432. Alteration and discharge of floating charges

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

(1)

The terms of an instrument creating a floating charge may be varied in the same manner in which an instrument may be executed by the company.

(2)

Subject to the modifications contained in subsection (3) of this section subsections (1) and (3) of section 102, sections 103 and 108 shall apply to an instrument of alteration under this section, which—

(a)

prohibits or restricts creation of any fixed security or any other floating charge having priority over or ranking equally with the floating charge ;

(b)

varies or otherwise regulates the order of and the ranking of the floating charge in relation to fixed securities or to other floating charges ;

(c)

releases property from the floating charge ; or

(d)

where the floating charge secures a specified obligation or a specified amount, alters that obligation or increases that amount, as the case may be.

(3)

The provisions of subsections (1) and (3) of sections 102, 103 and 108 shall apply in respect of an instrument of alteration to which subsection (2) applies, as if—

(a)

references to a charge were references to an alteration to a floating charge ; and

(b)

references to the creation of a charge, were references to the execution of the instrument of alteration.

(4)

Where an alteration to the terms of an instrument creating a floating charge has the effect of extending the floating charge to property not previously comprised in the floating charge, the priority of the floating charge in respect of the additional property shall be determined, as if the instrument by which the amendments were affected were an instrument creating a new floating charge in respect of that additional property.

(5)

A floating charge may be released in respect of the whole or any part of the property comprised in it, in the same manner in which such a charge may be created.

Read on from s 433

Part XV