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Can someone plz explain how it's answer is not option (d)
Answers (3)
(Updated)
As there is security of land & building given against the loan, therefor it shall be considered as hypothecation. Moreover cash credit or overdraft are more of short term credit facilities for working capital needs, which is not the case in the question.
CA YOGITA HARJANI Faculty
(Updated)
As there is security of land & building given against the loan, therefor it shall be considered as hypothecation. Moreover cash credit or overdraft are more of short term credit facilities for working capital needs, which is not the case in the question.
So it's answer should be option d right??
Thread Starter
Rifhat KhanSo it's answer should be option d right??
Pardon me. There is small correction here. See hypothecation is when a moveable property is put as security to get a loan. Whereas, Mortgage is where an immovable property is put as security for the loan. In the given question, Land is put as security which is an immovable property thus making it a mortgage. However, that option is not available to us. The closest option is (b) term loan. It can't be hypothecation since the security is not moveable.