Charge creation means the establishment of the lender’s right over specified assets of the borrower in order to recover principle and interest in default from the borrower. The charge can be created against the same assets by more than one lender. The lender in whose favour charge is first created is called the holder of…
A Charge means an interest or lien created on the property and assets of the company or any of its undertakings or both as security and includes a mortgage. When a charge created on the property and assets of a company is registered by ROC, it is a notice of such charge to the public…
CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest) registration is mandatory for all types of security interests created on assets, including mortgages, securitization, and asset reconstruction. This includes loans secured by properties or other assets. The registration must be done by the lender within 30 days of creating the security interest.Section 17 to…
IntroductionIn the context of home loans, a mortgage refers to the process wherein a borrower offers their immovable property as collateral to secure a loan. One of the common methods used in India to create such a mortgage—particularly an equitable mortgage—is through the execution and registration of a Memorandum of Deposit of Title Deeds (MODT).…
A lien or positive lien is akin to a bailment. It is the claim or legal right to retain goods or securities that are typically used as collateral to satisfy a debt. There is no legal definition of the term ‘negative lien’ in any of the Indian legislative enactments. But as it is understood in…
Condonation of delay by Registrar of Companies: If a company is unable to file the registration of charge within a period of thirty days of the date of creation of the charge/modification of charge, it may prepare an application in the form CHG-10 supported by a declaration from the company signed by the company secretary…
Negotiable Instrument Fundamentals A negotiable instrument is a written and signed document that promises or orders payment of a specific sum of money, either on demand or at a future date, to a designated person or to the bearer. Examples include cheques, bills of exchange, and promissory notes. These instruments are transferable, allowing for change…
The lender’s right to the term “Hypothecation of assets” is not defined anywhere in the statute. Some courts have even compared hypothecation to the mortgage of movables. Hypothecation of assets is defined in SARFAESI ordinance 2002 as under; “a charge in or upon any movable property, existing or future, created by a borrower in favour…
(This post explains the essence of Mortgage of properties and several forms of mortgage of immovable properties in India viz. Equitable Mortgage, Simple Mortgage, English mortgage, Mortgage by conditional Sale, Usufructuary Mortgage, and Anomalous Mortgage which are major types of mortgage systems currently existent in India.) The essence of Mortgage of properties: The transfer of…
The article explains various types of charges created by banks to establish their rights over the specified security when the borrower defaults. The charge creation means establishing the lender’s right to recover from the specified assets of the borrower, in case the recovery is difficult in the normal course. The mode of bank charge on…
