TMI Blog1931 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Indian Companies Act, 1882. On or before May 4, 1923, the respondent bank had borrowed from the Imperial Bank of India, the appellant, hereinafter called the Imperial Bank, the sum of ten lacs with interest, and on May 4, executed and delivered to the Imperial Bank a debenture creating a floating charge on the whole undertaking, properties, assets and interest, present and future, of the respondent Bank as security for the loan. On August 1, 1923, a similar debenture was executed and delivered to the Imperial Bank, creating a similar floating charge as security for a further loan of ten lacs with interest. Both documents were duly registered pursuant to Section 109 of the Companies Act, 1913. Neither document was registered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om such customers and in the property comprised in the title deeds. The Imperial Bank set up the express charge over the whole of the assets of the respondent bank. The liquidators contend that the debentures, so far as they seek to charge the debts secured on deposit of title deeds come within Section 17 of the Registration Act, which requires registration of all non-testamentary instruments which "purport or operate to create, declare, assign, limit or extinguish, whether in the present or in the future, any right, title or interest whether vested or contingent of the value of Rs. 100 and upwards to or in any immovable property" and not being registered, are covered by Section 49 of the same Act, which provides that no document required b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. On March 26, 1928, the debenture-holders' action came on for decision before Costello, J., who, on admission made on behalf of the Imperial Bank, made a decree which, so far as is material, is as follows: "The plaintiff bank, by its advocate admitting that by reason of the fact that the two debentures in the plaint in this suit mentioned have not been registered in accordance with the provisions of the Indian Registration Act, 1908, such debentures do not operate to affect any immovable property of the defendant bank, it is declared that the said debentures constitute charges upon all the undertaking, property and assets (including uncalled capital) of the defendant bank other than the immovable property of the defendant bank." This decr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce them either in their own name or in the name of the respondent bank. Are they, however, left without any right or interest in the debts which the title deeds secure? The High Court on appeal has answered this question in the affirmative. Their Lordships are of opinion that this decision does not give effect to the rights of the parties and cannot be supported. The debentures were intended to create a charge over the whole of the assets of the respondent bank; a floating charge until the occurrence of the stipulated events; a fixed charge when any of these events occurred. It is unnecessary to discuss how such a floating charge obtains legal validity in India. It is sufficient in this case to say that its validity over assets other tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of Property Act, 1882, as amended by the Act of 1900. By the amending Act, an actionable claim was defined as "a claim to any debt other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property," and sections were substituted for corresponding sections in the Act of 1882 dealing with the transfer of actionable claims. It appeared to the Chief Justice that inasmuch as a secured debt is not within the definition of actionable claim, the debt without the security could not be made the subject of transfer at all. But this seems to be creating disabilities which are not expressed in the Act, and, indeed, are inconsistent with it, for by Section 6 of the Act of 1882, "property of any kind may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k have a charge over the debts due to the respondent bank, whether secured or not, and are entitled to the benefit of all sums received in reduction of the debts, whether from the realisation of securities or otherwise. Their Lordships are, therefore, of opinion that the appeal should be allowed, and the order of the Appellate Court, dated March 18, 1930, be set aside. The order of Mr. Justice Buckland, dated August 26, 1929, should be varied by adding before the first "It is ordered" the following declaration: "It is ordered and declared that by virtue of its debentures the Imperial Bank of India is entitled to all sums received or to be received subsequently to April 28, 1927, by the receivers or the liquidators of the Bengal National Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X
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