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Creation/ modification of charge is one of the crucial activity for Loan from Bank/ financial institutions etc.? When Companies Act, 2013 was introduced at that time, Charge satisfaction form was required to be submitted with ROC within 30 days of satisfaction otherwise Company have to file application of compounding with Regional Director. However, by Companies Amendment Act, 2017 this limit of 30 days has been increased up to 300 days as balanced with Creation/ modification of Charge.

However, Companies (Amendment) Ordinance, 2018 have changed the period for Creation/ Modification of Charge with tighter time based norms;

Section Involved: Section-77 Duty to Register Charge

1) BEFORE ORDINANCE: As per Section 77 of Companies Act, 2013, Company had to create charge with the Registrar within 30 days of creation of Charge.

Provided?that the Registrar may, on an?application?by the company, allow such registration to be made within a period of Three Hundred Days of such creation on payment of such additional fees?as may be prescribed:

Condonation: Provided further?that if registration is not made within a period of three hundred days of such creation, ?the company shall seek extension of time in accordance with section 87?

2) AFTER ORDINANCE: As per Section 77 of Companies Act, 2013, now Company can create charge with the Registrar within 30 days of creation of Charge.

Provided that the Registrar may, on an application by the company, allow such registration to be made within a period of Sixty Days of such creation on payment of such additional fees as may be prescribed

In place of Condonation: Provided further that if the registration is not made within the period specified -

The Registrar may, on an application, allow such registration to be made within a further period of Sixty Days after payment of such?ADVALOREM?fees as may be prescribed

Quick Bites:

i) If Charge is created before date of Ordinance i.e. 02.11.2018 in such case filling shall be according to new provisions or old provisions?

As per Act before ordinance or after ordinance both states that company shall file form for registration of charge within 30 days of creation.

In case company fails to file the same within 30 days of Registration and date of creation of charge is before 02.11.2018 in that case:

Provided that?the Registrar may, on an application by the company, allow such registration to be made within a period of three hundred days of such creation on payment of such additional fees as may be prescribed.

Provided further that if the registration is not made within the period specified i.e. 300 days from such creation then the registration of the charge shall be made within six months from the date of commencement of the Companies (Amendment) Ordinance,2018, on payment of such additional fees as may be prescribed and different fees may be prescribed for different classes of companies.

Note: Thus, one can opine that as per ordinance there is no way for Condonation for creation/ modification of charge under companies act after 02.11.2018.

After 02.11.2018 form can be filed as per prescribed time with such additional fees plus ADVALOREM?as may be prescribed.

ii) If Charge is created after date of Ordinance i.e. 02.11.2018 in such case what shall be time period for filing of form for registration of charge with ROC.

STAGE

PARTICULAR

TIME PERIOD

Days

FEES

1.

Registration of Charge with ROC

Within 30 days of Creation

0+30

Normal Fees

2.

If Fails to file with in 30, days

within a period of 60 days of such creation

0+30+30 = 60

Normal Fees +
Additional Fees

3.

If Fails to file with in 60, days

Registrar may, on an application, allow such registration to be made within a further period of sixty days

0+30+30+60 = 120

Normal Fees +
Additional Fees + Advalorem?Fees

iii) As per question no. II if company fails to file form for creation/ modification of charge within 120 days of creation of charge. In such case whether company can file application for Condonation to Regional Director u/s 87.

As per Ordinance, 2018 there is modification in Section 87 of Companies Act, 2018.

Before Ordinance

After Ordinance

The?Central Government?on being satisfied that :

(i) (a) the omission to file with the?Registrar??the particulars of any?charge?created by a?company?or any charge subject to which any property has been acquired by a company or any modification of such charge;

The Central Government on being satisfied that -

(a) the omission to give intimation to the Registrar of the payment or satisfaction of a charge, within the time required under this Chapter;

?

Note: After ordinance i.e. 02.11.2018 clause relating to Condonation of delay in creation/ modification of charge has been removed from Section 87.

Thus, one can opine that as per question no. II if company fails to file e-form CH-1 for creation / modification of charge within 120 from creation of charge then there is no way under Companies act for filing of such form with ROC.

iv) If Charge is satisfied before/ after date of Ordinance i.e. 02.11.2018 in such case what shall be time period for filing of form for satisfaction of charge of charge with ROC.

If charge is satisfied even before or after 02.11.2018 in such case following shall be period for filing of e-form CHG-4 for satisfaction of charge with ROC.

 

STAGE

PARTICULAR

TIME PERIOD

Days

FEES

1.

Satisfaction of Charge with ROC

Within 30 days of Satisfaction

0+30 = 30

Normal Fees

2.

If Fails to file with in 30, days

within a period of 300 days of such satisfaction

0+30+270 = 300

Normal Fees +
Additional Fees

3.

If Fails to file with in 300, days

Filing of form with RD for satisfaction of Charge

0+30+270+---- = ------

Normal Fees +
Additional Fees + Condonation fees

 

Note: Provisions for Condonation of delay in satisfaction of charge is still there in act even after ordinance.

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