On 1april 2019 Jabeen created a fixed charge for 50000 over the assets of Clogs Ltd and it was registered on 1June 2019. On 1May 2019 a fixed charge for 100000 was created over the same assets on behalf of Adeel. Adeel's fixed charge was registered on 13May 2019.
Which of the following statements describes the priority of the two fixed charges?
1- jabeel's fixed charge has a priority as it was created first
2- adeel's fixed charge has priority as it was registered within 21days of creation
3- both charges rank equally in priority as they were both fixed
4- adeel's fixed charge has priority as it has greater value
shouldn't 1 be the correct answer? 1may-13may isnt 21 days
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Capital financing
we will consider the date on which fixed charge was created only if it is registred in 21 days after creation.
on ther hand if someone dont regsiter its charge creation date with in 21 days then will assume that charge reation date is when we register it with registrar..
so look in the question
Jabeen has not registered its charge creation date with in 21 days he registred on 1 june 2019 which is 2 mnths after charge creation date .So we will assume that his creation date is 1 june 2019
on other hand adeel registered its charge on 13 may which is with in 21 days of charge creation.
so now whose charge come first yes adeel's
option 2 is the answer
Hi
So all charges need to be registered within 21 days of creation. If it is not registered within 21 days ythe effective date is the date it is registered. Jabeel's charge is registered after 21 days so you need to take 1st June as the effective date.
Adeel's charge is registered within 21 days so you take 13th May as the effective date.
Adeel's charge therefore takes priority.
Best wishes,
Vijay
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