The Floating Charge As An Effective Security

1352 Words Jan 7th, 2016 6 Pages

This essay will critically evaluate on the floating charge being a useful security to banks in the modern day society. There are several controversies surrounding the floating charge which will be examined in this essay. The concept of floating charge over assets as medium of security is relied upon by many companies thereby showing us that it is inevitable for the banks to grant security based on them. The essay commences with an Introduction to concept of loans provided by the banks based on different modes of security followed by the nature and characteristics of the charges. The essay in the second part will discuss about the legal aspects revolving around the charges vis-à-vis registration and the third part will discuss on the advantages of the floating charges as a security. Further down in the fourth part of the essay the researcher attempts to bring out the distinction between the fixed charges and floating charges. The fifth part of the essay analyses the core question of floating charge being an effective security with the help of judicial pronouncements and legislations. Various concept viz, priority, crystallisation, impact of Insolvency Law, Enterprise Act, 2002 are given an insight under this part. The sixth part deals with the scenario in other states to a limited extent. Through the use of legislation, legal precedent and journal articles, a deeper examination will be provided into the application of the law surrounding the above issues and the…
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