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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 Rodickv.Gandell (1852) 1 De GM & G 763, extracted with approval in Palmer v. Carey, 1926 AC 703, the law as to equitable assignment is slated thus :

(vi) We, the Karnataka Leasing and Commercial Corporation Ltd., do hereby agree to ratify and confirm all and whatever our said attorney shall do, execute or perform or cause to be done or perform in exercise of the power of authority hereunder conferred upon or otherwise expressed or intended."

8. Mr. Udaya Holla, learned counsel for the Bank contended that the power of attorney and all other documents executed by the company have to be considered together to find out whether there is an equitable assignment. It is seen that the only document that refers to the rent and is therefore relevant to find out whether there is an equitable assignment of rents or not, is the Power of Attorney. In support of his contention that the said Power of Attorney created an equitable assignment in favour of the Bank in regard to rents, he relied on two decisions of the Supreme Court in Bharat Nidhi Ltd. v. Takhatmal, and Seth Loom Karan Sethiya v. Ivan E. John, .

15. Sri Udaya Holla, next contended that the Power of Attorney executed by the company should be read in the context of the loan advanced by the company and the equitable mortgage created by the Company and the execution of other loan documents on the same day. He relied on the decision in S. Chattanatha Karayalar v. Central Bank of India, AIR 1965 SC 1856 where it has been held that where a transaction between the parties is contained in more than one document, they must be read and interpreted together and they have the same legal effect for all purposes, as if they are one document. On that principle he contended that all the loan documents executed by the borrower should be read together and if so done, an equitable assignment in regard to the rents receivable from State Bank of India in respect of the portion of the property described in the schedule to the power of Attorney, will become evident. It is to be reiterated that the power of attorney does not refer to the grant of loan by the Bank to the Company or to any agreement or arrangement between the Bank and the Company whereby the Bank is entitled to receive the rents by using the power of Attorney and appropriate the same towards the debt due by the Company. Nor do the other documents dated 30-9-1986 said to have been executed by the Company (copies of which have been produced by the Bank) refer to any such arrangement or agreement. Further, it is doubtful whether reference to any such agreement in any document, other than the power of Attorney, will help the Bank to plead an equitable assignment, as an equitable assignment of a fund without notice to the person who is liable to pay the fund, is of no assistance to the person claiming assignment.

16. If the term loan agreement or other documents executed by the Company in favour of the Bank had stipulated that towards repayment of the loan, Bank was authorised to recover the rents in regard to the property and appropriate the same towards the loan and if the Power of Attorney had also contained a recital referring to the grant of loan and the agreement for repayment thereof by the company and stipulating that the Bank was authorised to adjust the amount received by way of rents towards the loan, then it might have been possible to state that a combined reading of the documents would imply on equitable assignment, leaving aside the question whether such an equitable assignment in regard to rents can be created otherwise than through a registered instrument. But if none of the documents executed by the Company in favour of the Bank refers to any such arrangement for recovery of loan advanced by them, then the position is different. Merely because the loan is advanced by the Bank and a power of attorney is executed by the debtor in favour of the creditor (Bank) to receive the rent, the two acts, without anything more, cannot be read together to draw an inference that there was an equitable assignment in regard to the rents. To illustrate, assume a case where a person creates an equitable mortgage in regard to a property; and on the same day, he also executes a power of attorney in favour of the mortgagee authorising him to manage the property and receive the rents from the property; the two acts cannot be read together to convert the equitable mortgage into an usufructuary mortgage. Such an interpretation or reading, if done, will violate the provisions of the Transfer of Property Act, Stamp and Registration laws.