Equitable assignment of part of a debt was upheld as outside company charge registration rules, with no set-off allowed.

An absolute assignment of part of a future debt was treated as an equitable assignment, not as a charge or hypothecation requiring registration under section 79 of the Companies Act, 1929. The statutory registration requirement was held to apply to security documents and charges, not to every equitable assignment of part of a debt, so non-registration did not invalidate the transaction. A receiver could not reduce the assignee's entitlement by setting off completion expenses or an alleged cross-claim in these proceedings, because that claim did not alter the assignment's enforceability.

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Issues: (i) Whether an instrument directing payment of a specified part of a future debt constituted a charge on book debts requiring registration under section 79 of the Companies Act, 1929, or was merely an equitable assignment; (ii) whether the receiver was entitled to set off completion expenses against the amount payable under the assignment.

Issue (i): Whether an instrument directing payment of a specified part of a future debt constituted a charge on book debts requiring registration under section 79 of the Companies Act, 1929, or was merely an equitable assignment.

Analysis: The document, read with the surrounding correspondence and oral evidence, was treated as an absolute assignment of part of a future debt and not as a security by way of hypothecation. The statutory language was held to be directed to security documents or charges, and the section was not read as extending to every equitable assignment of part of a debt. The authorities on equitable assignment and charge were distinguished on that basis.

Conclusion: The transaction was not a charge within section 79 of the Companies Act, 1929, and failure to register did not avoid it.

Issue (ii): Whether the receiver was entitled to set off completion expenses against the amount payable under the assignment.

Analysis: The claimed deduction was treated as an attempted set-off based on the receiver's expenditure in completing the contract and on an alleged breach by the sub-contractor. The court held that any such cross-claim did not alter the character or enforceability of the assignment and could not be worked out in these proceedings against the assignee's right to payment.

Conclusion: The receiver was not entitled to credit the completion expenses against the assigned sum.

Final Conclusion: The assignment was upheld as effective, the claimed set-off failed, and the appeal was dismissed with costs.

Ratio Decidendi: An absolute assignment of part of a debt is not a charge or hypothecation within the registration provisions for company charges, and an assignee's right under such an assignment cannot be reduced in these proceedings by an independent cross-claim for completion expenses.

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