Alfred Henry Lionel Leach, C.J.
1. The appellant in this case is the Official Assignee of Madras, who represents the estate of one C Subramania Iyah, an insolvent. Before his adjudication, the insolvent borrowed a sum of Rs. 300 from the respondent, who is a money-lender and as security for the loan deposited with him two policies of insurance on his life. The deposit was evidenced by a document in writing and the question which arises in this appeal is whether this document amounts to an assignment of the insolvent's interest in the policies. It was held by Somayya, J., that the document constitutes an assignment and the appellant challenges the correctness of this finding.
2. The document is in the, form of a letter signed by the insolvent in favour of the respondent and commences thus:
I have taken from you a loan of Rs 300 in words Rupees Three Hundred only at 1 1/2 pies per rupee per mensem on the pledge of the articles noted below on the following conditions.
3. It will be sufficient for the purposes of this appeal to state three of the conditions, namely, Nos. 4, 6 and 7, which read as follows:
4. I authorise you to hold and retain the below mentioned jewels with you as a collateral security for a general balance of account, i.e., not only for the aforesaid debt but also for any sums that I might have borrowed or may borrow from you or for any balance of account that may be due to you.
6. I have received to-day a copy of this letter giving full description of the pledge.
7. If I fail to redeem the articles within six months, or if I fail to pay interest for six months you may realize your dues either by sale or by public auction of all or any of the pledged properties after seven days' notice by post or by personal service or by. registered post to the address given above. I shall be responsible for any deficiency and you will refund the surplus if any.
4. Immediately following the signature are these words:
Particulars of Pledge.
One Postal Endowment Assurance Policy No. 22786 for Rs. 1,500.
One National Insurance Company Table No. Ill Endowment Assurance sum assured Rs. 1,000 Policy No. E. 114692.
5. The letter was in fact a printed form used by the respondent for an advance on the security of jewellery with certain details filled in by pen. No attempt was made to alter this very inappropriate form to make it read as a transfer of the respondent's interest in these policies.
6. The learned Judge has rightly pointed out that it is well established that the transfer of an actionable claim referred to in Section 130 of the Transfer of Property Act may be one of absolute assignment or by way of security. His reasons for holding that the letter signed by the insolvent operates as a transfer are that the law does not require any particular form of writing and that he was satisfied that there was here a writing by which security was created. We find ourselves unable to concur in the opinion of the learned Judge that the document operates as an assignment. It is quite true that the form of the instrument or words used are not of importance, provided that it is clearly indicated that the owner of the actionable claim is transferring his interest. A mere intention to create a pledge would not amount to an assignment within the meaning of Section 130 of the Transfer of Property Act. This was pointed out by the Privy Council in Mulraj Khatau v. Visvanath Prabhuram Vaidya (1912) 24 M.L.J. 60 : L.R. 40 IndAp 24 : I.L.R. 37 Bom. 198 . In that case the appellant claimed to be entitled to an insurance policy which had been assigned to him in writing. The respondent also claimed to be entitled to it on the ground that it had been deposited by the owner with him by way of pledge, but Lord Moulton in delivering the judgment of the Board pointed out that a pledge does not satisfy the requirements of Section 130.
7. Now when the document in this case is read, what dues it amount to? It amounts to an instrument evidencing the deposit of the policies of insurance by way of pledge, and nothing more. Under this document the respondent has merely the rights of a pledgee of movable property. A mortgagee is a transferee but a pledgee is not, although the pledgee has a special interest in the property as the holder of security. He may sell the property pledged if the condition of repayment is not fulfilled, but that does not make him in any way the owner or transferee of the property. The only difference which I can see between this case and Mulraj Khatau v. Visvanath Prabhuram Vaidya (1912) 24 M.L.J. 60 : L.R. 40 IndAp 24 : I.L.R. 37 Bom. 198 is that in this case there is a document evidencing the pledge whereas in the other case the pledge was unaccompanied by any acknowledgment. An instrument evidencing a pledge and nothing more certainly cannot be read as an assignment.
8. The learned advocate for the respondent has referred us to Rama Iyen v. Venkatachalam Pattar : (1906)16MLJ554 and Muthukrishna Aiyar v. Veeraraghava Aiyar : (1913)25MLJ356 , but the facts in those cases are very different from the facts in the present case. In the first of those cases, on the back of a promissory note was endorsed a direction to pay the amount to a certain person to whom the instrument was delivered. It was held that the direction to pay coupled with the delivery of the instrument amounted to an assignment within the meaning of Section 130 of the Transfer of Property Act. There are many differences between that case and the present one, but it is only necessary to mention that here there is no direction to the insurance companies to pay the amounts of the policies to the respondent. In the second case the instrument read as follows:
As I have received Rs. 600 from you by mortgaging the following, i.e., the house...and the promissory note mentioned as '2' in the Schedule...for Rs. 500 executed by my brother Sankarasubbier on the 21st November 1901...I promise to repay the said sum of Rs. 600 with interest thereon at one per cent, per month within a year from the date hereof failing which I shall repay the principal and interest thereon at 1 1/2 per cent, per month and add the interest to principal every year and repay the same with compound interest at the rate aforesaid failing which you may proceed against the mortgaged properties, other properties or personally for the collection thereof. Muthukrishnien v. Veeraraghava Aiyar : (1912)23MLJ430 .
9. There was disagreement in this case between Sundara Aiyar and Sadasiva Aiyar, JJ. and consequently the appeal was placed before a Bench of three Judges. It was held that the mortgage had operated as an assignment of the promissory note. The difference between that case and the present one is that in that case there was a mortgage and a mortgage implies a transfer of the mortgagor's interest in the property, whereas in the present case there has been merely a pledge and a pledge has not the same significance.
10. For the reasons indicated the appeal will be allowed-with costs here and below.