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TMI Blog2009 (2) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... i Village, Hosur Taluk, Dharmapuri District and lying within the limits of Begapalli Panchayat and Hosur Panchayat Union, which were pledged by one Mr. Jamsheed M. Panday, Chairman of Zen Global Finance Limited and who happened to be the friend of Mr. S.R. Eshwaran, the Director of the appellants-companies. 3. On 25-3-1998, by separate Board Resolutions, the said Jamsheed M. Panday was authorised and we refer to one such resolution passed by the Board of M/s. Vipanchi Investments Private Limited in respect of the property to an extent of 16.97 acres, which reads as follows: "Resolved that Sri Jamsheed M. Panday, Chairman of M/s. Zen Global Finance Limited be and is hereby authorised to pledge the documents of 16.97 Acres of the landed property of the company situated at Begapalli Village, Hosur as collateral security in favour of M/s. R.B.F. Nidhi Ltd., in connection with raising of funds for M/s. Zen Global Finance Limited and to sign necessary documents for the above purpose of pledge." Similar resolutions were passed in respect of the properties of the other two companies as well. The said Panday deposited the title deeds in respect of the properties with R.B.F. Nidhi Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ough O.S.A. Nos. 343 to 345 of 2007 cannot be prosecuted by the Committee which is not in existence as on today, as the very same common order is put in issue before this Court in the other appeals and they were parties to the applications before the Court below, and also for an effective adjudication of the issue, we are of the opinion that the learned counsel for the erstwhile Committee should also be heard. Therefore, we permit Mr. Arvind P. Datar, learned Senior Counsel representing the erstwhile Committee to present his case. So far as the appellant in O.S.A. Nos. 390 to 392 of 2007 is concerned, they being the Federation of Investors Association, we permit Mr. P. Girirajan, learned counsel to assist the Court for the very same reason namely, they have also questioned the common order put in issue before this Court and in case any order adversely affecting their rights are passed, they would also be aggrieved. Moreover, they were allowed to come on record to appeal by orders of this Court. Further, as the disposal of the O.S.A. Nos. 130 to 132 of 2008 will also govern the issue raised by the Committee and the Federation of Investors Association, the objection raised cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had availed several loans from M/s. R.B.F. Nidhi Limited only in the capacity of Chairman of M/s. Zen Global Finance Limited, thereby meaning that the loans were availed only for the benefit of the company and such loans cannot be considered to be the personal loans of Panday. Therefore, the contention of the learned Senior Counsel for the appellants-companies that the said Panday had deposited the title deeds contrary to the authorisation cannot be accepted. Whether Mr. Panday had contravened the authorisation or not is a matter between the appellants-companies and the said Panday to be resolved. There is no privity of contract between the appellants-companies and M/s. R.B.F. Nidhi Limited. 11. It could be further seen that even on the date when the title deeds were deposited on 15-4-1998, the said Panday had availed ten loans and had a huge outstanding amount of nearly Rs. 36 crores towards the loan amount and the interest accrued thereon. We are at loss to understand that when the said Panday had availed ten different loans from 6-4-1995 till 16-9-1995, he could deposit all the title deeds of the properties covering a total extent of approximately 44 acres for one loan of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is called a mortgage by deposit of title deeds." 14. Though there is no presumption of law that the mere deposit of title deeds by itself would constitute a mortgage, but the Court may presume under section 114 of the Evidence Act that under certain circumstances, loan and the deposit of title deeds constitute a mortgage. In the given facts and circumstances of this case, inasmuch as the loans were already availed and the promissory notes were executed in respect of a huge sum of Rs. 37 crores without there being any security, it could be reasonably presumed that the deposit of title deeds in question cannot be restricted only for one loan, but it shall be in respect of all the loans and thereby, M/s. R.B.F. Nidhi Limited would be entitled to oppose the redemption restricting the consideration only in respect of one loan. In our opinion, the deposit of title deeds cannot be confined to one loan and it is in respect of all transactions between the parties. 15. The duties of the Company Court are to (i) protect the assets of the company in liquidation; (ii) safeguard the company's records; and (iii) investigating the company's affairs to discover, protect and recover the asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may presume under section 114 of the Evidence Act that under certain circumstances a loan and a deposit of title deeds constitute a mortgage. But that is really an inference as to the existence of one fact from the existence of some other fact or facts. Nor the fact that at the time the title deeds were deposited there was an intention to execute a mortgage deed in itself negatives, or is inconsistent with, the intention to create a mortgage by deposit of title deeds to be in force till the mortgage deed was executed...." 18. This Court is competent to consider the circumstances under which the deposit of title deeds was made. Even when the title deeds were deposited, the said Panday had availed ten loans from R.B.F. Nidhi Limited. Another circumstance is that there is absolutely no indication as to why the deposit of title deeds should be restricted only in respect of one loan when there were no deposit of title deeds in respect of at least seven other loans. The further circumstance is that what prompted Mr. Panday to deposit the title deeds in respect of more than 44 acres of valuable land for a loan of Rs. 2.50 crores at the time when he had already availed a loan of nearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unless there is an express contract to that effect." 21. In Syndicate Bank v. Vijay Kumar AIR 1992 SC 1066, while considering the scope of 'general lien', the Apex Court quoted the Halsbury's Laws of England as follows:- "Lien in its primary sense is a right in one man to retain that which is in his possession belonging to another until certain demands of the person in possession are satisfied. In this primary sense it is given by law and not by contract." (p. 1068) The Apex Court has also quoted 'Chalmers on Bills of Exchange' as to the meaning of 'Banker's Lien', which reads as follows:- "A banker's lien on negotiable securities has been judicially defined as 'an implied pledge'. A banker has, in the absence of agreement to the contrary, a lien on all bills received from a customer in the ordinary course of banking business in respect of any balance that may be due from such customer." (p. 1069) The Apex Court has also quoted 'Chitty on Contract' as to the general lien, which reads as follows:- "'By mercantile custom the banker has a general lien over all forms of commercial paper deposited by or on behalf of a customer in the ordinary course of banking business. The custom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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