Mortgage

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 March 2012 Dear All,
This is regarding to creating a pari passu charge on movable plant & Machinery, furniture & fittings etc.
Deed of hypothetication has been executed by us.
My specific question is that whether we requred to executive deed of mortgage for the creating charge on plant & machinery...?

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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27 March 2012 First of all on plant and machinery as i think deep of hypothecation should not be executed.

If there is deed of hypothecation there is no need to register the charge because hypo. is a kind of pledge and section 125 does not apply on Pledge.

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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27 March 2012
Section 125(4)(e) this section applies to a charge not being a pledge, on any movable property of the Company.

NOT BEING A PLEDGE

d

PLEDGE:- To constitute a pledge, delivery of possession, actual or constructive, to the pledge is necessary. If the person entitled to the security is in possession of the movable property it is a pledge, carrying with it a power of sale on default of payment on the due date or if no date is fixed after notice.

No particular formality is required to be done regarding creating charge on pledged movable property to create a charge as the property is already secured.

Hypothecation is also a kind of pledge and is exempt from registration. Where movable property is hypothecated to a bank, whether delivery has been made or not, it will be an effective pledge whether registered or not. [Ideal Bank Ltd. V. Pride of India Pictures Ltd.]

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