Shanti Swaroop Dhavan, J. - (1.) This is a Defendant's second appeal from the decree of the Additional District Judge, Moradabad, confirming that of the Additional Civil Judge, Moradabad, decreeing the suit of a mortgagee for the recovery of his loan by the sale of the mortgaged property. The dispute is between an unsecured creditor who obtained a decree against his debtor and purchased properties belonging to the latter in the execution of his decree and a prior mortgagee of that very property. The facts are these. One Chiranji Lal, karta of a joint Hindu family firm owed money to several creditors, who may be classified for the purpose of this case into two sets. The first set consisted of three creditors each of whom lent different sums of money to Chiranji Lal, the total amount due to all the three being about Rs. 15,000/ -. The second set consisted of a single creditor Ishwardas Bank (Private) Limited which advanced a sum of Rs. 10,000/ - to Chiranji Lal. This bank is the Appellant before me, the appeal having been filed by its liquidator. The creditors of the first set, who had no connection with one another, were pressing Chiranji Lal for re -payment of their individual loans and each of them threatened to sue him. He persuaded all three of them to stay their hands by executing a mortgage of certain properties which consisted of a cinema building, together with all the machinery, the furniture and other movables which are usually used in a cinema business. The mortgage secured the entire amount of Rs. 15,000/ - owed by Chiranji Lal to the three mortgagees, but the mortgage deed contained a clause that each one of the three mortgagees would be entitled to file a suit under the mortgage for the recovery of his separate share and alternatively, all of them would be entitled to file a suit jointly for the recovery of the total amount due to them. After the execution of the mortgage deed, the Appellant Bank filed a suit against Chiranji Lal for the recovery of its unsecured loan and obtained a decree. In the execution of this decree, the cinema building Vas sold and purchased by the decree -holder Bank itself for a sum of Rs. 201/. It is manifest that the sale price was much too low. Thereupon, one of the three mortgagees - -namely, Deputy Shanker - -filed a suit for the recovery of his loan which amounted to Rs. 7000/ - with interest. He impleaded the original mortgagor as well as the Appellant Bank as the auction purchaser of the mortgaged property and also the other two mortgagees as co -Defendants. The mortgagor Chiranji Lal and the Appellant Bank both contested the suit and filed separate written statements which however contained the same pleas in defence. The co -mortgagees did not contest the suit. It was pleaded on behalf of the Appellant Bank that the mortgage was fictitious and without consideration, that the Bank as the buyer of the mortgaged property was entitled to the benefit of marshalling and that the mortgagee was not entitled to destroy the integrity of the mortgage by filing a separate suit for the recovery of his loan.
(2.) The trial court held that the Appellant Bank being an auction purchaser and not a buyer from the mortgagor himself was not entitled to the benefit of marshalling under Sec. 56 of the Transfer of Property Act. It further held that the Plaintiff mortgagee was entitled to file a separate suit for the recovery of his own debt because the mortgage deed itself contained an express clause giving him this right. It decreed the suit. These findings were affirmed in appeal and the Defendant Bank has come here in second appeal.
(3.) Mr. J.N. Agarwal advanced the following arguments in support of this appeal. First, he contended that the decree of the lower appellate court is without jurisdiction as the learned Additional District Judge, Moradabad was illegally appointed to the Judicial Service by the State Government. Learned Counsel relied on a recent decision of the Supreme Court in which it was held that several Judicial Officers in this State were illegally appointed. Learned Counsel contended that the appointment of Sri Indra Singh, Additional District Judge, who heard the appeal below was illegal for the reasons given in the judgment of the Supreme Court and consequently he had no jurisdiction to hear the appeal from the decree of the trial court. Learned Counsel drew my attention to the fact that a Full Bench of this Court has been constituted to consider the effect of the Supreme Court judgment on the validity of the appointments of several Judicial Officers and the legality of the judgments pronounced by them in other cases. Counsel suggested that the hearing of this appeal should be adjourned until after the decision of the Full Bench. There are two short answers to this argument. First, the question whether the appointment of Mr. Indra Singh, Additional District Judge was invalid for the same facts as existed in the case before the Supreme Court can only be decided on proof of these facts and the Appellant has not placed any facts before this Court to show that the case of the learned Judge is similar to that of the Judicial Officers whose appointments were declared invalid by the Supreme Court. Secondly, even assuming; that the appointment of Sri Indra Singh was invalid, the effect will only be that he was not competent to hear the appeal from the decree of the trial court. But the invalidation of his appointment does not in any way affect the competence of the trial court to hear the suit or the legality of the decree passed by him. The only objection of the Appellant can be that his appeal was heard by a Judicial Officer who was not competent to hear it. But this objection - -a purely technical one - -can be met by this Court giving the Appellant an opportunity to argue this appeal on questions of fact. Learned Counsel conceded, very properly in my opinion, that it would be impossible for him to contend that the Appellant has been materially prejudiced in any way and that he was merely taking advantage of a technical argument against the competence of the Presiding Officer of the lower appellate court. But this Court has ample power, in the exercise of its inherent jurisdiction and to prevent an abuse of the process of this Court, to pass any order it thinks fit in a situation like this in the interests of justice. Order 41, Rule 25 Code of Civil Procedure empowers an appellate court to determine itself any question of fact which may be essential to the right decision of the suit upon the merits and which the lower court has omitted to decide. Rule 25 clearly shows that this Court may in suitable cases re -hear questions of fact even in second appeal. In my opinion, this provision and the inherent powers of this Court are sufficient to enable this Court to hear questions of fact in second appeal if it is discovered that the Presiding Officer of the lower appellate court was for some technical reason not competent to hear the appeal below. I, therefore, called upon Mr. Agarwal to argue this appeal even on questions of fact, if he so desired. Learned counsel stated however that it would not be possible for him to challenge the finding of the trial court that the mortgage deed was executed for consideration and he would rely entirely on the learned Counsel's arguments which were advanced before the courts below but rejected.;