https://www.taxtmi.com/caselaws?id=98077 A holder of debentures secured by a floating charge remained a secured creditor even after the charged assets were sold free from encumbrances, because the charge attached to the sale proceeds as substituted security; loss of the debenture scrips did not divest that status. The holder could still be paid on executing an indemnity bond and furnishing a scheduled bank guarantee, since loss of the original instruments affected only the mode of discharge and protection against double liability. However, the statutory preferential debts under section 230(1) of the Indian Companies Act, 1913, read with section 230(2)(b), ranked ahead of debentures under a floating charge, so those debts had priority over the debenture claim. en-us Wed, 08 Jan 1964 00:00:00 +0530 Thu, 19 Jan 2012 11:19:16 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=98077 A holder of debentures secured by a floating charge remained a secured creditor even after the charged assets were sold free from encumbrances, because the charge attached to the sale proceeds as substituted security; loss of the debenture scrips did not divest that status. The holder could still be paid on executing an indemnity bond and furnishing a scheduled bank guarantee, since loss of the original instruments affected only the mode of discharge and protection against double liability. However, the statutory preferential debts under section 230(1) of the Indian Companies Act, 1913, read with section 230(2)(b), ranked ahead of debentures under a floating charge, so those debts had priority over the debenture claim. Case-Laws Companies Law Wed, 08 Jan 1964 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=98077