1. The petitioner in this Rule challenges the validity of the order passed by the learned Subordinate Judge under Section 73(1), proviso (6) of the Code of Civil Procedure in respect of the sale proceeds of some movable properties which were hypothecated with the opposite parties, the Rungpur Bank, Limited, and which have been sold in execution of a decree obtained by the petitioner. The petitioner contends that that proviso is confined in its operation to immovable properties only as 'mortgage' or 'charge' as defined in Sections 58 and 100 respectively of the Transfer of Property Act and can only be in respect of such properties. The petitioner further contends that the only form of security for payment of a debt or performance of a promise by the bailment of goods recognised by the Indian Contract Act is 'pledge' as defined in Section 172 of that Act, in which transference of possession of the goods to the pawnee is the essential ingredient, and that, inasmuch as in the present case the possession of the goods was retained by the pawner, there was no security created, and therefore the decree obtained by the opposite party was a nullity and on the basis thereof no order for rateable distribution can be made.
2. The words 'mortgage' and 'charge' are not defined in the Code of Civil Procedure Sections 58 and 100 of the Transfer of Property Act relate to 'mortgage' and 'charge' respectively of immovable properties; but that Act is not exhaustive and does not profess to be a complete Code as also appears from its preamble Satyabadi Behara v. Musst. Harabati (1907) 34 Cal. 223, Mohamed Safikul Huq v. Krishna Gobinda (1918) 23 C.W.N. 284. The Indian Contract Act no doubt speaks only of bailment of goods by way of security, but it appears from its preamble that it deals only with a part of the law of contract applicable to British India. From these therefore it by no means follows that there may not be mortgage or hypothecation of movable properties. Such hypothecation or mortgage not accompanied by possession confers a good title upon the person in whose favour it is made and the law recognises the transaction as security and equity gives effect to it Shirish Chandra v. Mungi Bewa (1904) 9 C.W.N. 14, Damodar v. Atmaram (1906) 9 C.W.N. 14, Horipodo Sadhukan v. Anath De (1918) 22 C.W.N. 758, Punithavelu Mudaliar v. Bhashyam Aiyangar (1902) 25 Mad. 406. The words any property used in Clauses (a) and (6) of the proviso as contra distinguished from immovable property in Clause (c) tend to show that such transactions were intended to be included therein. The decree based on a security of this character cannot therefore be held to be without jurisdiction.
3. The next contention urged on behalf of the petitioner is that even if the proviso is given effect to, the order of the court below as passed is not right, for it must be ascertained what interest the bank had in the property sold, inasmuch as the mortgage in their favour comprised other properties as well; and it is contended that to the extent of that interest only proviso (b) would apply, but with regard to the balance, if any, there should be rateable distribution between the petitioner and the bank. This contention to my mind is correct, though I am not sure that it would make much practical difference. However as the order seems to be technically wrong I must make the Rule absolute to that extent, and set aside the order passed by the learned Subordinate Judge and send the case back to his Court so that it may be ascertained to what extent the bank was interested in the properties sold, and then to allow the bank the same interest in the sale proceeds. If any surplus is left after such allowance then the same should be rateably distributed between the bank and the petitioner.
4. The rule is made absolute to this extent. No order is made as to the costs in this Rule.