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,