Legal Question in Credit and Debt Law in India

whether charge created under MPFACB act will appliacble to another new loan after closing of old one?


Asked on 2/18/17, 7:49 pm

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

19.02.2017

Dear Madam / Sir,

It depends whether the charge that has been created is a fixed or floating charge. If the charge is fixed and the loan against that charge has been cleared and settled, the charge will not be applicable to another loan. But if it is a floating charge, it will be deemed to remain applicable and extend to another loan availed, despite clearing and settling the previous loan.

Please refer to the following link for specific provisions regarding registration of charges :

http://www.icsi.edu/portals/0/REGISTRATION OF CHARGES.pdf

Regards,

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Answered on 2/19/17, 2:21 am


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