TMI Blog1974 (10) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... n Companies Act having its head office at Madras. Through its Counsel, the Company wanted an adjudication of stamp duty payable on the document- The Collector was of opinion that the document was chargeable to duty under Article 40 (b) of Schedule I of the Act and asked the respondent to pay ₹ 38,98,499.90 and to get the document certified under Section 32 of the Act. In the circumstances, therefore, the respondent asked for a reference under Section 56(2) of the Act. 2. The document in question, which is styled as a trust deed, was preceded by an agreement called Loan and Purchase Agreement dated 19-12-1966, entered into between the respondent and the Chemical Bank, New York Trust Company, in the United States. This agreement cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Company hereby charges in favour of the trustee by way of floating charge only with the payment of the debentures and other moneys hereby intended to be secured, ..... Clause 8: The security hereby constituted shall (subject as hereinafter provided) become enforceable within the meaning of these presents in each and every (one) of the events following: (a) Upon the happening of any event of default specified in Article VIII of the Loan and Purchase Agreement in the event of any such default continuing un-remedied for the respective periods prescribed therein. (b) If any Pari Passu floating charge created under Section 7.02 (A) of the Loan and Purchase Agreement or otherwise in excess of 1,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the specified immovable property as security for re-payment of money borrowed. So also, a charge, though not involving a transfer of interest in any specified property, creates a right over or in respect of specified property. As defined in Section 2(17), the inclusive part of it says; Every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to or in favour of another, a right over or in respect of specified property. Both in the concept of mortgage as understood in general law, and also in the extended definition of 'mortgage deed' in Section 2(17), it in contemplated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 40 (b) of Schedule I of the Stamp Act 5. The Advocate-General for the Revenue, heavily relied on Secy. to Commr. of Salt, Abkari and Separate Revenue, Revenue Board, Madras v. Orr, ILR 38 Mad 646 = (AIR 1916 Mad 374 (2)) (FB) and has contended that the transaction involved there was more or less similar to the transaction here, and that we must hold, following that judgment, that the trust deed is a mortgage deed. We have given our careful consideration to the contention, but are not persuaded that the transaction in the Secy. to Commr. of Salt, Abkari and Separate Revenue, Revenue Board. Madras v. Orr, ILR 38 Mad 646 = (AIR 1916 Mad 374 (2)) (FB) is like the one in the instant case. There was a question of floating charge in that ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of sums advanced by the Bank. It will at once be obvious that the difference between the transaction just now mentioned and dealt with in that case and the one in the present case is that in the former the charge was enforceable eo instanti and enforceability of the charge did not depend upon a particular event in which case the charge would crystallise. In other words, that case was not one of the floating charge, but a case of mortgage, for, there was transfer of an interest in specified immovable property, or in any case, there was creation of a right over or in respect of specified property, as recited. The essence of the difference between the two transactions, the one in the case cited by the learned Advocate-General and the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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