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Issues: (i) Whether non-registration of the sub-mortgage under the Registration Act destroyed the security over the immovable property and the debt assigned under it; (ii) Whether the failure to obtain timely registration with the Registrar of Joint Stock Companies under the Companies Act invalidated the charge as against the liquidator and creditors.
Issue (i): Whether non-registration of the sub-mortgage under the Registration Act destroyed the security over the immovable property and the debt assigned under it.
Analysis: The instrument, though ineffective as a mortgage over the immovable property for want of registration, clearly operated as an assignment of the debt due to the Benares Bank. A debt may be transferred independently of the security attached to the land, and the invalidity of the charge over the property does not necessarily extinguish the charge over the actionable claim represented by the debt and its proceeds.
Conclusion: The non-registration did not destroy the charge over the debt or its realised proceeds, though it did prevent enforcement of the security over the immovable property.
Issue (ii): Whether the failure to obtain timely registration with the Registrar of Joint Stock Companies under the Companies Act invalidated the charge as against the liquidator and creditors.
Analysis: The particulars of the charge were sent to the Registrar within the statutory time, and the delay in actual registration was attributable to the Registrar's later mechanical steps and fee dispute. Since the statutory requirement was substantially complied with by filing the particulars, and a certificate of registration was ultimately issued, the charge could not be treated as void against the liquidator and creditors on these facts.
Conclusion: The charge was not invalidated under the Companies Act and remained effective against the liquidator.
Final Conclusion: The Bihar Bank was held entitled to a valid charge over the debt and the realised fund in court, and the decree was varied accordingly, with the appeal succeeding only to a limited extent on ancillary matters.
Ratio Decidendi: An unregistered mortgage instrument may fail as a security over immovable property yet remain effective as an assignment of the debt and its proceeds, and where the statutory particulars of a company charge are filed within time, later delay in ministerial registration does not avoid the charge.
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