Question
What action must the assignee take upon accepting an
assignment of receivables that serve as security for a loan from a bank or creditor, provided the assignor has given notice of the encumbrance to the assignee as per the Factoring Regulation Act?Solution
Section 7. Assignment of receivables: (3) Any assignment of receivables which constitute security for repayment of any loan advanced by any Bank or other creditor and if the assignor has given notice of such encumbrance to the assignee, then on accepting assignment of such receivable, the assignee shall pay the consideration for such assignment to the Bank or the creditor, as the case may be.
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