A transaction of the kind which we are considering here is a mortgage and not a pledge; in its true nature and effect the transaction was a transfer of the whole legal interest in the share to the Bank.

Das, J.

1. This is an appeal from order No. 96 dated 22-1-1954 made by a learned single Judge of this Court in Companies Act Case No. 3 of 1951. The order was made on two petitions filed in the said case, one by Mr. Arjun Prasad and the other by his father Lala Gurusharan Lal, his mother Srimati Pankaj Devi, and his wife Srimati Madhurbhashini Devi.

2. The aforesaid four persons held a large number of shares in the Gaya Sugar Mills, Limited. Sometime in 1947, four thousand seven hundred, and seventy-six shares of Rs. 100 each and thirty-three thousand one hundred and forty shares of Rs. 10 each of the Gaya Sugar Mills, Limited in the names of the aforesaid four persons were deposited by Lala Gurasharan Lal with the Central Bank of India as security for payment of a debt of Rs. 8,83,000.00 and odd.

At the time of the deposit, Messrs. Arjun Prasad and Lala Gurusharan Lal & the two ladies executed transfers in blank in favour of the Central Bank. On 16-5-1951 there was an application for winding up, and on, 14-11-51 was an order for winding up of the Gaya Sugar Mills, Limited.On 29-7-1952, the Central Bank of India, Limited, wrote to Lala Gurusharan Lal to the effect that the latter had an overdraft account amounting to Rs. 6,10,885/- up to 10-6-1952, and against the said overdraft account the Bank held as security a number of shares of various companies, the market value of which was not sufficient to cover the said overdraft; the Bank, therefore, called upon Lala Gurusharan Lal to liquidate the overdraft account, and added that if the overdraft amount together with interest up to date was nut paid on or before 11-8-1952, the, Bank would proceed at their option to sell the shares held by them as security.

Sometimes in July, 1952, Mr. Arjun Prasad made an application for the approval of a scheme of re construction of the Company. This application was heard on 6-10-1953 and an order was passed for calling meetings of the share-holders and of the creditors in accordance with Sec.153, Companies Act and the meetings were to be held on 9th and 10th November 1953.

Sometime before this, however, on 20-7-1953, the Central Bank of India sent to the Official Liquitiator of the Gaya Sugar Mills, Limited, the share certificates in question together with the transfer deeds duly filled in, the transferee being the Central Bank of India, Limited and the date of transfer being the 2nd and 3rd February 1951. The Bank asked the Official Liquidator to get the-shares registered in the name of the Bank. On 6-8-1953, the Official Liquidator submitted a report to the learned Judge hearing Companies Act cases. In this report, the Official Liquidator said: "I have received from the Central Bank of India, Calcutta and Patna, seven applications for transfer of shares of the Gaya Sugar Mills Ltd., accompanied by the relevant share certificates and transfer deeds duly completed in all respects from the transferees. These transfer deeds are of a date prior to the petition for winding up. I have examined them and they appear to be bone fide.... It is therefore, prayed that your Lordships will be pleased to give me sanction to do all acts and things as may be necessary in respect of the said transfers and to permit me to affix the companys seal in relation to the said share certificates were required, or pass such other orders as may in the premises be deemed just and proper."

This report was considered by his Lordship Imam J. (as he then was) on 7-8-1953. On that date the following order was passed:

"Read the report of the Official Liquidator under Sec.227(2), Companies Act. It appears that the transfers in these cases took place before the order of winding up. The prayer of the Official Liquidator to the following effect is allowed. He is given sanction to do all acts and things as may be necessary in respect of the said transfers and is permitted to affix the Companys seal in relation to the said share certificates where required. These shares are to