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TMI Blog1934 (6) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in respect of the work done by Carr Morrison & Co. The conflict of claims between the liquidator of the bank and the liquidator of Carr Morrison & Co., arises from the fact that Carr Morrison & Co., borrowed from the bank the sum of Rs. 3,000 and executed in favour of the bank a promissory note, dated 8th July, 1930. In addition, the company assigned two bills, or rather ' invoices, which were made out by Carr Morrison & Co., as builders and contractors, addressed to the Wardens of the Armenian Church of Calcutta. One of those bills was for a sum of Rs. 5,737-10-0 and the other bill was for Rs. 6985-3-0. The bills were numbered respectively 166 and 167 and they were both dated 5th July, 1930. On the same date, a letter was addressed by Carr Morrison & Co., to the Wardens of the Armenian Church in these terms : RE : NO. 2, MIDDLETON ROW. We beg to hand you herewith our final bills in respect of the above work (repairs, sanitary and plumbing), for favour of payment, at your early convenience. The enclosed bills aggregate Rs. 12,720-13-0, against which you have, from time to time, advanced the sum of Rs. 7,000 only, leaving a balance of Rs. 5,720-13-0 still due. These final bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Wardens of the Armenian Church should be treated as a debt due to Carr Morrison & Co. (in liquidation), and the liquidator of Carr Morrison & Co., took the point that the assignment of the debt due from the Wardens to the bank was of such a nature that we ought to treat it as if it were a mortage and being a mortgage, it ought to have been registered under the provisions of Section 109(d), Companies Act. That Section provides that certain mortgages and charges are to be void, if not registered. The words of the section, so far as material for our present purposes, are these: "Every mortgage or charge created.........by a company and being either a mortgage or charge on any book-debts of the company, shall so far as any security on the company's property or undertaking is thereby conferred, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the mortgage or charge, together with the instrument (if any) by which the mortgage or charge is created or evidenced, or a copy thereof verified in the prescribed manner, are filed with the Registrar for registration ......... within twenty-one days after the date of its creation, but withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the debtors by the letter of 8th July, 1930, which I have already quoted. Sub-Section (2) of Section 130 provides that: "The transferee of an actionable claim may, upon the execution of the instrument of transfer ......... sue or institute proceedings for the same in his own name without obtaining the transferor's consent to such suit or proceedings and without making him a party thereto." It is manifest from the judgment of the present Chief Justice in Sadasook Ramprotap v. Hoare Miller & Co. AIR 1923 Cal. 719, that Section 130, Transfer of Property Act, contains a special scheme which has some of the features both of the English common law and of the principle of equity and it is analogous to the provisions which are contained in Section 25(b), Judicature Act, 1873, which are now enacted in Section 126, Law of Property Act, 1925. It is unsafe however to endeavour to decide the point of the kind now before us by any extensive reference of the English authorities. For the purpose of the present case, it is important at the outset to recall that the Judicial Committee have decided that the assignment as an actionable claim, such as debt, although absolute in form may neverthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and which the bank seeks to exclude is contained in a letter of 2nd March, 1931, written by the bank's solicitor and stating that bills were assigned by Carr Morrison & Co., to the bank for security. It has also been pointed out that when the Wardens questioned the amount of the bills, the bank declined to discuss the question without reference to Carr Morrison & Co., Ltd., thereby admitting that Carr Morrison & Co., Ltd., had still an interest in the debt. I am prepared on the letter to say that the issue of fact raised by Carr Morrison & Co., Ltd., should be decided in their favour. I am of opinion that there was an agreement between Carr Morrion & Co., Ltd., and the bank that the debts were assigned not as an out-and-out transfer but as security for an overdraft. I have now to decide whether evidence is admissible in proof of an oral agreement to this effect having regard to the language of Section 92, Evidence Act. We have not to concern ourselves in this appeal as to whether the learned Judge was right in resorting to the letter of 2nd March, 1931, and the course of dealings between the parties subsequent to the assignment, in order to arrive at a decision as to what in sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction between the provisions of Section 130 and those of Section 134. One would have expected that instead of saying any "residue belongs to the transferor," the section would have said "the residue, if any, shall be re-transferred by the original transferee to the original transferor.'' However, it seems reasonably clear that what is intended is that where a debt is transferred for the purpose of securing an existing debt then the whole matter should be interpreted, as far as possible, upon the analogy of a mortgage of any other kind of property. That the transferor still has some residuary interest in the transfer is clear from the fact that under the terms of Section 134 it would be possible for him to receive the original debt and as I have already pointed out the residue actually belongs to him. It seems to me, therefore that even if there had been in form an absolute assignment and subsequently the transferor pays off his debt to the transferee then the transferor would be in the position of being entitled to receive from his debtor the whole amount of the debt which had been transferred upon the basis that in those circumstances the residue would, in fact, be the whole debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has most bearing on the present problem occurs at p. 580 and is in these words : "Mr. Schiller on behalf of the defendant had contended that the deed operated as an absolute assignment of the book-debt, a sale in fact, in consideration of the advance. He (Lush, J.,) did not think that the deed was capable of that construction. The recital appeared to suggest it, but the operative part treats the book-debt as given only as an indemnity, which must mean as a security, and it provides for payment of interest by the company on the advance, thus treating them as debtors. Moreover, it had been given along with a director's guarantee, and the banking account, which was in evidence, showed that the company were debited as debtors with the amount of the advance. The bankers themselves called their interest in the book-debt a charge in a letter they wrote to the defendant, dated 4th January, 1910." In passing I may recall that the bankers in the present case in their letter of 2nd March, 1931, described the assignment as being a further security. Lush, J., continued thus : "The legal effect of the deed of 24th December, 1909, therefore was this. The company, accepting the loan as a lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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