TMI Blog1958 (5) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... debentures. The first series of debentures were allotted to 8-4-1948 for a total sum of ₹ 1,50,000/-. A Debenture Trust Deed was executed and registered with the Registrar, Joint Stock Companies, Lucknow and also in the office of the Sub-Registrar, Lucknow under the Indian Registration Act. The second series of Debentures were issued on 23-6-1950 for a sum of ₹ 100,000/-. For this series also a debenture Trust Deed was executed and it was registered with the Registrar, Joint Stock Companies Lucknow as well as in the office of the Sub-Registrar, Lucknow under the Indian Registration Act. By a resolution dated the 23rd March 1952 the Board of Directors authorised Sri B. P. Agarwall who was managing the affairs of the Company t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... half of these debenture holders. It is contended that registration under Section 109 of the Companies Act is all that is needed under the law and as the issue of debentures was intended to create only a floating charge on all the assets of the Company generally no registration under the Registration Act was either necessary or practicable. In this connection it was also urged that the plant and the machinery of the Company, at least the major and more substantial part of it was movable property within the meaning of the law and even if the third series of debentures were not registered under the Registration Act such plant and machinery being movable property could be held to be under a charge so far as these debentures were concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under which the charge is said to have been created is not to be considered as having an interest in Immovable property. The Debenture creating any interest in the Immovable property is not a transfer within the meaning of Section 17 of the Registration Act and therefore registration under that Act is not necessary. 5. Section 110 of the Companies Act deals-with the particulars that are required to be registered with the Registrar of Companies. These particulars are : (a) the total amount secured by the whole series, and (b) the date of the resolution authorising the issue of the series and the date of the covering deed (if any) by which the security is created or defined, and (c) a general description of the property charged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Registration Office of the place where the Company has its head office. In case there is no trustees registered in respect of a series of debentures he cannot get any information from such inspection. He may also make enquiries at the office of the Registrar of Companies. But inasmuch as the particulars required to be registered under Section 109 are of too general a character so far as the details of the properties are concerned, he is likely to have no clue to encumbrances on the property with which he is about to deal. In case there is no registration under the Indian Registration Act of the debentures issued specifying the properties purported to be encumbered, there will be no information available from the Registration Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in Immovable property. As observed by Derbyshire C. J. in the case referred to above, the issue of a debenture does limit the right of a Company to its property and creates from the moment it is executed a floating charge over the whole of the Company's property Immovable and movable that though the floating charge may become fixed on the happening of one of the events mentioned in the conditions of the debentures, the issue of debentures is a mutation of the right of the Company to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that the plant and the machinery of the Company are either embedded in the earth or they are permanently fastened to things attached to the earth. It is contended that most parts of the machinery are fixed to their bases with bolts and nuts and they can be removed by removing the nuts. It is therefore contended that such machineries as can be moved away by removing the nuts should be held to be movable property. A similar question went up for consideration to the House of Lords in/Reynolds v. Ashby Son 1904 ACJ 466. Machines in that case were fixed to concrete beds in the floor of the factory by bolts and nuts and could have been removed without injury to the building or the beds. Lord Lindley observed: The purpose for which the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
