1. This is a plaintiff's application against the decree and order of the Judge of the Small Cause Court of Muttra dismissing his suit. The facts are given in the judgment of the trial Court, in which it is said that the plaintiff's claim is dismissed on a technical ground, namely that the bond which has been transferred to the plaintiff by an endorsement only was a mortgage bond and could not be legally transferred, except by a registered document.
2. It has been argued by Mr. Chaturvedi that although the security could not be transferred, except by a registered document, yet the security is separable from the debt itself, and as the debt had been transferred to the plaintiff, he was entitled to sue without having regard to the mortgage security. There is some authority for this argument in Ram Saran Das v. Yudhishtar Prasad 1931 All 389, where an assignment of a mortgage bond was made by a Court without execution of a document. Here it is true the assignment was made by order of the Court, and not merely by transfer between individuals. But the principle appears to be the same. Similarly in Imperial Bank India v. Bengal National Bank Ltd. 1931 P.C. 245 (at page 807), their Lordships of the Privy Council have remarked:
The separation between debt and security is well established; the creditor is entitled to take a judgment for the debt without having recourse to his security.
3. It has been argued for the opposite party that although the debt is separable from the security the bond in the present case is, not a debt, but is an 'actionable claim' as defined in Section 3, T.P. Act, and consequently under Section 130 of that Act it can only be transferred 'by the execution of an instrument in writing signed by the transferor or his duly authorisied agent.' The bond in suit has not been transferred by a separate instrument in writing. There is however authority for holding that an endorsement on an instrument which is not a negotiable instrument is sufficient to effect a legal transfer. I have been referred to Rama Iyer v. Venkatachellam Patter (1907) 30 Mad. 75 and also to the case reported as Nanak Chand Kishori Lal v. Ram Sarup Gujar Mal 1924 Lah. 684. These are both cases where a document which was held to be not a negotiable instrument was transferred merely by endorsement on the document.
4. I have not been shown any authority on the other side to show that such an endorsement will not effect a legal transfer. I think that the trial. Court was wrong in dismissing the suit. The document on which it is based cannot be regarded as a, mortgage bond because the security has not been legally transferred. But there is no reason why the Court should not regard it as a simple money bond which has been transferred by the endorsement to the plaintiff. I therefore allow the application, set aside the decree and order of the trial Court dismissing the suit, and direct that the suit be readmitted on its original number and disposed of according to law, as there are other issues which have not been determined by the trial Court. Costs will abide the result.