DAMODARAN ASARI Vs. ABDUKUTTY

JUDGEMENT

(1.) In these second appeals only a short question is raised; and that relates to the interpretation of S.33 of the Travancore Chitties Act of 1120. The appellant obtained an assignment of two chitty hypothecation bonds from the foreman and instituted two suits against the subscribers, who executed the bonds. In one of the suits, namely, O. S. No. 742 of 1956 giving rise to S. A. No. 581 of 1961, the first defendant executed the bond; and in the other, (O. S. No. 744 of 1956 giving rise to the other second appeal, defendants 1 and 2 executed the bond. In the earlier suit the second defendant is the foreman; and in the later suit the third defendant is the foreman. The Munsiff held that because of S.33 of the Chitties Act, the suits against the executants of the bond should fail: however, she granted a decree for the amounts against the foreman. On appeal, the lower appellate court dismissed the suits in their entirety. In second appeal, I have to consider whether decrees have to be passed, and if decrees have to be passed, against whom.

(2.) S.33(1) prohibits the transfer of a right to receive subscriptions by the foreman from prized subscribers without previous sanction of the Registrar. The sub-section does not deal with the consequence of such a transfer without sanction. Provision is made for that in sub-s.2, which says that such a transfer will he voidable at the instance of a non prized or unpaid prized subscriber, if it delays or defeats him. Sub-s.2 makes it abundantly clear that sub-s.1 does not make the bonds executed contrary to the prohibition absolutely void. It is only voidable as contemplated by sub-s.2. It is clear that the provision is intended to protect the rights of non prized or unpaid prized subscribes; & at their instance alone can such a transfer be set at naught. In these cases no attempt has been made by any non prized or unpaid prized subscriber to avoid the transfer. Therefore, the transfers in these cases are good; and the transferee can proceed under the bond against the executants and recover the moneys thereunder.

(3.) The counsel of the executants of the bonds (now their legal representatives) argues that the expression "any such transfer" in sub-s.2 relates to a transfer with the previous sanction in writing of the Registrar. In other words, he contends that a transfer without the sanction of the Registrar is wholly void; and a transfer with the sanction is voidable, if it defeats or delays the rights of non prized or unpaid prized subscribers. I do not agree. What appears fairly clear to me is that sub-s.2 deals with the consequences of transfers without sanction, while sub-s.1 generally prohibits such transfers.