JUDGMENT

Fletcher, J. - This is a special case for the opinion of the Court under Order XXXVI of Schedule I of the Civil Procedure Code. The plaintiffs are the Charnock Collieries Co., Ltd., in liquidation and Edward William Viney and John Woodhouse Thurston, the liquidators of the Company; the defendant is Bholanath Dhar.

2. The matters in which the opinion of the Court is sought are under two headings. First, the defendant claims as a secured creditor in respect of a sum of Rs. 7,417-8, which is said to be due to him under a certain instrument of hypothecation, dated the 3rd January 1910, expressed to have been made between the Company of the one part and the defendant of the other part.

3. The second part of the claim is with reference to the right of the defendant to be a secured creditor in respect of certain royalties and rents due by the plaintiff Company to the defendant under the authority of a kabulat under which the plaintiff held the colliery.

4. This Colliery was, by an agreement made between the Company, the defendant, and the liquidators, sold, and the proceeds of the sale are now in the hands of the attorney to the liquidators.

5. The first point is a short one. It appears that Bholanath Dhar on the 3rd January 1910 lent to the plaintiff Company the sum of Rs. 3,995-8. On that date, there was also due to that gentleman on a promissory-note executed by the Company Rs. 2,004 8. Therefore the amount taken to be lent on the 3rd January 1910 was Rs. 6,000. That amount, it is not denied by the liquidators, went into the coffers of the Company and was credited by the Company or its managing agents in the loan account.

6. The liquidators do not dispute the right of the defendant to prove as an unsecured creditor; but they say that the terms of the articles of the Company were not complied with and that, therefore, the mortgage did not create a charge on the properties of the Company,

7. The only articles which are material to this matter are Nos, 49, 50/84 and 112.

8. Article 49 authorises the managing: agents with the approval of the Directors to barrow from the members or other persons, and may themselves lend any sum or sums of money for the purposes of the Company. Then follows a proviso which is not material to this case.

9. Article 50 says--"The Managing agents may with such approval as aforesaid raise or secure re-payment of such money in such manner and upon such terms and conditions in all respects as they think fit, and in particular by the issue of debentures or bonds of the Company or by the creation of debenture stock, or by making, drawing, accepting or endorsing on behalf of the Company, any promissory-notes or bills of exchange, or giving or issuing any other security of the Company, or by mortgage or charge of all or any part of the property of the Company including its uncalled capital."

10. Article 84 is material because by it a power, which in England is confined to the Board of Directors, is conferred on the managing agents. "Subject to the control and supervision of the Directors, the Managing agents are by this article authorised to sign all such contracts, and to draw, accept, endorse and negotiate on behalf of the Company all such bills of exchange, promissory-notes, hundies, cheques, drafts and other instruments as shall be necessary for the, carrying on of the business of the Company, and to exercise all the powers, authorities and discretions of the Company except only such of them as by the Company's Acts or these presents are expressly directed to be exercised by the Board of Directors or by the shareholders in general meeting. All monies belonging to the Company shall be paid to such bankers as the managing agents, subject to the approval of the Directors, shall deem expedient, and all receipts for monies paid to the Company shall be signed by the Managing agents whose receipts shall be an effectual discharge for the monies therein stated to have been received."

11. Article; 112 relates to the custo