courses open to the appeal Court: (1) to hear the appeal
* 19 N. L. R. 289.
FERNANDO A.J.—Avichchy Chettiar v. Perera.
as it stands, (2) to add and give notice to parties under section 770, or(3) dismiss the appeal for defect of parties. Which of the three coursesthe Court will follow will depend on the circumstances of the particularcase, and as stated in Dias v. Arnolis', is a matter for the decision of theJudge who hears the appeal.
We have been referred to certain later decisions. In Kaderasen Chettyv. Perera’, Dalton and Lyall-Grant JJ. rejected the appeal because theythought that an appeal should be dismissed unless the defect of partieswas not one of an obvious character which could not reasonably havebeen foreseen and avoided. Apparently no excuse was offered for theomission to make them parties to the appeal. In Ramasamy Chettiar v.Mohamed Lebbe Marikar Poyser and Soertsz JJ. following KaderasenChetty v. Perera allowed the addition of certain parties as respondents tothe appeal under section 770 for the reason that there was an error in thedecree, and that in those circumstances there was some excuse for thenon-joinder of the second and third defendants. The second and thirddefendants in that action were joined as lessees of the property in respectof which the plaintiff brought a hypothecary action. They did not appearat the hearing in the District Court, nor did they file answer. It wouldappear that the judgment of the District Court purported to dismissplaintiff’s action against all the defendants, but the decree only dismissedthe action of the plaintiff against the first defendant. For these reasonsthe appellant was allowed to join the second and third defendants asrespondents to the appeal on certain terms.
In the case of Wickremasuriya v. de Silva *, which came before the sametwo Judges, they refused to exercise the discretion under section 770because there was no good excuse for the non-joinder. That was anaction on a mortgage bond in which the first defendant was principal andthe second defendant was surety. The first defendant contested theaction and judgment was entered against him. The second defendantdid not appear and defend. When the first defendant appealed, objectionwas taken that he had not made the second defendant a party. If I mightsay so with all respect, the appellant in Wickremasuriya v. de Silva musthave known that the second defendant was a party to the action, and itmust have been obvious to him that the second defendant would beaffected if his appeal succeeds, and the order made was clearly Fight. Wehave also been referred to the case of Fernando v. Fernando ', in whichmy brother and I held that certain parties who had not been maderespondents to an appeal should be joined under section 770 because ifthe appeal succeeds the result would be to increase the share of the eighth,to eleventh defendants who had not been joined. But I do not thinkthat case is of any assistance with regard to the principle that should beapplied here. The only question that arises on this appeal is whether itwas obvious to the appellant that the second and third defendants shouldalso be made respondents to this appeal.- They did not take part in thecontest in the lower Court. The order made in the lower Court was for
1 17 N. L. R. 200.* 8 Ceylon Late Weekly 29.
* 8 Ceylon Law Recorder 172.s 7 Ceylon Law Weekly 133.
3 7 Ceylon Law Weekly 64; 17 CeylonLaw Recorder 14.
Jayasinghe v. Wijesinghe.
the payment of instalments by the first defendant, and the plaintiff’sappeal is against the amount which the first defendant has been orderedto pay. My own view is that it could not have been obvious to theappellant that the second and third' defendants were also necessaryparties to determine the amount payable by the first defendant, althoughthey are in a sense interested in the amount inasmuch as .their rights onthe encumbrances in their favour will be affected if the amount orderedby the learned District Judge is increased in appeal.
For these reasons, I think this is a case in which we should exercise thediscretionary power given to us by section 770. I would therefore follow‘ the order made by Poyser J. in Ramasamy Chettiar v. Mohamed LebbeMarikar (supra) and give the appellant leave to add the second and thirddefendants as respondents to the appeal, subject to payment by him ofRs.. 52.50 as costs to the first defendant-respondent. Let the hearing ofthis appeal be adjourned for November 13, and let the second and thirddefendants to this action be made respondents to this appeal, and let noticeof appeal be issued to the Fiscal for service on them.
These steps will be taken on payment by' the appellant of the sum ofRs. 52.50 as ordered before, or on production by him of a receipt from theProctor of the appellant to the effect that that sum has been paid.
Moseley J.—I agree.
AVICHCHY CHETTIAR v. PERERA