C. Cunniah, Proprietor of the Sri Krishna Vinodha Sabha Dramatic Company vs K. Gopal Chettiar

John Wallis, C.J.—In this case the defendant borrowed money from a Chetty on a promissory note secured by a deposit of title deeds. The

Chetty endorsed the promissory note to the plaintiff for collection and at the same time gave him the title-deeds, and the plaintiff sued on the

equitable mortgage. Bakewell, J., has given him a decree holding that, u/s 8 of the Transfer of Property Act, the security passed to the plaintiff with

the debt and that the objection that the transfer of the mortgage interest was a sale and required registration u/s 54 of the Transfer of Property Act

did not arise. In this he was clearly right. He also referred to my decision in Dwarka Doss v. Danakoti Ammal 23 Ind. Cas. 129, following

Subramaniam v. Perumal Reddi 5 M.L.J. 92 that even if there had been consideration for the transfer of the debt, the mortgage security would

have passed with it, although that decision had been questioned obiter by Bhashyam Aiyangar, J., in Ramasami Pattar v. Chinnan Asari 24 M.

As this last decision has been disserted from in Allahabad, with reference to Bhashyam Aiyangar, J.''s dictum, and as this provision of the

section has received very little consideration, it may be as well to point out that in that dictum the provisions of Section 8. Having pointed out that

the transfer of an equity of redemption for consideration was the sale of an intangible thing within the meaning of Section 54, he said the same thing

about the transfer of the mortgagee''s interest and expressed his dissent, without further discussion, from Subramaniam v. Perumal Reddi 5 M.L.J.

92 It seems to me, with great respect, that the learned Judge gave too little weight to the provisions of Section 8, if indeed he considered them at

all. Those provisions of the section which are new and were not, like the earlier part of the section, taken from the Conveyancing Act, 1881, are an

application of a general rule of jurisprudence taken from the civil law and variously expressed in such maxims, as res accessoria sequitur rem

principalem or accessorium non ducit, sed sequitur suum principalum Co. Litt 152 a Though in Walker v. Jones (1866) 1 P.C. 50 the Privy

Council declined to say that in England the mortgage security could never be separated from the mort. gage debt, Lindley, L. J., in In Re: Patrick

(1891) 1 Ch. 82 was inclined to hold that a transfer of the security might be implied from a transfer of the debt; and in the note to this section in

Mr. Grhose''s Law of Mortgage it is stated that this is the law in America. It is clearly inconvenient that the security should be separated from the

debt, and should remain in the hands of the transferor who has no further interest in it. The Legislature has, therefore, seen fit to enact that, unless a

contrary intention is expressed or necessarily implied, the transfer of the debt shall pass forthwith the securities therefor, that is to say, by a

statutory transfer without further act of the parties. Securities in the section must obviously include mortgages of Immovable property which are the

most valuable class of securities, and the operation of this beneficial Statute cannot, in my opinion, be out down and practically nullified by the

provisions of sectiop 54, which require transfers of Immovable property or intangible things by way of sale to be in a particular form.

Section 54 applies to transfers by act of parties and does not cover statutory transfer such as that provided in Section 8 on grounds of policy

and convenience. In any case the rule of construction- contained in the maxim generalia specialibus non derogant is sufficient to show that the

general provisions of Section 54 as to sales by act of parties cannot be construed as affecting the express provisions of Section 8 as to the transfer

of the securities being attendant on the transfer of the debt. Section 8 speaks of a ""debt or ""other actionable claim"", and it has been argued that its

operation has been affected by the definition of ''actionable claim'' in-serted in the Act in 1900, which excludes debts secured by the mortgage of

Immovable or moveable property. The section however, applies in terms to secured debts, whether they., are actionable claims or not, and if the

Legislature had desired to repeal this provision entirely it would have done so. Full effect must, no doubt, be given to the legislative provisions

which make registration essential to the validity of certain transactions in India, or render unregistered docnments inadmissible in evidence in

proving such transactions. The ordinary rules of statutory construction must nonetheless be applied to the provisions of Section 8, even if the result

should be to permit unregistered transfer of mortgages. In the present case the debt has been transferred by the endorsement of the promissory

note and the equitable mortgage passed with it. Seeing that the equitable mortgage was created by deposit of title deeds without registration, the

anomaly would be if the transfer required registration. ,

The appeal is dismissed with costs.

Napier, J.

The assignment in this case was admittedly not for consideration hut for collection. It is not, therefore, covered by any of the chapters special to

certain classes of transfer in the Transfer of Property Act. Section 9 accordingly applies and the documents having been delivered with an intention

to transfer, there is a legal transfer and title passed. I, therefore, agree that this appeal must be dismissed with costs.