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TMI Blog1982 (4) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of Rs. 90,343.37 with interest at the rate of 6% per annum from the date of the suit till the date of realisation and the assessed costs of Rs. 6,838, As the decretal dues remained unpaid, the applicant on or about January 3, 1974, presented a winding up application in this court being Company Petition No. 17 of 1974 alleging non-payment of the decretal dues which was amounted to Rs. l,01,303.61. Thereafter, there were various proceedings in the above winding-up application, some of which are not very material for our purpose. Suffice it to note that on September 30, 1974, an order was made by R. M. Datta J., whereby a direction for advertisement of the winding-up application was given in the Calcutta Gazette and in certain other newspapers. Thereafter, several applications were moved on behalf of the company before R. M. Datta J. The one that is material for our purpose is the one that resulted in an order dated February 11, 1975, modifying an earlier order dated October 11, 1974, to the following effect : "The order dated October 11, 1974, is modified to the following extent. Upon the company depositing with M/s. Khaitan Co., Solicitors for the petitioning-credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be advised and it is further ordered that in case of execution the security furnished by the said respondent company with the Registrar of this court to the extent of rupees fifty thousand shall continue as security for the said applicant company for the satisfaction of the decree and shall be the security for decree until the said entire decretal amount together with interest as aforesaid is satisfied in the manner aforesaid." It is on the basis of this order that the petitioner in the present application claims to be a secured creditor of the company to the extent of Rs. 50,000. It is an admitted fact that the entire assets of the company in liquidation have been sold and the sale proceeds are being held by the official liquidator. It is also the admitted position that the sum that is being so held by the official liquidator is far in excess of the sum of Rs. 50,000. The application is being opposed by the official liquidator. In the affidavit filed by Maha Prabhu Roy affirmed on July 9, 1981, on behalf of the official liquidator, the only objection with regard to the claim of the applicant appears to be contained in paragraph 11 where it is stated that in the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red me to a decision of the Division Bench of the Oudh High Court in the case of Hukmichand v. Pioneer Mills Ltd., AIR 1927 Oudh 55, in which the following passage occurs (p. 59): As regards the arguments advanced on the side of the defendants-respondents and based on the provisions of section 109 of the Indian Companies Act, 1913, much need not be said. Those provisions are only applicable to a 'mortgage or charge created...........by a company'. The charge arising in favour of the plaintiffs in the circumstances of this case is a charge by operation of law and not by a contract. I do not consider it necessary to deal with the submissions made by Mr. S. B. Mookherjee, who appeared for the official liquidator on this aspect of the matter including his submissions on the various cases which I have noted above. This is because of the fact that although Mr. Mookherjee appeared to contest this proposition which was submitted by Mr. Nag towards the end of his argument, he appeared to me to have accepted the position that if a charge is created by an order of court it will not require registration under section 125 of the Companies Act, 1956. Although there is no indication of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree of court. It is only in the event of an option being exercised in favour of the last contingency, viz. , in the event of the execution as a decree of court, that the security which was furnished pursuant to the order of R. M. Dutta J. would be a security for the applicant company for the satisfaction of the decree and would be the security for the decree until the decretal dues were paid. Thus, the benefit of the security in so far as the applicant company is concerned is entirely the creature of the order of Roy Chowdhury J. dated August 1, 1978. This can, in my view, by no stretch of imagination, be called a charge created "by a company" within the meaning of section 125 of the Companies Act, 1956, requiring registration under the above section. It would follow, therefore, from what I have said that the question as to whether the security as originally furnished was registered under section 125 of the Companies Act, 1956, or not, would be totally irrelevant for the purpose of determining the right of the applicant company after the order of Roy Chowdhury J., dated August 1, 1978. In so far as the registration under the Indian Registration Act is concerned, as I have alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be brought in, in which event registration would be required under section 17(2)( vi ) of the Act. It was submitted by Mr. Nag that the property outside the jurisdiction was the only subject-matter of the security by virtue of the earlier orders mentioned above. Therefore, in the instant case, there was no question of any property other than the property which is the subject-matter of the suit being included at all. As such the question of requirement of registration under section 17(2)( vi ) of the Indian Registration Act did not arise. Finally, my attention was drawn to the provisions of O. 23, rule 3 of the CPC, 1908. This rule, after its amendment in 1976, provides that any lawful agreement or compromise must be in writing and signed by parties thereto. As, admittedly, in the facts of the present case, there was no agreement in writing and signed by the parties evidencing the compromise, section 17(2)( vi ) could not possibly be attracted to the proceedings. In my view, both the arguments of Mr. Nag with regard to the subject-matter of the decree or order and with regard to the compromise are sound and should be accepted. I hold that the security created in favour of M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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