Venkataramana Rao, J.

1. This second appeal raises a question of some difficulty and importance. The question is whether there can be a valid pledge of the shares of a company registered under the Indian Companies Act by the mere deposit of shares as a security for a debt. The question has arisen in this case thus. One Subramania Pattar was indebted to Ramakrishna Pattar on a promissory note dated 22nd March, 1931. This note was subsequently endorsed to the plaintiff. The case of the plaintiff is that when he demanded the amount due under the note, Subramania Pattar deposited the shares which he held in Parali Tile Works Ltd., as and by way of pledge. He therefore filed this suit for recovery of the debt by sale of the said shares. The main contesting defendant in the case is the fourth defendant who purchased the shares in Court auction in execution of a decree in S. C. No. 13 of 1934 on the file of the Palghat Sub-Court obtained by the third defendant against the said Subramania Pattar. He denies the validity of the pledge. The District Munsif was of opinion that the pledge was not valid because there was no transfer of shares in favour of the plaintiff. He therefore decli