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Haripada Sadhukhan Vs. Anath Nath Dey and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in44Ind.Cas.211
AppellantHaripada Sadhukhan
RespondentAnath Nath Dey and ors.
Excerpt:
mortgage, equitable - hypothecation of immoveable property, whether passes fixtures--contract act (ix of 1872), section 172--chattels, whether can be hypothecated without transfer of possession--registration act (xvi of 1908), section 17--letter from mortgagor to equitable mortgagee showing object of mortgage, whether requires registration. - .....permit of a hypothecation of loose chattels except in the method provided by section 172 of the indian contract act; that is, the only security that is permitted on loose chattels is the contract of pawn where the possession of the goods is transferred to the pawnee. that is clearly not so. the indian contract act does not state that the whole of the law of contract in british india is comprised in the act. in fact, the preamble of the act shows clearly that the act only contains a portion of the law of contract applicable in british india and there is nothing to prevent a person from hypothecating his goods to another person for security. the ordinary principles of equity apply in such oases, namely, the question becomes whether there was an intention to create a security and if.....
Judgment:

Fletcher, J.

1. This is an appeal by the defendant No. 2 against the decision of the learned Subordinate Judge of Howrah dated the 6th May 1915. The action was brought by the plaintiff for the purpose of enforcing an equitable mortgage on certain moveable and immoveable properties comprised in an indenture of conveyance executed in favour of the Defendant No. 1. The Defendant No. 2 is an attaching creditor of the defendant No. 1, and he Mays that the property in suit is not subject to any equitable mortgage as stated by the plaintiff. The learned Judge in the Court below decreed the suit in favour of the plaintiff and hence the present appeal.

2. The learned Judge in the Court below has found that the deposit as mentioned by the plaintiff was, in fact, made. It was evidenced by a letter, dated the 20th November 1913, signed by the first defendant and it is not denied that the deposit did, in fact, take place within the limit of the Presidency town. Therefore, as regards the immoveable property, the security could be created in that manner as provided by Section 59 of the Transfer of Property Act. This appeal has been argued solely with regard to the moveable property that is mentioned in the conveyance to the defendant No. 1. The moveable property consists of plant and machinery, both fixed and unfixed. As regards the fixed machinery, the law is well established that between the mortgagor and the mortgagee that passes by the mortgage. The rule as between landlord and tenant does not apply between the mortgagor and mortgagee and the fixtures pass to the mortgagee. That rule-has been established for many years. As regards the loose chattels, the case stands differently. It has been argued in the present appeal that the law in British India does not permit of a hypothecation of loose chattels except in the method provided by Section 172 of the Indian Contract Act; that is, the only security that is permitted on loose chattels is the contract of pawn where the possession of the goods is transferred to the pawnee. That is clearly not so. The Indian Contract Act does not state that the whole of the law of contract in British India is comprised in the Act. In fact, the preamble of the Act shows clearly that the Act only contains a portion of the law of contract applicable in British India and there is nothing to prevent a person from hypothecating his goods to another person for security. The ordinary principles of equity apply in such oases, namely, the question becomes whether there was an intention to create a security and if there was an intention to create a security, equity gives effect to it. It is quite clear that in a case like this, it is impossible to hold, where a large body of the community is engaged in commercial pursuits--say, where a thousand tons of coal or a large parcel of goods is concerned, that the banker is bound to take actual possession of the property. That contention obviously has ho force. That is the first point that has been raised. It is quite clear that there is nothing to prevent a security of this nature.

3. The second point is that the letter, dated the 20th November 1913 is a document of title requiring registration under the provisions of the Indian Registration Act. Quite clearly, it is not a document of title. It does not profess to be a document of title, it professes to be a letter addressed by the defendant No. 1 to the plaintiff showing for what purpose he had deposited the document with the plaintiff. That is merely evidentiary to the purposes for which the deposit was made. That clearly is not a document requiring registration under the provisions of the Indian Registration Act as being a mortgage.

4. The next point is, as I have already stated, that no security is recognised on chattels except as provided by Section 172 of the Indian Contract Act. That is not so, as already remarked.

5. The last point is as to the form of the decree. It is agreed between the parties that the decree made herein does not cast any personal liability on the defendant No. 2 to pay the money found due on the mortgage.

6. The appeal is dismissed with costs.

Shamsul Huda, J.

7. I agree.


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