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CS Professional · Insolvency and Bankruptcy - Law and Practice · Debt Recovery and Securitization

Under the Act's definition of 'security interest', which of the following is expressly included in addition to a mortgage, charge, hypothecation or assignment over property in favour of a bank or financial institution?

Security interest expressly includes title retained by a bank or financial institution as owner of a tangible asset given on hire, financial lease or conditional sale, where it secures the unpaid purchase price or credit given to acquire the asset. Unsecured notes, voting rights and decrees are not listed.

  1. ATitle retained by the bank as owner of a tangible asset given on hire or conditional sale, securing unpaid purchase priceCorrect
  2. BAn unsecured promissory note held by a bank
  3. CA shareholder's voting right in the borrower
  4. DA decree of a civil court in favour of the bank

Explanation

The definition expressly includes right, title or interest in a tangible asset retained by the bank or financial institution as owner, given on hire, financial lease or conditional sale, which secures the unpaid purchase price or credit given to acquire the asset. An unsecured note creates no right over property. Voting rights and decrees are not listed.

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