9911796707
TMI Blog1938 (10) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property. The debentures were registered with the Registrar of Joint Stock Companies pursuant to Section 108 of the Indian Companies Act, but they were not registered under the Indian Registration Act. The company is now in liquidation, and the question is whether the holders of these debentures are entitled to rank as secured creditors. The question was considered by Gentle, J., on an application by the Official Liquidator, who is the first respondent in this appeal. The Official Liquidator contended that the debentures were invalid for two reasons. In the first place, he said that the wording of the debentures operated to create a mortgage and not merely a charge and therefore by reason of Section 59 of the Transfer of Property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as aforesaid, or (except in the case of a simple mortgage) by delivery of the property. 4. As a simple mortgage cannot be effected by delivery of the property it can only be effected by a registered instrument, and Section 4 of the Transfer of Property Act directs that Section 59 shall be read as supplemental to the Registration Act. The first clause of Section 100 as amended by Act XX of 1929 provides: Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinary meaning we are of the opinion that Section 59 cannot be excluded. In the course of the arguments our attention was drawn to the decision of Varadachariar and Mockett, JJ., in Kuppuswami ,v. Rasappa Chettiar (1936) 44 L.W. 438. The learned Judges there were considering whether there could be an oral charge and the case was one which was instituted before the amendment of the Transfer of Property Act in 1929. The learned Judges were not considering the question now before us and their decision has no application here. 7. For the reasons indicated we hold the debentures in question are Invalid by reason of non-registration, and the appeal must be dismissed with taxed costs in favour of the Official Liquidator. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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