JUDGMENT - Gadgil B.C., J.: - This is an appeal filed under Rule 164 of the Company (Court) Rules, 1959, whereunder the Deputy official Liquidator has rej~cted ~ the claim of the appellant. 2. The controversy arises as fallows; proceedings for winding up af the Company known as Central Hindustan Orange and Cold Storage Company Limited, is in progress in this Court in Company Petition No.3 of 1966. The Company has been ordered to be woud up. The Deputy Official Liquidator is dealing with the winding up affairs. The appellant, Bank af Maharashtra had advanced a loan to the Company long before the winding up order was passed. The loan was advanced on a security of a simple mortgage of certain assests of the Company. That was a second mortgage. Same assets were mortgaged in favour of C. P. and Berar Government and it was the first mortgage. The Deputy Official Liquidator took possession of the assets of the Company including the mortgaged property. He gave the mortgaged property to one Tulshan on a leave and licence basis for a period of two years. The licensee was to pay Rs. 1,10,000 as a licence fee. In addition, he was to make certain security deposits. Thus by this transaction, the Deputy Official Liquidator was able to realise Rs. 1,10,000 together with interest on that amount as also interest on the security deposit. 3. In due course, the mortgaged property was sold by the Deputy Official Liquidator for an amount of Rs. 4,48,000. Both the mortgagees laid their claim in this amount as secured creditors. Rs. 1,10,773 were spent by the Deputy Official Liquidator for the preservation of the mortgaged security. This amount was deducted from the sale price and thereafter the remaining amount was distributed between the State of Central Provinces and the Bank of Maharashtra. After satisfying the claim of the State of Central Provinces, the Bank of Maharashtra received Rs. 38,892.82. 4. The contention of the Bank is that the dues on the basis of the mortgage in its favour are still unpaid to the extent of over Rs. 3,00,000 and that, therefore, the Bank has a right as a secured creditor over certain assets of the Company. 38,892.82. 4. The contention of the Bank is that the dues on the basis of the mortgage in its favour are still unpaid to the extent of over Rs. 3,00,000 and that, therefore, the Bank has a right as a secured creditor over certain assets of the Company. I will go into the details in that respect later, but at this stage it is sufficient to state that the claim so made by the Bank has been rejected by the Deputy Official Liquidator. Such an order is appealable under Rule 164 and hence this appeal. 5. I have already stated that the Deputy Official Liquidator has recovered an amount of Rs. 1,10,000 as licence money from Tulshan. Some amount by way of interest has also been received by him. Mr. Khamborkar for the Bank of Maharashtra contended that these profits which accrued by the use and occupation of the mortgage security would itself be a mortgage security and as such the Bank has a prior claim over it. He drew my attention to the provisions of section 8 of the Transfer of Property Act which read as follows :- “8. Unless a different intention is expres tied or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferror is then capable of passing in the property, and in the legal incidents thereof. ... .... ... ... .... According to Mr. Khamborkar the Bank i~ a transferee as contemplated by section 8 and that, therefore, the Bank is entitled to all the interest of the Company. To substantiate this proposition, he relied upon the decision of the Rangoon High Court in the case of(Ma Joo Tean v. Collector of Rangoon)1 A.I.R. 1934 Rangoon 321. In that case, there was an equitable mortgage arid in execution of the decree of that mortgage a receiver was appointed. The Collector of Rangoon put a claim of Rs. 1,029 over the amount that was in the hands of the receiver. That claim was granted. The matter went to the High Court. In that case, there was an equitable mortgage arid in execution of the decree of that mortgage a receiver was appointed. The Collector of Rangoon put a claim of Rs. 1,029 over the amount that was in the hands of the receiver. That claim was granted. The matter went to the High Court. It was held as follows: “Where a mortgage deed provided that the property mentioned therein was mortgaged with all the appurtenance to the said premises belonging and all the estate, right, title, interest, property, claim and demand whatsoever of the mortgagors into and upon the said premises to hold the said premises unto the montgagees subject to the proviso for redemption hereinafter contained. Held: that the mortgagee was entitled as a secured creditor of the mortgagor to the rents and profits of the land of which the receiver appointed pending the mortgage suit was in possession: Held further: that even if no reference had been made specifically to the transfer or all the estate, right, title, interest, property, claim and demand whatsoever of the mortgagors in to and upon the said premises by reason of the provisions of section g, Transfer of Property Act, in like manner the rents and profits arising out of the mortgaged land in the hands of the receiver would form part of the mortgage which was created to secure repayment of the loan.” 6. This matter, however, has also been considered by the Full Bench of the Madras High Court in the case of (Collector Tiruchirapalli v. Trinity Bank Ltd)2 A.I.R. 1962 Mad. 59. Before the Madras High Court, there was a decree on simple mortgage and a receiver was appointed to recover and collect the rents and profits of the mortgaged property. The question arose as to whether the mortgagee has a prior claim over the amount so received by the receiver. The following is the relevant head note: “A simple mortgagee and an equitable mortgagee have no legal right to take possession of the mortgaged property or to claim any security in the rents profits accruing from that property. The question arose as to whether the mortgagee has a prior claim over the amount so received by the receiver. The following is the relevant head note: “A simple mortgagee and an equitable mortgagee have no legal right to take possession of the mortgaged property or to claim any security in the rents profits accruing from that property. The broad grounds on which such mortgagees were afforded preferential rights in the rents and profits collected by a receiver appointed at their instance are: firstly, the appointment of a receiver is an equitable mode of execution permissible under the provisions of the Code of Civil Procedure; secondly, Jaws delays ought not to prejudice the mortgagee in realising the amount due to him, and thirdly, the English Law has always recognised and upheld the mortgagees right to have a receiver appointed for the liquidation of the mortgage debt. The right to levy execution by the appointment of a receiver cannot alter the .substantive rights governing the parties to the suit. The rights of the decree-holder are primarily regulated by the terms of the decree and neither the fact that he has obtained decree nor the fact that he is permitted to have a receiver appointed as a mode of execution of the decree can clothe him with better rights than what the law other wise affords him” . The order of appointment of a receiver in an action of a simple mortgagee or an equitable mortgagee to recover the mortgage amount with a direction to him to bring in the rents and profits from the hypotheca to the credit of the suit without an order of appropriation allocation in favour of the mortgagee does not amount to a charging order in favour of the mortgagee. Independently of the order appointing a receiver a simple mortgagee or an equitable mortgagee or a charge holder in respect of an immovable property has no, security over the rents and profits accruing from that property. Whatever disabilities the mortgagor may suffer by the receiver Taking possession of the hypotheca as the hand of the Court, no special rights are conferred in favour of the mortgagee by reason only of such appointment.” In my opinion, the preferential claim of the secured creditor in winding up proceeding can be available only with respect to the security covered by a mortgage. In a simple mortgage the right to use and enjoy the property is not hypothecated to the mortgagee though the title of the property is so mortgaged. This is clear for the obvious reason that in respect of the simple mortgage, the mortgagor continues to enjoy the income of the property. Thus though the income is received from the mortgaged property, still it would not be a mortgage security under any mortgage. It is true that a mortgagee may be able to lay its hands over the income of the property if a receiver is appointed in the execution of the decree. But this right arises not on the basis of mortgage deed but on account of appointment of a receiver which is a mode of execution. In the present case, no receiver has been appointed and the net analysis is that the licence amount of Rs. 1,10,000 together with interest therein would not constitute a mortgage security and as such the mortgagee viz., the Bank cannot have any preferential claim over it. Under these circumstances, I do not think that the Deputy Official Liquidator has passed any wrong order when he has rejected the claim of the Bank in that respect. 7. Another contention of Mr. Khamborkar is that while making calculations about the amount that would be payable to the Bank as a secured creditor, the Deputy Official Liquidator should not have deducted Rs 1,10,773 towards the expenses for the preservation of the mortgaged property He contended that the preservation of such property was the responsibility of the Deputy Official Liquidator and that the costs of such preservation should come out of the general funds of the Company. This contention, however, will have to be appreciated in the background of the express provisions contained in section 529 of the Companies Act, 1956. It enables the secured creditor to realise his security independently and without affecting his right as a secured creditor. Proviso to sub-section(2) of section 529 deals as to who would be liable in such a case for the expenses for the preservation of the mortgaged property. It enables the secured creditor to realise his security independently and without affecting his right as a secured creditor. Proviso to sub-section(2) of section 529 deals as to who would be liable in such a case for the expenses for the preservation of the mortgaged property. It reads as follows “Provided that if a secured creditor instead of relinquishing his .- security and proving for his debt proceeds to realise his security, he shall be liable to pay the expenses incurred by the liquidator (including a provisional liquidator, if any) for the preservation of the security before its realization by the secured creditor.” Thus, there is an express provision that the secured creditor is liable to pay the expenses for the preservation of the security. It appears that this provision has been made when the secured creditor does not want to equate himself with the rest of the creditors. In view of this provision, it will be very difficult to accept the contention of Mr. Khamborkar that the Deputy Official Liquidator should have borne the preservation expenses of Rs. 1,10,773 from out of the general funds of the Company. 8. Result is that the appeal fails and is dismissed. However, this decision will not affect the rights, if any, to have the priority for the satisfaction of his decretal amount along with the other creditors. There would however, be no orders as to costs. Appeal dismissed. -----