SKIPPERS AND CO Vs. EVDAVID

JUDGEMENT

(1.) These cross-appeals arise out of a suit brought by Skippers Company Limited, Calcutta (now in liquidation) through the liquidator, William Duchatel Woellworth, against Mr. E.V. David, Official Receiver, Cawnpore, Mr. Frank Skippers and one Jairam Das. Up to July 1922, Skippers & Co., Ltd., a Calcutta firm, owned a business in Calcutta with a branch at Cawnpore. The Cawnpore branch was managed by Mr. Frank Skippers, Defendant No. 2. ON the 6 July 1922 a sale- deed was drawn up whereby Skippers & Co., Ltd., sold the assets of the firm at Cawnpore to Mr. Frank Skippers. John Skippers and M. Skippers were made parties to the sale-deed as vendors, but this fact has not been considered of any importance in the present litigation. The sale-deed purported to convey the business at Cawnpore of Skippers & Co., Ltd., Calcutta, and was to include not only the branch known as the Civil Lines branch, but also a branch known as the Cawnpore Motor Company situated on the Mall, Cawnpore. The sale was to cover not only immovable property and lessee rights but also the goodwill and interest and book debts and the benefits of all contracts and engagements owing to or entered into by the said Company's business at Cawnpore, and the movable plant, furniture, trade, machinery, stocks, cars and all other accessories and all other goods of any kind whatsoever now lying or to be found at the Company's business premises at Cawnpore except any goods sent on consignment sale account from Goodrich Tyre Agency, Calcutta.

(2.) There was a provision that the vendor Company shall have a lien and charge on all the immovable and movable property sold as aforesaid for securing payment of the balance of the said purchase money or any moneys that may remain unpaid or become due to the Company hereunder or otherwise, which lien and charge shall be subject only to a charge about to be created thereon in favour of the Imperial Bank of India or some other Bank, Company or person to secure an advance to the purchaser to the extent of rupees two lakhs and fifty thousand and the purchaser covenants further with the Company to execute and register a legal mortgage of the said property as and when required by the Company with full powers of sale and realisation and also not to create or allow any security or incumbrance (except as aforesaid) to rank in priority to or pari passu with the Company's rights hereunder.

(3.) The price fixed was Rs. 4,39,800 of which Rs. 2,50,000 were paid down and the balance was to be paid a year hence, on the 6 July 1923. The deed was registered at the Sub-Registrar's office, Cawnpore, on the 30 October 1922, and receipt of Rs. 2,50,000 acknowledged. There is an endorsement showing that the sale-deed was to be handed at the request of Mr. Frank Skippers, vendee, to an officer of what was then known as the Tata Industrial Bank and is now known as the Central Bank of India Ltd. It is common ground that Mr. Frank Skippers, in order to pay the Rs. 2,50,000 which were paid at the time of registration, borrowed two lakhs of rupees from this bank. He had raised Rs. 50,000 in some other way with which we are not concerned. It is also common ground that on the 30 July Frank Skippers applied to be made insolvent, and that Mr. E.V. David, Defendant No. 1, the Official Receiver, was made ad interim Receiver of his property. The balance under the sale-deed became payable on the 6 July 1923.