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TMI Blog1967 (3) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... e entitled Aval Yar . the document provides for the advance of a sum of ₹ 50,000, by the distributors to the producers, the amount to be paid in four instalments, the final instalment, a sum of ₹ 20,000, being payable against delivery of the prints, that is, positive prints for exhibition. The producers grant to the distributors the exclusive rights of exhibition, distribution and exploitation of the picture in specified territories for a period of five years. Mutual covenants are found for the protection of the respective interests of the producer and the distributor. There is provision for the distributor having commission on the realisations from the exhibition of the film. The operative part of the instrument, material for our purpose, is found in the following clauses:-- The producers hereby grant the distributors the exclusive rights of exhibition, distribution and exploitation of the said picture for the area referred to hereinabove for a period of five (5) years from the date of its first release in the said area. The producers shall deliver to the distributors three positive prints of the said picture for distribution, with three sets of photo cards, three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified territory till the amount due to the distributors is fully discharged. Reliance is placed on the assurance in the instrument that the distributors shall have a first and paramount charge on the net realisations from the picture. Mr. R. Janardhana Rao, appearing amicus curiae for the respondent emphasises that at the time when the instrument was executed, the picture was still under production, the positive prints were yet to be taken after the completion of the picture and there was than no property in existence for any transfer to operate thereon. It is pointed out that before positive prints are got ready and given to the distributor for exhibition, several stages have to be passed through, the negatives have to be completed and the picture would have to pass through the Board of Censors. The picture may come through as proposed and planned or there may be variations. Till the picture is completed and ready for exhibition, the property over which mortgage rights could be claimed would be non-existent. It may be that the distributor could enforce the contract and secure the prints if they should come into existence, but that would not make the instrument at its execution a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to rights. The expression 'transfer of property', whether moveable or immoveable, is defined in the Transfer of Property Act 1882, by Sec. 5 thus: In the following sections' transfer of property' means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons; and 'to transfer property' is to perform such act. (5) The word conveyance is used in this definition in a wide sense so as to include sale, mortgage, charge, lease, etc. As will be seen presently, it is settled law that while a transfer of property may take place not only in the present, but also in the future, the property must be in existence at the time of the transfer, for an instrument to be a deed of transfer. The words in present or in future in the definition, it is manifest, qualify the word conveys immediately preceding property and not the word property . The conveyance may be in present or in future, but the conveyance should be of property in existence. A purported transfer of property, not in existence at the time of the contract, can only operate as a contract to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sec. 2(17) of the Stamp Act. The Lahore High Court in Miran Baksh v. Emperor, AIR 1945 Lah 69 (SB) on a Stamp Reference observed: A transfer is property that is not in existence operates as a contract to be performed in future which may be specifically enforced as soon as the property comes into existence, but it does not operate as a transfer. I am of opinion that the same principles must govern the construction of the words 'transfer' and 'property' used in Section 2(17) of the Stamp Act, and in order that a document by which property is transferred may come within the purview of a mortgage deed for the purposes of the Act, the property to which it relates must be in existence. The learned Government Pleader drew our attention to In re Bajraj Singh, (1887) ILR 9 All 585 (FB), also a reference under the Stamp Act, as authority for the proposition that future property could be subject of mortgage. Having perused the judgment carefully, we find no warrant for such an inference. What was hypothecated there was produce of a field with sugarcane, then existing property, and there was no discussion in the case whether property not in existence could be the subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-trade is not future property. If stock-in-trade is mortgaged, there is existing property for the transfer to act upon, the security takes in all the effects then available as stock-in-trade. No doubt substituted property may be effectually included in the security by apt words, which can be found and are usually found in mortgages of stock, machinery, plant and the like where the subject-matter may change from day to day. It is a matter of construction of the deed whether effects subsequently brought in on the promises for the purposes of replacing those disposed of or consumed in the course of the business are covered by the mortgage. They are future property, but when the instrument is executed, there is existing property. No formalities are required for the creation of a mortgage of moveable property. A parole mortgage of goods is perfectly valid though a transfer on an actionable claim will have to comply with the requirement of Section 130 of the Transfer of Property Act. For the purpose of the Stamp Act, the effect of the instrument has to be examined at the time of the execution; whether in fact there is an operative transfer or mortgage on the execution of the instrument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... araf v. Raw Cotton Co., Ltd., , may be usefully referred to here. There, a firm of music publishers being members of the plaintiff society assigned by the deed to the society the performing right of every song the right of performance of which they then possessed or should thereafter acquire, to be held by the society for the period of the assignor's membership. Subsequent to the said assignment, an author wrote a song and assigned the copyright in it, together with the right of performance to the firm of publishers. The firm did not make any fresh assignment in respect of this song to the society, as required under the English Copy-right Act, 1911. In an action by the society against the defendants for infringement of their performing rights in the song under the original assignment, rejecting the claim of the plaintiffs as assignees of the copyright, under the Copyright Act, Viscount Cave, L.C., said (at p. 13): No doubt when a person executes a document purporting to assign property to be afterwards acquired by him, that property on its acquisition passes in equity to the assignee: (1862) 10 HLC 191; Tailby v. Official Receiver, (1888) 13 AC 523, but how such a subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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