TaxTMI 
TaxTMI 
1968 (8) TMI 196
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....lies under the contracts. For the purpose of carrying out this arrangement Malhotra executed an irrevocable power of attorney in favour of the appellant on July 13, 1946. The power of attorney recited: "Whereas we are working as contractors to the Government in its various departments and have entered into certain contracts and will in future enter into other contracts and whereas an agreement dated 13-7-1946 has been made between us and the Bharat Bank Ltd., in pursuance of which the attorneys have agreed to finance contracts and to advance us sums of money, against supply bills for payments to be received by us under the contracts issued by the Government in various departments on conditions mentioned therein; and whereas we, for the purp....
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.... the military authorities for Rs. 49,633/8/7- then due to him in respect of his supplies under the contracts during 1945- 46 and handed over the bill to the appellant for collection. On the bill, Malhotra made, the following endorsement: "Please pay to Bharat Bank Ltd. Jabalpur." The appellant sent the bill to the military authorities for payment. Before the appellant received the payment, the amount due under the bill was attached by Takhatmal in execution of a money decree obtained by him against Malhotra. The appellant filed objections in the execution proceedings. On September 11, 1952 the objections were dismissed. On December 12, 1952 the appellant filed a suit in the court of the 1st Additional District Judge, Jabalpur, against Malho....
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.... In construing the power of attorney it is necessary, to bear in mind that the relationship of the two parties, Malhotra and the Bank was that of borrower and lender and that the document was brought into existence in connection with a proposed transaction of financing of Malhotra's contracts. The loans were to be advanced by the Bank against Malhotra's bills for supplies under the contracts. The obvious intention of the parties was to provide protection for the lender and to secure repayment of the loans. With that object in view the lender was authorised to receive payment of the bills and to appropriate the receipts towards repayment of the loans. As the lender had an interest in the funds the power of attorney was expressed to b....
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.... as the borrower continued to be the owner and the lender was merely authorized to act as his agent. Never the less the Court held that the power Of attorney amounted to a binding equitable assignment. An actionable claim may be transferred under s. 130 of the Transfer of Property Act. Where a document does not amount to a transfer within s. 130 it may apart from and independently of the section operate as an equitable assignment of the actionable claim. In the present case the power of attorney authorized the appellant to receive all monies due or to become due to Malhotra in respect of pending or future contracts with the government authorities. Counsel argued that there was no engagement to pay out of specific fund and therefore there wa....