1964 (11) TMI 118 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the contract between the plaintiff and the defendant Company.
2. Interpretation of the assignment and its implications.
3. Defendant Company's right to deduct interest and disbursements.
4. Validity and extent of the lien claimed by the defendant Company.
5. Nature of the lien purportedly given to the plaintiff by the Naidus.

Issue-Wise Detailed Analysis:

1. Validity of the Contract Between the Plaintiff and the Defendant Company:
The defendant Company argued that there was no contract between them and the plaintiff, and even if there was, it was not enforceable. The plaintiff countered that this point was not raised in the pleadings and thus should not be considered. The court noted that the pleadings and issues did not clearly reflect the extent of the plaintiff's ultimate claim, but decided that it was unnecessary to determine the existence of a contract because the case could be resolved on the basis of the assignment.

2. Interpretation of the Assignment and Its Implications:
The court examined the assignment made to the plaintiff and determined that the assignment was valid. The main question was what passed by the assignment. The court noted that an assignment of moneys in the hands of a debtor, once communicated and assented to by the debtor, prevents the debtor from asserting any claim or charge against the assignee of which the assignee was not notified. The court concluded that the assignment did not free the plaintiff from the defendant Company's claims to interest and disbursements.

3. Defendant Company's Right to Deduct Interest and Disbursements:
The court analyzed the agreement of 17th February 1906, which allowed the defendant Company to deduct commission, interest, and disbursements. The court found that the term "commission" used in Exhibit A1 was intended to include interest and disbursements. It was determined that the plaintiff was aware of the terms of the 1906 agreement and thus took the assignment subject to the defendant Company's right to deduct these amounts. The court held that the defendant Company did not waive their right to deduct interest and disbursements by the correspondence in Exhibit A and A1.

4. Validity and Extent of the Lien Claimed by the Defendant Company:
The court examined Clause 12 of the 1906 agreement, which provided the defendant Company a lien on all cash and mica in their hands as security for repayment. The court found that the lien was valid and could be exercised for the capital sums due from the Naidus, including the standing advance of Rs. 55,000. The court held that the lien created by the agreement was not nullified by Clause 11, which required certain payments to be made to the Naidus. The lien was effective against the proceeds of the mica, subject to the discharge of guaranteed payments.

5. Nature of the Lien Purportedly Given to the Plaintiff by the Naidus:
The court considered the lien purportedly given to the plaintiff by the Naidus in Exhibit E. The court doubted whether the Naidus could validly give such a lien in light of Clause 12 of the 1906 agreement. The court concluded that the purported lien did not pass any property in the mica to the plaintiff, as the arrangement did not contemplate the plaintiff handling the mica. The assignment was of the proceeds in the hands of the defendant Company, not the mica itself.

Conclusion:
The appeal was dismissed with costs, certified for two Counsel. The court upheld the defendant Company's right to deduct interest and disbursements and validated their lien on the proceeds of the mica. The purported lien given to the plaintiff by the Naidus was found to be ineffective in passing any property in the mica to the plaintiff.