Find A Law Firm

Charge and Mortgage

Charges and Mortgages under Companies Act 

The Companies Act, 1956 prescribes for registration of charges with the Registrar of Companies, and also gives a list of assets a charge on which must be registered. Registration of charges identifies the assets which are subject to the charge. It becomes a source of knowledge, and, therefore, operates as constructive notice and a protection, to all classes of persons interested in knowing the assets position of the company. It makes charge effective against all quarters including the liquidator. The method of registration devised by the Act is filing of particulars of charge along with instrument creating charge with the Registrar within the period prescribed. Lest the failure of the company to file particulars within time cause hardship to any quarter, any interested person can get the charge registered and the Company Law Board is empowered to order registration even if applied for after the prescribed period. This is known as ‘rectification of the register of charges,’ and is liberally allowed so long as the company is a going concern, but no charge can be made in the status of creditors after commencement of winding up.  Charges are temporary phenomena. The company may overcome them and free its assets. The memorandum of satisfaction is also required to be brought on the Register so that the register may at all times reflect only the true position of the company’s assets.

CHARGE:

‘Charge’ as defined under section 100 of the Transfer of Property Act, 1882: Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge. Nothing in this section applies to the charge of a trustee on the trust-property for expenses properly incurred in the execution of his trust, and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.

‘Charge’ includes a lien and also an equitable charge whether created or evidenced by an instrument in writing or by deposit of title deeds or by an agreement to deposit. A charge may be ‘fixed’ or ‘floating’. When the charge is fixed, a company which has created the charge, can only deal with the property subject to the charge. But when the charge is floating, the company may, in the ordinary course of business, deal with the property in any manner until the charge attaches.

Charges are of 2 types:

  • Fixed Charge: Such a charge is against a specific clearly identifiable and defined property. The property under charge is identified at the time of creation of charge. The nature and identity of the property does not change during the existence of the charge. The company can transfer the property charged only subject to that charge so that the charge holder or mortgage must be paid first whatever is due to him before disposing off that property.
  • Floating Charge: Such a charge is available only to companies as borrower. A Floating charge does attach to any definite property but covers the property of a circulating and fluctuating nature such as stock-in-trade, debtors, etc. It attaches to the property charged in the varying conditions in which happens to be from time to time. Such a charge remains dormant until the undertaking charge ceases to be a going concern or until the person in whose favour charge created takes steps to crystallise the floating charge. A floating charge on crystallisation becomes a fixed charge.

Crystallization of floating charge:

When the charge holder takes steps to enforce his charge, a floating charge becomes a fixed charge on the assets covered by that charge. Until a floating charge becomes a fixed charge, the company is free to deal with the property charged in any manner it deems fit. But once the floating charge crystallises, the company cannot dispose off the charged assets without paying of the charge-holder. Otherwise, the charge-holder can recover his dues from the proceeds. A floating charge crystallises or becomes the fixed in following situations:

§         When the Company ceases to be going concern and charge holder intervenes/ appoints Receiver: A floating charge becomes fixed or crystallized when the debtor company ceases to carry on business or goes into liquidation or the debenture-holder or creditor, in whose favour the charge is created, intervenes by getting a receiver appointed or doing some other act which affects the company’s power of disposition over the assets charged.

§         Crystallization on event specified in the charge: A floating charge may also crystallize on the happening of an event specified in the charging deed. If the charge contract so provides, when the chargee gives notice that the charge is converted into a fixed charge on whatever assets of the charged class are owned by the company at the time the notice is given.

§         When winding up of company commences.

MORTGAGE:

‘Mortgage’ as defined under Sec 58 of the Transfer of Property Act, 1882: (a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.

The different types of Mortgage are:

  • Simple mortgage- Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.
  • Mortgage by conditional sale- Where, the mortgagor ostensibly sells the mortgaged property-
    • on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or
    • on condition that on such payment being made the sale shall become void, or
    • on condition that on such payment being made the buyer shall transfer the property to the seller,
    • the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale.

Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.

·        Usufructuary mortgage- Where the mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property or any part of such rents and profits and to appropriate the same in lieu of interest or in payment of the mortgage-money, or partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee.

·        English mortgage-Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.

·        Mortgage by deposit of title-deeds-Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and Bombay, and in any other town which the State Government concerned may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

·        Anomalous mortgage- A mortgage which is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.

Comments
condos in hyde park March 23, 2012
I own a presentation that we are presently working on, and I have been getting the appearance out for such information.
condos in hyde park
condos in hyde park March 23, 2012
I really enjoyed reading your post. Thank you for sharing so nice and helpful ideas, I appreciate your work. Keep it up and I hope to see more posts in the future.
http://www.chicagorealestatedream.com/buying-condos-in-hyde-park
AntonSondids January 24, 2017
Viagra Migliore dapoxetine Acheter Cialis Au Canada Metamucil With Amoxicillin Viagra Effets Indesirables Buy Cialis Buy Cialis Cheap Cialis Generico 20 Mg Viagra Bestellen 100mg Efficacia Propecia Effetti Collaterali How Long Does Cialis Last cialis online pharmacy Acheter Levitra Sur Le Net Viagra Effetti Secondari buy accutane online cheap Compra Cialis Erezione cialis price Kamagra Legal In Usa Buy Fluconazole Without A Prescription Dutasteride Amoxil Ensemble Buy Viagra Ez Online Pharmacy Buy Cialis Usa Cialis Mal De Tete
JIANBIN0505 May 5, 2017
JIANBIN0505
tods outlet
coach factory outlet
louis vuitton
nike trainers uk
salomon shoes
coach outlet
reebok shoes
cartier watches
oakley sunglasses
gucci outlet
burberry canada
true religion uk
louis vuitton outlet stores
iphone case uk
longchamp
true religion canada
ray ban sunglasses
coach factory outlet
kate spade
gucci outlet online
polo outlet
burberry outlet store
michael kors outlet
soccer cleats
louis vuitton online
nfl jerseys wholesale
lacoste outlet
kevin durant shoes
coach outlet online
nike uk store
ralph lauren polo shirts
borse gucci
michael kors outlet
ray bans
louis vuitton
nba jerseys wholesale
ralph lauren outlet
christian louboutin
cheap jordan shoes
coach outlet online
rolex orologi
swarovski crystal
fred perry polo
coach outlet store online
louis vuitton
oakley sunglasses wholesale
gucci site ufficiale
burberry outlet
michael kors outlet
mlb jerseys
gucci outlet online
ralph lauren outlet
louis vuitton handbags
louis vuitton outlet clearance
coach outlet
coach outlet online
ferragamo shoes
louis vuitton outlet
gucci borse
coach outlet store online
coach outlet
true religion jeans sale
soccer shoes
fitflops uk
coach outlet online
cartier watches
nike shoes
thomas sabo
ysl outlet
mulberry uk
cheap soccer jerseys
cheap oakley sunglasses
camisetas futbol baratas
hermes outlet store
bottega veneta outlet online
true religion jeans
cartier watches for women
cheap oakley sunglasses
nike air max 90
swarovski jewelry
louis vuitton outlet
cheap oakley sunglasses
nike outlet store
oakley sunglasses
soccer jerseys
gucci handbags
hollister clothing
ferragamo shoes
christian louboutin shoes
salomon outlet
hollister clothing
ray ban sunglasses
michael kors bags
ralph lauren uk
coach outlet store online
michael kors outlet online
louis vuitton outlet stores
longchamp outlet
longchamp handbags
gucci outlet
ray ban sunglasses
michael kors outlet
ralph lauren uk
cheap jordan shoes
longchamp outlet
hermes outlet
replica watches
polo outlet
hermes outlet
christian louboutin outlet
ralph lauren uk
coach outlet
birkenstock shoes
coach outlet clearance
coach outlet
oakley sunglasses wholesale
oakley sunglasses
prada outlet
polo outlet store
christian louboutin outlet
prada handbags
michael kors outlet clearance
rolex watches
coach outlet store online
rolex watches outlet
ralph lauren polo
hollister shirts
prada outlet
louis vuitton
cleveland cavaliers jerseys
michael kors outlet clearance
coach outlet online
prada sunglasses for women
fitflops sale clearance
coach outlet
giuseppe zanotti outlet
michael kors uk
fitflops
fitflops sale
cheap oakley sunglasses
basketball shoes
longchamp handbags
lacoste pas cher
true religion outlet
polo ralph lauren outlet
polo shirts
louis vuitton
nike roshe
michael kors handbags
coach outlet online
coach outlet
ferragamo shoes
cleveland cavaliers jersey
louis vuitton handbags
cheap oakley sunglasses
coach outlet
pandora jewellery
coach factory outlet
tods outlet online
snapbacks wholesale
fitflops
louis vuitton pas cher
beats by dre
ray ban sunglasses
michael kors outlet online
oakley sunglasses
polo ralph lauren
coach outlet store online
true religion jeans
cheap ray ban sunglasses
vans shoes
michael kors handbags
michael kors outlet
ray ban sunglasses
mcm outlet
coach factory outlet online
coach outlet store online
true religion jeans
tory burch shoes
ysl outlet online
adidas trainers
oakley sunglasses
cartier watches
nike store
coach outlet online coach factory outlet
michael kors handbags
ecco outlet
chrome hearts
nike free running
christian louboutin shoes
coach outlet clearance
coach outlet online
adidas nmd
cartier watches for sale
louis vuitton outlet
polo outlet
coach factory outlet
oakley sunglasses wholesale
cheap ray ban sunglasses
michael kors outlet
christian louboutin outlet
ray ban sunglasses
michael kors outlet
polo outlet
christian louboutin
christian louboutin shoes
longchamp outlet online
cheap oakley sunglasses
coach outlet store online
cheap oakley sunglasses
christian louboutin shoes
juicy couture outlet
asics
coach outlet store online
giuseppe zanotti shoes
louis vuitton bags
chrome hearts outlet
longchamp handbags
coach factory outlet
cheap oakley sunglasses
cheap jordans
coach outlet online
true religion jeans
true religion jeans
oakley sunglasses
nike air huarache
cheap nfl jersey
rolex watches
michael kors uk
instyler
juicy couture tracksuit
longchamp
michael kors wallets
ray ban sunglasses uk
louis vuitton outlet online
jordan shoes
louis vuitton handbags
hollister uk
oakley sunglasses wholesale
pandora jewelry
nfl jersey wholesale
ralph lauren outlet
michael kors handbags
kobe bryant shoes
air max 90
fitflops sale clearance
cheap nfl jerseys
fitflops sale clearance
reebok outlet store
coach factory outlet
tory burch outlet
ralph lauren outlet
cheap nike shoes
michael kors outlet stores
air max 90
ray ban sunglasses
coach outlet online
rolex watches,rolex watches,swiss watches,watches for men,watches for women,omega watches,replica watches,rolex watches for sale,rolex replica,rolex watch,cartier watches,rolex submariner,fake rolex,rolex replica watches,replica rolex
louis vuitton outlet
michael kors outlet online
christian louboutin sale
coach handbags outlet
louis vuitton outlet clearance
los angeles lakers jerseys
coach outlet store online
tory burch outlet stores
cheap oakley sunglasses
kobe 9 elite
hermes birkin
coach outlet online
coach outlet
cartier watches
cheap oakley sunglasses
rolex outlet
oakley sunglasses
adidas wings shoes
coach outlet online
replica watches
coach outlet store online
christian louboutin shoes
oakley sunglasses wholesale
oakley sunglasses wholesale
michael kors
coach outlet clearance
oakley sunglasses wholesale
kobe 9
fitflops sale clearance
michael kors handbags
football shirts
coach outlet
coach outlet online
new balance shoes
mbt shoes
omega watches
tory burch outlet
coach outlet online
oakley sunglasses wholesale
coach outlet
coach outlet store online
cheap nfl jerseys
ray ban sunglasses
coach outlet
nike foamposite
michael kors outlet clearance
prada shoes
tory burch outlet
coach factory outlet
michael kors outlet online
cheap mlb jerseys
michael kors handbags
christian louboutin outlet
christian louboutin
louis vuitton uk
polo ralph lauren
coach outlet
ferragamo shoes
iphone case
michael kors outlet
hermes belt
louis vuitton outlet
ray ban sunglasses uk
louis vuitton borse
fitflops
ferragamo outlet
true religion jeans
tory burch outlet
christian louboutin shoes
burberry outlet
tory burch outlet online
christian louboutin outlet
michael kors handbags
gucci outlet
louis vuitton outlet
ray-ban sunglasses
rolex watches
christian louboutin online
polo ralph lauren
nike air max 2015
pandora charms sale clearance
louis vuitton
ray ban sunglasses outlet
cheap ray ban sunglasses
coach outlet online
ferragamo outlet
michael kors handbags clearance
mont blanc pens
coach outlet online coach factory outlet
kobe shoes
mulberry handbags
christian louboutin uk
coach outlet store online
cheap oakley sunglasses
michael kors outlet
louis vuitton
oakley sunglasses wholesale
louis vuitton
michael kors outlet clearance
oakley sunglasses
coach outlet clearance
mulberry sale
coach outlet online
polo ralph lauren
oakley sunglasses wholesale
coach outlet
coach outlet
marc jacobs sale
louis vuitton outlet
nike air huarache
true religion jeans
rolex watches
true religion jeans
cheap ray ban sunglasses
cheap oakley sunglasses
oakley sunglasses
tory burch outlet online
ralph lauren polo
borse louis vuitton
air jordan 4
nike store uk
ferragamo outlet
louis vuitton outlet
ray ban sunglasses
montblanc pens
michael kors uk
swarovski jewellery
michael kors outlet
ralph lauren outlet
cheap jordans
polo ralph lauren
coach outlet canada
kate spade handbags
michael kors outlet clearance
fitflops shoes
longchamp handbags
omega outlet
coach outlet store online
nike trainers
kd shoes
oakley sunglasses
louis vuitton outlet stores
coach outlet store online
michael kors outlet clearance
oakley sunglasses
ferragamo outlet
coach outlet
louis vuitton
puma outlet
coach outlet online
ray ban wayfarer
christian louboutin shoes
christian louboutin uk
louis vuitton
rolex uk
michael kors outlet clearance
valentino outlet
air max 90
ralph lauren polo
michael kors outlet online
rolex watches
fitflops sale clearance
hermes birkin bag
true religion uk
adidas uk store
louis vuitton outlet
polo outlet online
cheap ray ban sunglasses
kate spade uk
rolex outlet
kate spade outlet
polo outlet
coach factory outlet
mbt shoes outlet
ray ban sunglasses
tory burch outlet online
oakley sunglasses sale
michael kors outlet clearance
coach outlet store
mulberry handbags
coach factory outlet
michael kors canada
rolex watches
true religion outlet
oakley sunglasses wholesale
swarovski outlet
nike roshe run
michael kors
reebok trainers
michael kors outlet
oakley sunglasses
cheap oakley sunglasses
cheap ray ban sunglasses
oakley sunglasses
cheap jordans
jerseys wholesale
kobe bryants shoes
polo outlet stores
michael kors factory outlet
ralph lauren pas cher
nike blazer pas cher
coach outlet store online
cartier outlet
louis vuitton
true religion jeans
polo ralph lauren outlet
cheap jordan shoes
ralph lauren outlet
valentino shoes
longchamp handbags
longchamp handbags
louis vuitton outlet
ralph lauren
michael kors outlet clearance
ferragamo shoes
mulberry outlet
michael kors handbags
lebron james shoes
coach outlet online
michael kors outlet clearance
tory burch outlet
roshe run
thomas sabo charms
polo ralph lauren
cheap jordans
nike roshe run
ralph lauren polo
michael kors factory outlet
jordan shoes
gucci outlet
christian louboutin sale
nike trainers
ray bans
coach outlet store online
ray ban sunglasses
cheap ray bans
nike free 5
polo ralph lauren outlet
nike store uk
pandora jewelry
coach outlet store online
louis vuitton
fitflops
louis vuitton handbags
mac cosmetics
prada sunglasses
kate spade handbags
coach factory outlet
nike huarache
nfl jerseys
nike outlet online
louis vuitton outlet
burberry outlet
kobe shoes
michael kors outlet
cheap ray ban sunglasses
mulberry bags
mulberry bags
adidas nmd
mulberry handbags
cheap mlb jerseys
(Please Enter the code above shown on image)