(1) A security interest may be created in fixtures. Where the goods
in which security interest is created are goods that become fixtures, the security
interest shall continue in such goods.
(2) Notwithstanding anything contained in sub-section (1), a security
interest in ordinary building materials shall cease to exist when the building
materials are incorporated into immovable property.
(3) The priority in readily removable factory machines, office
machines or domestic appliances shall not be determined pursuant to this
Section.
(4) Except as provided otherwise in this Section, a security interest in
fixtures shall be subordinate to all other real rights in immovable property.
(5) Where a notice is filed before the interest of the owner or the
mortgagee of a immovable property is registered pursuant to the laws in force,
a matured security interest in fixtures shall have priority over the interest of the
owner of such immovable property or a mortgagee thereof notwithstanding
any provision contained in the mortgage deed.
(6) Where a notice is filed before the filing of a notice of the interest
of the lien holder as required under this Act, a matured security interest in
fixtures shall have priority over the interest of a lien holder.
(7) Where the security interest is a purchase money security interest
given by the security giver before the goods become fixtures and a notice is
filed before such goods become fixtures or within five days after the date on
which such goods becomes fixtures, a matued security interest in fixtures shall
have priority over the interest of the owner of immovable property, a lien
holder or a mortgagee notwithstanding any provision in the mortgage deed.
Provided that the priority so determined shall not apply to a construction
mortgage.
Explanation: For the purposes of this sub-section, the expression “construction
mortgage” means a mortgage which is registered in accordance with the laws in
force, and which secures any obligation to pay for any construction,
improvement on immovable property.
(8) In the event of default in discharge of a secured interest, a
security holder who has priority under this section may remove fixtures from
immovable property, subject to the following matters being governed as
follows:
(a) A security holder that removes fixtures shall promptly reimburse
any mortgagee other than the security giver for the cost of repair
of any damage to the immovable property;
(b) The security holder shall reimburse such mortgagee or owner for
any diminution in value caused by the absence of the goods
removed or by any necessity for replacing such goods; and
(c) A person entitled to reimbursement may refuse to give
permission to remove such fixtures until the security holder gives
adequate assurance for the performance of the obligation to
reimburse.