9911796707
TMI Blog1958 (5) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... series of debentures. The first series of debentures were allotted on April 8, 1948, for a total sum of Rs. 1,50,000. A debenture trust deed was executed and registered with the Registrar, Joint Stock Companies, Lucknow, and also in the Office of the Sub-Registrar, Lucknow, under the Indian Registration Act. The second series of debentures were issued on June 23, 1950, for a sum of Rs. 1,00,000. For this series also a debenture trust deed was executed and it was registered with the Registrar, Joint Stock Companies, Lucknow, as well as in the Office of the Sub-Registrar, Lucknow, under the Indian Registration Act. By a resolution dated the 23rd March, 1952, the board of directors authorised Sri B.P. Agarwal who was managing the affairs of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of these debenture holders. It is contended that registration under section 109 of the Companies Act is all that is needed under the law and as the issue of debentures was intended to create only a floating charge on all the assets of the company generally no registration under the Registration Act was either necessary or practicable. In this connection it was also urged that the plant and the machinery of the company, at least the major and more substantial part of it, was movable property within the meaning of the law and even if the third series of debentures were not registered under the Registration Act such plant and machinery being movable property could be held to be under a charge so far as these debentures were concerned. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res under which the charge is said to have been created is not to be considered as having an interest in immoveable property. The debenture creating any interest in immoveable property is not a transfer within the meaning of section 17 of the Registration Act and, therefore, registration under that Act is not necessary. Section no of the Companies Act deals with the particulars that are required to be registered with the Registrar of Companies. These particulars are: ( a )the total amount secured by the whole series, and ( b )the date of the resolution authorising the issue of the series and the date of the covering deed (if any) by which the security is created or defined, and ( c )a general description of the property charged, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n at the registration office of the place where the company has its head office. In case there is no trust deed registered in respect of a series of debentures he cannot get any information from such inspection. He may also make enquiries at the office of the Registrar of Companies. But inasmuch as the particulars required to be registered under section 109 are of too general a character so far as the details of the properties are concerned, he is likely to have no clue to encumbrances on the property with which he is about to deal. In case there is no registration under the Indian Registration Act of the debentures issued specifying, the properties purported to be encumbered, there will be no information available from the registration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be registered non-testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immoveable property. As observed by DERBYSHIRE C.J. in the case referred to above, the issue of a debenture does limit the right of a company to its property and creates from the moment it is executed a floating charge over the whole of the company's property immoveable and moveable and that though the floating charge may become fixed on the happening of one of the events mentioned in the conditions of the debentures, the issue of debentures is a mutation of the right of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport it is clear that the plant and the machinery of the company are either embedded in the earth or they are permanently fastened to things attached to the earth. It is contended that most parts of the machinery are fixed to their bases with bolts and nuts and they can be removed by removing the nuts. It is, therefore, contended that such machinery as can be moved away by removing the nuts should be held to be movable property. A similar question went up for consideration to the House of Lords in Reynolds v. Ashby Son [1964] AC 466 . Machines in that case were fixed to concrete beds in the floor of the factory by bolts and nuts and could have been removed without injury to the building or the beds. LORD LINDLEY observed: "The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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