Sathya Narayana (Proprietor) 25 March 2012

Whether bank hold movable securities under hypothetical

WHETHER THE BANK HAS LEGAL RIGHT TO HOLD THE ENTIRE MOVEABLE SECURITIES UNDER HYPOTHECATION TO THE BANK TILL THE ENTIRE DUES ARE PAID.

IN OTHER WORDS, WHETHER THE LOANEE / BORROWER HAS THE RIGHT TO DISPOSE PART BY PART THE HYPOTHECATED GOODS AND BY REALISING THE AMOUNTS SO RAISED FROM THE SALE BE APPROPRIATED TO THE BANK. VIZ: SET-OFF OF MOVEABLE PROPERTY UNDER LIEN AGAINST PAYMENT OF AMOUNT SO REALISED.

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5 Replies

M. A. Khan (advocate) 25 March 2012

Bank has first charge over property, so you cannot sell it even for realising loan, without intervention of bank.

RAJU O.F., (Advocate) 26 March 2012

Movables, such as machineries, vehicles, etc., which are hypothecated to the bank cannot be sold without the permission of the bank. But open stock of goods for sales, under hypothecation can be sold and the proceeds to be directly remitted to the bank, to set off the loan dues.

Adil Ahmed Mohammed (Advocate ) 26 March 2012

Hypothicated vehicle means it is applicable to each and every part of vehicle, unless you clear the dues to Bank - you are not authorized to sell any single part of the vehicle, but you can add any extra items as you wish to the vehicle.