430. Dealing with property subject to floating charge before attachment

Official English translation. The Sinhala text prevails. Open the official Sinhala text, official PDF on documents.gov.lk

(1)

Subject to the terms of the instrument under which it is created, the creation of a floating charge in respect of any property shall not affect the ability of the company to deal with that property in the normal course of business.

(2)

Where—

(a)

any property of a company is subject to a floating charge which has not attached to that property ; and

(b)

the company has sold or disposed of that property, any person who receives that property from the company shall be liable to account to the person entitled to the benefit of the floating charge for the value of the property, in the circumstances set out in subsection (3) or subsection (4).

(3)

A person may be liable to account for the value of property received by that person under subsection (2), if—

(a)

the sale or disposal of the property did not take place in the normal course of the company’s business ;

and

(b)

that person knew or by reason of his relationship with the company ought to have known, that the sale or disposal did not take place in the normal course of the company’s business.

(4)

A person may be liable to account for the value of property received by that person under subsection (2), if—

(a)

the sale or disposal of the property is a breach of the instrument creating the floating charge ; and

(b)

that person knew or by reason of his relationship with the company ought to have known, of the terms of the instrument and the circumstances giving rise to a breach of those terms.

Read on from s 431

Part XV