11 August 2012
A Company has obtained car loan of Rs.5 Lacs from a nationalised bank.The Bank has not yet executed any hypothecation deed.It has executed a loan agreement as well as a Personal Guarantee Agreement. However, there is an endorsement on the RC Book of the vehicle.
Whether it is mandatory to creat and register the charge with the RoC for the above car loans?
If registration is needed ,can prescribed Returns be filed with the RoC without any Hypothecation Deed?
11 August 2012
i) Law says - Hypothecation amounts to pledge though constructive and hence registration of charge is not required.
ii) Expert says- Such charge can nevertheless be registered by the ROC ,if applied for, as per clarification given by DCA. ( pp 1495 - A. Ramaiya' guide to CA-2006 edn.)
iii) Factual- No hypothecation agreement.
iv) Observation- Since RC book contains endorsement,presuming that it is hypothecation, option (i) or(ii) may be followed if the company so wish.
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