chhatramani/nepal_legal_acts_corpus_english huggingface dataset:
Water Resources Act, 1992

Explanation: For the purposes of this Act, "extensive public use" means a use that benefits a larger population without causing significant adverse effect to the population benefited by the existing use.

(3) The Government of Nepal shall pay compensation as prescribed to the person concerned for the land, buildings, equipment or structures connected with the use of the water resource taken over under Sub-section (2).

(4) The amount of compensation payable under Sub-section (3) shall be determined on the basis of the current value of the land, buildings, equipment and structures taken over by the Government of Nepal under Sub-section (2) (after deducting wear and tear and depreciation from ordinary use). Added by the Some Nepal Acts Amendment to Make Compatible with the Constitution of Nepal Act, 2075.10a. Province and Local Level May Use or Develop Water Resources: The Government of Nepal may, by notification in the Nepal Gazette, prescribe the levels, capacities or quantities of water resources including drinking water, hydropower, irrigation, in respect of which the Province or Local Level may make law and use or develop water resources pursuant to such law. 11. Transfer of Water Resources Development Project: (1) After the construction of any water resource related project developed by the Government of Nepal under Sub-section (1) or (2) of Section 10 is completed, the Government of Nepal may transfer it to a consumer association, stipulating necessary conditions.

(2) The ownership of the project transferred under Sub-section (1) shall vest in the concerned consumer association, and the consumer association shall operate that project as if it had obtained a license itself, subject to this Act. 12. Contract for Use of Water Resources: Notwithstanding anything contained elsewhere in this Act, the Government of Nepal may, subject to the prevailing law, make a contract with any domestic or foreign company, incorporated body or person, and develop, use and expand services of any water resource according to the conditions mentioned in such contract. 13. Power to Prescribe Terms of Service and Collect Service Charges: (1) A licensee may provide the service of using water resources developed by himself to another person on the basis of mutual terms and collect charges for such service.

(2) The Government of Nepal may determine and collect service charges as prescribed for providing the service of using water resources developed by it to another person. 14. Service May Be Disconnected: The service may be disconnected in the case of a person who fails to pay the charges payable for availing the service, or who uses such service without authorization, or who misuses the service, or who avails the service contrary to the terms. 15.
Water Resources Act, 1992

14. Service May Be Disconnected: The service may be disconnected in the case of a person who fails to pay the charges payable for availing the service, or who uses such service without authorization, or who misuses the service, or who avails the service contrary to the terms. 15. Entry into Another's House and Land: If the Government of Nepal or a licensee has to enter any person's house and land in the course of survey or use of water resources, an employee deputed by the Government of Nepal or the licensee may enter such house and land only after giving prior notice to the concerned person. If any loss or damage is caused thereby, the Government of Nepal or the licensee shall pay compensation as prescribed. Provided that, if there is reasonable cause to suspect unauthorized use or misuse of water resources in any house and land, such employee may enter the concerned house and land without prior notice to inspect the matter or to prevent any accident. 16. Use or Acquisition of Another's House and Land: (1) If it is necessary to use or acquire another person's house and land for doing any of the following works for the use of water resources, a licensee may submit an application to the Government of Nepal as prescribed:-

(a) To construct a dam or embankment,

(b) To excavate a canal, watercourse or tunnel,

(c) To construct a water tank above or below ground or to lay a pipeline,

(d) To construct a pond or establish a water distribution centre,

(e) To carry out other necessary construction works related to the development of water resources.

(2) Upon receipt of an application under Sub-section (1), the Government of Nepal may, after making necessary inquiries in that regard, cause the licensee to acquire such house and land in the same manner as land is caused to be acquired for an incorporated body under the prevailing law.

(3) If the Government of Nepal or a licensee has carried out any construction work related to the development or use of water resources, the Government of Nepal may prohibit any other person from using the place where such construction work has been carried out, or the house and land within a prescribed distance around such place, for any particular purpose. The Government of Nepal or the licensee shall pay compensation as prescribed for the loss or damage caused to the concerned person by such prohibition. 17.
Water Resources Act, 1992

The Government of Nepal or the licensee shall pay compensation as prescribed for the loss or damage caused to the concerned person by such prohibition. 17. Safety of Structures Connected with Use of Water Resources: (1) For the safety of any structure connected with the use of water resources, the Government of Nepal may, upon the request of a licensee or on its own motion if it deems necessary to provide such safety, make necessary arrangements.

(2) If safety arrangements are made upon the request of a licensee under Sub-section (1), all expenses incurred therefor shall be borne by the licensee. 18. Prescribing Quality of Water Resources: (1) The Government of Nepal may, by notification in the Nepal Gazette, prescribe the required quality in respect of various uses of water resources.

(2) While using water resources, it shall be done in a manner that maintains the quality prescribed under Sub-section (1). 19. Not to Pollute Water Resources: (1) The Government of Nepal may, by notification in the Nepal Gazette, prescribe the tolerance limit for pollution of water resources.

(2) No person shall pollute water resources by putting or using any kind of waste, industrial effluent, poison, chemical or biological substance in a manner that exceeds the tolerance limit for pollution of water resources prescribed under Sub-section (1).

(3) The prescribed authority may, as necessary, test or cause to be tested whether any water resource is polluted or whether it meets the quality prescribed under Sub-section (1) of Section 18 in relation to any use of water resources. 20. Not to Cause Significant Adverse Effect on Environment: While using water resources, it shall be done in such a manner as not to cause significant adverse effect on the environment by soil erosion, flood, landslide or other similar causes. 21. License May Be Cancelled: (1) If a licensee does any act contrary to this Act or the Rules made under this Act, the prescribed authority may, by specifying a period, order him to make necessary correction of such act.

(2) If the licensee fails to make necessary correction within the period specified under Sub-section (1), the prescribed authority may cancel the license obtained by such person.

(3) Before cancelling the license under Sub-section (2), the prescribed authority shall give the concerned licensee a reasonable opportunity to present his defence. 22.
Water Resources Act, 1992

22. Penalties: (1) If any person contravenes this Act or the Rules made under this Act, the prescribed authority may impose a fine of up to five thousand rupees on him, and if any loss or damage has been caused to any person by such offence, may also order him to pay compensation for such loss or damage.

(2) If any person uses water resources without obtaining a license required under this Act or without complying with the conditions mentioned in the license, the prescribed authority may impose a fine of up to five thousand rupees on him and cause such act to be stopped.

(3) If any person steals, misuses or makes unauthorized use of water resources developed under this Act or the service generated from such water resources, the prescribed authority may recover the amount of loss from him and also impose a fine equal to the amount of loss.

(4) If any person, with evil intent, demolishes, damages or causes any loss or harm to any source of drinking water, dam, canal or any structure connected with the use of water resources, or any other structure affecting such structure, or abets or attempts to do any such act, he shall be liable to recover the amount of loss and to a fine equal to the amount of loss or imprisonment for up to ten years or both. 23. Appeal: A person who is not satisfied with the amount of compensation given under Section 10, 15 or 16, or with the cancellation of a license by the prescribed authority under Section 21, or with an order of punishment given by the prescribed authority under Sub-section (1), (2) or (3) of Section 22, may file an appeal in the Amended by the Some Nepal Acts Amendment Act, 2072.High Court within thirty-five days. 24.
Water Resources Act, 1992

24. Power to Make Rules: (1) The Government of Nepal may make Rules for the purpose of implementing the objectives of this Act.

(2) Without prejudice to the generality of the power conferred by Sub-section (1), the Government of Nepal may, in particular, make Rules on the following matters:-

(a) Matters relating to drinking water, irrigation, water transportation, industrial use, recreational use and other similar uses of water resources,

(b) Matters relating to water resources conservation, flood control and landslide prevention,

(c) Environmental matters,

(d) Matters relating to fees, charges, etc. payable to the Government of Nepal for availing services related to water resources,

(e) Matters relating to prevention of pollution of water resources,

(f) Methods of various uses of water resources,

(g) Matters relating to determination of the level of service generated from the use of water resources,

(h) Matters relating to accidents that may occur from the use of water resources and their inquiry and compensation,

(i) Matters relating to consumer association and other provisions concerning consumers, as well as matters relating to protection and facilities for consumers,

(j) Other necessary matters relating to the development and use of water resources. 25. Repeal and Saving: (1) The Canal, Electricity and Related Water Resources Act, 2024 is hereby repealed.

(2) Any act or proceeding done under the Canal, Electricity and Related Water Resources Act, 2024, or under the Rules made or Orders issued under that Act, prior to the commencement of this Act, shall be deemed to have been done under this Act.
Secured Transactions Act, 2006

Secured Transactions Act, 2063

Certification and Publication Date
2063.07.30

Amending Acts

1. Act to Amend Some Nepal Acts Relating to the National Code, 2075 2076.01.02
2. Secured Transactions (First Amendment) Act, 2081 2081.12.03

Act No. 19 of the Year 2063

An Act Made to Provide for Secured Transactions

Preamble: Whereas, it is desirable to make prompt provisions for the enforcement of obligations over movable property and for the immediate fulfillment of obligations arising thereunder by establishing an integrated legal framework to ensure the security of transactions involving movable property as collateral, in order to maximize the promotion of economic activities for the economic development of the country, amended by the First Amendment. Be it enacted by the House of Representatives in the first year of the issuance of the Proclamation of the House of Representatives, 2063. Chapter-1
Preliminary

1. Short Title and Commencement: (1) This Act shall be called the "Secured Transactions Act, 2063."

(2) This Act shall come into force immediately. 2. Definitions: Unless the subject or context otherwise requires, in this Act,-

(a) "Court" means the Commercial Bench of a court designated by the Government of Nepal, amended by the First Amendment. by notification in the Nepal Gazette, on the recommendation of the Judicial Council. Amended by the First Amendment.(b) "Instrument" means a promissory note, bill of exchange, or other negotiable instrument.

(c) Deleted by the First Amendment.

(d) "Record" means information stored in any document or by electronic or other means in a manner that can be viewed, seen, opened, or retrieved as required, and the term also includes a notice under this Act.

(e) "Consumer Goods" means any goods used primarily for personal, family, or household purposes. Provided that the term shall not mean a vehicle bearing an identification number.

(f) "Equipment" means goods other than farm products, inventory, or consumer goods.

(g) "Vehicle Bearing an Identification Number" means a vehicle, trailer of a vehicle, aircraft, or engine-installed boat, other than those in the inventory of the grantor.

(j) "Farm Products" means the following goods, other than uncut trees, of a grantor engaged in farming operations:-

(1) Crops, whether growing, grown, or to be grown,
(2) Aquatic goods produced in water,
(3) Livestock and poultry (including future offspring),
(4) Goods used or produced in the course of farming operations,
(5) Unprocessed products derived from crops or livestock.
Secured Transactions Act, 2006

Amended by the First Amendment.(jh) "Purchase Money Security Interest" means a security interest in goods or in the right of a licensee under a license of intellectual property or intellectual property, to the extent that:-

(1) The seller of the property takes or retains the interest to secure all or part of its price; or
(2) A person other than the seller gives value or consideration to the grantor to enable the grantor to acquire rights in or the use of the property, and the value or consideration is in fact so used. Added by the First Amendment.(jh1) "Movable Property" means tangible or intangible property of any nature of a person, including fixtures, minerals subject to extraction license, and trees to be cut, other than immovable property, and the term also includes future property, accounts, goods, bank accounts, proceeds from collateral property, or movable property located outside the country as per prevailing law.

(n) "Fixture" means goods that are or are intended to be affixed to immovable property in which a property right is created under prevailing law. Provided that the term shall not include factory machinery, office machines, or household goods that are readily removable.

(t) "Guarantee" means a secondary obligation, such as a payment obligation or the payment obligation of a person issuing a letter of credit, and the term also includes an obligation that helps to effect payment in respect of accounts, chattel paper, instruments, or other amended by the First Amendment. movable property. Added by the First Amendment.(t1) "Prescribed" or "As Prescribed" means prescribed or as prescribed in the rules made under this Act. Added by the First Amendment.(t2) "Registration Record" means the registration record established pursuant to clause (a) of subsection (1) of section 5.

(th) "Registration Office" means the Secured Transactions Registration Office established pursuant to section 4. Added by the First Amendment.(th1) "Event of Default" means a situation where the person bearing the obligation fails to fulfill the obligation required to be fulfilled, and the term also includes any other situation which is deemed to be a failure to perform an obligation under the terms of the agreement between the grantor and the secured party.

(d) "Obligor" means a person who is required to fulfill an obligation in respect of accounts, chattel paper, or other amended by the First Amendment. movable property.

(dh) "Secured Party" means a lender, creditor, seller, or other person who obtains a security interest pursuant to a security agreement, and the term also includes a person who purchases accounts or chattel paper, and a lessor of goods.
Secured Transactions Act, 2006

Amended by the First Amendment.(n) "Grantor" means a person who grants a security interest to secure the obligation of that person or any other person, and the term also includes a person who grants an account as collateral. Amended by the First Amendment.(t) "Collateral" means movable property in which a security interest may be created.

(th) "Security Agreement" means an agreement that creates or provides for a security interest. Amended by the First Amendment.(d) "Security Interest" means the interest of a secured party created by agreement in the movable property granted as collateral by the grantor, and the term also includes the interest of a person receiving a transfer of accounts.

(dh) Deleted by the First Amendment.

(n) Deleted by the First Amendment.

(p) "Purchaser" means a person who acquires any property or acquires an interest in such property in any manner.

(ph) "Account" means a right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or chattel paper, creating a right to payment.

(b) "Inventory" means goods held for sale or lease in the ordinary course of a trade or business, and the term also includes raw materials, work-in-process, finished goods, or materials used or consumed in such enterprise or business.

(bh) "Value" means the consideration given or to be given under the agreement.

(m) "Goods" means all things that are movable at the time a security interest attaches, and the term includes fixtures, trees to be cut for the purpose of sale, and farm products.
Secured Transactions Act, 2006

Provided that the term shall not mean accounts, chattel paper, currency, documents, or instruments.

(y) "Lease of Goods" means a lease of the following goods:-

(1) A lease of goods for a term of more than one year,
(2) A lease of goods for an indefinite term,
(3) If a lease of goods is initially for a term of one year or less but the lessee, with the consent of the lessor, continuously retains possession of the goods for more than one year from the time possession was obtained,
 Provided that if the lessee has not retained possession of the leased goods for more than one year, such goods shall not be deemed to have been leased for a term of more than one year.
(4) If a lease of goods is for a term of one year or less but contains a provision that it may be renewed for a term exceeding one year.

(r) "Registrar" means the person appointed or designated pursuant to subsection (3) of section 4.

(l) "Lien Holder" means the following persons:-

(1) A person entitled to an interest in or possession of the collateral of a secured party by order of a court, an authority empowered under prevailing law, or a practitioner of insolvency under prevailing law relating to insolvency,
(2) Any other person, other than a person who controls the collateral, who acquires an interest in the collateral of a secured party in the course of the enforcement of law.

(w) "Document" means a document of title or receipt, such as a bill of lading, warehouse receipt, etc., issued by a person engaged in the business of transporting or storing goods.

(sh) "Proceeds" means the benefit received or to be received from the following actions:-

(1) Any receipt of any kind from the sale, lease, license, exchange, or other transfer of collateral,
(2) Any receipt from collection or distribution in respect of collateral,
(3) Rights arising from collateral,
(4) A claim for loss, damage, or breach of condition concerning the collateral, to the extent of the value of the collateral,
(5) Insurance proceeds payable for loss or damage to or breach of condition of the collateral, to the extent of the value of the collateral and to the extent payable to the grantor or the secured party.

(sh) "Cash Proceeds" means proceeds such as currency, checks, or deposits, and the term also includes other similar cash proceeds.

(s) "Sign" means adopting or executing a name or symbol by any means with the intent to identify the person signing or to accept or establish the authenticity of a record.
Secured Transactions Act, 2006

Provided that the term shall not imply the requirement of a manual signature.

(h) "Acquiring Property" means taking property or creating an interest in property by voluntary transaction, such as a purchaser, donee, secured party, or pledgee.

(ksh) "Notice" means a record registered or submitted for registration at the Registration Office, and the term also includes an amendment, continuation statement, and termination statement registered or submitted for registration.

(tr) "Chattel Paper" means a record that creates a debt obligation and a security interest in goods or leased goods.

(jny) "Transfer" means the transfer, in whole or in part, from one person to another of the right to payment in accounts, chattel paper, instruments, documents, or other rights to payment. Amended by the First Amendment.(kka) "Assignor" means a person who transfers an account as collateral. Amended by the First Amendment.(kkh) "Assignee" means a person to whom an account is transferred as collateral. 3. Application of this Act: (1) This Act shall apply to the following transactions:-

(a) All transactions made to secure an obligation from collateral, including pledge, hypothecation, and hire purchase,
Added by the First Amendment.Explanation: For the purpose of this clause, "hypothecation" means the hypothecation of movable property. Amended by the First Amendment.(b) The sale of accounts, whether or not for the purpose of securing an obligation, and
Amended by the First Amendment.(c) The lease of goods, whether or not for the purpose of securing an obligation. Added by the First Amendment.(1a) This Act shall apply to the following collateral:-

(a) If movable property, including instruments, which constitutes collateral at the time the security interest is created, is located in Nepal,
(b) If the movable property has a basis for being in Nepal, or such property is commonly used in more than one country and the grantor resides in Nepal and the collateral is located in Nepal, or
(c) If movable property, including accounts, constituting collateral, and such collateral is located in Nepal.

(2) Notwithstanding anything contained in the agreement between the parties or irrespective of who holds the ownership right in the collateral, this Act shall apply to the transactions and collateral [mentioned] in subsections (1) and (1a).
Secured Transactions Act, 2006

Amended by the First Amendment.(3) Notwithstanding anything contained in subsections (1), (1a), and (2), this Act shall not apply to the following transactions:-

(a) The transfer of an employee's compensation claim.
(b) The sale of accounts or chattel paper related to a business in connection with the sale of that business.
(c) The transfer of an account, chattel paper, or instrument for the purpose of collection, and
(d) The transfer of a right to payment under a contract to an assignee who also has an obligation to perform under that same contract. Chapter-2

Establishment and Operation of Registration Office Relating to Secured Transactions

4. Establishment of Registration Office: (1) The Government of Nepal shall establish one Registration Office called the Secured Transactions Registration Office for the registration of notices under this Act.

(2) Until the establishment of the Registration Office pursuant to subsection (1), the Government of Nepal may designate an office to perform the work of registering notices under this Act.

(3) To manage the work and operations of the Registration Office, the Government of Nepal may appoint or designate an officer of at least the rank of gazetted second class or equivalent as the Registrar.

(4) The Registrar appointed or designated pursuant to subsection (3) shall perform the prescribed duties and responsibilities under this Act. 5. Functions, Duties, and Powers of the Registration Office: (1) The functions, duties, and powers of the Registration Office shall be as follows:-

(a) To establish, operate, and maintain a registration record to be operated by electronic technology for the registration of notices relating to any amendment, continuation statement, termination statement, rectification of errors, and notices concerning the rights of lien holders related to a notice or notice.
(b) To provide information from the records of the Registration Office as provided in this Act to any person upon request.
(c) To publish an annual report of its work within six months of the end of each fiscal year.

(2) For the purpose of performing any or all functions of the Registration Office, the Government of Nepal may enter into an agreement with a private entity and take necessary assistance through such entity to fulfill the functions of the Registration Office. Before entering into such an agreement, the Registration Office shall consider whether such entity is competent as follows:-

(a) Whether such entity has sufficient means, manpower, financial and technical resources to assist the Registration Office in registration work,
(b) Whether such entity has the capability to access the electronic registry maintained by the Registration Office in accordance with appropriate business practices. 6.
Secured Transactions Act, 2006

6. Right of Access to Office Notices: (1) Information relating to a notice registered under this Act shall be a public record.

(2) Indexes and other records prepared by the Registration Office in any form or medium regarding notices shall also be public records.

(3) Every person shall have the right to inspect the records under subsection (1) or (2) held in the Registration Office and to obtain necessary copies thereof. 7. Contents of Initial Notice: Amended by the First Amendment.(1) An initial notice must contain at least the following details:-

(a) Name, address, and other details of the grantor,
(b) Name, address, and other details of the secured party or its representative,
(c) Details relating to the collateral,
 Provided that if the initial notice relates to minerals subject to extraction license, trees to be cut, or fixtures constituting collateral, details of the relevant immovable property must also be stated. A vehicle bearing an identification number may be described by its identification number or in a general manner.
(d) Other details as prescribed. Amended by the First Amendment.(2) The secured party or a person authorized by them may register an initial notice under this Act on their behalf at the Registration Office.

(3) If the grantor has concluded a security agreement, the grantor shall be deemed to have authorized the registration of the initial notice or amendment relating to the collateral described in that agreement and the proceeds thereof, whether or not the agreement expressly provides for such registration.

(4) An initial notice under this section may be registered before the security agreement is concluded or before the security interest attaches. Amended by the First Amendment.(5) Information in an initial notice shall be effective from the date and time it is placed in the registration record. 8.
Secured Transactions Act, 2006

Amended by the First Amendment.(5) Information in an initial notice shall be effective from the date and time it is placed in the registration record. 8. Notice not Invalid or Affected: (1) A notice shall be valid even if it contains a minor error in the grantor's details, provided the information in the notice can be retrieved by searching the registration record using the actual details of the grantor, and the error does not materially differ from the security agreement.

(2) Any minor error in the notice regarding the identification of a grantor shall not affect the effectiveness of the notice in respect of another grantor whose correct identification is stated.

(3) Except for errors in the identification of the grantor, any minor error in any information required to be stated in the notice pursuant to subsection (1) of section 7 shall not affect the effectiveness of the notice, provided it is not seriously misleading to a person conducting a reasonable search of the registration record.

(4) If an error in the description of the collateral renders the notice ineffective regarding that collateral, this shall not affect the effectiveness of the notice in respect of other collateral sufficiently described in the notice. 9. Effect of Changes in Notice: (1) If collateral is sold, exchanged, leased, licensed, or transferred in any manner, the notice registered in respect of that collateral shall remain valid after such transfer, even if the secured party has knowledge of or has consented to the transfer. Amended by the First Amendment.(2) If a grantor changes their name to the extent that a registered notice becomes seriously misleading, the notice shall remain valid for collateral acquired by the grantor before the date of the name change or within four months after that date. The notice shall be deemed to remain effective for collateral acquired by the grantor after four months from the name change only if an amendment to correct the name is filed within four months of the name change.

(3) Except as otherwise provided in subsection (2) regarding the grantor's name change, a notice shall remain valid even if changes in circumstances after its registration render it seriously misleading. 10. Duration of Notice and Effect of Termination: (1) A notice registered under this Act shall remain effective for a period of five years from the date of registration.
Secured Transactions Act, 2006

10. Duration of Notice and Effect of Termination: (1) A notice registered under this Act shall remain effective for a period of five years from the date of registration. If a continuation statement is not registered before the expiry of this period, the notice shall not be effective after the expiry of the five-year period.

(2) Except where a security interest has become perfected without registration, the notice shall become invalid after the period of its effectiveness expires, and any security interest perfected by that notice shall become unperfected.

(3) If a security interest becomes unperfected due to the expiry of the notice period, the security interest shall in no case be deemed perfected against a person who purchases the collateral for value after the notice period expires. Amended by the First Amendment.11. Name of Secured Party in Notice: (1) The person whose name is given as the secured party or its representative in an initial notice or amendment notice registered under this Act shall be the secured party named in that notice.

(2) Unless the name of the secured party under subsection (1) is changed by an amendment notice, that person shall remain the secured party. 12. Amendment of Notice: (1) An initial notice may be amended by one or more amendments. A notice of amendment of an initial notice must include the following:-

(a) The initial notice must be identified by its registration number,
(b) The secured party named in the notice who authorizes the amendment must be identified,
(c) The intended amendment to the notice must be clearly stated,
(d) The notice must be completely rewritten to show the amendment, providing all information required in the initial notice. Amended by the First Amendment.(2) An amendment to a notice that adds collateral covered by the notice or adds a grantor to the notice shall be effective only if the grantor affected by the amendment authorizes it. Added by the First Amendment.(2a) After concluding an agreement regarding proceeds, the grantor shall be deemed to have authorized the registration of an amendment covering the collateral described in that agreement and the proceeds thereof.

(3) Deleted by the First Amendment
(4) Deleted by the First Amendment
(5) Deleted by the First Amendment

(6) An amendment adding collateral shall be effective regarding the added collateral from the date and time of registration of the amendment. Amended by the First Amendment.(7) If an amendment is registered to add a grantor, the amendment shall be effective regarding the added grantor from the date and time of registration of the amendment.
Secured Transactions Act, 2006

Amended by the First Amendment.(7) If an amendment is registered to add a grantor, the amendment shall be effective regarding the added grantor from the date and time of registration of the amendment. Amended by the First Amendment.(8) Except for an amendment under subsection (7), an amendment shall be effective regarding each grantor named in the amendment notice only if that grantor authorizes the registration of the amendment.

(9) An amendment that excludes all secured parties named in a notice without naming a new secured party in their place, or excludes all grantors named in a notice without naming a new grantor in their place, shall be invalid. Amended by the First Amendment.(10) The registration of an amendment shall not extend the duration of any notice. 13. Continuation of Notice: Amended by the First Amendment.(1) A registered continuation statement, identifying the initial notice by its registration number, may extend the duration of the notice. Amended by the First Amendment.(2) A continuation statement may be registered within six months before the expiry of the notice period to extend its duration.

(3) If a continuation statement is registered within the period under subsection (2), the notice shall remain effective for a period of five years from the date on which the notice would have expired had the continuation statement not been registered.

(4) Deleted by the First Amendment
(5) Deleted by the First Amendment

14. Termination of Notice: (1) The effectiveness of a notice may be terminated by registering a termination statement stating the following:-

(a) The initial notice is identified by its registration number,
(b) Deleted by the First Amendment.
(c) It is stated that the notice is no longer effective regarding the secured party giving the authorization for registration.

(2) If the following conditions are met, upon written request by the grantor, the person named as the secured party in the notice shall register a termination statement within twenty days of receiving such request:-

(a) There is no outstanding secured obligation and no commitment to make advances, incur obligations, or pay any kind of value, or
(b) The grantor did not authorize the registration of the initial notice, or
(c) An obligor or other person required to fulfill an obligation in respect of a sold account or chattel paper included in the notice has fulfilled that obligation, and there is no outstanding commitment regarding further sale of accounts. Added by the First Amendment.15.
Secured Transactions Act, 2006

Added by the First Amendment.15. Effectiveness of Notice: (1) The Registrar shall register a notice sought to be registered in the registration record if the following conditions exist:-

(a) Any fee payable for registration has been paid, or the procedure for payment under subsection (4) of section 19 has been followed,
(b) Each notice required to be entered under this Act has been entered into the registration record, or
(c) Other notices prescribed by the Registration Office have been entered into the registration record.

(2) If a notice sought to be registered under subsection (1) cannot be registered in the registration record, arrangement shall be made to immediately inform the person seeking registration electronically.

(3) A notice registered under this Act shall be effective only to the extent of the information registered.

(4) After a notice is registered in the registration record, arrangement shall be made to immediately send details thereof to the person identified as the secured party in the notice, including:-

(a) Details of the notice,
(b) The date and time of registration of the notice in the registration record, and
(c) In the case of an initial notice, the registration number of the notice. 16. Claims Regarding Improperly Registered Notice: (1) If a person believes that a notice registered in their name at the Registration Office is unfounded or improperly registered, that person may register a statement of correction at the Registration Office, stating the following:-

(a) The record related to the statement is identified by the registration number of the initial notice,
(b) The statement is a statement of correction, and
(c) The basis on which the person believes the record is inaccurate and how the record should be amended to remove the inaccuracy, or the basis on which the person believes the record was improperly registered.

(2) The registration of a statement of correction under this section shall not affect the effectiveness of the notice. 17.
Secured Transactions Act, 2006

17. Duties of the Registration Office: (1) The Registration Office shall, in respect of each notice registered in the registration record, do the following:-

(a) Assign a separate registration number to each registered record.
(b) Establish and maintain a record showing the registration number assigned to each record, along with the date and time of registration.
(c) Make the registration record accessible for searching notices.

(2) The Registration Office shall register the initial notice in the registration record by the name of the grantor.

(3) The Registration Office shall register the initial notice and all related records in the registration record in a manner that they are linked to each other.

(4) The Registration Office shall establish and maintain a list bearing identification numbers for notices concerning vehicles bearing identification numbers.

(5) The Registration Office shall retain records of expired notices in the registration record securely for ten years from the date of expiry.

(6) The Registrar shall ensure that a notice sought to be registered under subsection (1) of section 15 is accepted by the registration record and, except as otherwise provided in this Act, no registered notice shall be amended or removed from the registration record. 18. Obtaining Information from Registration Record: (1) A person searching for information may obtain information from the registration record based on the following:-

(a) The identification of the grantor,
(b) The identification number of a vehicle bearing an identification number, or
(c) The registration number of the initial notice.

(2) A fee as prescribed shall be charged for obtaining information under this section.

(3) The Registration Office may transmit notices or information through appropriate means.

(4) Other arrangements relating to obtaining information shall be as prescribed. 19. Provisions Relating to Registration Fees: Amended by the First Amendment.(1) A fee as prescribed shall be charged for the registration of an initial notice, amendment notice, continuation statement, or termination statement.

(2) Notwithstanding anything contained in subsection (1), no fee shall be charged for searching records using electronic technology.

(3) No fee shall be charged for other services provided under this Act.

(4) The Registrar may establish accounts for persons using services provided by the Registration Office and determine procedures for periodic payment of fees charged for such services. Chapter-3
Provisions Relating to Security Interests

20. Security Interest: (1) Subject to subsection (2), any person may grant and take a security interest under this Act.
Secured Transactions Act, 2006

Chapter-3
Provisions Relating to Security Interests

20. Security Interest: (1) Subject to subsection (2), any person may grant and take a security interest under this Act. When granting and taking a security interest, the security interest may be granted and taken in a manner that creates security interests for more than one person in the same collateral.

(2) No security interest other than a purchase money security interest may be created in consumer goods held by the grantor.

(3) A security interest shall not be deemed invalid solely because the grantor retains the right to use, enjoy, sell, exchange, commingle, or otherwise transfer rights in the collateral. 21. Secured Obligation: (1) A security interest created pursuant to section 20 may secure the maximum amount specified in the security agreement and one or more obligations, whether specific or general.

(2) The secured obligation under subsection (1) may be monetary or non-monetary.

(3) A security interest may also secure a future obligation. Such obligation may be binding, conditional, or voluntary.

(4) A security interest may also secure pre-existing obligations. 22. Description of Collateral: A description of collateral other than consumer goods shall be deemed sufficient if it identifies the collateral pursuant to clause (c) of subsection (1) of section 7. Provided that in respect of a security agreement for consumer goods, a specific description of such goods must be stated. 23. Effectiveness of Security Agreement: (1) A security agreement shall exist as a record. A security agreement may be kept in one or more records.

(2) Except as otherwise provided in this Act, the terms of a security agreement shall apply to the parties to the agreement, acquirers of collateral, creditors, and lien holders.

(3) A security agreement may relate to one or more security interests. 24. Collateral in Possession of Secured Party: (1) The secured party shall exercise reasonable care over the collateral in their custody and possession.

(2) While the collateral is in the possession of the secured party, unless otherwise agreed, the following shall apply:-

(a) The grantor shall be liable for the cost of insuring the collateral and for the payment of reasonable expenses, including taxes and fees related to the collateral, and such expenses shall be recoverable from the collateral,
(b) Risk of loss or damage to the collateral due to any accident shall be borne by the grantor to the extent not covered by insurance proceeds, and
(c) Any increase in value of the collateral, other than proceeds, shall be held by the secured party as additional security, and the secured party may apply such funds to reduce the secured obligation unless the grantor is reimbursed. 25.
Secured Transactions Act, 2006

25. Attachment of Security Interest to Collateral: (1) A security interest shall attach to collateral and become enforceable against the grantor and third parties only in the following circumstances:-

(a) A security agreement is entered into describing the collateral,
(b) Value is given by the secured party to the grantor, and
(c) The grantor has rights in the collateral or the power to transfer the collateral to the secured party.

(2) Unless otherwise agreed, the attachment of a security interest to collateral shall give the secured party, under this Act, the right to proceeds from such collateral. Chapter-4

Perfection and Priority of Security Interest

26. Perfection of Security Interest: (1) A security interest is perfected when it has attached and all requirements of this section are satisfied.

(2) Except as otherwise provided in this section, for perfection of a security interest, a notice must be registered in the registration record. Amended by the First Amendment.(3) A purchase money security interest in consumer goods is perfected only after it attaches to the consumer goods. No notice needs to be registered for that purpose.

(4) Amended by the First Amendment.(4) A security interest in goods, instruments, documents, or currency may be perfected by the secured party taking possession of such collateral. No notice needs to be registered for that purpose. The security interest in such goods, instruments, documents, or currency shall be perfected from the time of taking possession and shall remain perfected so long as possession is retained.

(5) Deleted by the First Amendment
(6) Deleted by the First Amendment
(7) Deleted by the First Amendment

(8) Amended by the First Amendment.(8) If goods are in the possession of a bailee who has issued a document covering the goods, a security interest in the goods may be perfected by perfecting a security interest in the document.

(9) Perfection of a security interest in collateral perfects a security interest in a supporting obligation given as security. Amended by the First Amendment.(10) A secured party with a security interest in an account, instrument, or other right to payment shall have the benefit of personal or property rights securing or supporting such payment, without the need for a transfer process. If such benefit is transferred, it shall be the duty of the grantor to transfer it to the secured party under prevailing law. 27.
Secured Transactions Act, 2006

If such benefit is transferred, it shall be the duty of the grantor to transfer it to the secured party under prevailing law. 27. Continuity of Perfection: (1) If a security interest is perfected first by one method and later by another method without a break in continuity, the security interest shall be deemed continuously perfected.

(2) If a secured party transfers a perfected security interest, the transferee does not need to register a notice under this Act to maintain the perfection of the security interest. Amended by the First Amendment.28. Priority of Security Interests in Same Collateral: (1) Except as otherwise provided in this Act, priority among conflicting security interests in the same collateral shall be determined as follows:-

(a) Among perfected security interests, the one whose priority time is earlier has priority,
(b) Between a perfected and an unperfected security interest, the perfected security interest has priority, and
(c) Among unperfected security interests, the one that attaches to the collateral first has priority. Provided that if unperfected security interests attach at the same time, the security interest arising from the earlier security agreement shall have priority.

(2) If a security interest is continuously perfected without later attachment, the time of registration constitutes the priority time for the first perfected security interest.

(3) If continuously perfected, the time of perfection by taking possession constitutes the priority time.

(4) If a bank has a perfected security interest in a bank account held with it, that security interest has priority over any other security interest, whether perfected or unperfected, in that bank

Amended by the First Amendment.(b) Even if another person has registered a notice after taking a security interest over the inventory or domestic animals in the stock prior to the registration of notice by the person taking a purchase money security interest, if the person taking the purchase money security interest provides written information to that person about such goods or domestic animals along with details thereof and of his purchase money interest. 36. Priority of the right to take control (retention) of goods: Where a right to take control of goods arises by operation of law and such goods have been taken into possession, even if the security interest over such goods has been perfected, the right to take control shall have priority in the following circumstances:-

(a) if the right to take control was created in favor of the person taking possession of such goods to secure payment for materials or services provided in respect of such goods, and

(b) if such materials or services were provided in the ordinary course of business. 37. Fixtures: (1) A security interest may be created in fixtures.