The main legal point established in the judgment is that the specific terms of the Power of Attorney and other loan documents are crucial in determining whether an equitable assignment is created, and the absence of references to loan repayment or appropriation of rents towards the loan precludes the existence of an equitable assignment.

( 1 ) RESPONDENTS 1 to 52 herein filed a petition for winding up against respondent No. 53 (hereinafter referred to as 'the Company') in Company Petition Nos. 43 to 94 of 1992 (later clubbed into Co. P. No. 43 of 1992 ). The said petitions were admitted on 28-8-1992. The Company is the owner of Premises No. 48, Church Street, Bangalore. An order has been made by this Court on 22-9-1992 in C. A. No. 988 /1992 directing the tenants of the Company to deposit the rents from September 1992 and onwards into Court, to preserve the assets of the Company and proper management thereof, so that the interests of the large body of unsecured creditors can also be protected.

( 2 ) THE applicant Bank (hereinafter also referred to as 'the Bank') claims to be a secured creditor of the Company. According to the applicant a sum of Rs. 98 lakhs was advanced by the Bank to the Company and in that behalf the company had executed an on demand promissory note, an agreement for term loan and other documents on 30-9-1986, copies of which are produced as Exs. B to 1 to the application; and premises bearing No. 48, Church St. Bangalore, belonging to the Company was equitably mortgaged in favour of the applicant Bank confirmed by Memorandum dated 30-9-1986 (Annexure- G); and a Power of Attorney was executed by the Company on 30-9-1986 irrevocably authorising the applicant to demand and receive from State Bank of India or any other person in possession of the portion of Premises No. 48, Church Street, Bangalore, measuing 45460 sq. ft. described in the Schedule to the said power of Attorney; and in view of the said documents, the applicant claims that there is an equitable assignment of the rents in favour of the Bank and therefore the Bank is entitled to receive the monthly rent of Rs. 1,36,380/- for the said portion from State Bank of India and as there is an equitable assignment of the said rent in favour of the Bank, only the Bank is entitled to receive the rent for the said portion and not the Company; and the order of 22-9-1992 directing all the tenants to pay the rents into court requires to be modified and the Bank should be permitted to receive rents in regard to the portion in the occupation of State Bank of India; and that on the date of filing of the application, a sum of Rs. 1,11,77,879. 45 was due to the Bank and now as on date about Rs. 125 lakhs is due to the Bank.

( 3 ) THE respondents have opposed the said application. Respondents 1 to 52 in their objections have contended that the Power of Attorney, executed in favour of the Bank does not amount to an equitable assignment of the rent and if the Power of Attorney is to be held as having effected equitably assigning the rent, the power of Attorney itself is void for want of registration.

( 4 ) ON these rival contentions, the question that arises for consideration is whether the execution of the Power of Attorney dated 30-9-1986 or the other documents by the Company in favour of the Bank, created an equitable assignment of the rents payable in regard to a portion of Premises No. 48, Church Street, Bangalore in favour of the Bank to be appropriated by the Bank, towards the amounts due by the Company and whether it entitled the Bank to receive the same, to the exclusion of the Company.

( 5 ) AN act which did not amount to a regular assignment, or which was not recognised as an assignment in common law, but nevertheless giving assignee, a right enforceable in equity was termed as equitable assignment. In an equitable assignment of a debt, even though there may be no regular assignment, the debtor is notified or made to understand that the debt has been made over by the creditor to some third person. Thus in Rodick v. Gandell (1852) 1 De GM and G 763, extracted with approval in Palmer v. Carey, 1926 AC 703, the law as to equitable assignment is stated thus:"the extent of the principle to be deduced is that an agreement between a debtor and a creditor that the debt owing shall