Section 2
Definitions
Unless the subject or the context otherwise requires, in this Act,-
(a) “court” means the commercial bench of such court as may be specified by the Government of Nepal, with the consent of the Supreme Court, by a notification in the Nepal Gazette;
(b) “instrument” means a deed which can be transferred to another person by way of endorsement or assignment in the ordinary course of business and a share certificate, and this term also includes any deed that evidences a right to the payment of money.
Provided that this expression does not mean a security agreement or lease.
(c) “intangible property” means movable property other than goods, accounts, secured sales contract, deeds, instruments and cash, which create legal right;
(d) “record” means any information that is stored in any deed or electronic or other medium in such a manner that it can be perceived, seen, opened or retrieved as per necessity, and this term also includes a notice under this Act;
(e) “consumer goods” means any goods used for personal, family or household purposes;
Provided that this expression does not mean any serial numbered vehicles.
(f) “equipment” means any goods other than farm products, inventory or consumer goods;
(g) “serial numbered vehicle” means a motor vehicle, a trailer of motor vehicle, an aircraft or a motorized boat, when not held as inventory of a security giver;
(h) “farm products” means the following goods of a security giver
engaged in farming, other than standing timber:
(1) crops grown, growing, or to be grown;
(2) aquatic animals produced in water;
(3) livestock (including the unborn);
(4) goods used or produced in a farming operation;
(5) products of crops or livestock in their unmanufactured state.
(i) “purchase money security interest” means a security interest up to the following extent:
(1) taken or retained by the seller of goods to secure all or part of the price of such goods; or
(2) taken by a person other than the seller who gives value or consideration to enable the security holder to acquire rights in or the use of goods, and such value or consideration is in fact used for the purpose for which it has been taken.
(j) “fixture” means goods that are fixed to immovable property, or are intended to become fixed to immovable property, in a manner that causes a property right to arise in the goods under the laws in force.
Provided that readily removable or detachable factory machines,office machines or domestic appliances are not fixtures.
(k) “guarantee” means a secondary obligation such as an obligation to pay, or an issuer’s obligation to pay under a letter of credit, and this term also includes an obligation that supports the payment on an account, secured sales contract, document, instrument or other intangible property.
(l) “Registration Office” means the secured transactions registration office established pursuant to Section 4.
(m) “obligor” means the person who is obligated on an account, secured sales contracts or other intangible property.
(n) “security holder” means a lender or creditor or seller or other person in whose favor a security interest is created under a security agreement, and this term also includes a purchaser of accounts or secured sales contracts and a lessor of goods.
(o) “security giver” means the person who owes payment or other performance of the secured obligation, whether or not the person owns or has rights in the collateral, and this term includes a seller
of accounts or secured sales contracts and a lessee of goods.
(p) “collateral” means any intangible property of any nature, fixtures, movable property such as timber to be cut, minerals to be extracted, which is subject to a security interest, and this term includes collateral that arises in the future, collateral located in or outside of the country, accounts or secured sales contracts that have been sold, leased goods and proceeds of collateral.
(q) “security agreement” means an agreement that creates or provides for a security interest.
(r) “security interest” means a property right in collateral that secures performance of an obligation.
(s) “buyer in the ordinary course of business” means a person who buys, in the ordinary course, goods from a person in the business of selling goods of that kind, if the buyer buys in good faith and without knowledge that the sale violates the rights of another person in the goods.
(t) “lessee in the ordinary course of business” means a person who, in good faith and without knowledge that the lease is in violation of the ownership rights or security interest or leasehold interest of a
third party in the goods, leases in the ordinary course from a person in the business of selling or leasing goods of that kind.
(u) “purchaser” means a person who takes any property or takes any interest in such property in any manner.
(v) “account” means an account that creates a right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or secured sales contract.
(w) “inventory” means goods held for sale or lease in any trade or business, and this term also includes raw materials used in any enterprise or business, semi-prepared or prepared goods, or materials used or consumed in such enterprise or business.
(x) “value” means any consideration made or to be made in accordance with a contract.
(y) “goods” means all kinds of things that are movable when a security interest attaches, and this term also includes fixtures, timber to be cut and removed for sale and farm products.
Provided that this term does not include accounts, secured sales contracts, currency, documents or instruments.
(z) “lease of goods” means a lease of the following goods:
(1) a lease of goods for a duration of more than one year;
(2) a lease of goods for an indefinite term;
(3) a lease of goods for an initial term of one year or less if the lessee, with the consent of the lessor, retains uninterrupted possession of the leased goods for more than one year after the lessee first acquired possession of the goods.
Provided that the lease does not become a lease for a term of more than one year until the lessee’s possession extends
beyond one year.
(4) a lease of goods for a term of one year or less where the lease provides that it is renewable for a period that may
exceed one year.
(aa) “Registrar” means a person who is appointed or designated pursuant to Sub-section (3) of Section 4.
(bb) “lien holder” means the following persons:
(1) a person who obtains a right in a security holder’s collateral or a right to seize such collateral, by order of a court or of any authority under the laws in force or of an administrator in an insolvency proceeding under the laws in force relating to insolvency;
(2) any other person who obtains a right in a security holder’s collateral by operation of law, except a person with a right of retention of collateral.
(cc) “document” means a document of title or a receipt such as a bill of lading or warehouse receipt issued by a person carrying on the business of transporting or storing goods.
(dd) “proceeds” means proceeds derived or to be derived from the following activities:
(1) whatever is acquired upon the sale, lease, license, exchange, or other disposition of, collateral;
(2) whatever is collected on, or distributed with respect to, collateral;
(3) rights arising out of collateral;
(4) to the extent of the value of collateral, claims arising out of the loss of or damage to, defects in, or violation of the
terms of, the collateral;
(5) to the extent of the value of collateral and to the extent payable to the security giver or the security holder, insurance payable by reason of the loss of or damage to, or violation of the terms of, the collateral.
(ee) “cash proceeds” means proceeds such money, cheques, funds on deposit, and this term also includes similar other cash proceeds. (ff) “sign” means to execute or adopt a name or symbol by any means, with intent to identify the signing party or to adopt or establish the authenticity of a record.
Provided that this term does not means the compulsion to make a manual signature.
(gg) “acquisition of property” means an act of taking a property by a person receiving security as a buyer, donee, security holder or mortgagee, or creating an interest in the property by any other voluntary transaction.
(hh) “notice” means a record filed or presented for filing in the Registration Office, and this term also includes amendments, continuation statements, and termination statements that are filed
or presented for filing.
(ii) “secured sales contract” means a record that creates a debt liability and a security interest in goods or in a lease of goods.
(jj) “assignment” means the transfer from one person to another, in whole or in part, of a right to payment in an account, secured sales contract, document, instrument, or other right to payment.
(kk) “assignee” means a person who takes an assignment of right or payment.
(ll) “assignor” means the person who makes an assignment of right or payment.
(a) “court” means the commercial bench of such court as may be specified by the Government of Nepal, with the consent of the Supreme Court, by a notification in the Nepal Gazette;
(b) “instrument” means a deed which can be transferred to another person by way of endorsement or assignment in the ordinary course of business and a share certificate, and this term also includes any deed that evidences a right to the payment of money.
Provided that this expression does not mean a security agreement or lease.
(c) “intangible property” means movable property other than goods, accounts, secured sales contract, deeds, instruments and cash, which create legal right;
(d) “record” means any information that is stored in any deed or electronic or other medium in such a manner that it can be perceived, seen, opened or retrieved as per necessity, and this term also includes a notice under this Act;
(e) “consumer goods” means any goods used for personal, family or household purposes;
Provided that this expression does not mean any serial numbered vehicles.
(f) “equipment” means any goods other than farm products, inventory or consumer goods;
(g) “serial numbered vehicle” means a motor vehicle, a trailer of motor vehicle, an aircraft or a motorized boat, when not held as inventory of a security giver;
(h) “farm products” means the following goods of a security giver
engaged in farming, other than standing timber:
(1) crops grown, growing, or to be grown;
(2) aquatic animals produced in water;
(3) livestock (including the unborn);
(4) goods used or produced in a farming operation;
(5) products of crops or livestock in their unmanufactured state.
(i) “purchase money security interest” means a security interest up to the following extent:
(1) taken or retained by the seller of goods to secure all or part of the price of such goods; or
(2) taken by a person other than the seller who gives value or consideration to enable the security holder to acquire rights in or the use of goods, and such value or consideration is in fact used for the purpose for which it has been taken.
(j) “fixture” means goods that are fixed to immovable property, or are intended to become fixed to immovable property, in a manner that causes a property right to arise in the goods under the laws in force.
Provided that readily removable or detachable factory machines,office machines or domestic appliances are not fixtures.
(k) “guarantee” means a secondary obligation such as an obligation to pay, or an issuer’s obligation to pay under a letter of credit, and this term also includes an obligation that supports the payment on an account, secured sales contract, document, instrument or other intangible property.
(l) “Registration Office” means the secured transactions registration office established pursuant to Section 4.
(m) “obligor” means the person who is obligated on an account, secured sales contracts or other intangible property.
(n) “security holder” means a lender or creditor or seller or other person in whose favor a security interest is created under a security agreement, and this term also includes a purchaser of accounts or secured sales contracts and a lessor of goods.
(o) “security giver” means the person who owes payment or other performance of the secured obligation, whether or not the person owns or has rights in the collateral, and this term includes a seller
of accounts or secured sales contracts and a lessee of goods.
(p) “collateral” means any intangible property of any nature, fixtures, movable property such as timber to be cut, minerals to be extracted, which is subject to a security interest, and this term includes collateral that arises in the future, collateral located in or outside of the country, accounts or secured sales contracts that have been sold, leased goods and proceeds of collateral.
(q) “security agreement” means an agreement that creates or provides for a security interest.
(r) “security interest” means a property right in collateral that secures performance of an obligation.
(s) “buyer in the ordinary course of business” means a person who buys, in the ordinary course, goods from a person in the business of selling goods of that kind, if the buyer buys in good faith and without knowledge that the sale violates the rights of another person in the goods.
(t) “lessee in the ordinary course of business” means a person who, in good faith and without knowledge that the lease is in violation of the ownership rights or security interest or leasehold interest of a
third party in the goods, leases in the ordinary course from a person in the business of selling or leasing goods of that kind.
(u) “purchaser” means a person who takes any property or takes any interest in such property in any manner.
(v) “account” means an account that creates a right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or secured sales contract.
(w) “inventory” means goods held for sale or lease in any trade or business, and this term also includes raw materials used in any enterprise or business, semi-prepared or prepared goods, or materials used or consumed in such enterprise or business.
(x) “value” means any consideration made or to be made in accordance with a contract.
(y) “goods” means all kinds of things that are movable when a security interest attaches, and this term also includes fixtures, timber to be cut and removed for sale and farm products.
Provided that this term does not include accounts, secured sales contracts, currency, documents or instruments.
(z) “lease of goods” means a lease of the following goods:
(1) a lease of goods for a duration of more than one year;
(2) a lease of goods for an indefinite term;
(3) a lease of goods for an initial term of one year or less if the lessee, with the consent of the lessor, retains uninterrupted possession of the leased goods for more than one year after the lessee first acquired possession of the goods.
Provided that the lease does not become a lease for a term of more than one year until the lessee’s possession extends
beyond one year.
(4) a lease of goods for a term of one year or less where the lease provides that it is renewable for a period that may
exceed one year.
(aa) “Registrar” means a person who is appointed or designated pursuant to Sub-section (3) of Section 4.
(bb) “lien holder” means the following persons:
(1) a person who obtains a right in a security holder’s collateral or a right to seize such collateral, by order of a court or of any authority under the laws in force or of an administrator in an insolvency proceeding under the laws in force relating to insolvency;
(2) any other person who obtains a right in a security holder’s collateral by operation of law, except a person with a right of retention of collateral.
(cc) “document” means a document of title or a receipt such as a bill of lading or warehouse receipt issued by a person carrying on the business of transporting or storing goods.
(dd) “proceeds” means proceeds derived or to be derived from the following activities:
(1) whatever is acquired upon the sale, lease, license, exchange, or other disposition of, collateral;
(2) whatever is collected on, or distributed with respect to, collateral;
(3) rights arising out of collateral;
(4) to the extent of the value of collateral, claims arising out of the loss of or damage to, defects in, or violation of the
terms of, the collateral;
(5) to the extent of the value of collateral and to the extent payable to the security giver or the security holder, insurance payable by reason of the loss of or damage to, or violation of the terms of, the collateral.
(ee) “cash proceeds” means proceeds such money, cheques, funds on deposit, and this term also includes similar other cash proceeds. (ff) “sign” means to execute or adopt a name or symbol by any means, with intent to identify the signing party or to adopt or establish the authenticity of a record.
Provided that this term does not means the compulsion to make a manual signature.
(gg) “acquisition of property” means an act of taking a property by a person receiving security as a buyer, donee, security holder or mortgagee, or creating an interest in the property by any other voluntary transaction.
(hh) “notice” means a record filed or presented for filing in the Registration Office, and this term also includes amendments, continuation statements, and termination statements that are filed
or presented for filing.
(ii) “secured sales contract” means a record that creates a debt liability and a security interest in goods or in a lease of goods.
(jj) “assignment” means the transfer from one person to another, in whole or in part, of a right to payment in an account, secured sales contract, document, instrument, or other right to payment.
(kk) “assignee” means a person who takes an assignment of right or payment.
(ll) “assignor” means the person who makes an assignment of right or payment.