CASE STUDY M.C. Chacko v. State _Bank_of Travancore 1970 AIR 500 [Section 25(1) of Indian Contract Act, Privity Of Contract, Exceptions, Section 40]FACTS: = H bank had an overdraft account with State Bank. MC Chacko was the manager of H bank and his father K had guaranteed the repayment of debt. K ee le properties to members of his ‘amily. The gift deed provided that liability if any under the said guarantee should be met either by MC personally or through property gifted to him under the said deed. State Bank sued all the heirs under the deed along with MC; albeit limitation period to sue on letter of guarantee had already passed.ISSUES: 1) Whether a ‘charge’ was created in favor of State Bank under the said deed to satisfy the debt under the letter of guarantee? 2) Whether the charge, assuming that a charge exists, is enforceable by bank when it is not a party to the deed?HELD: A ‘charge’ may be created on immovable property when either through express words or implied from deed, it is clear that party intended to make a specified property or fund, belonging to him, liable for debt due by him. In present case, no such charge was created in favour of State Bank—the deed merely set out an internal arrangement between the donor and members of family which conferred a right of indemnity upon them against M.C. Chacko and his inherited property—however, no intention to convert a personal debt into a secured debt in favour of the bank could not be inferred.