Security Interests Over Moveable Assets

Security interests over movable property can be created by way of mortgage, pledge, hypothecation, lien and charge. However, mortgage is usually a method of creating security interest over immovable properties, and its only in certain specified cases that it is coupled with a mortgage on moveable properties thereon. This article provides a brief introduction to some of the more commonly used security interests for moveable properties (being pledge, hypothecation, lien and charge).

A.    What are the various types of security interests which can be created over moveable assets?

• Pledge: A 'pledge' is a bailment of goods as security for payment of a debt or performance of a promise in terms of the Indian Contract Act, 1872 ("Contract Act"). The goods so pledged are returned, upon payment of the debt or performance of the promise.