https://www.taxtmi.com/caselaws?id=96771 A security deposit retained by a company was treated as a mere debt, not trust money, because the agreement did not require segregation or separate holding and the funds were used in the ordinary course of business. The applicants therefore had no priority over ordinary creditors. A clause describing the security money as a second charge on the company's machinery and goods was treated as a floating charge, since the company could deal with the assets in the ordinary course of business; as no registration had been made under the Companies Act, 1913, the charge was ineffective against liquidators. The claim in liquidation therefore failed. en-us Fri, 19 Aug 1938 00:00:00 +0530 Wed, 11 Jan 2012 10:36:26 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=96771 A security deposit retained by a company was treated as a mere debt, not trust money, because the agreement did not require segregation or separate holding and the funds were used in the ordinary course of business. The applicants therefore had no priority over ordinary creditors. A clause describing the security money as a second charge on the company's machinery and goods was treated as a floating charge, since the company could deal with the assets in the ordinary course of business; as no registration had been made under the Companies Act, 1913, the charge was ineffective against liquidators. The claim in liquidation therefore failed. Case-Laws Companies Law Fri, 19 Aug 1938 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=96771