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Statement of existing indebtedness by intending mortgagor.
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34.—(1) Whenever a recognised borrower (in this subsection referred to as the intending mortgagor) agrees to make and a recognised lender (in this subsection referred to as the intending mortgagee) agrees to take a chattel mortgage (in this subsection referred to as the proposed chattel mortgage), the following provisions shall have effect—
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(a) the expression “existing creditor” means any other recognised lender to whom the intending mortgagor is for the time being indebted;
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(b) the intending mortgagor shall furnish to the intending mortgagee a statement in writing stating—
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(i) whether or not there is or are any existing creditor or creditors, and
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(ii) if there is one existing creditor and no more, the name of such existing creditor, and
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(iii) if there are two or more existing creditors, the names of such existing creditors;
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(c) if—
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(i) the provisions of paragraph (b) of this subsection are not complied with, and
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(ii) the proposed chattel mortgage is made, and
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(iii) there is or are any existing creditor or creditors,
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the proposed chattel mortgage shall be deemed to be fraudulent and void as against such existing creditor or creditors;
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(d) if the said statement is furnished and it appears therefrom that there is or there are any existing creditor or creditors—
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(i) the intending mortgagee shall send by post to that existing creditor or, if there is more than one existing creditor, to each of the existing creditors a notice in writing stating the intention of the intending mortgagee to take the proposed chattel mortgage;
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(ii) if the intending mortgagee does not comply with subparagraph (i) of this paragraph in respect of any existing creditor the proposed chattel mortgage shall be deemed to be fraudulent and void as against that existing creditor;
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(iii) if the proposed chattel mortgage is made within ten days after the day on which sub-paragraph (i) of this paragraph is complied with, the proposed chattel mortgage shall be deemed to be fraudulent and void as against all existing creditors specified in the statement.
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(2) Every person, who makes a statement in writing in pursuance of paragraph (b) of subsection (1) of this section which is to his knowledge false or misleading in any material respect, shall be guilty of a misdemeanour and be liable on conviction thereof to a fine not exceeding two hundred pounds, or at the discretion of the court, to penal servitude for three years or imprisonment for any term not exceeding two years.
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