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Discussion > Corporate Law > MCA >

ROC Charge Creation

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Self Employed

[ Scorecard : 787]
Posted On 18 November 2009 at 12:10 Report Abuse

A Company has availed car loan of Rs.6.50 lacs from Oriental Bank of Commerce. The company has executed the following documents with the bank at the time of availing the loan (1) Agreement of Term Loan (2) Common Agreement (3) General Power of Attorney.

Normally the hypothecation will be endorsed in the RC Book of the vehicle and RC book will be retained by the bank till the loan gets repaid.

The bank officer is now asking the company to create a charge in favour of the bank with ROC. My questions are (1) Whether it is mandatory to create and register the charge with ROC for car loans (2) Is the above documents are enough to file the charge with ROC (Note : The company has not executed any hypothecation deed and has executed only the above documents)


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Ankur Garg
Company Secretary and Compliance Officer

[ Scorecard : 82375]
Posted On 18 November 2009 at 15:34

Hi,

 

No the above charge is not required to be registered with ROC as the above transaction is outside the preview of compulsorily registerable charge given under section 125(4) of the Companies Act, 1956.

You have to adopt a strict approach towards the bank.

 

Regards

 





CS Ankur Srivastava
Company Secretary & Compliance Officer

[ Scorecard : 14560]
Posted On 19 November 2009 at 14:13

Dear Murlidharan,

 

In my opinion charge is required to be registered with ROC under section 125(4)(e)

i.e. a charge, not being a pledge, on any movable property of the company;

 

Thus, it is mandatory to register the charge within 30 days from the date of execution of abovementioned documents.

 

 




Preety
Company Secretary

[ Scorecard : 96]
Posted On 04 December 2009 at 11:47

Hello everyone.

Can anyone pl tell me what are the consequences of not filing charge . In one of my Company, there is renewal of terms and condition of CC limits, Fund Based Limits and Non fund based limits and no change at all. All terms are same as that of last year.There is only Collateral Security and personal gurantee of Directors. Now Bank is saying there is no need to file Form 8 for its renewal. Now can anyone pl tell me what will be consequnces of this on the Company for not filing Form 8 for modification.Prompt reply is appreciated.

 

Regards

Kamal




karn
trainee

[ Scorecard : 172]
Posted On 04 December 2009 at 11:56

Preety Mam,

I have also dealt with the same issue bt we have registered the charge and after filing a letter from ROC was delivered to our corporate office stating that the charge was priorly registered only there is change in the limits as specified.

so, i suggest kindly register the same.

regards... 




CS Ankur Srivastava
Company Secretary & Compliance Officer

[ Scorecard : 14560]
Posted On 04 December 2009 at 12:27

Dear Preety,

 

The charge should be registered or modified in the above case.

 

It is a duty of company tofile the particulars of charges with the ROC within the stipulated time for registration or modification. Unless and until the charge is registered with the ROC, it has no sanctity notwithstanding the fact that such charge was brought into vogue by reason of agreement inter aprties between the two creditors or by registration of guarantee bond. 

 

In case of non filing and non registration of particulars of charge following consequences shall arise:-

 

1. the charge becomes void against liquidator or creditors and the money secured thereby shall immediately become payable. However, it can be enfored so long as the company does not go into liquidatino.

 

2. The security becomes void but non registration does not affect any contract or obligation of the company as to repayment of the money secured by the charge.

 

3. The company and every officer of the company or other person who is in default, shall be punishable with fine which may extend to Rs. 5000/- for every dau during which the default continues. A further fine of Rs. 10000/- may also be imposed on the company and every officer of the company who is in default of any other requirements of the Act concerning registration of a charge created by the Company,




Preety
Company Secretary

[ Scorecard : 96]
Posted On 04 December 2009 at 12:47

Thank u so much.

Actually in our Company., all form 8 are filed by the bank itself. Now how should I convince them for filing Form 8. as there are not filing it. pl suggest.

Regards

Preety




CA Adarsh Agrawal
CMD of SHAYVIDZ Group

[ Scorecard : 3597]
Posted On 09 December 2009 at 20:02

Preety,

 

Show them the legal provisions regarding registraton of modification of charge.. if they r not convinced after that, then just ur company can file the form8 by itself by asking the bank to just put DSC on that form.. The form8 shud be filed otherwise it will b default on part of the company only..




MOHIT SALUJA
PRACTICING CS Jalandhar 9914558709

[ Scorecard : 1186]
Posted On 31 March 2012 at 19:31

I am also agree with Mr. Ankur Srivastava athat charge should be registered as per Sec 125 (4) of the CA, 1956 AS Sec. 125(4) says

As per section 125(4), the following kinds of charges are mandatory and these charges needs to be
registered with the Registrar of Companies:—
(a) A charge for the purpose of securing issue of debentures;
(b) A charge on uncalled share capital;
www.bharatlaws.com
(c) A charge on the immovable property, wherever situated, or any interest therein. This includes
mortgage by deposit of title deeds. [Wallis v Simmonds (Builders) Ltd (1974) 1 All ER 561];
(d) A charge on any book debts. Assignment of book-debts as security is covered. [Paul and Frank
Ltd v Discount Bank Overseas Ltd (1966) 2 All ER 9221 (Ch D)] A lien on sub-freight is a charge
on book-debt of the company. [Welsh Irish Ferries Ltd. (1985) ECLC 327 (Ch D); Ladenberg &
Co. v Goodwin (1912) 3 KB 275]. Bank-balances are not treated as book-debts in commercial
practice. [Bright Life Ltd., in re 1986 BCLC 418: (1986) 3 All ER 673: (1987) 3 Comp LJ 102 (Ch
D)];
(e) A charge, not being a pledge, on any movable property;
(f) A floating charge on the undertaking or any property of the company including stock-in-trade;
(g) A charge on calls made but not paid. Section 14 of the Banking Regulation Act, 1949 debars a
bank from creating a charge on any unpaid capital;
(h) A charge on a ship or any share in a ship;
(i) A charge on a goodwill, patent or on a license under a patent or on a trademark or on a copyright
or license under a copyright.

 

Dear Ankur Garg Sir, can you please elaborate why the charge should not be created as one of my client company is also not registering the charge.




Radhika
Associate Chartered Accountant

[ Scorecard : 22]
Posted On 10 April 2012 at 13:19

The Public Limited Company has taken a Bank guarantee and Cash Credit from Bank. without creating any charge on any asset. do i need to file any document to notify ROC about such Loan?


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