1938 (8) TMI 17

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....greement dated December 2, 1934, was not trust money and that the applicants were merely ordinary creditors in respect of the same. The applicants Messrs. Maheshwari Brothers entered into an agreement on December 2, 1934, with the Indra Sugar Works Ltd., which is now in liquidation. By that agreement the applicants were appointed the sole selling agents of the company for the period of one year. It was a term of the agreement that the applicants should deposit a sum of Rs. 50,000 with the Company as security for the fulfilment of their obligations under the agreement and such money was to a carry interest at the rate of 5% per annum and was to be refunded to the applicants at the date of the expiry of the agreement. According to the term....

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....sues framed. One of the issues which had been framed related to the very question which is now before me and it has been argued by Mr. David that I have no power to deal with this application and that the matter must be decided by the Bench which passed the winding up order. As I have pointed out that Bench has made it clear that it does not propose to proceed any further in the matter and has left the questions to which the issues related to be dealt with by theLiquidators in the ordinary course of Liquidation. The Liquidators called upon all creditors to establish their debts and the applicants claimed that the Company were indebted to them to the extent of Rs. 55,437-8-0 and they further claimed that in respect of this sum they wer....

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....ch money was to be repaid by the Company upon the expiry of the term of employment. It was further provided that in case the Company went into liquidation the applicant would have the position of a preferential creditor. The sum of Rs. 10,000 was paid to the Company and the latter utilised Rs. 3,500 from the said sum to purchase a mill and used the remainder of the money in paying off a creditor of the Company. Upon the Company going into liquidation the Liquidators sought the directions of the Court to sell the mill which had been purchased out of part of the moneys which had been deposited with the Company as security. Dr. Tug objected and claimed that the sum of Rs. 10,000 deposited with the Company was in the nature of turst money and w....

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.... character, as such, of those moneys and that if the bank subsequently became insolvent the trust moneys could be followed. There is one very important distinction of fact between this Madras case and the present case. In the Madras case the sum of money handed to the Bank by way of security deposited was placed to a special account in the bank, that is, was placed in a fixed deposit account in the name of the employee who deposited such sums. In the present case the receipt which is before me shows that the Company merely acknowledged the receipt of Rs. 50,000 from the applicants and did not deposit it in any account in the name of the applicants. In fact Mr. David tells me it was paid into the account of the Company with the Imperia....

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....ng is concerned, be void against the Liquidators and any creditor of the Company unless the mortgage or charge together with the instrument creating it is filed with the Registrar for registration as required by the Act within 21 days of its date. No such registration took place and it is therefore contended that this charge is void as against the Liquidators. Mr. David, on the other hand, contends that this is not a floating charge but a charge upon the moveable property of the Company and as such it did not require registration in the year 1935 though after the amendment of the Companies' Act in 1936 such a charge would require registration. In my view the charge created is clearly a floating charge and as such required registration. It m....