Securitization Act 2002
What is security interest, property, hypothecation
Security Interest means right, title and interest of any kind whatsoever upon property, created in favor of any secured creditor and includes any charge, hypothecation, assignment other than those specified below.
- Immovable property
- Movable property
- Any debt or any right to receive payment of money, whether secured or unsecured
- Receivables, whether existing or future
- Intangible assets, being know-how, patent, trade mark, licence, franchise or any other business or commercial right of similar nature.
Hypothecation means a charge in or upon any movable property, existing or future, created by a borrower in favor of a secured creditor without delivery of possession of the movable property to such creditor, as a security for financial assistance, and includes floating charge and crystallization into fixed charge on movable property.
Exclusions from 'security interest'
Exclusions from 'Security interest' - Provision of the Act shall not apply to the following :
- A lien on any goods , money or security given by or under the Indian Contract Act, 1872 or the Sale of Goods Act, or any other law for the time being in force.
- A pledge of movables within the meaning of section 172 of Indian Contract Act,
- Creation of any security in any aircraft as defined u/s 2(1) of Aircraft Act,
- Creation of any security interest in any vessel as defined in section 3 (35) of Merchant Shipping Act.
- Any conditional sale, hire -purchase or lease or any other contract in which no security interest has been created.
- Any right of unpaid seller u/s 47 of Sale of Goods Act.
- Any properties not liable to attachment or sale under first provision to section 60(1) of Code of Civil Procedures.
- Any security interest for securing repayment of any financial asset not exceeding one lakh Rupees.
- Any security interest creating in agricultural land.
- Any case in which the amount due to less than 20% of the principal amount and interest thereon (i.e. where borrower has repaid more than 80% of principal amount and interest. )