2.
| (1) Where upon a statement made to any approved credit agency by any person, that he proposes to purchase goods for the purpose of transportation and sale within the territory of Sri Lanka, such person, for the purpose of making payment for the goods and of meeting expenditure in connection with the transportation and sale and preparation for transportation and sale thereof, obtains from such agency, advances by way of loan, overdraft or otherwise, upon the execution in favour of such agency of a document which complies with the provisions of subsection (2) (which document is hereinafter referred to as "an inland trust receipt"), the previsions of section 3 shall be applicable in relation to that trust receipt and the goods to which it relates. |
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| (2) In order to comply with the provisions of this subsection, a document which is executed by any person in the circumstances mentioned in subsection (1), shall contain the following undertakings on the part of that person in respect of the goods to which the documents relates"
| | (a) an undertakings to hold the goods in trust for the agency in favour of which it is executed, to mark the goods or the packages or cases containing them in a specified manner, and to keep the goods in specified premises until the transportation and sale thereof; | | |
| | (b) an undertaking to hold in trust and to pay to the agency from time to time as received, the proceeds of the sale of those goods or a specified proportion of such proceeds; | | |
| | (c) an undertaking to insure the goods against all insurable risks to their full insurable value on a reinstatement basis in the name of the agency and in the ease of loss, to pay the insurance moneys to the agency in the same manner as the proceeds of the sale ; | | |
| | (d) an undertaking not to sell those goods or any of those goods except for cash; | | |
| | (e) an undertakings to deliver such of those goods as may for the time being be untransported or, unsold, to or to the order of, the agency upon demand made in writing in that behalf; | | |
| | (f) an undertaking to permit the agency without prior notice, from time to time, to enter and inspect the premises in which 'those goods are kept and to take stock of such of those goods as may be in the premises; | | |
| | (g) an undertaking upon the transportation and sale of those goods to deliver to the agency the documents of title and other transportation documents relating to such goods, if called upon to do so by the agency; | | |
| | (h) an undertaking to store those goods in a specified premises, or warehouse in the name of the agency; and | | |
| | (i) and undertaking to keep the transportation documents, goods and proceeds relating to the inland trust receipt separate and distinct from any and all other transportation, documents, goods and proceeds of the person by whom the inland trust receipt is executed. | | |
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| (3) Nothing contained in subsection (2) shall be deemed to prevent the inclusion in the document of any undertaking conditions or stipulations in addition to the undertakings specified in that subsection. |
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Sri Lanka Consolidated Acts