TMI Blog1964 (12) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipts. The pledge was, however, not registered with the Registrar of Companies. The Registrar, however, took an objection that it was a charge which required to be registered under section 125 of the Companies Act, 1956. It is here necessary to quote sections 125(1) and 125(4) ( d ) and ( e ). They are as follows : "125. Certain charges to be void against liquidator or creditors unless registered. (1) Subject to the provisions of this Part, every charge created on or after the 1st day of April, 1914, by a company and being a charge to which this section applies shall, so far as any security on the company's property or undertaking is conferred thereby, be void against the liquidator and any creditor of the company, unless the prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es had been executed in favour of the bank by its own debtors. The bank subsequently went into liquidation. Radhakrishnan Chettiar, as endorsee of the promissory notes, collected a sum of Rs. 1,100 and odd from the makers of those notes. The official liquidator of the bank took out an application against Radhakrishnan Chettiar asking him to refund the sum of Rs. 1,100 so collected on the ground that the agreement between the bank and Radhakrishnan Chettiar by which the promissory notes had been endorsed required registration under section 109(1)( e ) of the Indian Companies Act, 1913 (which in this respect was similar to section 125 of the Act of 1956), that since it had not been registered, it was void against the official liquidator. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore required registration. The argument was addressed only with 'reference to clause ( e ). The contention on behalf of the official liquidator was that there was a mortgage of the promissory notes which were conceded to be movable property of the Madras Peoples' Bank Ltd., and therefore required registration under clause ( e ) of section 109(1). The contention of Radhakrishnan Chettiar however was that, though it might be a mortgage, it a pledge of the promissory notes, that consequently it was exempt from was a iteration. The learned judges pointed out by quoting the definition of "pledge" in section 172 of the Contract Act (the bailment of goods as security for payment of a debt or performance of a promise) and a decision of the Excheq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o receives support from the principle possibly underlying the necessity for the registration of a charge. The registration of the charge is' intended to give notice to people who may not othrewise be aware of it, particularly to persons who may advance money to the company, and it may also serve the purpose of preventing a fraudulent and belated claim of a charge in the event of liquidation. But where the movable property of the company has itself been taken possession of by its creditor, the very possession of the movable property should itself be notice of the charge. Following the Bench decision, I shall have to hold that in the present case the registration is not required. The learned Government Pleader has cited the decision in Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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