C Law Test 8 Solution
C Law Test 8 Solution
C Law Test 8 Solution
Solution
Part 1 MCQs
1. b
2. b
3. a
4. d
5. b
Part 2
Ans 1
Types Of Borrowings
Effectively, any security issued by a company to raise capital, other than a share,
is a debenture. A public company may issue debentures to public or may issue
debentures to any persons privately. Debentures may be secured or unsecured.
Other sources for obtaining loans may include the sponsors or controlling
shareholders of the company. This type of financing is usually unsecured,
however, it may be secured against the assets of the company.
Ans 2
(a) There is no issue in this case as deadline to register mortgage is 30th July
2020.
(b) According to companies act 2017 if the company or interested persons fails
or neglects to register the mortgage or charge as aforesaid, the mortgage
or charge would become void and shall not be accepted as such by the
liquidator or any creditor. However, this shall not affect any contract or
obligation for repayment of the money secured by such unregistered
mortgage or charge. Hence non registration does not mean that terms of
contract of mortgage has become invalid. So property cannot be sold by
MNA limited.
(c) Mr. Saud cannot be reused for inspection as according to the companies act
2017 the register of charges maintained and the copies of instrument
creating any mortgage and charge or modification thereof shall be open to
inspection of:
any member or creditor of the company without fee; and
any other person on payment of such fee as may be fixed by the
company for each inspection.
The refusal of inspection of the said copies or the register shall be an
offence and any person guilty of an offence shall be liable to a penalty of
level 1 on the standard scale, and every officer of the company who
knowingly authorises or permits the refusal shall incur the like penalty, and
in addition to the above penalty, the registrar may by order compel an
immediate inspection of the copies or register.
Ans 3
Firangi limited should submit intimation of satisfaction up to 8 November 2021.
Further they have to follow the following procedure in accordance with
companies act 2017
If no cause is shown
If no cause is shown, by such holder of the mortgage or charge, the registrar shall
accept the memorandum of satisfaction and make an entry in the register of
charges kept by him.
If any cause is shown, the registrar shall record a note to that effect in the register
of charges and shall inform the company.
The show cause notice referred as above shall not be required if a no objection
certificate on behalf of the holder of the mortgage or charge is furnished, along-
with the intimation submitted for the payment or satisfaction.
Effect of delay
Ans 4
(a)
Forms of Security
Pledge
Mortgage
Charge
According to the Transfer of Property Act, 1882 a charge is security for the
payment of a debt or other obligation that does not pass ‘title of the property’ or
any right to its possession to the person to whom the charge is given.
A charge may relate to any asset that the lender has right to take possession in
event of company’s default to pay the loan.
Fixed charge: The charge which is created on identified assets like specific land
and building, specific plant and machinery, etc.
Floating charge: The charge is created over class of assets which changes over
time like debtors, stock, etc. or the entire undertaking of the company.
The Companies Act 2017 requires that the following charges (including
mortgage and pledge) must be registered: