නිල පරිවර්තනයවෙනස් නොකළ පාඨය, Department of Government Printing වෙතින්
(1)
An unperfected security right in collateral, shall be subordinate to-
(a)
the interest of a perfected security right;
(b)
the interest of a creditor who has registered a notice of judgment with the Registrar, where such right was unperfected at the time such notice was registered; and
(c)
the right of any person under any law, whether statutory or otherwise, to participate in a distribution of movable property, subject to the interest of a creditor referred to in paragraph (b).
(2)
An unperfected security right in-
(a)
collateral, shall not be effective against-
(i)
an assignee in any insolvency proceedings, if the security right is unperfected at the time of the bankruptcy; or
(ii)
a liquidator appointed under the
Companies Act, No. 07 of 2007, if the security interest is unperfected when the winding up order is made;
(b)
chattel paper, documents of title or goods shall not be effective against a transferee thereof, if the transferee-
(i)
acquires the interest in the collateral under a transaction that does not secure payment or performance of an obligation;
(ii)
gives value; and
(iii)
receives delivery of the collateral without knowledge of the security right; and
(c)
tangibles other than accounts shall not be effective against a transferee thereof, if the transferee-
(i)
acquires the interest in the collateral under a transaction that does not secure payment or performance of an obligation; and
(ii)
gives value without knowledge of the security right.
Part II
Establishment of the Secured Transactions Registration Authority