TaxTMI 
TaxTMI 
1941 (12) TMI 19
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....nt, the appellants deposited Rs. 50,000 with the company as security for the fulfilment of their obligations under the agreement. The company was ordered to be wound up by this Court on a petition of the appellants, and liquidators were appointed. The liquidators called on all creditors to establish their debts. The applicants claimed that the company were indebted to them to the extent of Rs. 55,437-8-0. They further claimed that in respect of this sum they were preferential creditors and held a charge on the machinery and other goods of the company. The Official Liquidators allowed the petitioners' claim for Rs. 52,694-8-0, but disallowed their claim that the sum of Rs. 50,000 which constituted the "security deposit" was held by the compa....
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....the charge to be enforced. In the case of The Imperial Bank of India Ltd. v. The Bengal National Bank Ltd. [1931] 1 Comp. Cas. 159 the principal tests as to whether a charge is a floating one or not were laid down by their Lordships of the Privy Council. They are :- "(1)Is it a charge upon all or a certain class of assets. Present or future ? (2)Would the assets charged in the ordinary course of business be changed from time to time ? (3)Has the company power until such step is taken by the chargees to carry on the business of the company in the ordinary way?" If these tests are applied to the present charge, there can be no doubt that the charge was a floating one. This being so, the charge is void under Section 109 for non-registrati....
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....e money handed over by him was to be kept aside in trust for him or was not to be utilised by the company for any purpose. The same view was taken by the Bombay High Court in the case of G.K. Malvankar v. The Credit Bank of India Ltd. [1914] AIR 1914 Bom. 118 and In re ; Manekji Petit Manufacturing Co. Ltd. [1933] 3 Comp. Cas. 50. Learned counsel for the appellants relies on the case reported in In the matter of Hindustan Commercial Bank (India) Ltd. [1938] 8 Comp. Cas. 101 . This case is distinguishable inasmuch as there the money was placed in a fixed deposit account in the name of the employee, who deposited the money apart from the funds of the Bank. We think that every case of this kind will fall to be considered on its own facts an....