AIR 1966 MADRAS 24 ::1965 (1) Com LJ 266 ::(1965) 1 MadLJ547 ::(1966) 36 Com Cas 961 ::1978 MadLW 521

Madras High Court

Hon'ble Judge(s): Venkataraman , J

Companies Act (1 of 1956) , S.125(4)(e)— Company raising loan by pledging fixed deposit receipts - Pledge is exempt from registration. The registration of the charge is intended to give notice to people who may not otherwise be aware of it, particularly, to persons who may advance money to the company and it may also serve the purpose of preventing a fraudulent and belated claim of a charge in the event of liquidation. But where the movable properly of the company has itself been taken possession of by its creditor, the very possession of the movable property should itself be notice of the charge.(Para 2) A company which had some fixed deposits with a bank raised a loan from bank by pledging those fixed deposit receipts. This pledge was, however, not registered with the Registrar of Companies. The Registrar took objection that it was a charge which required to be registered under S. 125. Held that the fixed deposit receipts would be movable property and though there might be it charge, it was also a pledge and hence it was exempt from registration under S. 125(4)(e) AIR 1943 Mad 73 Applied. (1962) 3 All ER 27 Disting.(Para 2) .....