ANTHRAPPER BANK LTD Vs. UNITED STATE PACKERS AND CANNERS LTD
HIGH COURT OF KERALA
ANTHRAPPER BANK LTD.
UNITED STATE PACKERS AND CANNERS LTD.
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(1.)The plaintiff is the appellant. Its suit was to recover the balance amount due under an overdraft agreement executed by the 1st defendant company. The 2nd defendant was the Managing Director of the 1st defendant company. The 3rd defendant executed a promissory note to the plaintiff as collateral security for the balance amount that may be due under the overdraft agreement. The transaction was also secured by a pledge of certain moveables belonging to the 1st defendant. The 4th defendant, the Travancore Forward Bank Ltd., Punalur branch, had obtained a decree charged on the movables pledged, and the 5th defendant, the Official Receiver was appointed receiver of the movables. An amount of Rs. 3,310-3-4 with interest was claimed in the plaint as a charge over the movables pledged, in priority to the 4th defendant's claim.
(2.)The main contesting defendant was the 4th defendant. Its contention was that it had no notice of the pledge of the movables in favour of the plaintiff, and that there was no valid pledge of the movables to the plaintiff as possession of the pledged articles was not given to the plaintiff Bank, and so the plaintiff was not entitled to get a charge on the movables in priority to it. It was also contended that in order to create a valid charge on the movables belonging to an incorporated company, the charge must be registered with the Registrar of Joint Stock Companies and that the charge in favour of the plaintiff not having been registered as aforesaid, the plaintiff was not entitled to get any charge over the movables, at any rate in priority to it, as the articles were hypothecated to it by the 1st defendant and that was registered under S.125 of the Companies Act.
(3.)The court below came to the conclusion that the 4th defendant was entitled to priority as against the plaintiff on the ground that the pledged articles were not given possession of to the plaintiff, and also for the reason that the charge in favour of the plaintiff was not registered under the Companies Act with the Registrar of the Joint Stock Companies. It decreed the plaintiff's suit as against the 1st defendant company giving it only a subsequent charge on the plaint movables, as it held that the 4th defendant was entitled to a prior charge. The decree has been challenged on the ground that the court below was wrong in thinking that the charge in favour of the plaintiff required registration under the Companies Act and that the plaintiffs title depended upon actual physical delivery of the movables to it by the 1st defendant.
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