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of <h1>Court sets aside order, dismisses application by unsecured creditor for lack of locus standi. Order not void, but voidable.</h1> The court allowed the appeal, set aside the order by G.K. Mitter J., and dismissed the application filed by the respondent with costs. The court held that ... Charges – Rectification of register of Issues Involved:1. Locus standi of an unsecured creditor in a proceeding for extension of time for registration of a mortgage or charge.2. Competency of the court to extend time for registration of a mortgage or charge under section 120 in a case falling under section 109A.3. Validity and revocability of an order extending time for registration of a mortgage or charge.Issue-wise Detailed Analysis:1. Locus Standi of an Unsecured Creditor:The primary issue was whether an unsecured creditor has the locus standi to file an application for revoking an order made under section 120 of the Indian Companies Act, 1913. The court examined the interpretation of the term 'creditor' in sections 109 and 120. The appellant argued that 'creditor' refers only to secured creditors, while the respondent contended it includes both secured and unsecured creditors. The court referred to English law, noting that under similar provisions, unsecured creditors neither require protection nor need to be served notice in proceedings for extension of time for registration of a mortgage or charge. The court concluded that under section 120, the court is not required to protect or serve notice upon unsecured creditors, and thus, the second subsection of section 120 is an exhaustive codification of the legal effect of an order made under the first subsection. Consequently, the respondent, being an unsecured creditor, had no locus standi in the proceeding.2. Competency of the Court to Extend Time under Section 120 in Cases Falling under Section 109A:The court considered whether it could extend time under section 120 for registration of a mortgage or charge in cases falling under section 109A. The court noted that section 120 authorizes extensions only for mortgages or charges not registered within the time required by section 109, which is 21 days from the creation of the mortgage. In contrast, section 109A pertains to registration within 21 days from the completion of acquisition by the company. The court found that the omission to include section 109A in section 120 was not accidental or due to inadvertence. The court rejected the argument that it should read section 109A into section 120, stating that such an action would constitute an encroachment upon the legislative domain. Thus, the court held that it is not competent to extend time under section 120 for cases falling under section 109A.3. Validity and Revocability of the Order Extending Time:The court addressed whether the order made by S.B. Sinha J. on April 4, 1949, extending the time for registration of a mortgage or charge, was a nullity and could be revoked. The respondent argued that the court could revoke an invalid order suo motu and that he, being affected by the order, was entitled to have it set aside. The court distinguished between orders made without jurisdiction and those made by irregular assumption of jurisdiction. It held that the order by S.B. Sinha J. was not void but merely voidable and could be revoked only at the instance of a party with an interest in the subject matter. Since the respondent had no such interest, the order could not be revoked at his instance. The court further noted that the delay in filing the application for extension and the omission to serve notice on the company were not grounds for revocation, as the company had not challenged the order, and the mortgage's validity under the Defence of India Rules should be decided in the pending mortgage suit.Conclusion:The court allowed the appeal, set aside the order by G.K. Mitter J., and dismissed the application filed by the respondent with costs. The court held that the respondent, being an unsecured creditor, had no locus standi to challenge the order, and the order by S.B. Sinha J. was not void but voidable, revocable only at the instance of a party with an interest in the subject matter.
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