Section 21   [ View Judgements ]

Pledge, Hypothecation or Lien of Government security


(1) The holder of a Government security may create a pledge, hypothecation or lien in respect of a Government security by-



(a) issuing a notice of pledge, hypothecation or lien to the Bank, or, as the case may be, its agent, in triplicate in Form - XIV; and



(b) submitting the stock certificate and the duly executed Form - HI in relation thereto; or the duly executed Forms - III, IV or V, as may be applicable to the Government security, where a pledge, hypothecation, or lien is to be created for the Government security held in subsidiary general ledger account or constituents' subsidiary general ledger account or bond ledger account, as the case may be.



(2) The Bank, or, as the case may be, its agent may on receipt of the notice as referred to in clause (a) of sub-regulation (1), - (a) record the pledge, hypothecation or lien in its records and confirm the same on the duplicate and triplicate of the Form - XIV and such confirmation shall be conclusive proof of the creation of pledge, hypothecation or lien; and



(b) where any discrepancy is found in the Form - XIV, issue a return memo on the duplicate and triplicate of the notice in Form - XIV, stating the reasons for not recording the pledge, hypothecation or lien.



(3) The pledgee or creditor, at any time, when wants to invoke the pledge, hypothecation or lien may file an application in Form - XV in duplicate, to the Bank, or, as the case may be, its agent for transferring the Government securities in. his favour alongwith the following documents, namely, -



(a) the stock certificate, if any;



(b) Form - XIV wherein the Bank, or, as the case may be, its agent has confirmed the recording of pledge; and



(c) Forms - III, IV or V, which may be applicable to the Government security and was executed at the time of creation of pledge, hypothecation or lien by the holder of the Government security.



(4) The Bank, or, as the case may be, its agent may on receipt of the application under sub- regulation (3) -



(a) record in its books, the invocation of pledge, hypothecation or lien and transfer of the securities in favour of the pledgee or the creditor and confirm the same on the duplicate of the application in Form - XV; or



(b) issue a return memo to the pledgee or creditor on the duplicate of the application in Form - XV, if any discrepancy is found, stating the reasons for not transferring the securities in the name of the pledgee or the creditor.



(5) The pledgee or the creditor may, at any time, before the registration of transfer of the Government securities in the books of the Bank or its agent in his favour, apply to the Bank, or, as the case may be, its agent in Form - XVI in triplicate for cancellation of such pledge, hypothecation or lien application registration.



(6) The Bank, or, as the case may be, its agent may on receipt of the application under sub-regulation (5) -



(a) record the cancellation of pledge, hypothecation or lien registered in its books and confirm the cancellation on the duplicate and triplicate of the application in Form - XVI; and



(b) issue a return memo on the duplicate and triplicate of the application in Form- XVI to the. pledgee or the creditor, stating therein the reasons for not cancelling the pledge, hypothecation or lien.



(7) The Forms - III, IV or V executed at the time of creation of pledge, hypothecation or lien, shall be valid during the currency of the pledge, hypothecation or lien created in respect of the Government security.



(8) Subject to the forms prescribed in this regulation, the transfer form, notice of pledge, hypothecation or lien, confirmation of pledge, hypothecation or lien, application for cancellation or invocation of pledge, hypothecation or lien, or return memo, may be executed in electronic form under digital signature, as defined in clause (p) of section 2 of the Information Technology Act, 2000 (21 of 2000).

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