Unregistered mortgage charge and pre-winding-up decree remain distinct; prior sale decree stays enforceable against the liquidator.
Section 125 of the Companies Act, 1956 invalidates only a charge created by the company that required registration but was not registered; it does not automatically invalidate a separate mortgage decree for sale obtained before winding up. A pre-winding-up decree enforcing the mortgage remains distinct from the underlying unregistered mortgage and can be executed against the official liquidator, provided it is not collusive or unconscionable. Section 529 did not alter that result on the facts stated. The operative point is that registration invalidity for the charge does not extend to a prior, valid decree enforcing it.
Issues: Whether Section 125 of the Companies Act, 1956 rendered unenforceable, against the official liquidator, a mortgage decree for sale obtained before the winding-up order on the basis of an unregistered mortgage by deposit of title deeds.
Analysis: Section 125 operates against a charge created by the company which is required to be registered, failing which the charge is void as against the liquidator and creditors. A decree obtained on a mortgage is not itself a charge created by the company, but a separate adjudication creating enforceable rights under the decree. The fact that the mortgagor's right of redemption may continue under the decree or under the law does not convert the decree into the mortgage or into a charge created by the company. The decree in question had been passed before the winding-up petition and was not shown to be collusive or unconscionable. Section 529 also did not assist the applicants on the facts.
Conclusion: Section 125 did not prevent execution of the pre-winding-up mortgage decree, and the decree was not void as against the official liquidator.
Final Conclusion: An unregistered mortgage may be void as a charge against the liquidator, but a prior decree for sale enforcing that mortgage remains enforceable and cannot be treated as void merely because winding up subsequently intervened.
Ratio Decidendi: A decree enforcing a mortgage or charge, if validly passed before winding up, is distinct from the underlying charge and is not hit by the registration-invalidity rule applicable to charges created by the company.
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AI Drafter ✕
TaxTMI 
