Beg, J. - (1.) This is an appeal arising out of an application given by the Official Liquidator of the U.P. Oil Industries Limited hereinafter called "the Company" The company went into liquidation, and was ordered to be wound up on the 11th of May, 1956. An investigation into the assets and liabilities of the Company by the Liquidator revealed that it had three series of debentures. The first series of debentures were allotted on the 8th of April, 1947, for a total sum of Rs. 1,50,000/-. A debenture Trust Deed in respect of this series 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 the 23rd of June, 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. Agarwala who was managing the affairs of the Company to issue a third series of debentures for Rs. 4,50,000/-, and a Committee was appointed to allot these debentures. In pursuance of the above resolution, on the 7th April, 1952, the Committee allotted debentures bonds Nos. 1 to 4 for Rs. 2,000/- to Rai Sahib. Pandit Sri Krishna Deva Bhargava of Khatauli and four bonds Nos. 5 to 8 for Rs. 3,000/- io Smt. Rajeshwari Devi of Karol Bhagh Delhi. In respect of this series of debentures no Trust Deed was executed nor was any registration effected in the office of the Sub-Registrar as required under the Indian Registration Act. The Company, however, registered with the Registrar, Joint Stock Companies, the particulars of this series of debentures on the 18th of April, 1952, under Section 109 of the Indian Companies Act. In view of this situation the liquidator moved an application in the High Court before the Company Judge praying for a relief to the effect that a declaration be made that the holders of the third series of debentures are not secured creditors but ordinary unsecured creditors. The Company Judge before whom the matter came up for determination allowed this application and made the declaration prayed for. Dissatisfied with the said order of the learned Judge, the appellants, who were holders of the third series of debentures, filed the present appeal.
(2.) On behalf of the appellants learned counsel advanced two arguments before us. The first argument was that the third series of debentures, having been registered under Section 109 of the Indian Companies Act 1913, were not required to be further registered under the Indian Registration Act. The second argument advanced by him was that, in any case, the declaration prayed for should not have been given in respect of the moveable properties of the Company. So far as the first argument is concerned, it involves a discussion of the following two questions: 1st. Is a charge compulsorily registrable under the Indian Registration Act? 2nd. How far is a floating charge created by the third series of debentures in the present case compulsorily registrable under the said Act?
(3.) We have no doubt in our mind that an ordinary charge created under the Transfer of Property Act is compulsorily registrable. Such a charge is created under Section 100 of the Transfer of Property Act (Act 4 of 1882). The first portion of Section 100 lays down that where immoveable properly of one person is by act of parlies 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 therein made applicable to a simple mortgage shall, so far as may be, apply to such a charge. It may be noted in this connection that the words "which apply to a simple mortgage shall, so far as may be, apply to such charge" in this section were substituted by section 53 of the Transfer of Properly (Amendment) Act, 1929 (XX of 1929) for the words "as to a mortgagor shall, so far as may be, apply to the owner of such property, and the provisions of sections 81 and 82 shall, so far as may be, apply to the persons having such charge". The effect of the amendment was that all the provisions of the Transfer of Property Act which apply to simple mortgages were, so far as possible, made applicable to charges.;