JUDGMENT

King, J. - This is a defendant's appeal arising out of a suit for sale upon the basis of a mortgage. The defendant is the Dehra Dun Mussoorie Electric Tramway Co., Ltd. (in liquidation). This company was incorporated about the end of August 1921 having a registered office at Dehra Dun. The plaintiff's are the proprietors of a bank at Dehra Dun and the company had an account with that bank. On 19th January 1923 the plaintiff's allowed the company, at the request of their managing agent Mr. Beltie Shah Gilani, an overdraft of Rs. 25,000. The mortgage deed in suit was executed on 19th June 1923 by Mr. Beltie Shah on behalf of the company in favour of the plaintiffs to secure the overdraft. The defendants admit receipt of the consideration by the company. The overdraft of Rs. 25,000 was undoubtedly utilized for the necessary purposes of the company. The defendants have no objection to treating the plaintiffs as unsecured creditors but plead that the company is not bound by the mortgage deed for various reasons which we shall have to consider in detail. The trial Court held that the mortgage was valid and binding upon the company and decreed the plaintiffs suit. The defendants in appeal have pressed the same points that were taken in the Court below in support of their contention that the mortgage deed is not valid and binding upon the company.

2. The first question is whether Mr. Beltie Shah had authority to borrow Rs. 25,000 from the plaintiffs on behalf of the company. This question formed the subject of issue 1 in the trial Court.

3. The Board of Directors undoubtedly had power under the Articles of Association to borrow money for the purposes of the company and to secure the loan by a mortgage. The appellants rely upon Article 104 of the Articles of Association which lays down that

the Board may delegate any of their powers, other than powers to borrow and make calls, to committees consisting of such member or members of their body as they think fit.

4. Under this article the Board are expressly prohibited from delegating their power to borrow money. Under Article 120 the managing agent was given very extensive powers to conduct and manage the business and affairs of the company and he was given power to enter into all contracts and to do all other things usual, necessary or desirable in the management of the affairs of the company.

5. The respondents contend that the power of entering into contracts would include the power of contracting loans. In our opinion however this contention cannot be accepted. The articles must be read as a whole and as Article 104 restricts the Board from delegating its powers of borrowing we think that Article 120 could not be interpreted so as to give the managing agent unrestricted powers of borrowing money on behalf of the company. It is open to question however whether under the ordinary rules of law relating to agency the managing agent should not be held to have been authorized to obtain the overdraft in the circumstances of this case. The loan was urgently required for the purposes of the company. Machinery and stores had been ordered and had arrived from England and had to be paid for without delay. Under Sections 188 and 189, Contract Act, an agent has very extensive powers in an emergency to do such acts as are necessary for the purpose of protecting his principal from loss and for carrying on the business. Under Article 120 of the Articles of Association also the managing agent was given extensive powers to do anything necessary in the management of the affairs of the company, in the circumstances of this case the managing agent might well be regarded as being faced with an emergency and thus authorized under the ordinary rules of agency to obtain temporary accommodation 'from the bank for the purpose of protecting the interests of the company. It is not denied that the loan was necessary and that the money was at once utilized for the purposes of the company. We think that although t