TMI Blog1919 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... es a penalty upon any official of the Company who knowingly and wilfully authorises or permits the omission of such entry on the register. The performance of the duty to enter the mortgage or charge on the register may be compelled by order of the High Court. There is appended to this section in the Indian Act an Explanation in the following terms :- Explanation.-Omission to register under this section a mortgage or charge does not render the same invalid. But the officers of the Company cannot avail themselves as such of a mortgage or charge specifically affecting property of the Company and not so registered. 3. The appellant contends that the judgment of the High Court is erroneous, and that the question of construction has been conclusively settled in his favour by an order of the District, Judge in 1912 which stands unreversed. 4. The appellant was the secretary of the Swadeshi Steam Navigation Company, Limited. On the 27th June, 1910, a Resolution creating the charge in question was passed by the managing directors in the following terms:- Resolution III. --Resolved that, in consideration of the fact that the Honorary Secretary Krishna Ayyangar has worked for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it had not been registered; and (c) that it was not entitled to priority over debentures previously issued. The District Judge, Mr. Waller, refused to entertain grounds (a) and (b) as they had been decided by the order of the 27th April, 1912, but heard argument on ground (c), and on the 22nd December, 1913, decided that the appellant was entitled to priority over the debenture-holders. On appeal against this decision to the High Court at Madras the judgment now under appeal was delivered on the 30th April, 1915. The judgment deals with two points. The first was as to the claim of the debenture-holders to priority over the charge. On this the High Court decided in favour of the present appellant and against the debenture-holders. The second point was that of non-registration, which the Court allowed the debenture-holders to raise on this appeal. The Chief Justice, in delivering judgment, referred to the conflict on the interpretation of Section 43 of the English Act which had arisen between Sir George Jessel and James L.J. as to mortgages and charges to officers of the Company, and said that the Explanation appeared to be intended to reproduce the ruling of James L.J. in Ex pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have regularised the proceedings by extending the time, and giving leave to appeal from the 1912 decision, and they considered the point without going through this process. Their Lordships are not prepared to re verse the decision of the High Court merely because the proper course in point of practice was not taken, and they propose to deal with this appeal on the footing that the respondents wen; entitled to raise in the High Court their objections under Section 68. Whether leave should have been given to appeal would have been a matter of discretion, but the High Court appear to have had no doubt that they should allow the point to be raised. Their Lordships have, therefore, dealt with the case on this basis, and now proceed to con-wider the appeal on its merits. 9. The question of the effect of non-registration in cases where the charge was taken by an officer of the Company must be decided upon the terms of the Explanation to Section 68, but in order to make the judgment of the Chief Justice intelligible it is necessary to refer shortly to the English decisions which he quotes in his judgment. 10. The English Section-Section 43 of the Companies Act of 1862-corresponds t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No statement made on the introduction of the measure or its discussion can be looked at as affording any guidance as to the meaning of the words. 12. The question really narrows itself to this: What effect should be given to the words as such in the Explanation? 13. The appellant contended that the words as such relate to the words the officers of the Company, and that the effect is to enact that the officers cannot avail themselves as such officers of unregistered mortgages or charges taken by them in their capacity of officers of the Company. This is the most natural meaning of the words; it was adopted by Mr. Oldfield, the District Judge, in his decision of the 27th April, 1912, and in his judgment (Record, p. 9) he suggested circumstances in which lie thought the words so read would take effect. The contingency referred to by Mr. Oldfield was the retention by the Company of redeemed debentures or charges in the name of an officer. Such a contingency, however, is remote even if possible and it appears to their Lordships that it would be a mistake to read the words as directed to it. 14. The respondents contended that the words as such refer entirely to the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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