Secured Transactions Act 2024 · As enacted · Part IX · Interpretation
75. Interpretation
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
In this Act, unless the context otherwise requires -
“accessions” means goods that are installed in, or affixed to, other goods;
“account” means a monetary obligation not evidenced by a chattel paper, a security or an instrument, whether or not the obligation has been earned by performance;
“acquisition security right” means -
a security right taken or reserved in a collateral to secure payment of all or part of its price;
a security right taken in a collateral by a person who gives value for the purpose of enabling the debtor to acquire rights in the collateral, to the extent that the value is applied to acquire the rights;
or
the interest of a lessor of goods under a lease for a term over one year, but does not include a transaction of sale by, and lease-back to, the seller;
“amendment statement” means a statement that satisfies the requirements imposed by this
Act and any regulations made thereunder and which is filed by the secured party or its agent, under section 54, 55, 57, 58 or 60
of this Act;
“Bureau” means the Credit Information Bureau of
Sri Lanka established by the Credit
Information Bureau of Sri Lanka Act, No.
18 of 1990;
“certified security” means a security represented by a certificate that-
provides that the person entitled to the securities is the person in possession of the certificate; or
identifies the person entitled to the securities;
“chattel paper” means a document in writing that evidence, both a monetary obligation and a security right, in or in a lease of, specific goods;
“collateral” means any movable property that is subject to a security right;
“commercially reasonable” means the adoption of a procedure in the disposition of a collateral under such conditions as may be considered reasonable according to the prevailing circumstances, calculated to obtain the best market price for the same considering the prevailing circumstances;
“consumer goods” means goods that are used or acquired primarily for consumption or for any household purpose;
“debtor” means -
a person who owes a payment or the performance of an obligation that is secured, and who owns or has rights in the collateral;
a purchaser under a hire purchase agreement or a lessee under a lease for a term over one year;
a purchaser who acquires goods subject to a retention of title clause or under a conditional sale; and
a transferor of an account or chattel paper, and includes the transferee of a debtor’s interest in the collateral, where the context so permits;
“default” means-
the failure to pay or otherwise perform the obligation secured when due; or
the occurrence of any event or a set of circumstances whereupon, under the terms of the security agreement, the security right becomes enforceable;
“diminution in value” means the difference between before and after, of the value of any property which has been damaged;
“document of title” means a writing issued by, or addressed to a bailee, that -
covers goods in the bailee’s possession that are identifiable or that are fungible portions of an identifiable mass; and
is in the ordinary course of business, treated as establishing that the person in possession of it is entitled to receive, hold and dispose of the document and the goods it covers;
“equipment” means goods that are not an inventory or consumer goods;
“financing statement” means a statement containing the information required under paragraph (c) of subsection (1) of section 50, and, where the context so permits, includes an amendment statement and a document registered under the Registration of
Documents Ordinance (Chapter 117), together with any writing that accompanies or was registered to rectify, amend or renew such registration;
“fungible collateral” means goods of such nature or kind as can be freely exchangeable or replaceable in whole or in part, for another of a like nature or kind;
“future advance” means the advance of any money, credit or other value secured by a security agreement, whether or not such advance is made pursuant to a commitment;
“goods” means movable property other than chattel paper, documents of title, instruments, money and investment property, and includes fixtures, growing crops, the unborn young of animals, timber to be cut and minerals and hydrocarbons to be extracted;
“instrument” means -
a bill of exchange, a promissory note or a cheque within the meaning of the
Bills of Exchange Ordinance (Chapter 82);
a letter of credit or an advance of credit, if the letter or advance states that it must be surrendered upon claiming payment thereunder; and
any other writing that establishes a right to payment of money and is of a type that in the ordinary course of business is transferred by delivery with any necessary endorsement or assignment, but does not include a writing that constitutes a part of chattel paper, document of title, instrument, money or investment property;
“intangible” means movable property including choses in action that is not goods, chattel paper, documents of title, instruments, money or investment property;
“inventory” means goods that are-
held by a person for sale or lease or that have been leased by that person as a lessor;
to be furnished or that have been furnished under a contract or service;
raw materials or work in progress; or
material used or consumed in any business or profession;
“lease for a term over one year” includes a series of short term leases of the same asset that in aggregate exceeds one year, but does not include-
a lease of goods by a lessor who is not regularly engaged in the business of leasing goods;
a lease of household furnishing or appliances as part of a lease of immovable property where the goods are incidental to the use and enjoyment of the immovable property; or
a lease of goods of a prescribed kind, regardless of the length of the term of lease;
“minerals” includes oil, gas and hydrocarbons;
“Minister” means the Minister to whom the implementation of the provisions of this Act is assigned;
“movable property” means-
goods, a document of title, chattel paper, security, instrument, money or any intangible property; or
(i)
an interest in a fixture of any immovable property; or
an assignment of a right to payment under a mortgage, charge or lease of any immovable property, where the assignment does not convey or transfer the assignor’s interest in the immovable property;
“notice of change” means data included in any prescribed form required to be submitted to the Bureau, in order for a financing statement to be discharged or otherwise amended;
“notice of judgment” and “notice of claim” means the data in any prescribed form required to be registered with the Authority to effect a registration under this Act, and where the context so admits, includes the data authorized in order to give effect to an amendment, renewal or discharge of such registration;
“obligation secured”, for the purpose of determining the amount payable under a lease that secures payment or performance of an obligation, means -
the amount originally contracted to be paid as rent under the lease; and
all other amounts payable under the terms of the lease, including the amount, if any, required to be paid by the lessee to obtain ownership of the collateral, less the amounts paid;
“pawnbroker” shall have the same meaning as given to that term in the Pawnbrokers Ordinance
(Chapter 90);
“pledgor” means a person who delivers goods in pledge or for pawn to a pawnbroker;
“prescribed” means prescribed by regulations made under this Act;
“proceeds” means identifiable or traceable movable property in any form derived directly or indirectly from any dealing with the collateral or the proceeds therefrom, and includes-
any payment representing an indemnity or compensation for loss or damage caused to the collateral, including a right to an insurance payment or proceeds therefrom; and
any payment made in total or partial discharge or redemption of chattel paper, an instrument or any intangible;
“purchase” includes obtaining by sale, lease, mortgage, pledge, lien, gift or any other consensual transaction creating an interest in movable property;
“receiver” includes a receiver and manager;
“registered interest” means a right in immovable property that is registered with a competent authority;
“secured party” means -
a person who holds a security right for the person’s own benefit;
a person who holds a security right for the benefit of another person;
a trustee, if a security right is embodied in a trust indenture; and
where the context so admits, includes a receiver;
“security agreement” means an agreement that creates or provides for a security right and includes a document evidencing a security right;
“security right” means an interest in movable property that secures payment or performance of an obligation and includes, whether or not the interest secures payment or performance of an obligation, the interest of-
a lessor under a lease for a term over one year; and
a transferee of an account or chattel paper;
“trust indenture” means any security agreement by the terms of which a body corporate, with or without a share capital and wherever or however incorporated, issues or guarantees debt obligations or provides for the issue or guarantee of debt obligations, and appoints a person as trustee for the holders of the debt obligations so issued, guaranteed or provided for; and
“value” means any consideration sufficient to support a contract and includes an antecedent debt or liability, and accordingly “new value” means value other than an antecedent debt or liability.
Except as otherwise expressly provided for by this
Act, the determination as to whether any goods are
“consumer goods”, “inventory” or “equipment”, shall be made at the time the security right is created.
Proceeds are traceable, whether or not there is a fiduciary relationship between the person who has a security right in the proceeds as provided in section 35 and the person who has rights in or has dealt with the proceeds.