Rose Ltd. raised a loan from a State financial institution by creating hypothecation of book debts and also future debts of the company. Incidentally, the charge was not registered with the Registrar of Companies concern
CS Executive · Company Law · PYQS · December 2014
Rose Ltd. raised a loan from a State financial institution by creating hypothecation of book debts and also future debts of the company. Incidentally, the charge was not registered with the Registrar of Companies concerned. State financial institution demanded a certificate of registration of charge for the amount of loan so granted by it. The directors of the company replied to the State financial institution that the charge need not be registered for hypothecation of book debts. Is the action of the directors valid? Give reasons.
Topics: Charges
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